Today’s Labor Updates:
Executive Order Requires Certain Federal Contractors to Self-Report Labor Violations; Prohibits Mandatory Arbitration of Certain Discrimination and Harassment Claims
Union wins NLRB fight with Boeing, company must hand over pay, productivity data
Canada: Labour relations board finds in favour of workers
Summary of NLRB Decisions for Week of July 28 – August 1, 2014
Executive Order Requires Certain Federal Contractors to Self-Report Labor Violations; Prohibits Mandatory Arbitration of Certain Discrimination and Harassment Claims
August 6, 2014
Roshni Chaudhari
Executive Summary: On July 31, 2014, President Obama signed the “Fair Pay and Safe Workplaces” Executive Order (“EO”), requiring federal contractors and subcontractors bidding on contracts over $500,000 to disclose any violations that they have incurred under 14 different federal workplace laws (and their state-law equivalents) in the last three years. The EO also prohibits contractors and subcontractors with contracts exceeding $1 million from requiring employees to arbitrate their Title VII or sexual assault or harassment claims. Additionally, it requires contractors to provide employees with paycheck details regarding hours worked, overtime hours, and additions or deductions to their pay. The EO is expected to be implemented in phases through 2016, and is another milestone in the President’s “Year of Action” according to the White House’s Fact Sheet. The new EO comes right on the heels of President Obama’s order prohibiting federal contractors from discriminating on the basis of sexual orientation and gender identity.
Required Disclosures of Labor Violations (Compliance with Labor Laws):
The most significant requirement of the EO is its attempt to “hold corporations accountable” by requiring federal contract bidders to state whether “any administrative merits determination, arbitral award or decision, or civil judgment” has been rendered against them in the preceding three years for any of the following 14 federal laws or their state-law equivalents:
- Fair Labor Standards Act
- Occupational Safety and Health Act of 1970
- Migrant and Seasonal Agricultural Worker Protection Act
- National Labor Relations Act
- Davis-Bacon Act
- Service Contract Act
- Executive Order 11246 (equal employment opportunity)
- Section 503 of the Rehabilitation Act of 1973
- Vietnam Era Veterans’ Readjustment Assistance Act of 1974
- Family and Medical Leave Act
- Title VII of the Civil Rights Act of 1964
- Americans with Disabilities Act of 1990
- Age Discrimination in Employment Act of 1967
- Executive Order 12658 of February 12, 2014 (new minimum wage)
The disclosure requirement is triggered for any new contract for goods or services, including construction, valued at more than $500,000. The bidder making a disclosure of violations will have an opportunity to disclose what steps it has taken to correct the violations. The contracting officer will be required to consult with its agency’s labor compliance advisor, a new position created by the EO, to determine whether a bidder is responsible, that is, “has a satisfactory record of integrity and business ethics.” According to the White House Fact Sheet on this EO, while the EO “ensure[s] that the worst actors, who repeatedly violate” the laws “don’t get contracts,” the overall goal of the EO is not to deny contracts but to “help more contractors come into compliance with workplace protections.” To that end, a bidder may seek “early guidance on whether [its] violations are potentially problematic” and remedy problems before an award is made.
The reporting requirements also flow down to subcontracts for supplies or services exceeding $500,000 that are not for commercially available off-the-shelf items. The contracting officer will require the contractor to state that it will require subcontractors to make similar disclosures and that the contractor will make a responsibility determination as to the subcontractor. The contracting officer will be made available for consultation with a contractor to determine the propriety of including the subcontractor.
During performance of the contract, both contractors and subcontractors must provide updates every six months. If a new violation is disclosed, the contracting officer may take responsive action, ranging from the provision of compliance assistance to termination of the federal contract.
The Federal Acquisition Regulations, which cover federal government acquisitions and contracting, will be amended to implement this EO. The EO also requires the Administrator of General Services to develop a website for federal contractors to use to report the information required under this order.
Voluntary Arbitration of Title VII Claims (Complaint and Dispute Transparency):
Although most of the EO focuses on the disclosure requirement, the prohibition on mandatory arbitration of certain discrimination and harassment claims could have a significant impact on contractors and subcontractors. Specifically, the EO requires that for all contracts exceeding $1 million, the decision to arbitrate Title VII or sexual harassment or sexual assault tort claims may only be made with the voluntary consent of the employee or independent contractor after such a dispute arises.
As with the rest of the EO, this requirement also applies to subcontracts (with the same $1 million threshold requirement). It will not apply to parties covered by collective bargaining agreements or other valid arbitration contracts entered into before the contractor or subcontractor bid on the covered federal contract, unless the contractor or subcontractor is permitted to change the terms of the contract with the employee or independent contractor, or when the contract is renegotiated or replaced. It also will not apply to contracts or subcontracts for the acquisition of commercial items or commercially available off-the-shelf items. A number of issues relating to this provision remain unclear, including whether the prohibition applies to all employees or only those working on the federal contract. The implementing regulations undoubtedly will clarify this issue.
Required Hours Worked and Pay Disclosures (Paycheck Transparency):
The EO also includes a provision relating to “paycheck transparency,” requiring contractors to provide details relating to hours and pay, which most contractors already provide. This provision requires employers to provide their employees with information relating to the individual’s hours worked, overtime hours, pay, and additions or deductions made to that pay. Employers must also provide formal notice to an individual if that individual is classified by the employer as an independent contractor. This aspect of the EO flows down to subcontractors as well.
Employers’ Bottom Line: This is a significant change to the existing landscape for reporting requirements for federal contractors and subcontractors as well as the use of mandatory arbitration provisions. Although the EO will take time to implement, and challenges will undoubtedly be raised as to the precise meaning of different provisions of the EO, it is clear that the Obama Administration has added teeth to its oversight and enforcement of workplace laws. Federal contractors should immediately begin considering the new consequences of any potential employment and labor law violations, as a violation incurred tomorrow may be a required disclosure when the EO takes effect in 2016.
If you have any questions regarding the EO, please contact the author of this Alert, Roshni Chaudhari, rchaudhari@fordharrison.com, an attorney in our New York City office and member of our Affirmative Action/OFCCP practice group. You may also contact the FordHarrison attorney with whom you usually work.
Aug 4, 2014, 2:40pm PDT Updated: Aug 4, 2014, 3:04pm PDT
Union wins NLRB fight with Boeing, company must hand over pay, productivity data
Steve Wilhelm Staff Writer- Puget Sound Business Journal
Boeing has been ordered by the National Labor Relations Board to supply wage rate and productivity data to the company’s engineering union.
The ruling, which was made public by the Society of Professional Engineering Employees in Aerospace (SPEEA) on Monday, is the result of filings made during contract talks in 2012. While the ruling won’t impact the current contract, it could affect future negotiations and possibly could supply information the union could use in its age discrimination complaint against Boeing, filed July 23.
Those filings were with the federal Equal Employment Opportunity Commission and the Washington State Human Rights Commission. They’re hiding wage and productivity rates, and we have a charge against them for age discrimination,” said SPEEA spokesman Bill Dugovich. “This is all part of a pattern by the Boeing company of hiding information.”
A Boeing spokesman said the company will appeal, in this statement: “Throughout negotiations with SPEEA, Boeing followed all applicable labor laws. We disagree with this ruling and plan to appeal the decision.“ In the NLRB ruling, by Administrative Law Judge Dickie Montemayor, he wrote that Boeing clearly didn’t follow the requirements of the National Labor Relations Act. Here’s the case filing.
“Having found that the respondent has engaged in certain unfair labor practices, I find that it must be ordered to cease and desist and to take certain affirmative action designed to effectuate the policies of the act,” he wrote. The company has to supply the requested information “in a timely manner” and also post in visible places statement of its intent to do so. Some of the wording is below.
“WE WILL NOT fail to collectively bargain in good faith with the SPEEA, IFPTE LOCAL 2001 (the “Union”), by refusing and failing to provide the Union with requested information that is relevant and necessary to the performance of its duties as the collective-bargaining representative of our employees,” the notice, as supplied in the NLRB ruling, says.
August 6th, 2014
Canada: Labour relations board finds in favour of workers
Trent Ernst, Editor
On Thursday, July 24, the BC Labour Relations Board found in favour of the United Steelworkers (USW) complaint that Walter Energy had violated the Labour Relations Code. As a result, Walter must now “make up the monetary amount to all members of Local 1-424 at Wolverine Mine.”
According to the USW, Walter failed to provide the required 60 days’ notice required when Walter announced that it was idling its mines earlier this year.
Under Section 54 of the Labour Relations code, the employer must give notice to the union at least 60 days before introducing “a measure, policy, practice or change that affects the terms, conditions or security of employment of a significant number of employees to whom a collective agreement applies.”
The USW says that because proper notice wasn’t given, the Union and the Employer were not able to discuss a number of issues prior to the shut down, and that affected employees must be paid in lieu of the notice required. “The employer provided no notice of the layoff,” says the Union’s submission to the Labour Relations Board (LRB). “The usual remedy for a breach under section 54 is pay in lieu of notice. These damage awards are compensatory, not punitive. They are intended to put employees in the position they would have been, but for the breach. The fact that some meetings took place after the layoff does not relieve the Employer of its notice obligations.”
Walter, for their part, argued that Section 54 of the Labour Relations Code did not apply to this case, as the layoffs are temporary. “There are a number of employees who remain working at the Mine, keeping the equipment in order for a quick start up. “The facts in this case,” argued Walter, “resemble the forest industry, where Section 54 does not apply to temporary layoffs.
Walter pointed to Section 65 of the act, which does not require layoff notice to be given “to seasonal workers.” Walter argues that it follows that “it follows that an employer is not required to give notice to an employee who is temporarily laid off.” They also argued that a temporary layoff “does not affect the employee’s terms, conditions, or security of employment,” and that it would be “absurd” for the Board to find that Section 54 applies to a temporary layoff. “The Union seeks to have the Board declare that section 54 applies to temporary layoffs,” writes Walter in their submission. “If the Board were to accede to the Union’s request, it would render completely meaningless the layoff provisions that employers and unions across the province have negotiated into their collective agreements.” These provisions would be rendered meaningless if employers have to provide 60 days’ notice, says Walter.
Moreover, says Walter, it is expected to re-open the mine within the allotted 24 months. Even if coal prices do not increase, Walter expects to resume operations to mine the coal in Phase 4A, which has already been prepared for extraction. “There is at least six to 12 months of work that will need to be done to remove and process coal that has already been exposed,” argues the company. “This would result in the recall of the bargaining unit.”
In making his decision, LRB vice-chair Richard S. Longpre says that he accepts that Section 54 might not apply in certain situations, but not in this one. The argument that permanent mine workers are comparable to seasonal worker is not satisfactory, as inherent in the phrase “seasonal employee” is the presumption that it is temporary work. “The purpose of Section 54,” writes Longpre in his decision, “is to provide employees with 60 days’ notice and to provide the Union and Employer the opportunity to discuss issues arising from the employer’s decision. This did not occur in this case.
“I am satisfied that the … employees who were laid off on April 15 and 16, 2014 are entitled to wages equivalent to what each of those employees would have received had their work continued.”
The USW will be setting up a process for members to get their information to the union, who can in turn pass it on to Walter Energy.
The USW is still waiting to hear the results from arbitration on the issue of whether Walter Energy must continue paying the $500 “working in the north” allowance until recall rights have expired.
USW Local 1-454 president Frank Everitt calls the decision “A wonderful victory for our members from the Wolverine Mine and for all workers in British Columbia.”
Summary of NLRB Decisions for Week of July 28 – August 1, 2014
The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB. Inquiries should be directed to the Office of Public Affairs atPublicinfo@nlrb.gov or 202‑273‑1991.
Summarized Board Decisions
The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman (02-RC-076954; 361 NLRB No. 11) New York, NY, July 28, 2014.
The full Board unanimously rejected the Regional Director’s decision ordering an election among the petitioned-for bargaining unit of all women’s shoe sales associates at a retail store. The Board found that the petitioned-for unit is not appropriate because, although the women’s shoes sales associates in the store’s separate departments of Salon Shoes and Contemporary Shoes are a readily identifiable group, they do not share a community of interest. Women’s shoes sales associates in Salon Shoes and Contemporary Shoes do not track any administrative or operational boundaries drawn by the Employer, do not share common supervision, do not interchange with one another on either a temporary or a permanent basis, do not have significant contact with one another, and do not share any specialized skills or training. Member Miscimarra agreed that employees within the petitioned-for unit do not share a sufficient community of interest to render the unit appropriate under the standards the Board has historically applied to the retail industry. Member Miscimarra stated that he would not apply Specialty Healthcare & Rehabiliation Center of Mobile, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), or the overwhelming community of interest standard to determine whether the petitioned-for unit must include additional employees. Instead, he would ask whether the interests of the group sought are sufficiently distinct from those of excluded employees to warrant establishment of a separate unit. Member Johnson concurred in finding that the petitioned-for unit is not appropriate for collective bargaining. He found no need to express his opinion on whether Macy’s, Inc., 361 NLRB No. 4 (2014) or Specialty Healthcare were properly decided. Petitioner Local 1102 Retail, Wholesale Department Store Union. Chairman Pearce and Members Miscimarra, Hirozawa, Johnson, and Schiffer participated.
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McKenzie-Williamette Regional Medical Center Associates, LLC d/b/a McKenzie-Williamette Medical Center (19-CA-077096 and 095797; 361 NLRB No. 7) Springfield, OR, July 29, 2014.
The Board reversed the Administrative Law Judge and found that the non-Board settlement between the Respondent and the Charging Party Union satisfied the standards set forth in Independent Stave Co., 287 NLRB 740 (1987). Although the General Counsel opposed the settlement and the settlement was signed late in the decisional process, the Board found that, on balance, the parties’ settlement adequately serves the policies underlying the Act, as well as the Board’s longstanding policy encouraging the amicable resolution of disputes. Charges filed by Service Employees International Union Local 49, CTW-CLC. Administrative Law Judge Gerald M. Etchingham issued his decision on June 3, 2013. Members Miscimarra, Hirozawa, and Schiffer participated.
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Ralphs Grocery Company (21-CA-039867; 361 NLRB No. 9) Irvine, CA, July 31, 2014.
The Board agreed with the Administrative Law Judge’s finding that the Respondent violated Section 8(a)(1) by requiring an employee to submit to a drug and alcohol test, notwithstanding his request for Weingartenrepresentation. A Board panel majority consisting of Chairman Pearce and Member Schiffer also agreed with the judge’s finding that the Respondent unlawfully suspended and discharged the employee for his refusal to take the test without representation. Accordingly, they found that because the reason for the employee’s suspension and discharge was inextricably linked to his assertion of Weingarten rights, the Judge’s make-whole remedy is appropriate. Member Johnson dissented from these latter two findings. Contrary to the majority, Member Johnson concluded that the employee was suspended and discharged because of the Respondent’s belief that he was intoxicated, not due to any hostility toward his request for union representation, and therefore, that the suspension and discharge were not unlawful and a make-whole remedy is not appropriate. Charge filed by United Food and Commercial Workers, Local 324. Administrative Law Judge Jeffrey D. Wedekind issued his decision on April 30, 2013. Chairman Pearce and Members Johnson and Schiffer participated.
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Fresh & Easy Neighborhood Market (31-CA-077074 and 080734; 361 NLRB No. 8) El Segundo, CA, July 31, 2014.
A Board Panel majority consisting of Chairman Pearce and Member Schiffer reversed the Administrative Law Judge and found that the Respondent violated Section 8(a)(1) by maintaining a rule that required employees to keep employee information secure, and to use information fairly, lawfully, and only for the purpose for which it was obtained. The majority also found that the Respondent did not effectively repudiate the unlawful rule under Passavant Memorial Hospital, 237 NLRB 138 (1978). The Board, however, rejected the Union’s request for a broad order, finding that the Respondent did not have a demonstrated proclivity to violate the Act nor was the misconduct the type warranting a broad order. Member Johnson, dissenting, agreed with the Judge’s dismissal of the complaint, and found that the rule did not violate Section 8(a)(1). Contrary to the majority, Member Johnson agreed with the Judge that employees would not reasonably construe the rule to prohibit Section 7 activity. Charge filed by United Food and Commercial Workers International Union. Administrative Law Judge Gerald A. Wacknov issued his decision on March 22, 2013. Chairman Pearce and Members Johnson and Schiffer participated.
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American Water Works Company, Inc. a/k/a American Water Works Service Company, Inc. (29-CA-030676; 361 NLRB No. 3) Voorhees, NJ, July 31, 2014.
The Board affirmed the Administrative Law Judge’s conclusion that Respondent violated Section 8(a)(5) and (1) by unilaterally implementing the terms of its last, best and final offer, which modified certain benefit plans. Although the Board agreed with the Judge that Respondent provided effective oral notice to the Federal Mediation and Conciliation Service (FMCS), it found that the Respondent failed to comply with the requirements of Section 8(d)(3) because the Respondent gave no notice to any state mediation agency about the parties’ bargaining dispute. The Board ordered the Respondent, among other things, to bargain with the Charging Party Union for a successor to the National Benefits Agreement, to rescind its unilateral changes to certain benefit plans, and to make employees whole for losses suffered as a result of those changes Member Johnson agreed with his colleagues that the Respondent’s actual notice to FMCS was sufficient, but separately wrote that the better practice would be to provide written notice, and that, based on the parties’ bargaining history, he agreed that the Charging Party was the apparent agent of the other unions in the bargaining consortium at the time Respondent initiated bargaining. Charge filed by Utility Workers Union of America, AFL–CIO, and its subsidiaries. Administrative Law Judge Steven Davis issued his decision on October 16, 2012. Chairman Pearce and Members Hirozawa and Johnson participated.
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Unpublished Board Decisions in Representation and Unfair Labor Practice Cases
R Cases
Your Public Radio Corporation (05-RC-130206) Baltimore, MD, July 31, 2014. The Board denied the Petitioner’s Request for Review of the Regional Director’s Decision and Direction of Election. The Regional Director found that the two disputed employees are supervisors within the meaning of 2(11) of the Act. In denying review, the Board permitted the disputed employees to vote under challenge. Petitioner – Screen Actors Guild – American Federation of Television and Radio Artists, Washington – Mid Atlantic Local, AFL-CIO. Chairman Pearce and Members Miscimarra and Hirozawa participated.
Dominion Nuclear Connecticut, Inc. (01-RC-106263) Waterford, Connecticut, August 1, 2014. The Regional Director directed an election among employees in a number of classifications employed at the Employer’s nuclear power plant. The Board denied the Petitioner’s Request for Review as not raising any issues warranting review, but granted the Employer’s Request for Review as to the Regional Director’s application of the Board’s public utility standard for unit determination. The Board denied the Employer’s request for review as to several disputed classifications. Petitioner— International Brotherhood of Electrical Workers, Local 457, AFL-CIO. Chairman Pearce and Members Miscimarra and Schiffer participated.
C Cases
Laborers International Union of North America, Local 1177 (Turner Industrial Maintenance) (15-CB-005974) Baton Rouge, LA, July 28, 2014. No exceptions having been filed to the Administrative Law Judge’s findings that the Respondent had engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and ordered the Respondent to take the action set forth in the judge’s recommended Order. Charge filed by an individual. Administrative Law Judge Keltner W. Locke issued his decision on October 24, 2012.
Service Employees International Union, United Healthcare Workers-West (Permanente Medical Group, Inc.) (20-CB-113164) Oakland, CA, July 29, 2014. No exceptions having been filed to the Administrative Law Judge’s findings that the Respondent had not engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and dismissed the complaint. Charge filed by an individual. Administrative Law Judge Gerald A. Wacknov issued his decision on June 12, 2014.
Daycon Products Company, Inc. (05-CA-035687, et al.) Upper Marlboro, MD, July 29, 2014. No exceptions having been filed to the Administrative Law Judge’s Supplemental Decision regarding the amounts of backpay due the discriminatees, the Board adopted the judge’s determination of amounts of backpay due and ordered the Respondent to pay the amounts set forth in the Judge’s recommended Order. Charges filed by Drivers, Chauffeurs and Helpers Local Union No. 639, a/w International Brotherhood of Teamsters. Administrative Law Judge Eric M. Fine issued his supplemental decision on June 16, 2014.
Aerostar Development, Inc. d/b/a Pajaro Valley Golf Club (32-CA-111385) Watsonville, CA, July 29, 2014. No exceptions having been filed to the Administrative Law Judge’s findings that the Respondent had engaged in certain unfair labor practices, the Board adopted the judge’s findings and conclusions, and ordered the Respondent to take the action set forth in the Judge’s recommended Order. Charge filed by Unite Here Local 483. Administrative Law Judge William L. Schmidt issued his decision on June 12, 2014.
American Baptist Homes of the West d/b/a Piedmont Gardens (32-CA-078124 and 080340) Oakland, CA, July 31, 2014. The Board denied the Charging Party Union’s motion for reconsideration of the Board’s May 12, 2014 Decision and Order finding that the Respondent violated Section 8(a)(1) of the Act by posting a sign in an employee break room stating that union meetings were prohibited there, by maintaining a policy prohibiting employees from remaining on its premises after their shift unless previously authorized by a supervisor, and by enforcing that policy against two employees who sought access to the Respondent’s premises to engage in protected activity. In its motion, the Charging Party requested, for the first time, several additional remedies, including an order requiring the Respondent to post a notice in its employee break room and to provide employees a copy of the Board’s decision upon request. The Charging Party also urged the Board to offer a toll-free telephone number for employees to call when contacting the Executive Secretary to request hard copies of Board decisions. The Board found that the Charging Party had not identified any material error or demonstrated extraordinary circumstances warranting reconsideration under Sec. 102.48(d)(1) of the Board’s Rules and Regulations. Charges filed by Service Employees International Union, United Healthcare Workers-West. Members Miscimarra, Johnson, and Schiffer participated.
Durham School Services, L.P. (32-CA-077078 and 32-RC-066466) Campbell, CA, July 31, 2014. The full Board denied the Charging Party Union’s motion for reconsideration of the remedies in the Board’s Decision and Order reported at 360 NLRB No. 85 (2014). The Board found that the Charging Party did not identify any material error or demonstrate extraordinary circumstances warranting reconsideration. Charges filed by Freight, Construction and General Drivers, Warehousemen & Helpers – Teamsters Union Local No. 287, affiliated with International Brotherhood of Teamsters, Change To Win. Chairman Pearce and Members Miscimarra, Hirozawa, Johnson, and Schiffer participated.
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Appellate Court Decisions
No Appellate Court Decisions involving Board Decisions to report.
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Administrative Law Judge Decisions
Oregon School Employees Association Chapter 204, American Federation of Teachers, Local 6732 (First Student, Inc.) (19-CB-106045; JD(SF)-39-14) Gresham, OR. Administrative Law Judge Eleanor Laws issued her decision on July 28, 2014. Charge filed by an individual.
International Brotherhood of Electrical Workers, Local Union 357, AFL-CIO (Desert Sun Enterprises Limited d/b/a Convention Technical Services) (28-CC-115255; JD(SF)-38-14) Las Vegas, NV. Administrative Law Judge Gerald A. Wacknov issued his decision on July 28, 2014. Charge filed by Desert Sun Enterprises Limited d/b/a Convention Technical Services.
The Conklin Group LLC, d/b/a Massage Envy (15-CA-117947 and 119538; JD-44-14) Panama City, FL. Administrative Law Judge Michael A. Rosas issued his decision on July 28, 2014. Charges filed by individuals.
Hyatt Corporation d/b/a Hyatt Regency Scottsdale (28-CA-112474; JD(SF)-29-14) Scottsdale, AZ. Administrative Law Judge Dickie Montemayor issued his decision on July 31, 2014. Charge filed by an individual.
The Boeing Company (19-CA-093656; JD(SF)-36-14) Seattle, WA. Administrative Law Judge Dickie Montemayor issued his decision on July 31, 2014. Charge filed by Society of Professional Engineering Employees in Aerospace, affiliated with International Federation of Professional & Technical Engineers, Local 2001.
Commercial Air, Inc. (25-CA-092821, et al.; JD-47-14) Lebanon, IN. Administrative Law Judge Paul Bogas issued his decision on August 1, 2014. Charges filed by Indiana State Pipe Trades Association and U.A. Local 440, AFL-CIO.