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Today’s Labor Updates, December 26, 2017

Interesting statistic with all the A&D testing put in place by Companies over the last 25 years: Overdoses from the non-medical use of drugs or alcohol while on the job increased from 165 in 2015 to 217 in 2016, a 32 percent increase.

Are American Workers in Danger? OSHA Reports Dramatic Increase in Fatal Occupational Injuries

The Bureau of Labor Statistics’ Census of 2016 Fatal Occupational Injuries reports there were 5,190 workplace fatalities in 2016, a seven percent increase from 2015, and notes that opioid-related deaths are on the rise in the workplace.

Sandy Smith | Dec 19, 2017

Fatal workplace injuries showed a dramatic uptick in 2016, rising by 7 percent over the number of workplace fatalities tallied in 2015. The fatal injury rate also increased from 3.4 per 100,000 full-time equivalent workers in 2015 to 3.6 in 2016.

More workers lost their lives in transportation incidents than any other event in 2016, accounting for about one out of every four fatal injuries. Workplace violence injuries increased by 23 percent, making it the second-most common cause of workplace fatality. The Dec. 19 report also shows the number of overdoses on the job increased by 32 percent in 2016, and the number of drug-related fatalities has increased by at least 25 percent annually since 2012.

“Today’s occupational fatality data show a tragic trend with the third consecutive increase in worker fatalities in 2016 – the highest since 2008. America’s workers deserve better,” says Loren Sweatt, deputy assistant secretary for OSHA. “[OSHA] is committed to finding new and innovative ways of working with employers and employees to improve workplace safety and health. OSHA will work to address these trends through enforcement, compliance assistance, education and training and outreach.” In 2008, 5,214 workers lost their lives.

Sweatt added that the nation’s opioid crisis has invaded the workplace, and “is impacting Americans every day at home and, as this data demonstrates, increasingly on the job. The Department of Labor will work with public and private stakeholders to help eradicate the opioid crisis as a deadly and growing workplace issue.”

Peg Seminario, director of occupational safety and health for the AFL-CIO, says the 2016 BLS Job Fatality Report reveals disturbing trends.

“The increase in job fatalities in 2016 reported by BLS shows that for many groups of workers in this country work is becoming more dangerous and deadly,” says Seminario.”The 5,190 workplace deaths from injuries means that 14 workers were killed on the job a day, the highest number since 2008 and the highest rate since 2010.”

She adds that in industries where OSHA and MSHA focus resources and attention, fatality rates declined or remained stable, but that job fatalities are increasing in the growing sectors of the economy, including healthcare and food services, which receive little attention and oversight from workplace safety agencies. The same is true for groups of workers that lack OSHA protection, Seminario adds, including state and local government employees and many

“Federal OSHA now has fewer than 800 inspectors and can inspect workplaces on average only once every 159 years,” says Seminario, who points out that OSHA’s budget has declined since 2010 and been frozen for years.

“House Republicans are now seeking big cuts for 2018,” she adds. “Fewer resources and less oversight will mean more injuries and workplace deaths. Workers need more safety and health protection, not less.”

The National Safety Council (NSC) released a statement indicating it “is very disheartened to see the latest data from the Bureau of Labor Statistics showing a seven percent rise in workplace deaths since 2015. Fatal work injuries reached 5,190 in 2016 – the third consecutive annual increase and the first time in nearly a decade that the number has surpassed 5,000. Employers cannot ignore this data, particularly since many different demographics are affected.”

Of note, said NSC, were these numbers:

· Overdoses from the non-medical use of drugs or alcohol while on the job increased from 165 in 2015 to 217 in 2016, a 32 percent increase.
· Deaths among workers aged 55 or older totaled 1,848 – a 9.9 percent increase.
· Deaths among black or African-American, non-Hispanics increased 18.6 percent, totaling 587.
· Deaths among Asian, non-Hispanic workers increased 40.4 percent, totaling 160 deaths.
· Fall, slip and trip deaths increased 6 percent, totaling 849 deaths.
· Transportation incidents remained the most common fatal event, totaling 2,083 deaths.
· Unintentional workplace deaths increased 5 percent, totaling 4,399 deaths.
· Homicides increased 19.9 percent now totaling 500 deaths.

“All employers need to take a systematic approach to ensure the safety of all of their workers,” said the statement from NSC. “This includes having policies and training in place to address the major causes of fatalities as well as emerging issues such as prescription opioid misuse and fatigue. Leadership should set the tone from the top and engage all workers in safety, continually looking to identify and mitigate workplace safety hazards and measuring safety performance using leading indicators to ensure continuous improvement.”

TAGS: Safety

What’s Past is Prologue—NLRB Restores the Common Sense Meaning of Past Practice

Article By:Kenneth B. Siepman Matthew J. Kelley

In Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017), the National Labor Relations Board (NLRB) jumped back into the quagmire of past practice, dynamic status quo, and impasse to create firmer ground for employers. Since first decided in 2010 and throughout the appeals process, unions used the Board’s Du Pont case, most recently reissued in 2016, E.I. Du Pont de Nemours, 364 NLRB No. 113 (Du Pont III), to leverage companies into difficult post-expiration disputes over “changes” to the terms and conditions of employment. Last week, the Board returned to a common sense approach to past practice during contract negotiations.

Unions utilized Du Pont in conjunction with the NLRB’s general prohibition against single-issue impasse to put employers in untenable bargaining situations. Once a contract expired, the Board in Du Pont held, a company could not follow an established past practice if there was any discretion in the company’s decision. As a result, employers were held hostage in bargaining while difficult choices needed to be made on strict timelines.

Du Pont created a Hobson’s choice for employers, most specifically regarding health care benefits. Under Du Pont, unions were empowered to drag negotiations on past contract expiration without striking and create leverage as open enrollment periods approached. The choice for employers: carve out small groups of unionized employees from broader company-wide health care plans at great cost and expense while bargaining continued; agree to whatever union demands were still left on the table; or move to declare impasse on all remaining issues. This is exactly what happened to Raytheon.

Raytheon and the History of “Pass Through” Language

Raytheon and the United Steelworkers (USW) had a long bargaining history, and the 35 bargaining unit employees in Fort Wayne had been on the company’s health plan since 2001. Collective bargaining agreements (CBA) between the parties included “pass through” language that allowed the company to modify health care benefits for the bargaining unit so long as those changes were made for the other 65,000 employees on Raytheon’s health care plans around the country.

The parties began negotiating a successor contract in early 2012 and it expired in April without an agreement. The union wanted to delete the pass through language and bargain over any health care changes each year, for the life of the new contract. Raytheon insisted on the pass through language. Although Raytheon reached the point where it could have declared impasse, it decided against that option given the difficulty and risks associated with declaring impasse during the Obama-era NLRB.

The parties continued to negotiate after the expiration of the CBA when open enrollment for 2013 health care options arrived. The company did exactly what it had done for the past 12 years and sent out open enrollment notices to all employees, including bargaining unit employees. The notices explained the minor modifications to the company’s health care offerings (changes to premiums, deductibles, co-pays, coverage options, etc.) and explained the timeline for selecting benefits for 2013.

The union demanded the company bargain over these minor changes to the plan options. The company refused and implemented the changes effective January 1, 2013. The union insisted that until the parties reached agreement, the “status quo” was to carve out 35 bargaining unit employees from the 65,000 Raytheon employees enrolled in the company’s health care plan, with benefits and health care options frozen in time with 2012 options at 2012 prices.

The USW’s bargaining position frustrated the company and for good reason. The 35 Fort Wayne employees constituted an older group, with more health issues generally. These particular employees benefited greatly from the volume discount Raytheon had procured for its 65,000 employees. Standing alone, the bargaining unit employees’ per capita cost on health care was significantly higher. During negotiations, the USW did not propose moving these employees to another plan because it was not cost effective. The USW did not propose a health care solution, other than yearly renegotiation of Raytheon’s plan for the 35 affected employees. The company refused and the USW filed a charge alleging violations of Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act.

The NLRB issued a complaint, and the parties stipulated to the facts in the case. After an administrative law judge decided against Raytheon in November 2013, the case lingered before the Board for four years. In fact, the process dragged on for so long that the company did the exact same thing at the end of 2013, as the parties still did not have a new contract. The USW filed another charge and the NLRB deferred the second charge pending the outcome of this case.

Four Years But Worth the Wait

The Board’s decision in Raytheon returns the law to harmony with the Supreme Court decision in National Labor Relations Board v. Katz, 369 U.S. 736 (1962). Katz establishes that a unilateral change in a mandatory subject (i.e., wages, hours, and other terms and conditions of employment) violates Section 8(a)(5). The issue in most cases since Katz has been what constitutes a “change” that triggers the obligation to bargain.

Prior to DuPont, the Board and courts repeatedly had held employers could lawfully take actions established as past practice without bargaining because doing so did not constitute a “change” in the terms and conditions of employment. In this case, Raytheon always made minor modifications to the health care plan. Each year the company or its provider tweaked coverages, expanded services, and modified plan options, and each year the employees selected from the available options. That was the parties’ practice, established over a dozen years. DuPont made it impossible to have a past practice in this regard unless the employer exercised no discretion of any kind (e.g., the Board had upheld changes where, for instance, the expired CBA provided for specific annual increases in co-pays or deductibles and the increase post-expiration was the same).

The Board overruled DuPont as inconsistent with the long line of cases following Katz and as inconsistent with the principles behind the Act. The Board held Raytheon’s modifications to employee health care benefits in 2013 were a continuation of past practice involving similar plan modifications made at the same time every year from 2001 to 2012, i.e., the company did exactly what it had always done.

The Board determined Raytheon’s actions did not constitute a “change” in the terms and conditions of employment because they were similar in kind and degree with an established past practice of comparable unilateral actions. That the actions involved management discretion was irrelevant. Therefore, the Board found the company did not violate the Act by failing to give its union advance notice and the opportunity to bargain before making the 2013 changes.

Practical Impact

The Board’s decision provides employers more flexibility to act during any hiatus between collective bargaining agreements, so long as the employer can point to a past practice of unilateral modifications similar in kind and degree with the contemplated action. The decision also limits unions’ ability to hold employers hostage on potential unilateral actions through dilatory bargaining. The ability to implement does not, however, eliminate the employer’s obligation to continue bargaining over the contemplated modification, even though the union cannot prevent implementation.

Unions Are Dead? Why Competition Is Paying Off For America’s Best Workers

Maggie McGrath , Forbes Staff Dec 12, 2017 @ 05:00 AM

By Maggie McGrath, with Lauren Gensler and Samantha Sharf

Almost two years ago, CEO Brian Krzanich made the kind of headlines no company wants: In the process of restructuring the storied chipmaker, he was eliminating 11% of its workforce — 12,000 jobs. But far more quietly, Krzanich was focusing on something seemingly contradictory: cranking up a program to prevent the workers the company wanted to keep from walking out the door.

The retention initiative was launched as part of a diversity push. In 2015, Krzanich had pledged some $60 million a year to boost underrepresented groups at Intel, yet in that year the company treaded water: 584 African-Americans, Hispanics and Native Americans were hired, and 580 from those groups departed. Ed Zabasajja, a Ugandan-born, Auburn University-trained engineer who oversees internal diversity analytics, was keen to acquire data to figure out why employees left — before they did.

Thus was born WarmLine, whose touchy-feely name hasn’t prevented more than 10,000 workers from reaching out. More than just a data-collection operation, WarmLine quickly developed into a way to address problems such as finding colleagues for isolated workers to bond with, mediating management disputes, arranging transfers and even asking for raises. And it also became an outlet for the entire company–roughly half of WarmLine’s users have been white and Asian men.

“There’s a limited number of people who can do many of these technologies,” Krzanich says. His product, ultimately, relies on talent.

Zillow, the online real estate marketplace, has gone even further to keep its key employees. CEO Spencer Rascoff sees recruitment and retention as the company’s leading priority and has a new “internal mobility” team focused on top performers. After one star recently decided during a six-week paid sabbatical (yep, Zillow grants one every six years) that he needed to leave and pursue a big change, Zillow kept in touch. Within two months, the defector was back in a new role. “It’s much more economical to just keep people motivated and engaged over a long period of time rather than churning and burning people,” Rascoff says.

Conventional wisdom holds that employees have less power than they’ve had in decades, with a growing share of jobs vulnerable to automation or offshoring and just 6.4% of U.S. private-sector workers in unions. Exhibit A is the recovery from the Great Recession: As corporate profits set new records, median wages barely budged until last year. That anxiety is reflected in the Just 100, the first-ever ranking of companies based on what Americans expect of a good corporate citizen. Some 80% of the 72,000 Americans surveyed over the past three years by Just Capital say companies aren’t sharing enough of their success with employees. Asked to cite what a company’s top priority should be, 33% said workers or jobs, compared with just 6% who said shareholders or management.

But a free labor market can cut both ways. With unemployment now scraping 4%, and traditional rewards of long tenure (pensions and protection from layoffs) just a memory, employees have little reason to be loyal. The “quit rate” for 2017 is on track to be the highest in over a decade, with 26% of workers voluntarily waving goodbye. So companies that fare well on the Just 100 list are attempting to rebuild workers’ loyalty, 21st-century-style: not with no-layoff guarantees but with fair pay, bonuses, stock options, new benefits (think paid family leave, sabbaticals and student-loan repayments) and programs designed to fulfill Millennial demands for work-life balance, inclusive workplaces and professional growth. Competition is the new union. “Transparency combined with a tight labor market is effectively working as an advocate for employee betterment,” says Andrew Chamberlain, the chief economist at Glassdoor.

No, we’re not trying to sugarcoat reality. The new benefits are far more likely to be lavished on in-demand, highly skilled workers, and there are still too many terrible jobs and employers in America. But there’s an aspect to this phenomenon that might surprise some less enlightened CEOs and investors: Treating workers right ultimately benefits shareholders after all, and not only in tight labor markets. The companies of the Just 100 have returned three percentage points a year more than the S&P 500 over the last five years. (For a full explanation of the Just 100’s methodology, see this link here.)

So does great performance allow companies to treat workers better, or does worker treatment drive great performance? While there’s some measure of both at work, the latter seems to be the main dynamic. In 2012, Alex Edmans, a finance professor at Penn’s Wharton School who is now at the London Business School, analyzed 27 years of stock market returns for U.S. companies chosen as top places to work. They outperformed the market by 2.3 to 3.8 points per year for the entire stretch, no matter the broader economic conditions.

More recently, he studied the relationship between employee satisfaction and stock returns across 14 countries. In rigid labor markets, such as Germany’s, where regulations or union contracts provide a floor of benefits and limit management flexibility, spending extra on workers provides little in the way of return. But in flexible labor markets, such as in the U.S. and the U.K., treating workers better consistently produced higher returns.

The Just 100 get that, even if Wall Street doesn’t. Stock analysts “look at things like layoffs and they look at the cost. They don’t think about the employees’ long-term morale,” says Krzanich, of Intel, which claimed the No. 1 spot this year on the Just 100. “I’ve never been asked, ‘How do you treat employees?’ ” Mark Costa, the CEO of Eastman Chemical, which ranks seventh on our list in terms of employee treatment, concurs: “Investors just want more dollars. I don’t think they spend a lot of time thinking about the consequences to the worker.” Ironically, if they did, more dollars would often follow.

The idea of treating workers well isn’t new — just erratic. In 1875, American Express became the first private employer to provide a retirement plan. By the early 1900s, when employee turnover often exceeded 100% a year, visionary businessmen were experimenting with new ways to attract and keep workers. Henry Ford introduced $5-a-day pay; Milton Hershey and George Pullman built towns and housing for their workers; a company called Norton Grinding pioneered paid vacations. The Great Depression halted, at least temporarily, this brand of welfare-minded capitalism.

But then the government and unions stepped in. The National Labor Relations Act of 1935 guaranteed workers the right to organize and strike, and labor-union growth continued for the next three decades. Private pensions continued to grow during this time too–thanks in large part to the new labor unions. The unions’ decline began in the 1960s, when the Supreme Court issued a string of pro-employer rulings, holding, for example, that companies weren’t obligated to bargain over decisions “at the core of entrepreneurial control.” Reforms to the National Labor Relations Board under the Nixon Administration and anti-union Supreme Court decisions and executive actions during the Reagan years further weakened the union movement. In 1983, 16.8% of all private-sector workers were in a union, two and a half times the rate of today.

Wall Street also played a role during this period. The Reagan era coincided with the Milken era, when leveraged buyouts were built around finding efficiencies, even if that meant treating company assets like Tinker Toys and workers as costs rather than assets. Barbarians at the Gate was a bestseller, the Predators’ Ball was the marquee event and the iconic 1987 movie Wall Street depicted workers as pawns of Armani-clad paper pushers. At the same time, companies began shifting from “defined benefit” retirement plans — a lifetime pension, with benefits backloaded to reward longer-tenured workers–to cheaper “defined contribution” plans. While this brought some sanity to corporate balance sheets, it also liberated workers to walk out the door with their retirement stash and roll it into an IRA or a new employer’s plan.

Those at the top of the Just 100 list figured out years ago that if every worker is now a free agent, a competitive advantage lies in bringing in and retaining the top talent.

Take Delta, which ranks 60th on the list. After coming out of bankruptcy in 2007, the airline started giving a portion, now at least 10%, of its annual profits back to its workers. “We made a commitment to people that when things turned around and got better, they would see the first rewards from those initiatives,” says Delta CEO Ed Bastian. Plus, it gave every worker–including customer-service agents, who have to explain flight delays to cranky passengers–skin in the game. In the past five years, Delta has returned nearly $5 billion to employees–and 170% to its shareholders over the past decade, double the S&P 500. Not coincidentally, it’s also the least unionized workforce of any legacy airline.

If you want to see how to treat a worker in 2018, start at the top. That would be Nvidia, the No. 1 Just 100 company in worker treatment. It competes with Apple, Google, Facebook and the rest of Silicon Valley’s giants for the best minds in technology. That means it pays well. But fair and competitive pay–the largest single driver of the Just 100–is taken almost as a given at top companies. Those motivated only by salary tend not to stay, no matter what. So to get stars, Nvidia treats them as stars, with universal employee perks that no union negotiation has ever extracted. New mothers get 22 weeks of fully paid leave. Workers get $6,000 of their students loans paid off every year, up to $30,000. Recently, Nvidia started offering to pay for in vitro fertilization, adoption and, soon, egg freezing.

As a result, Nvidia says, its quit rate sits at 5%, roughly half that of its peers. It was the best-performing stock in the S&P 500 in 2016, giving its investors a 224% return. In 2017, through early December, it was up another 75%–four times the S&P’s gains.

Another key employee perk: training. Accenture, No. 6 on the Just 100, announced a $1.4 billion, four-year push to bolster current employees as the consultancy shifts to cloud and security services. In this labor market, and with technology changing so fast, simply hiring new experts with cutting-edge skills isn’t a viable approach for employers. And continual growth engages the kinds of employees worth keeping and promoting.

Companies looking to attract and keep younger workers, meanwhile (read: everyone), understand that Millennials are looking for a better work-life balance than their parents had. At Zillow (No. 51), the 42-year-old Rascoff leads by example: When he’s not traveling, he aims to get home by 5:30 and turns off his phone until 8:30 to spend time with his three kids, ages 6, 9 and 12.

Note that this explosion of family benefits has gone beyond the young tech companies. In 2016, Johnson & Johnson (No. 35) increased fertility benefits from $25,000 to $35,000 and began reimbursing workers up to $20,000 for payments to surrogate mothers. “We’re also competing for talent as we bring in people from tech and other industries,” says Peter Fasolo, J&J’s chief human resources officer.

Yet another new trend embraced by the old, established members of the Just 100: flexible benefits. At Procter & Gamble (No. 15), with 95,000 workers worldwide, every employee gets the equivalent of 1% to 2% of their salary set aside for a benefit of their choice, anything from disability insurance to financial planning to extra vacation time. Similarly, last year 123-year-old Hershey (No. 50) introduced a suite of “SmartFlex” policies for its white-collar workforce. Those include a number of leave options for new parents (they can take their time in one chunk or intermittently, as needed) and expanded opportunities to work from home or work flexible hours. And this attitude transcends what can be standardized or put into an employee manual. After Hurricane Maria hit Puerto Rico in September, Hershey spent $9,000 just to bring a new hire from there to New York and get her set up in an apartment.

How much has the world changed? Private equity firm KKR, Wall Street’s original “barbarians,” is adding goodies for the rank and file to its buyout formula. Since 2011, KKR has distributed more than $200 million in equity grants across four industrial deals to 10,000 blue-collar workers. “Companies can achieve incredible results when all employees are given the opportunity to think, act and participate as owners in the business,” says Pete Stavros, the leader of KKR’s industrials group. When KKR took industrial equipment maker Gardner Denver public in May, it gave 6,000 employees $100 million of stock grants–equal to 40% of a year’s pay for each. The company’s stock has surged 50% since the IPO, so each worker now holds stock worth 60% of his or her salary.

If competition now delivers what unions once did, it has also replaced government policy, or filled in where it’s lacking. The federal minimum wage hasn’t been increased since 2009, and at its current $7.25 an hour, it offers a path to poverty, with few avenues for advancement–a combination that explains why so many retail companies perform atrociously in the Just 100 rankings. That’s what made Target’s TGT +0.78% announcement in September interesting: The retailer said it was immediately boosting its starting pay for all workers, including seasonal ones, to $11 an hour, and aiming to hit $15 — the number favored by “living wage” activists — by 2020. The announcement blathered on about paying workers fairly. A better reason: No one really needs to shop in a store right now. To avoid a race to the bottom, Target is making a bet, one pioneered by Costco, that its long-term fate is better aligned with superior consumer experience and a brand that people feel good about, rather than just lower prices or bigger dividends. “People expect it now,” says Hershey CEO Michele Buck. Consumers, especially younger ones, “want to know, ‘I’m buying a product from someone who cares about sourcing and who cares about the people who were involved in the product along the chain of production.'”

Of course, treating workers well sounds better as a profit strategy near full employment. What happens during the next downturn? Many companies will surely revert to their old habits — and pay the price that comes with short-term savings. “People will see through that company, and it’s not seen as genuine,” says Edmans, the finance professor.

“The reason why you invest in your workers is because the business you want to build is one in which you believe workers should be treated fairly, not in response to market conditions.”

As the Just 100 reflects, the American public seems primed to reward those who act well. And the markets will follow. Eastman Chemical offers a case study from the financial crisis. Rather than major layoffs, management took an employee suggestion and cut wages 5% across the board. “In a difficult recessionary environment, everyone was aggressively cutting costs. We took a pay cut, from the board to frontline employees, and kept investing in innovation,” says CEO Costa. Full salaries were soon reinstated, and Eastman’s stock roared higher, returning three times as much as the S&P 500 since the market bottomed in 2009.

“Companies that don’t invest in talent management will be left behind,” predicts Zillow’s Rascoff. “This is not just HR gobbledygook, this is mission-critical work.” A mission that defines America’s new labor reality.

Click here for the full 2018 Forbes Just 100.

Kaplan Named Acting Chair of Labor Board

Friday, December 22, 2017

President Donald Trump has named new National Labor Relations Board Member Marvin E. Kaplan Acting Chairman. Kaplan was sworn in as a Board Member on August 10, 2017, for a term ending on August 27, 2020.

Kaplan said:

“The President’s announcement is an honor and privilege, and I look forward to serving as Acting Chairman of the National Labor Relations Board. I remain committed to working with my colleagues to achieve the important goal of issuing timely decisions that apply the National Labor Relations Act in a way that protects the rights of employees, employers, and labor organizations throughout the country.”

Kaplan also recognized former Chairman Philip A. Miscimarra for his service on the Board.

Currently, there are four Board members (two Republicans and two Democrats), with one vacant seat that Trump is expected to fill with a Republican.

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