Happy New Year to ALL!
Today’s Labor Updates:
The NLRB Means Business
DuPont announces details about job cuts, Dow merger
Quickie Election Rule Challenge To Be Heard By Fifth Circuit
Kuwait: MP slams labor unions’ bill
Employment Law 2015 – Year In Review
The NLRB Means Business
Rebekah Mintzer, Corporate Counsel
December 28, 2015
The National Labor Relations Board has taken a tough and generally pro-labor stance recently, but 2015 may have been its biggest year yet. In April, the board retooled union elections by implementing new “quickie” election rules, which have been found to reduce the average time between petition and election by around 40 percent. Many believe this can only benefit unions, as management now has less time to mount a campaign against them.
It’s not just about speed though. The rules force employers to articulate certain legal issues with a union drive early in the process, or else waive the right to get them resolved later. Employers now have to provide unions with a list of employees’ personal email addresses.
Another big moment for the board came in August, when it ruled that waste management company Browning-Ferris Inc. and Leadpoint, a staffing agency, should be considered joint employers. In doing so, the board tore down a 30-year standard. Before the decision, a company needed “direct and immediate control” over a partner to be deemed joint employers. Now it looks like an indirect relationship with less control will suffice.
The fallout may be dramatic. In joint employment, both entities can be held liable for the alleged employment law violations of one, and both could be dragged to the bargaining table, even if one isn’t actually unionized. If joint employment is extended to franchisors and franchisees, which seems to be the board’s intention, unions could get a big boost because they would no longer have to organize franchisee by franchisee. The corporate office could also get in trouble for labor law violations by franchisees, a case the NLRB has already tried to make by charging McDonald’s USA for violations that allegedly occurred at individual restaurants.
DuPont announces details about job cuts, Dow merger
Dec 29, 2015, 4:10pm CST
JOHN WEST – STAFF PHOTOGRAPHER
DuPont (NYSE: DD) released a message from CEO and Chairman Ed Breen on Dec. 29 outlining details about imminent job cuts and the upcoming merger with The Dow Chemical Co. (NYSE: DOW).
Although the company will cut jobs globally, Breen’s letter specifically notes 1,700 jobs will be cut in Delaware, where the company has been based for more than 200 years. DuPont will provide affected employees with separation packages, career placement services and training allowances.
“Especially given that we are in the middle of the holidays, we would have preferred to wait until individual notifications were complete before reporting the full local impact,” Breen said in his letter. “However, by December 31st, we are legally required to file a notice with the Delaware State government detailing the expected local job reductions, and I wanted you to hear the difficult news — directly from me — that approximately 1,700 Delaware-based positions will be eliminated in the beginning of the year.”
The cuts are part of the upcoming merger with Michigan-based Dow, as well as DuPont’s own 2016 cost-reduction program, both of which were announced on Dec. 11. The 2016 global cost savings and restructuring plan is expected to cut costs by $700 million compared to 2015. It includes cutting about 10 percent of the company’s global workforce, which would mean cutting an estimated 5,400 employees worldwide.
The cuts are expected to result in a pre-tax charge to earnings of approximately $780 million, consisting of approximately $650 million of employee separation costs and about $130 million of asset-related charges and contract terminations, according to a Dec. 11 press release.
Meanwhile, Breen also announced on Dec. 29 more details about the future of DuPont and Dow following the merger. As previously announced, the merged company will be called DowDupont, which will then spin off its businesses into three independent, publicly traded companies.
Breen revealed that the specialty products business will be based in Wilmington, Delaware, and the material science business will be based in Midland, Michigan. The companies are still deciding where to headquarter the agriculture business.
Both Dow and DuPont have a significant presence in the Houston area.
Dow has some of its largest operations in the Houston area, and it currently is pushing forward with a $4 billion Gulf Coast expansion project based out of Freeport. DuPont has operations in Spring and La Porte.
Quickie Election Rule Challenge To Be Heard By Fifth Circuit
Thursday, December 31, 2015
A court challenge to the National Labor Relations Board’s “quickie” election rule will be heard by the United States Court of Appeals for the Fifth Circuit, in New Orleans, on February 29, 2016. A lawsuit filed on June 1, 2015 by the Associated Building and Contractors of Texas in the United States District Court for the Western District of Texas sought a declaratory judgment that the rule is invalid under the Administrative Procedures Act and an injunction against implementation of the rule. The Fifth Circuit challenge is an appeal from Judge Robert L. Pittman’s decision denying the Association’s motion for expedited summary judgment and granting the Board’s motion for summary judgment in that lawsuit. Hundreds of representation elections have been conducted by the NLRB since the rule became effective on April 14, 2015. A ruling in favor of the Association could invalidate the results of all of those elections, including those where the union won and was certified by the NLRB as the collective bargaining representative of the bargaining unit employees. – See more at: http://www.natlawreview.com/article/quickie-election-rule-challenge-to-be-heard-fifth-circuit#sthash.uJj9uIks.dpuf
Kuwait: MP slams labor unions’ bill
KUWAIT: MP Saleh Ashour criticized the government over a new bill to organize labor unions’ work in Kuwait. The lawmaker charged that article 12 of the new law, which states that the regulations are compulsory, is considered a blatant intervention in unionist work and a shift in the government’s role which providing guidance according to the constitution. “Article 177 of Kuwait’s constitution states that applying its articles must not contradict with Kuwait’s agreements with other states and international agreements,” Ashour said in a statement, adding that Kuwait has joined the International Labor Organization even before it joined the United Nations.
School fees
MP Abdulhameed Dashti urged Minister of Education and Minister of Higher Education Dr Bader Al-Essa to reconsider private schools’ tuitions, especially American schools, where the ministry’s private education department have approved fees ranging between KD 1,653 and KD 7,000 annually. The lawmaker argued that the standards based on which the new estimations were put together “were not based on realistic studies.”
Hawally fight
The Criminal Court adjourned a case in which an Egyptian man was killed during a fight in Hawally to January 12, 2016. Two Kuwaiti men are charged with murder in the case and could face capital punishment. The incident took place last October at the Rihab Mall in Hawally, where one of the suspects reportedly ran over the victim several times with his car following a fight that started at a video games’ shop inside the building.
By A Saleh
Employment Law 2015 – Year In Review
Employment law is a constantly changing legal landscape and the past year provided employers and employees with a great deal of food for thought. The following cases and decisions by courts, the National Labor Relations Board (“NLRB”), and the Equal Employment Opportunity Commission (“EEOC”), affect employers in all industries and should be considered with care in the coming year.
Purple Communications, Inc., 361 N.L.R.B. No. 126 (Dec 11, 2014)
In a reversal of its 2007 decision in Register-Guard, the NLRB determined that employees are entitled to use employer e-mail systems for protected Section 7 concerted activity during non-work hours. The decision also prevents the use of blanket bans (prohibiting all non-work use of e-mail systems) unless the employer can show “special circumstances [that] make the ban necessary to maintain production or discipline.” However, the decision does not require employers to grant e-mail access to all of its employees. The Purple Communications ruling continues a trend reflecting that the Board is highly concerned with preserving the rights of employees to engage in concerted activity on social media and electronic platforms. Both union and non-union employers should review their workplace policies concerning e-mail usage and social media to ensure employees’ Section 7 rights are not potentially being violated.
Young v. UPS, 135 S. Ct._1338_ (Mar. 25, 2015)
The Supreme Court clarified the scope of protections afforded to pregnant employees under the Pregnancy Discrimination Act of 1978. The Court held that a pregnant employee may establish a prima facie case of pregnancy discrimination by alleging: (1) she belongs to a protected class (i.e., she was pregnant); (2) she sought an accommodation; (3) the employer denied the accommodation request; and (4) the employer accommodated others “similar in their ability or inability to work.” Thus, if an employer offers accommodations, such as job reassignments, to certain categories of employees (e.g., employees who suffer work-related injuries), then it may be obliged to extend the same accommodations to pregnant employees unless there is a non-discriminatory reason to deny the accommodation. An employer acts at its own peril where it fails to extend a reasonable accommodation to a pregnant employee while simultaneously extending accommodations to employees in other similar circumstances.
NLRB Election Law Changes (April 2015)
The NLRB implemented changes to its rules regarding union certification elections in April of 2015. The new rules are generally acknowledged as being advantageous to labor interests and restricting the rights of employers in union elections. The specific changes include: (1) employers, once served with a Notice of Petition for Election by the NLRB, must post and distribute the notice by e-mail within 2 days; (2) pre-election hearings will be set for 8 days after a Notice of Hearing is served; (3) pre-election hearings are limited to only “necessary issues,” and will not include issues of eligibility or inclusion that affect only a small percentage of a voting unit; (4) employers must provide a “statement of position” prior to the pre-election hearing and issues not raised in the statement may not be argued at the hearing; (5) elections will no longer be stayed for 25 days following the issuance of a decision on a petition; and (6) voter lists must be submitted within 2 days of the regional director’s approval of an election and must include personal phone numbers and e-mail addresses of eligible voters, if that information is available to the employer. Data through mid-October of this year shows that the median number of days between the filing of an election petition and the election itself was twenty-three, compared to thirty-eight in that same period in 2014.
Employee Benefits Changes – Same-Sex Marriage (June 2015)
This past summer, the Supreme Court held in Obergefell v. Hodges, 135 S. Ct. 2584 (2015), that same-sex couples have a fundamental right to marry. The impact of this decision on employers is that employee benefit plans, especially in states that had not previously adopted same-sex marriage, must be altered to offer equal benefits to same-sex spouses and families as to opposite-sex spouses and families. Additionally, employers that have private health insurance plans and are not required to provide coverage for spouses may risk a discrimination suit if benefits are offered to opposite-sex spouses and not same sex spouses. Employers must also be careful to ensure that same-sex couples are offered the same tax treatment as opposite-sex couples on benefits, both at a state and federal level, and to communicate these changes to the workforce.
DOL Proposed Rule-Making – White-Collar Employee Exemptions (July 2015)
The Department of Labor issued a Notice of Proposed Rulemaking on July 6, 2015 suggesting changes to the white-collar minimum wage and overtime pay exemptions for executive, administrative, professional, outside sales, and computer employees. Presently, certain employees whose primary job duties fall within certain specified categories are exempt from overtime and minimum wage requirements under the FLSA if they earn a salary of $23,660 per year or more (for a full-time employee). Similarly, an exemption currently also exists under federal law (for which there is no Connecticut equivalent) for highly compensated employees if the employee earns $100,000 per year or more and performs certain exempt tasks. The proposed rule change from the DOL would set new salary thresholds to qualify for both the white-collar and highly compensated employee exemptions, which are currently estimated to be $47,892 per year for white-collar employees and $122,148 per year for highly compensated employees. The comment period for the proposed rule change ended on September 4, 2015. Though no rule change has yet issued, employers should expect new rules regarding these exemptions in mid-2016.
EEOC Ruling Recognizes Sexual Orientation Discrimination Claims Under Title VII
The EEOC changed course in a decision on July 16, 2015, finding that employees have protection under Title VII from discrimination based on sexual orientation. Prior EEOC cases held that sexual orientation was not a protected class for the purposes of Title VII claims but the 2015 ruling against the U.S. Department of Transportation is a clear departure from the EEOC’s previous position. In the July case, a male employee of the Federal Aviation Administration claimed he was denied a promotion due to his sexual orientation. The EEOC concluded that the employer relied on a “sex-based consideration” by improperly taking into account an employee’s sexual orientation in undertaking an adverse employment action. Accordingly, the EEOC has confirmed that discrimination based on sexual orientation is equivalent to an accusation of sex discrimination under Title VII. It is worth noting that the EEOC’s decision in this case was reached a mere month after the Supreme Court overturned generations-long precedent regarding same sex couples in Obergefell v. Hodges.
Browning-Ferris Industries, 362 N.L.R.B. No. 186 (Aug. 27, 2015)
The NLRB adopted a new standard to determine when two companies are joint employers in Brown-Ferris Industries, holding that where there is a common law employment relationship with an employee and an entity has either direct or indirect control over terms and conditions of employment, then a joint employer relationship exists. Previously, an entity was required to exert direct and immediate control over the working conditions of employees to be considered a joint employer. Factors to be considered in the determination include power to hire, fire, discipline, supervise and direct, as well as “dictating the number of workers to be supplied; controlling scheduling, seniority, and overtime; and assigning work and determining the manner and method of work performance.” The Board may also interpret an entity’s reservation of the right to invoke these powers, regardless of whether the power has been exercised, as a signal that there is a joint employer relationship. The ruling should guide employers in structuring relationships with third party service providers. Franchisors should also review their relationships with franchisees as their business models may suggest some level of control, regulation, or oversight of franchisee employees that could create a joint employer relationship.