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Labor Relations News Update July 28, 2014

Today’s Labor Updates:

Fair Labor Standards Act case filings continue to rise

NLRB ruling further expands ‘micro unions’

Top 10 NLRB Issues to Monitor the Rest of the Year

Judge: Mercedes violated labor laws regarding unions; ruling did not impose any fines



Fair Labor Standards Act case filings continue to rise

Husch Blackwell LLP

July 22 2014

According to Federal Judicial Caseload Statistics, nearly five percent more Fair Labor Standards Act cases were filed between April 1, 2013 and March 31, 2014 than during the same period in 2012-2013.  This 2013-2014 total of 8,126 newly-filed FLSA cases is nearly 2,500 more than the 2008-2009 total of 5,644.

Click here to view chart

Source:  Federal Judicial Caseload Statistics

All employers should evaluate their wage and hour practices to ensure they are in line with current applicable law and regulation.  In particular, the FLSA’s agricultural exemptions can be difficult to understand—particularly given the differences between federal and certain state law.  Child labor restrictions, unpaid breaks, and travel time are some of the issues that can easily trip up agricultural employers.

FLSA litigation is expensive and time-consuming.  An ounce of prevention is definitely worth a pound of cure in this area.


NLRB ruling further expands ‘micro unions’

By Sean Higgins  | July 24, 2014 |

In a case involving a Macy’s department store cosmetics counter, the National Labor Relations Board on Tuesday further expanded its recent precedents allowing for so-called “micro-unions.” The ruling will make it easier for unions to organize individual parts of an employer’s workforce, a strategy Big Labor is increasingly turning towards to bolster its sagging membership.

Until recently, federal labor law required that a union must try to get the backing of a majority of all a workplace’s employees to be certified. This can create a fairly high bar that labor organizers cannot always clear. However, in a 2011 case called Specialty Hardware, the NLRB reversed decades of precedent and said it would allow the organization of individual groups in a workforce.

A three-member board majority — all appointed by President Obama and one a former top AFL-CIO lawyer — expanded that precedent further Tuesday in the case of Macy’s and Local 1445 United Food and Commercial Workers. Specifically, they affirmed a regional NLRB director’s decision to allow the UFCW to pursue unionizing just the store’s cosmetics salespeople.

The practical effect of the decision will be to make it easier for unions to organize those particular sub-groups of employees inclined to support them, giving them a foothold in workplaces where they otherwise would not be able to sustain a labor group.

In it’s decision the majority argued that cosmetics sales was so vastly different from anything else in the store that it justified singling out that staff as a distinct group to be organized. Among other things, the NLRB cited as a compelling reason the fact that: “Fragrances beauty advisors also keep client lists, which they use to invite customers to new fragrance launches.”

In a dissent, Republican nominee Philip Miscimarra said the decision “departs from the board’s long-held retail-industry standards.” He argued the majority’s standard was absurdly broad and could easily apply to any other employee group: “Salespeople across the store must have specialized, technical knowledge about the products they sell.”

NLRB boardmember Kent Hirozawa, one of the three-member majority, wrote a separate opinion responding to Miscimarra defending the decision. He nevertheless conceded the significance of the change, noting that it would likely boost organized labor.

“If the result is that parties are better able to predict which potential units will be found appropriate, and consequently more petitioned-for units are approved, we should view that not as suspicious, but as a success,” Hirozawa concluded.


Top 10 NLRB Issues to Monitor the Rest of the Year

By Richard Hankins, Seth Borden, Brennan W. Bolt and Cary Burke on July 25, 2014 1.  Aftermath of Noel Canning

The Supreme Court determined in late June of this year that President Obama’s purported recess appointments to the National Labor Relations Board were unconstitutional.  Hundreds, or potentially even thousands, of Board decisions issued by the improperly-constituted Board could be affected by the Court’s ruling.  Administrative actions taken by the Board and the former Acting General Counsel, Lafe Solomon, could also be affected by the decision.  Interestingly, Member Craig Becker, whose term in office was also effectuated via recess appointment, was deemed to be properly-appointed in a recent decision by an Administrative Law Judge, so presumably cases issued during his tenure are unaffected.

2.  Quickie Election Rules

After the Board’s 2011 efforts to adopt new rules designed to shorten the time between petitions and union elections were found to be procedurally defective, the Board announced in February 2014 that it was proposing virtually the same rules anew.  The Board held a public hearing, and the public comment period closed in mid-April.  While no date for final determination has been announced, a decision will likely come by the end of 2014.

3.  Micro Units

This week’s decision in Macy’s, Inc., finding appropriate a bargaining unit consisting only of cosmetics and fragrance employees represents a significant break from the Board’s long-standing practice of upholding only store-wide units in the retail industry.  It certainly reveals that the Board’s 2011 decision in Specialty Healthcare is alive and well.  Another micro-unit case — Bergdorf Goodman, Case No. 2-RC-076954– is pending at this time.  While that case also arose in the retail industry, application of the Macy’s/Specialty Healthcare framework to the facts of that case may shed additional light on how micro-unit cases will be approached in all industries.

4.  Employee Access to Employer Communication Systems

In May, 2014, the Board invited amicus briefs in the Purple Communications case, with an eye toward creating special rules for employee access to employer email systems for union activities. Currently, the Board’s Bush-era Register Guard decision governs these decisions, holding that employers can enforce a blanket-ban on non-work-related use of its email system so long as the ban is non-discriminatory and consistently applied.  The General Counsel’s position, summed up in its brief filed in the case is that employees should “have a statutory right to use [the employer’s email] systems for Section 7 purposes during nonwork time, absent a showing of special circumstances relating to the employer’s need to maintain production and discipline.”  Such a holding would not only reverse the Register Guard holding, but would depart from decades of Board precedent holding that employees have no right to use employer equipment for union organizing activities. On June 24, 2014, the House Subcommittee on Health, Employment, Labor and Pensions (HELP) conducted a hearing concerning the National Labor Relations Board’s current agenda, including the issue of employee access to employer email systems. Briefing in Purple Communications has concluded, and thus the case is ripe for decision.

5.  Joint Employer Standard

In May 2014, the Board invited interested parties to submit amicus briefs in Browning-Ferris Industries, a case involving the routine application of the Board’s decades-old standard for determining whether two or more businesses may be found to be “joint employers.”  Under the existing standard, two or more employers must “share or co-determine matters governing essential terms and conditions of employment.” Predictably, unions and their allies submitted briefs proposing that a much broader standard be adopted.  The NLRB’s General Counsel’s brief argued that the Board should abandon its current joint employer standard in favor of an amorphous “totality of the circumstances” test.  The briefing period for amici closed on June 26, 2014, and the case appears to be ripe for decision.

6.  Deferral to Arbitration

Back in February of this year, the Board solicited briefings on whether it should “continue, modify or abandon the Olin/Spielberg standard for deferral to arbitration awards.”  The existing standard has been good law for many years, but has recently come under attack from former Acting General Counsel Lafe Solomon.  The current General Counsel is also advocating for a new standard, which would place the burden of proof on the party seeking deferral to demonstrate that (1) the collective-bargaining agreement incorporates the statutory right, or the statutory issue was presented to the arbitrator, and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue.  Briefing on the issue has concluded and labor watchers expect a ruling in the coming months.

7.  Persuader Rules

The much-anticipated and long-delayed Department of Labor rule narrowing drastically the scope of the “advice exception” to the so-called persuader regulations in the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) remains a very significant issue to be watched.

8.  Appointment of Sharon Block

The term of Board Member Nancy Schiffer, one of three Democrats on the five-member Board, expires December 16, 2014.  President Obama has announced that he intends to appoint Democrat Sharon Block to replace Member Schiffer.  Ms. Block was one of the attempted recess appointments invalidated by the Supreme Court in Noel Canning.  If Ms. Block’s appointment is confirmed by the Senate, the Democrats will maintain the existing 3-2 majority on the Board.

9.  Successor Employer Obligations

In 2011, the Board overturned existing precedent and held that, where a new employer is determined to be a successor employer after a sale or merger, no challenge to a union’s representational status may be raised for a “reasonable” time after the transaction.  NLRB General Counsel Richard Griffin has indicated that additional changes may be in the works impacting successor employers.  Under current law, even though a successor employer has an obligation to bargain with the union representing the predecessor’s employees, the successor may, in most instances, unilaterally determine the initial terms and conditions of employment for those employees.  On February 25, 2014, General Counsel Griffin wrote that his “initiatives or policy concerns” included “[c]ases involving the issue of whether a perfectly clear successor should have an obligation to bargain with the union before setting initial terms of employment.”  He is expected to request the Board to change the existing law in this area.

10.  Rights of Non-Union Employees

The Board and General Counsel Griffin are focused on addressing the rights of non-union employees. The Board has already issued a number of decisions affecting non-union employees such as cases involving employer work rules, rules against gossipconfidentiality rules, disciplining employees’ for insubordinate conduct while engaged in protected activity, as well as others. Meanwhile, General Counsel Griffin has identified multiple initiatives directed at non-union employees for which it wants to give guidance to the Regions. For example, he has publicly stated that one of his major focuses for the next term will be eliminating workplace rules stating that employees cannot discuss wages. In addition, he has directed that matters involving the following issues are to be submitted to the General Counsel’s Division of Advice:

  • the applicability of Weingarten principles in non-unionized settings;
  • at-will” provisions in employer handbooks
  • the rights of contractor employees, who work on another employer’s property, to have access to the premises to communicate with co-workers or the public; and
  • mandatory arbitration agreements with a class action prohibition.

Honorable Mention

While affecting a small subset of private employers, the Northwestern University case presents interesting issues about when students are “employees” under the National Labor Relations Act. In Northwestern, the Regional Director found that the university’s football players are not primarily students, and thus are “employees” under the Act and able to form a union. The players voted in a union election on April 25, but the ballots were impounded pending a decision by the Board on the university’s appeal of the Regional Director’s decision. The Board’s decision will not only address the status of football players under the Act, but also likely the continued viability of the Board’s 2004 decision in Brown University, holding that graduate students are not “employees” under the Act. Brown University reversed the Board’s 2000 decision in New York University holding for the first time that graduate assistants are “employees.” Briefing concluded on July 10, so the case is now ready for a decision.


Judge: Mercedes violated labor laws regarding unions; ruling did not impose any fines

By Patrick Rupinski Business Editor

Published: Friday, July 25, 2014 at 11:00 p.m.

A National Labor Relations Board administrative law judge has ruled that Mercedes-Benz U.S. International in Vance committed three violations of labor laws in dealing with employees interested in forming a union.

The 27-page ruling, issued Thursday, did not impose any fines but ordered MBUSI to revise the rules in its employee handbook on the solicitation and distribution of materials at the auto manufacturing plant in Vance.

NLRB Administrative Law Judge Keltner W. Locke issued the ruling in response to a complaint, filed last year, that accused Mercedes management of unfair labor practices.

Locke conducted a three-day trial-like hearing in Birmingham in April at which the United Auto Workers and Mercedes employee Kirk Garner, the lead plaintiff, said Mercedes managers had stymied pro-union employees’ efforts to distribute information about the union at the plant.

Mercedes’ attorneys contended the only restrictions imposed were designed to assure worker safety and smooth production on the auto assembly lines and other production areas.

In his ruling, Locke said employees who are not on working time can solicit support for a union from other employees who are not on work time even if they are in work areas. He specifically mentioned the atrium inside the main entrance area of the plant, where employees gather before heading into the plant and team centers inside the plant near the employees’ work areas where employees gather before the start of their shifts and where they often go during breaks and lunchtime.

According to testimony at the April hearing, a Mercedes supervisor had told employees they could not solicit for a union in the atrium, but the company had rescinded that action and allowed union discussions in the atrium. Mercedes’ attorneys argued at the hearing that that part of the complaint was moot, but Locke said he wanted it included in his order.

Locke also ordered Mercedes to post a notice to its employees advising them that the NLRB has found the company in violation of the federal labor law. That notice will state that the company will not prohibit employees who are not on work time from distributing literature or discussing unions or other matter relating to wages, hours, terms and conditions of employment with other employees not on work time.

Mercedes, in a written statement to The Tuscaloosa News, said:

“The judge’s ruling largely validates our position that we never violated any team member’s rights. We are especially pleased that the judge found no credible evidence of threats or harassment. The judge also stated that MBUSI truly sought to be neutral at all times and not to interfere with team members.

“There are aspects of the ruling that we don’t agree with and we are evaluating next steps. In the meantime, we will continue to focus on building world-class vehicles and growing the positive team culture that has produced over 20 years of success.”

Tom Scroggins, an attorney at Rosen Harwood PA who specializes in labor law, but who was not involved in the case, said after reading the decision that the judge “ruled in favor of the UAW on some very minor violations.”

Both sides have 28 days to appeal the decision to the National Labor Relations Board. If no appeal is made, Locke’s orders take effect.

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