Today’s Labor Updates:

It’s not all about the benjamins – what really makes an exempt executive

Revitalized National Labor Relations Board sets an aggressive course

FEBRUARY 2014 Select events and news from the world of organized labor

Boeing to Freeze Pension Benefits for 68,000

 

It’s not all about the benjamins – what really makes an exempt executive

Timothy M. Rusche, Jonathan L. Brophy and Jennifer J. Wiegley

USA  March 5 2014

It seems simple enough. You hire an employee as a manager, you call her a manager, you pay her like a manager – voila! You don’t have to pay overtime, right?  Not so fast.

Entrepreneurial lawyers and disgruntled employees frequently attack “exempt” classifications to recover overtime pay, missed rest break and meal period pay, and other penalties. To avoid being an easy target, it is critical that employers avoid common pitfalls (like reading this blog with less than rapt attention!) and take affirmative steps to protect the exemption.

The Test:

In addition to earning at least two times the minimum wage, generally speaking, the “executive exemption” requires employees to spend most (i.e., the majority) of their time on management tasks, to regularly exercise discretion and independent judgment, and to supervise at least two employees.  In addition, their recommendations for changes in employment status, like hiring and firing, must be given particular weight.

Common Pitfalls:

1. Bigger Salaries Are Not Always Better.   Just because an employee receives a high salary does not make him or her exempt under California law.  Regardless of the size of salaries, employees still must meet the other requirements of the exemption.
2. A Job Title By Any Other Name Would Smell As Sweet.  If an employee is not  actually performing managerial or related duties more than 50% of the time or meeting the other requirements of the exemption, neither an impressive job title nor a detailed job description will save the exemption.
3. To Deduct, Or Not To Deduct, That Is The Question.  Employers cannot deduct from exempt employees’ salaries for poor performance, lack of work, or some kinds of missed work days.  Employers must consider alternatives to salary deductions for disciplinary measures in order to protect the exemption.
4. Give Them An Inch And They Will Take a Mile. While discretion is the better part of valor, and the exercise of discretion and independent judgment is an essential element of the exemption, unfettered discretion can actually hinder an exemption defense.  Employers must allow exempt employees to exercise discretion, but when exempt employees are free to work as they please with zero oversight, employers can face an uphill battle when employees argue that they used their discretion to perform mostly nonexempt duties.
5. Lean Is Good But Too Skinny Is Dangerous. While all businesses strive to run efficiently, employers should provide exempt employees sufficient resources so that they are not compelled to spend most of their time performing nonexempt work.
6. Independent Contractors May Not Fit the Bill. Exempt employees must supervise at two least other employees. The supervision of independent contractors or employees of contractors may be attacked as insufficient.
7. Allow Exempt Employees To Rule The Roost.  Oftentimes employers vest hiring and firing decisions in their Human Resources or other departments, or high atop the chain of command.  If an exempt employee’s recommendations regarding hiring and firing or other changes in employment status are regularly ignored, the employee may not qualify for the executive exemption.

Workplace Solutions:  How can you protect executive exemption classifications?  Below are a few tips:

1. Remind Employees To Keep You Posted.  Provide written reminders to your executive employees, both upon hire and throughout their employment, that they need to alert someone in Human Resources if they think they are not spending most of their time on exempt tasks.
2. Institute An Open Door Policy.  Consider implementing an open door policy that specifically instructs employees to raise any concerns about how much time they might be spending on nonexempt duties.
3. Create Unique Job Descriptions.  Review job descriptions to ensure that an employee performing in accordance with that description would meet the test for the exemption.
4. Conduct Periodic Training.  Institute periodic training for managers that specifically instructs them on the expectations of employees subject to the executive exemption.
5. Be Mindful Of Loss Of Direct Reports.  Instruct your Human Resources department to keep track of direct reports to ensure that employees classified as exempt executives supervise at least two full-time equivalent employees.
6. Require Self-Evaluations Regarding The Exemption Test.  If your company uses self-evaluations as part of a performance review process, solicit self-evaluation in categories related to the exemption test.  For example, ask employees to:

·       Describe how they have exercised discretion and independent judgment in managing their departments;

·       Describe how they have exercised discretion and independent judgment in supervising subordinates; and

·       Describe how they have helped the department through employee growth and retention.

1. Require Periodic Signed Acknowledgements.  Have your employees sign periodic acknowledgments that they spent more than 50% of their time on exempt tasks during the applicable time period.

 

 

Revitalized National Labor Relations Board sets an aggressive course

Douglas A. Hass and David G. Weldon

March 3 2014

The National Labor Relations Board is now operating at full strength with five Board members who were properly nominated and confirmed. As a result, employers should expect increased activity as the Board seeks to make up for lost time. All signs point to a fully engaged Board as it seeks to resuscitate its “quickie” election rule and churns out decisions that play a role in shaping the workplace for union and non-union employers. The following provides an update on recent Board decisions and developments, including the latest “quickie” election developments.

Board Sets Public Hearings on Quickie Election Rule

As we recently reported, the Board indicated that it would reissue its controversial quickie election rules, first proposed in June 2011, in the coming months. The Board announced late in February that it has scheduled the first of at least two public meetings to address its latest effort to drastically streamline union elections. The meetings will be held on April 10 and April 11, 2014 in the Margaret A. Browning Hearing Room (Room 11000) at the Washington D.C. headquarters, starting at 9:30 a.m. Parties who want to speak at the event must submit a Request to Speak no later than March 10, 2014, and those who want to watch the proceedings must submit a Request to Attend, which must be received by the Board no later than March 31, 2014. Information about these requests is described in detail in the Federal Register notice announcing the public meetings. Topics to be discussed during the meetings include: petitions and pre-hearing issues; pre-election hearings; voter eligibility lists; requests for review; timing of elections; post-election hearings; and other post-election procedures. The Board’s notice also observes that it may hold additional meetings on April 8 and/or April 9, 2014.

Board Strikes Down Employer’s Overbroad Baseball Cap Policy

In February, in World Color Corp., the Board affirmed an ALJ’s decision which found that the employer’s baseball cap policy was overbroad and violated Section 8(a)(1) of the National Labor Relations Act. The policy prohibited employees from wearing baseball caps, except for official company caps with the company logo, purchased from the employer at the employee’s expense. Employees generally have the right to wear clothing with union insignia, unless the employer can establish the existence of “special circumstances” that outweigh the employees’ right. In this case, the employer offered safety concerns as the basis for the policy, but it failed to provide any evidence to establish that allowing employees to wear union baseball caps would jeopardize employee safety. Accordingly, the Board held that the policy violated employees’ right to engage in the protected activity of wearing union baseball caps, and ordered the employer to either rescind or modify the unlawful policy.

Board Holds that Union Picketing Does Not Extend to Social Media

Also in February, a divided Board panel ruled that the NLRA did not require a union to disavow and remove from its Facebook page disparaging comments posted by its members aimed at workers who chose to cross a picket line. On behalf of those workers, the General Counsel had argued that failing to disavow the online threats was no different than failing to disavow threats by picketers on a real world picket line. The General Counsel contended that the union’s public Facebook page amounted to an “electronic extension” of the real picket line. The Board upheld an ALJ’s finding that, unlike a picket line, a Facebook page “does not serve to communicate a message to the public” and was “private.” This reasoning appears to run directly counter to rationales supporting earlier Board decisions finding NLRA violations by employers, rather than unions, in Facebook-related cases. The Board held that the threats of physical violence made by union members did not rise to the level of Section 8(b)(1)(A) violations, and that the General Counsel had failed to demonstrate that the members were agents of the union.

Regional Director Finds Medical Residents are “Employees” and Orders Election at Queens Hospital

Last week, Region 29 ordered a representation election among resident doctors at Elmhurst Hospital Center in Queens, N.Y., finding that medical residents are employees under the NLRA, rather than students. Region 29 Regional Director James Paulsen agreed with the SEIU-affiliated union seeking to represent the residents that, under the Board’s decision in Boston Medical Center, the residents were employees within the meaning of the NLRA. In 1999, the Board held in Boston Medical Center that residents are employees based on the fact that they received compensation in the form of a stipend, workers’ compensation, paid vacations, sick leave, and health, dental and life insurance. The Icahn School of Medicine at Mount Sinai, which operates the residency program at Elmhurst Hospital, relied primarily on Brown University, a 2004 decision in which the Board ruled that university teaching assistants and research assistants were not statutory employees, and argued that the residents were “more akin to graduate students” under that decision. The Regional Director disagreed, noting that the doctors spent most of their time providing patient care without supervision and that the doctors were not registered as “students” with the Icahn School.

General Counsel Asks Board to Adopt New Standard for Deferral to Arbitration Decisions

In early February, the Board invited interested parties to file briefs in Babcock & Wilcox Construction Inc., to determine whether or not the Board should continue, modify or abandon the Olin/Spielberg standard for deferral to arbitration awards. The deferral standard comes into play where an arbitrator issues a decision in a case that also involves a pending unfair labor practice charge based on the same facts.

Under the existing standard, the Board defers to an arbitration award when (1) the arbitration proceedings are fair and regular; (2) all parties agree to be bound; and (3) the arbitral decision is not repugnant to the purposes and policies of the Act.  Further, the arbitral forum must have considered the unfair labor practice issue.  The Board deems the unfair labor practice issue adequately considered if (1) the contractual issue is factually parallel to the unfair labor practice issue, and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice issue.  The burden of proof rests with the party opposing deferral.

The Board’s General Counsel has asked the Board to adopt a different standard.  Under the General Counsel’s proposal, the party urging deferral would bear the burden of demonstrating 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.  If the party urging deferral makes that showing, the Board would defer unless the award was clearly repugnant to the Act.

The Board has invited all interested parties to file briefs, not exceeding 50 pages in length, with the Board in Washington, D.C. on or before March 25, 2014. Briefs may also be filed electronically at http://mynlrb.nlrb.gov/efile. The Board’s notice and invitation to file briefs identifies four separate questions which the Board will consider as part of its review process, including whether some other modification of the Olin/Spielberg standard would be more appropriate than the new standard proposed by the General Counsel.

Employers that operate under a union contract should be concerned about a new deferral standard. The General Counsel’s proposed standard decreases the likelihood of deferral and undermines the finality of arbitration by providing unions who lose at arbitration with a second bite at the apple if the employer cannot meet the proposed deferral standards.

General Counsel Outlines Enforcement Priorities in New Memorandum

Late last month, former NLRB Member and now General Counsel Richard Griffin released Memorandum GC 14-01, which outlined the matters that Regions must submit to the NLRB’s Division of Advice for guidance before proceeding with potential enforcement actions. The memorandum provides employers—both union and non-union—with insight into the General Counsel’s priorities for prosecuting upcoming cases.

Griffin’s memorandum divides the priorities into three groups: “the General Counsel’s initiatives or policy concerns,” cases “that involve difficult legal issues or the absence of clear precedent,” and cases involving matters that traditionally were submitted to the Division of Advice, such as those involving injunctive relief or the issuance of subpoenas after a complaint is filed.  Prominently mentioned among these priorities was the Bush-era Register Guard decision, which allowed employers to ban employees from using work e-mail systems for non-work purposes, and cases related to the Board’s decision in Alan Ritchey, which essentially held that an employer could only issue unilateral discipline during first time contract negotiations in nebulous “exigent circumstances.” The General Counsel’s priorities demonstrate that the Board continues to look to expand its reach beyond the traditional union/management setting, adding the rights of non-union employees to representation in disciplinary meetings and employer e-mail solicitation rules to its already aggressive social media and immigration enforcement efforts.

FEBRUARY 2014 Select events and news from the world of organized labor

Organizing

Auto workers at a Volkswagen AG plant in Chattanooga, Tennessee rejected, by a 712-626 vote, the United Auto Works’ (UAW) global union representation plan that had been negotiated with, and encouraged by, the company. The defeat dealt a blow to the UAW’s long-laid plans to unionize manufacturing plants in the region. The vote came just weeks after a decision by the National Labor Relations Board’s (NLRB or Board) General Counsel recommended dismissal of charges stemming from the company and union’s collaboration to convince employees to make the UAW their bargaining agent. The proposal included the formation of a works council where all employees would have been represented by elected council members. The UAW has filed objections with the NLRB alleging coercive third-party interference, and has asked the Board to set aside the election results. A small group of workers at the Chattanooga plant have asked the NLRB for permission to intervene, and have challenged the objections.

Approximately 233 Coachella Valley Water District (CVWD) employees in California voted to pull out of their union, Service Employees International Union Local 721, and instead form a new association called the Coachella Valley Water District Employee Association. The independent association will elect officers and hold regular meetings, and work with a Long Beach labor relations services firm, City Employees Associates (CEA). The Association will now send new representatives from CEA to continue negotiations with the CVWD on behalf of the employees.

An NLRB regional director ordered a representation election among resident physicians at Elmhurst Hospital Center in Queens, New York. The resident physicians are trying to organize with the Service Employees International Union-affiliated Committee of Interns and Residents. The proposed bargaining unit includes 140 interns, residents, chief residents and fellows at the hospital, who are part of a residency program operated by the Icahn School of Medicine at Mount Sinai. The regional director relied on prior Board precedent to find that the residents in this program were employees, rather than graduate students as argued by Mount Sinai.

At another Mount Sinai Health System hospital, Beth Israel Medical Center, in New York, more than 400 resident physicians filed a petition for a representation election, seeking representation by the Service Employees International Union-affiliated Committee of Interns and Residents. The hospital is arguing the residents are not employees.

A 13-member bargaining unit consisting of full and part-time staff members and writers at In These Times magazine in Chicago, Illinois, voted through a card check process for representation by the Newspaper Guild Local 32035, an affiliate of the Communications Workers of America (CWA). The campaign and subsequent unanimous vote at the non-profit magazine was unopposed by the publication’s management and board of directors.

According to the US Bureau of Labor Statistics, Tennessee was the state with the fastest rate of union membership growth in 2013. The number of union members grew by approximately 31,000, a 25 percent growth over 2012. Georgia and Alabama were a close second and third, respectively, with a 22 percent rate of growth in 2013. Georgia added 38,000 union members while Alabama added 37,000

 

Strikes & Labor Disputes

According to the U.S. Department of Labor, in 2013, for the first time in four years, the number of workers idled by major strikes or lockouts declined. Fifteen work stoppages of 1,000 or more workers idled approximately 55,000 workers, down from 19 stoppages in 2012 that affected 148,000 workers. Consequently, work time lost to work stoppages dropped by 74 percent to 290,000 workdays, or less than .0005 percent of all U.S. workdays, the lowest numbers in three years. The industries with the largest number of major strikes and lockouts in 2013 were healthcare and local government, each with four. Eight of the year’s major stoppages took place in California, including a seven-day walkout by the California Nurses Association/National Nurses United in May.

Approximately 130 United Steelworkers Local 8565 members offered “an unconditional return to work” to Rotek Inc., in Aurora, Ohio, ending an almost 13-month strike. The union initially called the strike to pressure the company in support of its negotiating position, but the parties have remained unsuccessful in reaching a new labor agreement. Yet, the union claimed the offer to return from strike without a deal was strategic because it “starts the meter running on back wages.” Rotek and the union both insist that talks are continuing in order to overcome the impasse and move forward with their negotiations.

 

Major Contract Settlements & Negotiations

An analysis of data compiled by Bloomberg BNA through the beginning of February showed that the average first-year wage increase for all settlements was 1.7 percent, compared with 2.4 percent reported in the same period in 2013. The median first-year wage increase for settlements reported to date in 2014 was two percent, the same increase as that reported in 2013, and the weighted average was 3.2 percent, compared with .9 percent in 2013. When lump-sum payments were factored into wage calculations, the all-settlements average first-year increase in 2013 was 1.9 percent, compared with 3.1 percent reported in 2013. Median and weighted average increases were two percent and 3.4 percent, respectively, the same increases reported in 2013. The all-settlements (excluding construction and state and local government) average increase was 2.2 percent, compared with 3.6 percent in 2013; the median was 2.7 percent, an increase from 2.2 percent a year ago; and the weighted average was 3.5 percent, compared with last year’s .9 percent.

The American Federation of Teachers ratified new labor contracts at Lawrence & Memorial Hospital on the heels of a strike and lockout at the New London, Connecticut, hospital late last year. The new contracts, which will run until June 30, 2016, cover approximately 540 registered nurses, and 250 licensed practical nurses and health care technicians and technologists. The central issue in the dispute over the new deal involved language related to job transfers. Though no details on the deal were released, both sides claimed satisfaction with the outcome.

The International Association of Machinists District 142 reached a five-year deal with Alaska Airlines that covers some 2,800 clerical, office and passenger service employees. The new deal is retroactive to January 1, 2014 and gives the employees a 12.3 percent wage increase over the five-year term. Terms also involved improved job security, better premium pay, and strengthened merger protections. If ratified, the deal would end 10 months of bargaining between the two sides.

AT&T Inc. and the CWA struck a tentative four-year collective bargaining agreement covering approximately 13,000 employees who work in customer service, network organizations, and sales in nine Southeastern states. The new deal provides a $1,050 ratification bonus to employees and would retroactively increase wages by a total of 9.75 percent over the four year term. Additionally, the agreement creates a new pension tier for workers, increases severance pay, upgrades certain jobs and reduces the number of steps in the wage table. The union bargaining committee unanimously recommended that its members ratify the contract.

As part of the negotiations between the International Longshoremen’s Association (ILA) Local 333 and the Steamship Trade Association in Baltimore (which represents Baltimore Port employers), the ILA Local’s 1,200 members rejected a proposed deal by Baltimore’s port management by a vote of 416-140. Union leadership encouraged members to reject the offer because it did not include certain “mandatory subjects of bargaining.” The union told members they should leverage a $3.8 million damages award that had been previously assessed by an arbitrator against ILA Local 333 for a prior work stoppage. That decision stemmed from a three-day strike that shut down the port’s terminals and was found to be in violation of a “no strike” provision of a separate master contract related to container ship cargo on the East Coast. The union had been looking to appeal the ruling and avoid paying penalties, but stated it might use possible payment of the award as incentive to strike a better bargain for its workers.

After almost seven years of bargaining, the International Brotherhood of Teamsters (IBT or Teamsters) reached a tentative four-year agreement with Republic Airways Holdings Inc. covering about 2,200 pilots over three regional airlines: Chautauqua Airlines, Republic Airlines, and Shuttle America. If ratified, the agreement would increase wages, include signing bonuses, and implement improvements to work rules and flexible scheduling. Negotiations had been ongoing since October 2007, and aided by the National Mediation Board since 2011.

A four-year agreement was ratified between the Connecticut Office of Early Childhood and the Connecticut State Employees Association/Service Employees International Union Local 2011 (CSEA/SEIU). The agreement is the first contract between the parties, and covers about 4,100, state funded, licensed and unlicensed child care service providers in the state’s Care4Kids program. The new agreement provides the first wage increases for employees in 12 years (three percent a year for four years) and changes the state department administration of the child care program from the Department of Social Services to the Office of Early Childhood. The agreement also emphasizes professional development, mandatory orientation for providers, and a way for providers to become licensed.

Members of the International Association of Machinists District 837 voted 1,269 to 449 to approve a new labor contract with Boeing Co. and a 90-month contract extension. The new agreement, covering about 2,400 employees, extends until 2022 and includes: a signing bonus of $8,000; lump-sum payments of varying amounts in 2017, 2019 and 2021; and wage raises. However, the new deal also sets the defined-benefit pension plan to expire in 2016. The union’s negotiating committee felt that approval of the contract was required to help Boeing attract new military and commercial business.

Dealers belonging to the Transport Workers Union Local 721 in Las Vegas, Nevada voted 342-27 to ratify first contracts with Caesars Entertainment Corporation, which owns Bally’s Las Vegas Hotel and Casino, Paris Las Vegas Hotel and Casino, and Harrah’s Las Vegas. Covering 1,300 table games dealers, the five-year contracts provide 29 days of leave with pay and tips, grievance and arbitration procedures, seniority, layoff and recall procedures, and healthcare plans equivalent to those that upper management has, but with low premium payments by employees. The union claims the new contracts will set the industry standard in Las Vegas.

 

Administrative, Court & Other Decisions

An NLRB Administrative Law Judge (ALJ) ruled that parts of the William Beaumont Hospital’s Code of Conduct for Surgical Services and Parianesthesia that forbade comments that went beyond “fair criticism” and proscribed behavior detrimental to “promoting teamwork” were too broad and at odds with Section 7 of the National Labor Relations Act (NLRA or Act). The ALJ reasoned that although the employer had a legitimate interest in establishing rules to maintain a safe work environment, these rules were overbroad, ambiguous and could reasonably be interpreted to prohibit lawful discussions or complaints about work activities that the Act is intended to protect. Additionally, the ALJ found that an oral instruction not to discuss an investigation into inappropriate conduct was unlawful, but upheld the employee terminations at issue in the case, ruling that the individuals would have been terminated in any event. William Beaumont Hospital and Jeri Antilla.

A three-judge panel of the U.S. Court of Appeals for the Second Circuit unanimously ruled that a former New York Institute of Technology professor was time-barred from pursuing a fair representation claim against his union. Following an arbitration where the professor’s termination was upheld, the professor filed a petition in state court to vacate the ruling. The petition was denied more than six months later, at which time the professor tried to sue the union for breach of its duty of fair representation. The panel upheld a lower federal court’s ruling that rejected the professor’s attempt to get around the NLRA’s six-month statute of limitations for employees to bring suit against their unions. Relying on precedent from other circuits, the panel reasoned that the petition to vacate did not toll the statute of limitations because the arbitrator’s decision was an “optional, parallel” method of relief, separate from his grievance against his own union. Kalyanaram v. American Association of University Professors At The New York Institute of Technology, Inc.

An NLRB ALJ held that an auto dealership must take affirmative steps to make sure its employees are aware of its new social media policy, despite having amended a prior policy after consulting with NLRB staff. Initially, a local branch of the International Association of Machinists sued the auto dealership over allegedly unlawful social media policies in its employee handbook. The policy stated that employees were barred from discussing their conditions of employment with other employees, unions or the media. Once the dealership changed the policy to comply with recent NLRB rulings, it argued the allegations were moot. However, the ALJ stated that merely changing the policy was not enough and ordered the dealership to post a notice explaining the new policy update. The ALJ reasoned that under Board precedent, merely disavowing prior unlawful statements does not always remove the need for remedial action, especially where no assurances are made by the employer to refrain from interference with employee rights in the future. Boch Imports Inc.

The U.S. Court of Appeals for the Fifth Circuit recalled the recently issued mandate from its December 2013 D.R. Horton ruling and allowed the NLRB 45 days to file a petition for a rehearing. The mandate is now stayed until March 20, 2014. Although if the NLRB decides to file a petition for certiorari in the U.S. Supreme Court, the stay would remain in place until that Court issues a final decision. The NLRB is seeking to challenge the Fifth Circuit’s rejection of the NLRB’s prior decision that mandatory arbitration agreements which bar employees from pursuing class or collective actions violate workers’ rights under the NLRA. D.R. Horton Inc. v. NLRB.

Ruling on an issue of first impression, a federal judge in the Northern District of California ruled that Kaiser Foundation Health Plan Inc. must face trial against the National Union of Healthcare Workers (NUHW) in a suit based on claims that Kaiser violated the Labor Management Relations Act (LMRA). In denying Kaiser’s motion for summary judgment, the judge held that a jury could reasonably find that Kaiser allowed supporters of the incumbent union, the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), to go on leave with paid benefits because Kaiser preferred the incumbent union and wanted to defeat a challenge by the NUHW. The court found the benefit payments could violate LMRA §302 because those employees sought reimbursement for time spent campaigning for SEIU-UHW, an activity that benefited the union but could not be justified as providing a legitimate benefit to the employer. Nat’l Union of Healthcare Workers v. Kaiser Foundation Health Plan, Inc.

The NLRB affirmed an ALJ’s decision that technology company MCPc Inc.’s confidentiality policy violated the NLRA because it was too broad. The policy stated that “dissemination of the confidential information within [the company], such as personal or financial information, etc., will subject the responsible employee to disciplinary action or possible termination.” The Board found that employees could reasonably construe the policy’s language as prohibiting discussion of wages or other conditions of employment with fellow employees. The Board also upheld the ALJ’s decision that MCPc had wrongfully discharged an employee for engaging in protected concerted activity under the policy. The employee had been terminated for making complaints about employee workloads and an executive’s salary during a company luncheon. MCPc Inc. and Jason Galanter.

An ALJ for the NLRB ruled that janitorial services company Haynes Building Services LLP’s arbitration agreement policy was unlawful because applicants and employees could reasonably construe the policy’s language as precluding the filing of an unfair labor practice charge. However, the judge noted that although he was bound by the Board’s decision in D.R. Horton to find such arbitrations agreements unlawful, the Fifth Circuit had rejected D.R. Horton on this basis. He further opined that the reasoning upon which the D.R. Horton decision was based would not survive scrutiny by the U.S. Supreme Court. Under D.R. Horton, an employer violates the NLRA when it requires employees to sign agreements that waive their right to pursue class claims in any forum. Ultimately, the judge here ruled that the company did not violate the law because the facts did not show that the company required all applicants to sign the agreement in question, but rather was threatening to enforce the agreement against an employee who signed it prior to the D.R. Horton ruling. Haynes Building Services LLP.

The NLRB held that an Amalgamated Transit Union local was not required to remove comments from the union’s Facebook page that were posted by striking union members disparaging those workers who chose to continue working through the strike. The case concerned a six-day strike by Veolia Transportation Services Inc. bus drivers. The Board’s General Counsel argued that the picket line was electronically extended when the union failed to disavow the disparaging Facebook posts, and cited prior authority that unions have been found to be similarly responsible for failing to disavow threats by striking employees from the actual picket lines. However, the Board found that the Facebook remarks themselves did not amount to threats under the law. The Board was swayed by the fact that that the individuals who posted the comments were neither alleged to be nor found to be union agents. Amalgamated Transit Union, Local Union No. 1433, AFL-CIO (Veolia Transportation Services Inc. Phoenix Division).

The NLRB overturned an ALJ’s ruling that Quad Graphics Inc., a unit of World Color (USA) Corp., violated the NLRA when a supervisor indicated that an employee had been reassigned to a different position because of posts he made on his Facebook page that were critical of the company. The Board found that there was insufficient evidence to prove that the posts were protected activity. After the employee posted the comments, he was reassigned within the company. Soon thereafter, that employee’s supervisor remarked to the employee that the company was aware of his Facebook activity. In rejecting the ALJ’s ruling, the Board stated that the record did not include a printout of the employee’s post and provided scant evidence regarding their nature. World Color (USA and Conference of the International Brotherhood of Teamsters, Local 715-C.

In a memorandum from the NLRB Division of Advice, the NLRB Assistant General Counsel (AGC) found that Walmart did not violate the NLRA when it terminated two employees who had participated in demonstrations by the United Food and Commercial Workers (UFCW) and Organization United for Respect at Walmart (OUR Walmart) in two Florida stores. The AGC wrote that although the employees participated in protected activity, Walmart was able to show that it would have fired the employees for otherwise valid reasons. One employee repeatedly took excessive work breaks, while the other was terminated for an alleged food safety violation following progressive discipline spanning 16 months. Additionally, the AGC found that Walmart did not violate the NLRA when a manager tried to photograph OUR Walmart demonstrators who had entered the store and blocked the cash registers. The memorandum concluded that the employer reasonably believed that most of the individuals were not employees who were trespassing, and that the photographs would have been relevant to the ongoing litigation over that kind of activity.

The NLRB invited interested parties to submit briefs on the question of whether the Board has jurisdiction over universities with religious affiliations such that non-tenure-eligible professors are entitled to join unions, or whether they are excluded as managerial employees. The issue stems from a prior NLRB regional director’s decision that Pacific Lutheran University was not a religious institution exempt from NLRB oversight and that these non-tenured professors did not have sufficient responsibility such that they could be classified as managers. The director’s decision was based on the fact that the school’s mission statement had no religious references and that students did not have to be Lutheran to attend. Among the questions asked by the Board were what tests should be used to determine whether schools that self-identify as religious should be exempt, and whether different standards should be used to determine whether academics were managerial employees.

 

Legislation & Politics

The five members of the NLRB told an American Bar Association committee that the fast pace of Board case decisions issued since the beginning of January 2014 will continue for the foreseeable future. With its first full five-member Board in almost a decade, the NLRB published 19 decisions in January 2014. The Board also stated that it planned on having a bigger presence in social media and public relations by issuing more press releases, increasing activity on sites like Twitter, and possibly pursuing search engine optimization. Although the Board said it would look into possible rule-making options regarding employer social media policies, it stated more guidance in that area was likely to come from case decisions.

In a 3-2 vote, the NLRB re-proposed controversial changes to the rules and regulations governing union representation-case procedures. The Board claims that the new rules would modernize processes, enhance transparency, and eliminate unnecessary litigation and delay in more effectively and efficiently administering the NLRA. Opponents call the changes “ambush election rules,” claim the new rules violate the NLRA, exceed the Board statutory rule-making authority, and violate the Constitution. The proposed changes would: allow for electronic filing and transmission of election petitions and other documents; ensure the employees, employers and unions receive and exchange timely information they need to understand and participate in the representation process; streamline pre- and post-election procedures to facilitate agreement and eliminate unnecessary litigation; include telephone numbers and email addresses in voter lists to enable parties to the election to be able to communicate with voters using modern technology; and consolidate all election-related appeals to the Board into a single post-election appeals process. View the briefing, NLRB Proposes Amendments to Union Election Rules

NLRB General Counsel Richard Griffin issued a memorandum to regional offices that listed the types of cases that he will expect Regions to submit to the agency’s headquarters for guidance. The memorandum updated the list of matters that are mandatory for the NLRB’s regional offices to submit to the Division of Advice, and highlights the types of cases considered priorities to the General Counsel’s office. The purpose of the mandatory list is the help the Board issue consistent guidance. To that end, the memorandum asks for cases that are on the cutting edge of Board interpretation of the Act, as wells as cases that could serve as vehicles for arguments against existing Board precedent. Some types of cases on the list include those involving the issue of whether employees have a right under the Act to use an employer’s email system, the non-union employee’s rights to have representatives present during an investigatory interviews by an employer, whether a perfectly clear successor should have an obligation to bargain with the union before setting initial terms of employment, and an employer’s refusal to furnish information related to relocation.

 

Crime, Corruption & Other Misdeeds

Federal prosecutors filed criminal conspiracy charges against ten members of a Philadelphia-area Ironworkers Local 401 union for violations of the Racketeer Influenced Corrupt Organizations Act (RICO). The seven-count indictment alleges that the union members conspired to commit arson, including the creation of “goon squads” to set fires, violent physical assault on workers, and sabotage of property, all in order to intimidate contractors into hiring union employees. Four of the defendants, including some who ran the union’s daily operations, face mandatory minimum sentences of 35 years. Sometimes calling themselves The Helpful Union Guys (or THUGs), the indictment listed a number of specific actions taken in the name of the union, including “assaulting nonunion employees with baseball bats, slashing the tires of vehicles, smashing vehicles with crow bars, cutting and changing the locks of construction sites, filling the locks with super glue, damaging construction equipment, stealing construction materials, and otherwise sabotaging the construction site.”

 

The Operating Engineers Local 324 in Michigan has started publishing the names and places of employment of workers who chose to opt-out of union representation after the state became the nation’s 24th Right-to-Work state in 2012. The quarterly list, called the “Freeloaders List” is published on the union’s website and seen by some as a way of publicly scolding and intimidating employees who are seen as disloyal for exercising their legal right to reject union membership. Other unions in Michigan have published similar lists despite the fact that such public exposure puts the employees and their families at risk of harassment or retaliation.

A report issued by the US Chamber of Commerce calls the latest wave of worker centers “union fronts” that serve the purpose of evading labor law and offsetting a decline in dues-paying members. The study, titled “The New Model of Representation: An Overview of Leading Worker Centers,” specifically identified the Labor-Management Reporting and Disclosure Act’s financial disclosure report filing requirements and the NLRA’s prohibition of certain picketing activities as areas where unions are skirting compliance. For example, the report singled out the UFCW’s support of OUR Walmart, alleging that the UFCW falsely claimed OUR Walmart as its subsidiary in DOL filings, therefore bypassing the need for OUR Walmart’s financial disclosures. The report also highlighted organized actions by worker centers like protests and strikes that the Chamber alleges are staffed by “[s]urrogates supplied to the organization by labor unions.” The report stated that the worker centers were effectively advocating on behalf of employees without actually representing a majority of the employees.

 

Miscellaneous

At the UAW’s annual National Community Action Program Legislative Conference, UAW President Bob King told the delegates that building global networks and coalitions with allies in other unions are essential for ultimately strengthening the UAW and more effectively winning better wages, benefits, pensions, and working conditions for its membership. King highlighted UAW’s partnership with UNITE HERE as helping sway gaming industry companies to agree to organizing neutrality and card check recognition as an example of such beneficial coalition building. He praised recent contact negotiations with the big three automakers that returned 20,000 jobs back to the United States from Mexico. King further spoke about the progress made through efforts to get out the vote for political candidates who support union causes. Vice-President Joseph Biden also addressed delegates at the conference calling collective bargaining the bedrock of the US economy, and equated the decline in unionization since the 1970s with an average decline in wages over the same period. Vice-President Biden also praised the UAW’s activism on behalf of workers, whether or not in their membership ranks.

 

Boeing to Freeze Pension Benefits for 68,000

Company Will Shift Nonunion Workers to 401(k) Retirement Savings Plans

By Jon Ostrower and Theo Francis

Updated March 6, 2014 7:30 p.m. ET

Boeing Co. , following other U.S. companies moving away from traditional pension plans, said Thursday that it would freeze the pension benefits of more than 68,000 nonunion employees, and will shift those workers to 401(k) retirement-savings plans, starting in 2016.

The move comes in the wake of recent deals the aerospace company has struck with its unionized machinists that also move them toward defined-contribution retirement plans in coming years.

Boeing, which contributed $1.5 billion to its pension fund in 2013, said it expects to record a noncash pension-curtailment charge of about $110 million against first-quarter earnings as a result of the change. That is on top of $220 million of previously announced charges related to its recent contracts with the machinists union.

A growing number of U.S. companies have swapped traditional pensions for 401(k) plans, effectively shifting the risk of market volatility to their workers and reducing long-term costs. Boeing, which had 169,071 employees as of Jan. 30, stopped offering pension benefits to new nonunion workers in 2009, and has done so increasingly for new hires in 28 of its unions.

Roughly 70% of employees who currently have workplace retirement plans are covered solely by defined-contribution plans. About 24% of companies offer both a defined-contribution plan and defined-benefit pension, and just over half of the latter are closed to new hires, according to the Employee Benefit Research Institute.

Tony Parasida, Boeing’s senior vice president for human resources, said the company’s move is aimed at providing “attractive” benefits while “curbing the unsustainable growth of our long-term pension liability.”

Large U.S. companies have sought to limit their exposure to pension obligations for years, often by closing their plans to new employees or by freezing the plans so employees still in them cease building new benefits with additional years of work. Macy’s Inc., for example, froze its pension plan in December and increased 401(k) contributions.

Long a powerful recruiting and retention tool, pension plans also leave companies on the hook for long-term obligations that can last decades. Federal rules require companies to fund the plans in return for tax benefits, but market downturns and interest-rate changes can leave them with big bills to close funding gaps.

Retirement-savings plans such as 401(k)s shift that investment risk to workers and let employers curtail spending quickly by reducing company contributions to employee accounts.

The shift from defined-benefit pensions has played out differently for different industries and types of workers. About 16% of private-sector U.S. workers participated in a pension plan last year, according to the Bureau of Labor Statistics. But higher-income workers were much more likely to have a pension, including almost a quarter of management and professional workers.

In the natural resources, construction and maintenance industries, 23% of workers had pensions, while about 20% of production and transportation workers did. But the number was just 6% for service workers, and 14% for sales and office workers. Including state and local government employees, about 26% of the U.S. workforce benefits from pension plans, along with most federal workers.

Boeing said employees affected by the pension changes, including Chief Executive Jim McNerney, will keep benefits already accrued, as required by law.

The company will make bigger contributions to 401(k) accounts over three years, at 9% of eligible income in 2016, 8% in 2017 and 7% in 2018.

After that, Boeing’s contributions will range from 3% to 5%, depending on the worker’s age. Boeing will match employee contributions up to roughly 6% of income.

Mr. McNerney had accumulated pension and related benefits of $42.9 million, including benefits under an executive retirement plan and his employment agreement, as of the end of 2012, Boeing filings show.

In January, machinists at Boeing’s commercial unit based in Washington state narrowly approved a contract that will shift the unionized workforce of around 32,000 to a 401(k)-style system in 2016.

In exchange, Boeing said it would build its planned 777X jetliner in unionized facilities there.

Last week a group of 2,300 machinists at Boeing’s defense unit voted overwhelmingly for a similar retirement plan transition.

Mr. McNerney was asked on the company’s latest quarterly earnings call, in January, about the fairness of maintaining his own retirement benefits as Boeing sought benefit changes from its largest union.

He said at the time to “stay tuned” about potential changes. “The principle of dealing with that in a fair and equitable way is something that we’re mindful of,” he said.

Write to  Jon Ostrower at jon.ostrower@wsj.com and Theo Francis at theo.francis@wsj.com