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Labor Relations News Update June 4, 2014

Today’s Labor Updates:

Next UAW Chief to Confront Wage Dispute

Italy: Bring your own device

UPDATE 1-Norwegian oil dispute set for mediation after wage talks break down

Record number of federal wage and hour lawsuits filed under the Fair Labor Standards Act 


Next UAW Chief to Confront Wage Dispute

Dennis Williams Must Address Legacy of Auto Industry Downturn

By  Christina Rogers

June 2, 2014 12:52 p.m. ET

DETROIT—The likely next president of the United Auto Workers plans to attack the two-tier wage system that divides workers at Detroit car makers, setting the union up for a confrontation with companies intent on keeping labor costs down.

“It’s time to bridge the gap,” said UAW Secretary-Treasurer Dennis Williams, whose nomination as president will be put to a vote at the union’s convention this week.

A two-tier wage structure was negotiated by the three Detroit auto makers in 2007 as a way to make their labor costs more competitive with foreign car makers’ U.S. plants. Under the structure, newer hires’ pay is capped at about $19 an hour while veterans make $28 an hour—a split that rankles many younger workers.

Chrysler Chief Executive Sergio Marchionne last month said he wanted to do away with the higher tier, phasing it out as veterans retire.

Mr. Williams, a 61-year-old former Marine and salvage welder from Rock Island, Ill., made his mark in the UAW as a regional director in Chicago, negotiating with companies such as heavy-equipment maker  Caterpillar Inc. and farm-equipment manufacturer  Deere  & Co.

In the late 1980s, he was part of a successful effort to organize workers at a  Mitsubishi Motors Corp. factory in Normal, Ill., currently the only Japanese-owned auto assembly plant in the U.S. represented by the UAW.

The UAW’s next president will inherit an organization that is undergoing profound change. Despite the name, only about half the UAW’s members work in the automotive sector today.

The rest are teachers, nurses, social workers, and other public and private sector workers. The UAW’s largest local is in Lansing, Mich., and it represents about 17,000 state employees.

As did current UAW President Bob King, Mr. Williams plans to continue to push for a union presence at foreign-owned auto plants in the U.S., despite a string of failures including a loss earlier this year at  Volkswagen AG ‘s Chattanooga, Tenn., assembly plant.

Mr. Williams and other UAW officials blame the defeat in Tennessee on outside political pressure. “We learned a great deal of lessons about being more cautious about who is out there trying to undermine the process,” Mr. Williams said. “We’ll be more prepared. We’re going to communicate differently.”

Mr. King on Monday linked abolishing two-tier wages with organizing foreign car plants in the U.S. “The fastest way to get rid of the two-tier wage…is by organizing the competition, he said at the convention.

Although he inherits some old battles, Mr. Williams has shown himself to be astute about business and cost cutting as secretary-treasurer.

He has worked to improve the union’s finances, proposing to off-load union-staff retirement health benefits to a separate medical trust, just like those of retired Detroit auto workers. The move would save between $15 million and $20 million a year.

Troy Clarke, CEO of  Navistar International Corp. , where Mr. Williams is a member of the board, calls the union official among a new generation of business-minded UAW leaders. “He’s very conversant in the business jargon we use, so that bargaining takes place on a higher plane,” Mr. Clarke said.

While the UAW remains one of the largest and richest U.S. industrial unions, it is fighting to expand membership, wrestling with tightening finances and dealing with political setbacks in the South and Midwest.

Its ranks grew slightly last year to just over 391,000 people, but far off the peak of 1.5 million members in 1979.

To balance its budget, the UAW has cut spending by nearly 23% over the last five years and sold about $245 million in assets. It also has tapped its strike fund for operating expenses.

The UAW this week will ask members to approve a 25% increase in dues—the first increase since 1967—to rebuild its strike fund. The fund last year stood at $627 million. In 2006, it had more than $900 million. The UAW will be free to call strikes next year if it can’t agree on a contract with the Detroit car makers. In the 2011 talks, the UAW was barred from striking  General Motors Co. and Chrysler Group LLC under the terms of the federal auto-bailout agreements. “Do we plan on striking? No one wants a strike,” Mr. Williams said. He described the strike fund as “a deterrent.”

A potential risk for the UAW’s next round of talks with auto makers is that the companies employ nearly 58,000 union-represented workers in Michigan, who could withhold dues if they don’t like the next contract. Michigan became a right-to-work state last year, allowing workers to opt out of paying union dues.

Mr. Williams said he wasn’t worried about that. In Iowa, a right-to-work state, where Deere has many of its factories, UAW participation is close to 98%, he said.

“We’ve already got contracts [in Michigan] that have expired, not in autos, but for state workers and a lot of independents,” he said. “We don’t see the numbers dropping.”

Write to Christina Rogers at


Italy:Bring your own device

Contributed by Stanchi Studio Legale

June 04 2014

Many companies are moving towards a new communication model whereby they recall all company BlackBerrys or smartphones and instead ask employees to install an application on their own device for business use. While there are obvious savings to be made on hardware costs, this development has caused some consternation among the employment law community in relation to issues such as increased access to personal employee information, as well as potential difficulties in retrieving relevant company-owned information in the event of litigation.

What employment issues must companies consider in deciding whether to switch to the bring your own device (BYOD) model? Are there any specific issues that organisations with a global presence, or those in highly regulated sectors, should bear in mind?

The main issues concerning the BYOD model relate to:

·       the protection of business information;

·       the ability to control data;

·       the need to respect employees’ privacy; and

·       the effect of social security contributions on fees paid as consideration (which are due as this is considered employment compensation).

From a regulatory point of view, generally speaking, the only major issue is the need to verify compliance with the regulations of each country in which the organisation operates. A specific point to consider is exposure to criminal offences (eg, for the transport of pornographic material through devices), which will vary from country to country.

How do privacy laws, employment laws and protecting a company’s confidential information overlap or intersect on this issue – and how can they be reconciled, given their disparate aims?

The main issue to consider is the monitoring of employees through devices, which is governed by Article 4 of the Workers’ Statute (Act 300/1970). The use of BYOD implies the need either to conclude specific agreements with trade unions or to request authorisation from the Territorial Directorate of Employment in accordance with the law. Article 4 prohibits the use of audiovisual equipment or other equipment designed to monitor workers remotely. Moreover, Article 4 emphasises that where organisational or production reasons require the use of devices that could facilitate such monitoring, installation or use of the device requires the prior agreement of trade union representatives. In the absence of such agreement, the employer must submit an application to the Labour Inspectorate.

The use of any device that could potentially monitor employees also constitutes a criminal offence. Section 113 of the Personal Data Protection Code (which is identical to Section 4 of the Workers’ Statute) provides that breaches will be penalised pursuant to Section 38 of the Workers’ Statute, which governs criminal provisions.

For those that make the switch to BYOD, how can the confidentiality of both employer and employee be preserved? And who owns the information on the device – the employer or the employee?

The concept of an ‘internet environment’ under Italian law should be borne in mind, in order to ensure adequate protection of the data contained on internet-enabled devices.

Section 615ter of the Criminal Code makes it a crime to access a computer system without authorisation, and penalises parties who unlawfully break into a computer system that is protected by safety measures and who continue to access the computer against the will – whether tacit or express – of the party that is entitled to prohibit such activity.

Pursuant to Article 14 of the Constitution, which protects the home (ie, an individual’s domestic environment), criminal law treats the ‘internet environment’ as a domestic space, provided that appropriate security measures are in place which establish the confidential nature of the information stored in the processing unit. Access to this internet environment must be limited to persons authorised by the owner. In this context, the employer is the owner of the business information stored on the device.

Where a clear distinction between the employer’s software and that belonging to the employee has not been established on the employee’s device, the employee may refuse to subject the device to monitoring. In this case, the employer can monitor the use of business data only by invoking the criminal law provisions, which requires the involvement of a judge and the employer’s compliance with all requirements for this type of protection (eg, subjective unlawful purpose). The BYOD model thus diverges from the traditional model governing business devices: under the BYOD model, the company may not be in a position to ensure adequate protection of business-related information.

In order to ensure adequate protection of an employee’s domestic internet environment, the employer and employee should delineate the areas which each may access and use through the establishment of job descriptions, policies and technical boundaries. Once the employer has established certain limits, any use of the company IT system which breaches these established rules can constitute a violation of the employer’s organisational arrangements.

Protection of the company IT system is severely impaired if the device is owned by the employee, as under the BYOD model, because the employee has the right to exclude others from his or her internet environment. In this respect, the employer-employee relationship is reversed when compared with the traditional model, where the employer owns the device.

How can companies separate out which information sent or received on the device is official and business related? And how can employer access to information be assured?

The BYOD system necessitates the installation of a specific browser to access company email exclusively and also requires a specific disk section reserved for the use of company data. As a consequence, the employer must reach agreement with the employee on both the partitioning of personal and company systems and the exclusive use of the disk section reserved for company purposes. The agreement must provide for compensation to the employee.

Despite these measures, the employee may still be able to steal or pass on company information through other browsers without the employer’s knowledge or consent.

What happens in the event of a security breach? Is the employee protected from liability? What steps can a company take to prevent an employee leaving the company from taking company confidential information via his personal device? And how can the employee’s own personal information be safeguarded in the process?

In this respect, and in light of the conditions discussed above, the employee’s liability is the same as if a company device were used. The formal protections can be extensive and depend on the specific agreements in place; therefore, protection with immediate effect is evidently impossible.


UPDATE 1-Norwegian oil dispute set for mediation after wage talks break down

Wed Jun 4, 2014 2:18am EDT

* Fourth round of wage talks to fail

* Strike two years ago firmed oil prices (Adds background)

(Reuters) – Wage talks between oil companies and the largest union representing land-based oil workers in Norway have broken down and are heading to state-appointed mediation, the Norwegian Oil and Gas Association said on Wednesday.

The negotiations over pay and work conditions affect about 5,000 employees working for Statoil, BP, ConocoPhillips and Shell, among others.

This is the fourth round of talks involving oil workers to head for mediation. So far talks between the companies and platform workers, oil services employees and those operating onshore supply bases have failed to agree a deal.

“Industri Energi did not accept our last offer and chose to walk out of the talks while Safe, Parat and Negotia asked for more time,” the Norwegian Oil and Gas Association said in a statement.

These talks will resume after local unions negotiate their own deals, the Safe union said in a separate statement.

Two years ago about 10 percent of Norway’s offshore workers went on strike for 16 days, cutting oil output by 13 percent and gas by 4 percent.

The dispute ended when oil companies threatened a full lock-out and the government stepped in to impose a deal. The strike then pushed oil prices above $100 a barrel.

The first mandatory mediation is scheduled for June 16-17 and unions said that if talks fail they would shut down two ExxonMobil and one GDF Suez platform with combined production of about 80,000 barrels of oil per day. (Reporting by Gwladys Fouche; Editing by David Goodman.



Record number of federal wage and hour lawsuits filed under the Fair Labor Standards Act

There are several steps that in-house counsel may want to take in response to the data

By Ed Silverstein May 21, 2014

There was a record high for federal wage and hour lawsuits filed under the Fair Labor Standards Act during the 2013-2014 year.

Some 8,126 FLSA cases were filed between April 1, 2013 and March 31, 2014, according to data from the Federal Judicial Center. That is almost 5 percent more than the number of lawsuits filed in the prior year’s period.

The latest increase was the seventh straight year of increases for these types of cases. In fact, FLSA cases have jumped 438 percent since 2000.

Richard Alfred, chair of Seyfarth’s Wage & Hour Litigation practice, said in a statement, “We expect this trend to expand further in the coming year.”

Among the reasons why the increases will continue is the tightening of standards for class certification. That has led plaintiffs’ attorneys to file many single and multi-plaintiff lawsuits when class certification is denied or a class is decertified, the law firm explained.

Other reasons for the jump are discussions on raising the minimum wage, and a directive to revise the regulations on white-collar exemptions.

“We expect that the DOL’s [Department of Labor] current efforts to revise the ‘white collar’ exemptions, as ordered by the President, will cause exempt employees not receiving overtime to challenge their classification with greater frequency and non-exempt employees to contest more often uncompensated activities,” Alfred said in a statement. “This will predictably lead to even greater increases in the number of wage and hour lawsuits filed against employers.”

When considering how the data impacts businesses, Alfred explained to InsideCounsel that, “the best course for in-house counsel to take to reduce the risk of or avoid wage and hour litigation is to audit their company’s exempt classifications and pay practices for compliance with federal and applicable state laws.”

“We recommend paying particular attention to exemptions that may be lightning rods for legal claims, such as those under the administrative exemption, for example loan officers in financial services and adjusters in the insurance industry; and the executive exemption, for example in the retail industry as may be applied to store managers and assistant store managers,” he added.

When auditing pay practices, Alfred said that in-house counsel may want to consider how “meal and rest breaks are taken, unpaid pre- and post-shift activities, and the use of technology devices by off-shift non-exempt employees. It is also important to review the method used by your company to determine the regular rate used in computing overtime to ensure that all required forms of compensation are included.”


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