New Labor Board General Counsel Rescinds Guidance Declaring Student-Athletes ‘Employees’
Jackson Lewis PC – Gregg E. Clifton
USA December 7 2017
One of the first actions of new National Labor Relations Board General Counsel Peter Robb was to rescind guidance that college football players at private universities are employees under the National Labor Relations Act.
“Robb’s Memorandum GC 18-02, which created a mandatory Division of Advice review of many Board decisions from the Obama Administration (and rescinded many previous NLRB General Counsel memorandums), rescinded Memorandum GC 17-01, “General Counsel’s Report on the Statutory Rights of University Faculty and Students in the Unfair Labor Practice Context”.
GC 17-01 stated that college football players at private universities are employees under the Act, and, therefore, they are entitled to seek pay for their contributions and to request improved working conditions.
In GC 17-01, former NLRB General Counsel Robert F. Griffin determined that scholarship football players at private colleges, such as Stanford, Notre Dame, University of Southern California, and Northwestern, have employment rights and are protected by the law should they seek protection against unfair labor practices, seek to bargain for a safer work environment, or request pay. Scholarship FBS athletes at private institutions, Griffin wrote, “clearly satisfy the broad definition of employee and the common-law test.” Griffin explained that the athletes, like employees, work full-time hours during the regular season, receive “significant compensation” in exchange for their work, and can be “fired” from the team for poor performance or other reasons. GC 17-01 did not carry the force of law or give players at private colleges the right to unionize or collectively bargain. Therefore, its impact was minimal. However, it provided positive legal substance to the belief that student-athletes are university employees under the labor laws, and it could have lent support to an NLRB determination that student-athletes, in fact, were employees.
“Robb’s reversal halts administrative momentum toward the declaration of student-athletes as employees of the universities they attend.”
Further, the rescission should quell any remaining notion that the NLRB, as currently composed, will grant student-athletes the right to collectively bargain or the right to file unfair labor practice charges, effectively intercepting the legal Hail Mary thrown by student-athletes in their attempts to organize.
Argentina’s Workers March in Protest Against Labor Reforms
Workers say the new labor legislation undercuts employees’ rights, lowers wages and makes union organizing more difficult.
Labor unions, social organizations and opposition political parties are protesting in the streets of Buenos Aires against labor reforms pushed through by the conservative government of President Mauricio Macri.
From 4pm local time, the protesters started marching from the Congress to the Plaza de Mayo, blocking the capital’s main streets. The Autonomous Workers Union (CTA) also announced a 24-hour general strike across the country.
“The only way to stop these reforms is organization,” said CTA leader Hugo ‘Cachorro’ Godoy. “This is why we are convoking the largest level of unity.
“That’s why we said that when these legislations are debated, we won’t just mobilize across the entire country, but we will block roads and we will do everything we can so they are not approved.”
The Association of Public Workers (ATE) is also demanding that the government renew all of the contracts that are due to expire this month, representing a total of at least 20,000 jobs.
Meanwhile, the government has urged the Senate to debate the legislation before the end of this year.
Planned reforms – which would affect employees, retirees and trade unions – have come in for sustained criticism in recent months.
Workers say the labor legislation undercuts employees’ rights, lowers wages and makes union organizing more difficult, while pension changes would increase commodity prices and slash the number of beneficiaries.
Macri has been on a two-year crusade to install neoliberal, pro-market reforms since he took office in December 2015. Since then, more than 108,000 public workers have been laid off.
The administration eliminated energy and gas subsidies, resulting in a 500 percent price increase for electricity and a 300 percent jump for natural gas. Public transportation costs are up 100 percent in some areas.
GE Is Said to Plan 12,000 Job Cuts as New CEO Revamps Power Unit
The reductions, accounting for about 18% of GE Power’s workforce, will mostly affect professional and production workers outside the U.S., according to a source.
By Richard Clough Bloomberg | Dec 07, 2017
General Electric Co. is planning to cut 12,000 jobs in its power business, a person familiar with the matter said, as the company’s new leaders move to slash costs and stabilize the beleaguered manufacturer.
The reductions, accounting for about 18% of GE Power’s workforce, will mostly affect professional and production workers outside the U.S., said the person, who asked not to be identified discussing the plans before they are revealed. GE is also chopping capital expenditures and research-and-development spending as it grapples with a sharp downturn in gas- and coal-power markets, the person said.
The moves, which could be announced as early as Thursday, add to a flurry of cost cuts by Chief Executive Officer John Flannery, who has already scaled back use of corporate jets and delayed work on a new Boston headquarters since taking the reins in August. GE, the world’s largest maker of gas turbines, said last month it would pare the quarterly dividend and sell some businesses.
Trimming the workforce will help GE achieve its goal of slicing $1 billion of structural costs next year in the power division. That plan is part of a larger effort to cut $3.5 billion of expenses across the company through 2018.
The shares fell 0.6% on Wednesday to $17.66, the lowest in almost six years. GE has plunged 44% this year. That’s easily the worst in the Dow Jones Industrial Average, which has climbed 22%.
‘Poor Execution’
GE had about 300,000 employees across its operating units at the end of last year. Power was the company’s biggest division, with sales last year of $26.8 billion. The total would have been $36.8 billion after accounting for the effects of a reorganization this year in which GE added some energy businesses to the unit.
The manufacturer has been hit hard by flagging demand for electricity generated with natural gas, in part due to a shift toward power from renewable sources. In addition, “we have exacerbated the market situation with some really poor execution,” Flannery told investors last month.
The power unit expanded considerably with the $10 billion acquisition of Alstom SA’s energy business in 2015 — but the drawn-out deal has turned into a drag. Intended to broaden the product lineup with steam-turbine technology, the tie-up pushed GE Power’s workforce to 65,000 at a time when the market was slowing.
“Alstom has clearly performed below our expectations,” Flannery said last month, referring to the assets acquired from the French company.
Management Changes
As the size of the hurdles became clear this year, GE made changes to management in the power business and reorganized divisions. Russell Stokes was named head of GE Power in June, taking over from Steve Bolze, who left the company shortly after Flannery was named to succeed Jeffrey Immelt as GE’s next CEO.
Online message boards for GE employees were active in recent weeks as workers discussed layoff notices going out in GE Power manufacturing locations such as Greenville, S.C., and Schenectady, N.Y. GE also met with union representatives in Europe this week to discuss cutbacks there.
Another Joint Employment Development, And Still More Uncertainty
Article By:Christopher G. Ward
For the last several years, “joint employment” (whatever that now means legally) has been anything but the gift that keeps on giving for employers. First, joint employment became a tool that the previous Administration locked onto in seeking to expand wage and hour liabilities and to open up potential union organizing opportunities and labor relations obligations. After those actions sent tremors through franchise-based businesses and companies that have significant subcontractor relationships, the new Administration took relatively swift action seeking to unwind the previous joint employment expansion. And even where the federal appellate courts have weighed in on the joint employment changes, to this point they have provided little helpful guidance about what joint employment means (and what the derivative legal obligations will become) for the long term.
If we have learned anything from these recent machinations, it is that joint employment has become as much a political tool as a legal concept. And with politics being what it is these days, employers could be forgiven for wondering if the rules will change with every national election cycle.
But perhaps there is hope on the horizon. Perhaps.
On November 7, 2017, the House passed H.R. 3441, dubbed the “Save Local Business Act,” a short bill with a clear purpose: a legislative solution to the suddenly uncertain joint employment landscape. The bill seeks to define joint employer status for purposes of the National Labor Relations Act and Fair Labor Standards Act, such that a joint employment relationship only is created where the “higher up the chain” entity “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over essential terms and conditions of employment, such as hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, or administering employee discipline.”
In other words, according to H.R. 3441, while it is still a legitimate possibility in professional employer organization relationships and some others, joint employment will be the rare exception, not the rule, for franchises and most other typical vertical business relationships under federal law. For many employers, passage of the bill would be a significant source of relief, perhaps as much for the certainty of the legal standard as for the narrow view of joint employment and the effect on derivative obligations and potential liabilities.
The Save Local Business Act hit the Senate on November 8, 2017, where it has seen no further action. And it is uncertain whether the bill will advance in the Senate or can overcome a filibuster, given that only five House Democrats voted in its favor (even though two Democrats co-sponsored the bill and supporters hoped for broader bipartisan appeal when introducing the bill in July). And of course, even if it passes, it is always possible that a differently constituted Congress could change the law through further legislative maneuvering, even though achieving change in Congress remains a far more difficult prospect than changing federal agency policy with the changing political winds.
While we continue to wait for certainty in the joint employment arena as these developments continue, franchise companies and businesses that subcontract with other employers would remain wise to seek counsel on joint employment risks and risk mitigation strategies. Not only does the future of joint employment at the federal level remain uncertain, but states have the power to create their own joint employment rules with respect to their own wage and hour requirements, meaning a clear federal law will not necessarily create clear nationwide risks and rules.
© 2017 Foley & Lardner LLP