Labor Relations & Wages Hours Update
February 2014
Hot Topics in LABOR LAW:
NLRB resurrects accelerated election rule
By Pamela Wolf, J.D.
In a move clearly anticipated by labor law experts, the NLRB has once again issued a
proposed rule revising its rules and regulations governing representation-case procedures
— the so-called “quickie election” rule. According to the Board, this new version is
substantively identical to the prior proposal, which the Board rescinded just two weeks ago
after being forced to retreat from its appeal of a district court decision invalidating the much
fought-over revisions due to a quorum issue. Under a stipulation of voluntary dismissal, the
agency’s appeal was dismissed by the D.C. Circuit on December 9, 2013.
“The present proposal is, in essence, a reissuance of the proposed rule of June 22,
2011. … The Board is again proposing the same changes which were proposed in 2011,
and asking for any comments the public may have on whether or how the Board should
act on these proposals,” the new Notice of Proposed Rulemaking states. It will be published
in the Federal Register on Thursday, February 6.
Again, the NLRB contends that the revisions are intended to enable it to more effectively
administer the NLRA via a number of changes to its representation case procedures
aimed to modernize the processes, enhance transparency, and eliminate unnecessary
litigation and delay. The new proposal was approved by Board Chairman Mark Gaston
Pearce and Members Kent Y. Hirozawa and Nancy Schiffer. Board Members Philip A.
Miscimarra and Harry I. Johnson III dissented.
Pearce signaled that the entire Board may be open to a change in the representation case
procedures, despite an apparent disagreement over exactly what changes would be
appropriate: “The Board is unanimous in its support for effective representation case
procedures. I am pleased that all Members share a commitment to constructive dialogue,
and we all agree that important issues are involved in this proposed rulemaking. With a
Senate-confirmed five-member Board, I feel it is important for the Board to fully
consider public comment on these proposed amendments, along with the comments we
previously received in 2011.”
All of the comments that the Board received in response to its prior proposal will be
incorporated into the renewed rulemaking: “No final decisions have been made,” Pearce
stressed. “We will review all of the comments filed in response to the original proposals,
so the public will not have to duplicate its prior efforts in order to have those earlier
comments considered. Re-issuing the 2011 proposals is the most efficient and effective
rulemaking process at this time.”
According to the notice for the resurrected proposal, the Board received 65,958 written
comments, with “tens of thousands” expressing support for the change and an equal
number opposing it. During two days of a Board-conducted hearing, 66 individuals
“representing diverse organizations and groups” gave oral statements and answered
questions asked from the Board — there are 438 transcript pages of oral testimony. All of
this will be taken into account by the Board as it moves forward with the proposed rule
change.
The Board said the proposed rule revisions would:
 allow for electronic filing and transmission of election petitions and other
documents;
 ensure that employees, employers, and unions receive and exchange timely
information they need to understand and participate in the representation case
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.
Comments. The new rulemaking notice, in addition to its former request for comments,
includes a more specific request on employee privacy issues in connection with the voter
list proposals. Comments on the proposed rule revisions must be received on or before
April 7, 2014. During the week of April 7, the Board will hold a public hearing on the
proposed rulemaking at which members of the public may address the proposed
amendments and make other suggestions for improving the Board’s representation case
procedures.
Reactions to the news. News of the re-issued proposal has immediately drawn both
opposition and support. The Associated Builders and Contractors (ABC) weighed in with
disapproval: “This proposal is a solution in search of a problem,” said ABC Vice
President of Government Affairs Geoff Burr. “Unions already are winning 64 percent of
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elections and more than 94 percent of those elections occur within 56 days — exceeding
the NLRB’s own goals related to election timeframes.
“Shortening the election period does nothing to ensure a fairer election and it is clearly
not necessary to help the NLRB meet its self-imposed goal for election timeframes,” Burr
said. “In addition, it denies employers their rights to free speech and employees the
opportunity to make a fully informed decision.”
Jobs With Justice Executive Director Sarita Gupta offered her support for the proposal:
“We applaud the Board’s decision to reintroduce this commonsense rule. This modest
reform would streamline the drawn-out union election system, reducing a number of
obstacles faced by men and women trying to form a union to better their workplaces.
“Currently, workers who petition for a union election encounter delays of months and
even years before an election is held, and some never get to vote at all. The current
protracted election process sacrifices workers’ rights to an election and, instead,
incentivizes coercive and often illegal activity by employers. This rule would cut back on
senseless procedural delays, closing the loopholes employers have exploited for
decades.”
Cleared of ULP charges, Volkswagen, UAW gear up for union election featuring
first-ever “works council” model
By Lisa Milam-Perez, J.D.
Some 3,200 workers at Volkswagen’s Chattanooga, Tennessee, plant will vote in an
NLRB-conducted election next week to decide whether to be represented by the United
Auto Workers (UAW). The NLRB scheduled the election for February 12-14 after a
stipulated election agreement was reached between Volkswagen Group of America
(VWGA) and the union. The organizing drive at Volkswagen has attracted considerable
attention because the auto workers, who manufacture the company’s Volkswagen Passat,
will decide whether to move ahead with a European-style “works council”
representational model — the first of its kind in the United States. But the union’s
collaboration with the German automaker has not been without controversy.
Works council model. Local works councils, comprised of employee-elected members,
negotiate with an employer on issues such as plant rules, discharge, work hours, and
vacation scheduling. They also have authority to request information and address
employee grievances. German law mandates the existence of such works councils as a
means of promoting employee co-determination of the business, and it also mandates
representation of works council members on corporate boards. Accordingly,
Volkswagen’s parent company, Volkswagen Aktiengesellschaft Group (VWAG), has a
works council in its German operation. It also has a global works council comprised of
representatives from each of its production facilities’ local works councils. Members of
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the global works council serve on VWAG’s supervisory board. (In contrast to the works
councils, German unions negotiate CBAs with multi-employer associations or on an
industry-wide basis. These negotiations generally establish only minimum wages and
other terms and conditions. Union reps may attend all works council and department
meetings in an advisory capacity.)
Last August, the UAW confirmed that officials of Volkswagen Group, the Volkswagen
Global Works Council, and the UAW met in Wolfsburg, Germany, to continue a series of
meetings focused on “the appropriate paths, consistent with American law, for arriving at
both Volkswagen recognition of UAW representation at its Chattanooga facility and
establishment of a German-style works council.” In September 2013, the union obtained
authorization cards from a majority of workers at the plant. The authorization card
included language stating that the workers “commend and embrace the Volkswagen
philosophy of co-determination,” and went on to state: “We believe that the best way to
actively participate in our company and to contribute to VW’s continued success is to
achieve representation as our colleagues have at the other 61 Volkswagen facilities across
the globe.”
Currently, the Chattanooga plant is the only major Volkswagen assembly facility without
labor representation, according to the UAW. With a works council, the plant would have
a seat at the parent company’s global works council, the union said in a recent press
release. “Ultimately, such a labor relations model would give workers an integral role in
co-managing the company and providing input on workplace improvements that would
contribute to the success of the company and the workers.”
The collaborative approach with VWGA (VWAG’s U.S. subsidiary) would be “based on
the principles of co-determination,” according to the union. “Volkswagen is known
globally for its system of cooperation with unions and works councils,” said UAW
President Bob King, noting the union wanted to partner with the company and a works
council “to set a new standard in the U.S. for innovative labor-management relations that
benefits the company, the entire workforce, shareholders and the community.” The union
has launched a website describing the works council model in detail.
ULP allegations. The problem, as the National Right to Work Foundation (NRTW) saw
it, is that Volkswagen was improperly touting its works council model and strong-arming
the Chattanooga workers into accepting it. Moreover, NRTW alleged, the company was
providing unlawful assistance to the UAW in order to secure its vision of European-style
labor-management collaboration in Tennessee. The organization filed unfair labor
practice charges against the employer and the union on behalf of employees who opposed
such representation.
Several Volkswagen workers at the Chattanooga plant alleged that statements by German
company officials were unlawfully coercive. According to media reports, VWAG
officials said that for any expanded production to be considered in Chattanooga, the plant
must adopt a works council that would force workers to accept representation by the
UAW. By threatening to condition future work on whether employees select the union
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and by providing unlawful assistance to the UAW, the company violated the NLRA, the
charges contended. Other workers charged that the UAW misled and coerced them into
forfeiting their rights during the earlier card-check drive. They alleged the union
unlawfully demanded recognition from Volkswagen without a valid showing of majority
support. The cases were submitted to the NLRB’s Division of Advice for consideration
and, in two advice memoranda released in January, the Division recommended the
charges be dismissed.
Charges against Volkswagen. Last November, Volkswagen hosted a meeting with
several German labor officials sitting on VWAG’s works council. Those officials
endorsed the UAW. Moreover, according to a trade magazine, a member of VWAG
management, in a meeting of VWAG executives, said he was confident a works council
plan would work in the U.S., that VWAG executives intended to release a works council
plan and, if their proposal won the support of the managing board, formal negotiations
with a labor organization would be imminent. He also was quoted saying that
Volkswagen wanted a works council and that the “UAW would be a natural partner.”
Vokswagen also hosted three management representatives on the work council who came
to encourage the Chattanooga employees to participate in the global works council,
according to the charges, but U.S. law required them to elect a union before that could
happen. Volkswagen also allegedly cooperated with the union’s distribution of a booklet
entitled “Co-determining the Future.”
Citing Sec. 8(c) of the Act, which grants employers the right to express their opinions on
unionization so long as they are not accompanied by threats of reprisal or promises of a
benefit, the Division of Advice noted that Volkswagen was free to state its preference for the
union — or for a works council. “There is nothing unlawful about such statements of
preference for unionization in general, or the Union in particular. All of these statements
— urging union representation and/or a works council system, and those saying that the
Union would be a ‘natural partner,’ that direct communication between workers’
representatives globally is ‘essential to guarantee good working conditions,’ or that the
law requires a labor organization before employees could form a works council,” were
lawful.
Moreover, the Division pointed out, “It is well settled that a certain amount of employer
‘cooperation’ with the efforts of a union to organize is lawful,” adding, “these actions
were well within the range of lawful cooperation with the Union and its organizing
efforts.” Taking a “totality of circumstances” approach to its analysis, the Division
concluded Volkswagen’s conduct as a whole would not tend to inhibit workers in their
free choice of a bargaining representative. That was particularly true given that VWGA
also stated repeatedly that the decision on unionization, and on forming a works council,
was “entirely up to its employees,” a message the company “emphatically reiterated” at
the November meeting itself and in two subsequent employee newsletters. Further, as the
charging parties’ witnesses conceded, Volkswagen’s supervisors and managers have been
neutral with regard to the unionization effort. Thus, there was no evidence that the
company inhibited employees’ free choice regarding a bargaining representative.
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German officials’ statements. There were two possible violations, the Division
observed, based on allusions to expanding the Chattanooga facility to manufacture
another vehicle there if the works council were established. One was an alleged statement
by a German company official that VWAG would only agree to an extension of the site
once “it is clear how to proceed with the employees' representatives in the United States.”
The other: a reported statement by the head of the global works council that “we know
how important that (second) vehicle is for Chattanooga” and that “in the interests of our
U.S. colleagues, we're open to such an allocation of an order.”
These statements could be understood “to condition future expansion of the Chattanooga
facility on the employees’ representational status,” and arguably would violate the Act —
had they been made by an employer that was subject to its coverage. But VWGA could
not be held responsible for the statements of German union representatives who are
members of VWAG’s supervisory board. Although a wholly owned subsidiary, VWGA
is a separate corporation from VWAG, operates independently, and sets its own
employment policies. While there has been consultation and cooperation between the
entities, there are no other indicia of single employer status, the Division concluded.
Moreover, the NLRA does not apply beyond the geographic boundaries of the United
States, and its reach is limited to locations in which the U.S. has sovereignty or some
measure of legislative control. Also, the speakers were not acting as agents of VWGA
when they made the statements at issue. They had no apparent authority, and after the
statements were made, VWGA “clearly and effectively disavowed any message
indicating that future expansion of the Chattanooga facility might be conditioned on the
employees’ representational status.”
Charges against UAW. The union faced accusations that it made misrepresentations
while soliciting authorization cards from Volkswagen workers; specifically, that a
signature on the authorization card meant the employee was approving a secret-ballot
election to be held. The UAW also allegedly relied on ambiguous or outdated
authorization cards signed more than a year before the union claimed majority status.
Finally, the union was accused of telling workers who had revoked authorization cards,
and sought their return, that they’d have to contact the UAW office and meet with a
union representative, who would destroy the cards in their presence. But the union did not
violate the Act in its solicitation or handling of authorization cards, as there was no
evidence indicating any unlawful restraint or coercion, the Division advised.
“None of these claims include any factual assertions that would indicate that any of the
Union’s conduct in the solicitation of cards would itself constitute unlawful restraint or
coercion,” according to the Advice Memorandum. “Nonetheless, the charges allege that the
Union’s alleged misrepresentations and solicitation of authorization cards was itself
unlawful.” The Division disagreed, concluding that the UAW did not violate the Act
merely by claiming majority status and demanding recognition, regardless of whether it
had made a valid showing of majority support. Nor did the union violate the Act in its
solicitation or handling of authorization cards, given the lack of evidence indicating any
unlawful restraint or coercion.
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Acting on the recommendation of the Division of Advice, the Board, in turn, recently
dismissed the charges against both Volkswagen and the UAW.
NRTW seeks inquiry. Last week, NRTW staff attorneys (led by former NLRB Member
John Raudabaugh) requested an official inquiry into the NLRB's conduct in adjudicating
the Volkswagen workers’ charges. It has asked the Board’s inspector general to
investigate the agency’s conduct in processing the unfair labor practice allegations and
the instructions by the Division of Advice to dismiss the charges. Foundation attorneys
have filed a Freedom of Information Act request with the NLRB seeking full disclosure
regarding the agency's handling of the case and its contacts with UAW agents.
Chief among the NRTW’s complaints is that NLRB staff released the advice memoranda
to members of the press in Tennessee but not to NRTW attorneys — who only received
the memos from a reporter. “Such memos are rarely, if ever, released to anyone in open
cases,” according to NRTW. An email from the NLRB Atlanta region, accidentally
forwarded to NRTW attorneys, reflects that the Board regional drector questioned the
propriety of releasing the memos to the media, contrary to longstanding NLRB practice,
NRTW said. “Foundation attorneys are concerned that the NLRB's hurried public release
of memos favorable to VW and the UAW calls into question the agency's impartiality in
the workers’ cases.” They also say the NLRB’s actions undermined the organization’s
ability to advise its clients before it became publicly known that the Board would dismiss
their cases.
Election scheduled. News of the “rapid-fire” UAW election was met with a prompt
response from NRTW President Marx Mix. He issued a statement Monday, February 3,
noting the organization was “pleased that despite constant calls by UAW officials to be
recognized as the workers' monopoly bargaining representative via card check
recognition, Volkswagen workers will instead be given a chance to vote on the matter in
a secret-ballot election. A secret-ballot election is what Foundation-assisted workers were
asking for all along,” Mix said.
Still, he cited concerns over “the existence of backroom deals cut between Volkswagen
and UAW officials giving union organizers preferential access to the workers leading up
to the election.” NRTW asked the company to give equal time to those workers opposing
the union, and “to release any agreements it has signed regarding what would happen if
the UAW union takes monopoly bargaining power over the workplace, including
agreements to impose a so-called works council on the employees.” Said Mix: “VW
workers should be given all the facts before the election so that they can make an
informed choice, and we will oppose efforts to stampede them or tilt the playing field.”
At any rate, with charges of campaign misconduct cleared, the election is slated to
proceed on February 12 (Case No. 10-RM-121704). The UAW’s King said the works
council model is in line with the union’s existing partnerships with domestic auto
companies and is in keeping with “its vision of the 21st century union.” Come next week,
the union will find out whether the Chattanooga workers share that vision.
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Unions and employers reach deals, declare impasse, prepare to strike in response
By Pamela Wolf, J.D.
A familiar refrain of bargaining deals, membership balloting, impasses and strikes has
been ringing in the labor world. Among the recent developments is the approval of a new
contract for Las Vegas hotel workers, a new deal for airline pilots, an unconditional
return-to-work offer by striking workers at an Ohio bearings plant, and a planned one-day
strike by nurses at a medical center in Massachusetts on the heels of their employer’s
declaration of impasse.
Caesars Entertainment. On Friday, January 28, Members of the Culinary and
Bartenders Unions voted to ratify a new five-year deal with Caesars Entertainment in Las
Vegas. According to the unions, the move was approved by 97 percent to the voting
members. The new contract will cover some 13,000 workers in food and beverage,
housekeeping, cocktails, and the bell departments.
The new contract came via a negotiating committee made up of workers from all Caesars
properties and varied departments who worked with the company to reach terms that
safeguard benefits and will help bring back jobs, the unions said. Negotiations began last
summer following the expiration of the prior CBA on June 1, 2013. Agreement on the
new contract was reached on January 13, 2014.
The economic package mirrors the agreements of the unions and other employers, the
unions reported. Workers will keep their high-quality health insurance, and contract
changes were made for food and beverage operations to permit flexibility in closed and
distressed venues with the aim of reopening shops and bringing workers back to their
jobs. New housekeeping language will increase job safety by creating measures designed
to deal with hazardous work conditions. Finally, a new program in the cocktails
department will create jobs and maximize customer service.
Silver Airways. On Thursday, February 6, Silver Airways and its pilots, represented by
the Airline Professionals Association Teamsters Local 1224 and the International
Brotherhood of Teamsters Airline Division (IBTAD), announced that they have reach a
deal that will help address pilot shortages at the airline and provide Silver’s pilots with
pay increases and quality of life improvements.
The two groups have been working since last August on a midterm contract solution that
will increase pilot pay and provide quality of life enhancements, while at the same time
let the airline operate better and continue to grow. Once ratified by the pilots, the Letter
of Agreement will also assist the airline in attracting and retaining high quality pilots by
immediately boosting pay, enhancing commuting and schedule flexibility, and permitting
all pilots who remain with Silver for another year to earn a cash retention bonus.
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The deal is strongly endorsed by both the Silver Executive Council and their Teamster
local. Final approval, however, is subject to ratification by Silver’s pilot membership.
“We are very pleased that we reached a mutually beneficial agreement that recognizes the
value of our pilots and the key role they play at Silver, while at the same time ensuring
that our company can operate successfully and continue to grow and expand,” said Silver
Airways President and CEO Dave Pflieger. “Achieving these goals is an outcome that
will not only allow us to secure and better our pilots’ jobs, it will create more
advancement opportunity enabling our pilots to gain the experience needed to quickly
advance in their careers as professional aviators, both here and throughout the industry.
Silver Airways Corp. operates flights to and from destinations in Florida, the Bahamas,
Georgia, Alabama, Mississippi, Virginia, West Virginia, Pennsylvania, New York and
Ohio.
Rotek, Inc. Members of United Steelworkers Local 8565 have in good faith offered to
unconditionally return to work, ending a year-long unfair labor practice strike at Rotek,
Inc.’s Aurora, Ohio, bearings plant while contract negotiations proceed. On January 27,
USW District 1 Director David McCall said that the strategic decision to put an end to the
dispute at Rotek, a subsidiary of ThyssenKrupp, is based on the union’s belief that the
remaining issues can and should be resolved at the bargaining table. “The company’s
illegal behavior instigated and prolonged this labor dispute, and Rotek will soon enough
need to answer for it,” McCall said. “Rather than continue to wait for management, we
have proactively offered to end our strike in the interest of getting these Steelworkers
back on the job as soon as possible.” The union pointed out that the NLRB has authority
to award back pay to strikers who are unlawfully denied reinstatement by their employer
after an unconditional request for reinstatement has been made.
The Board’s Region 8 has set a hearing for March 10, 2014, on an amended consolidated
complaint against Rotek before an administrative law judge in Cleveland. In the
complaint, issued on December 31, 2013, NLRB Region 8 Director Frederick Calatrello
alleges that Rotek failed to bargain in good faith by refusing to provide information
relevant to bargaining and by unilaterally implementing its final contract offer without
bargaining to a good faith impasse, according to the union. Rotek also purportedly
engaged in illegal surveillance of employees engaged in activity protected by federal
labor law. In addition, the company allegedly violated labor law when it fired an
employee with the aim of discouraging other employees from engaging in protected
union activities.
Baystate Franklin Medical Center. On January 30, registered nurses at Baystate
Franklin Medical Center (BFMC) in Massachusetts announced a one-day unfair labor
practice strike that will take place on Monday, February 10. According to the
Massachusetts Nurses Association/National Nurses United, the move comes in direct
response to Baystate Health's declaration of impasse the week before in its negotiations
for a new contract with the nurses and its plan to implement its last offer, which the
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nurses claim would eliminate a key nursing standard that serves to protect nurses from
working prolonged shifts.
Last October, the membership cast an overwhelming vote to authorize the BFMC nurses'
negotiating committee to call a strike, but the decision to issue the required 10-day notice
and to set a strike date was made by the committee the week of the strike’s
announcement. The membership once again endorsed the decision at open meetings held
on January 29. The union said that this will be the second one-day strike by the BFMC
nurses in the two years since negotiations began for a new contract in October of 2011.
The first strike was held on October 5, 2012.
Last summer, the NLRB issued complaints against Baystate for its refusal to provide
information that the nurses needed to evaluate the management's proposals at the table, as
well as for management's efforts to prevent nurses from their lawful right to discuss
union matters at work, the union said.
The recent declaration of impasse, according to the union, followed two complaints
issued by the NLRB against Baystate Health for unfair labor practices. The union said
that one of the complaints was for a similar declaration of impasse in 2012 in Baystate's
negotiations with the nurses who work at the Springfield-based Baystate VNA &
Hospice. In that case, the union stated, Baystate was ultimately forced to rescind its
declaration of impasse and to continue negotiations with the nurses.
In response to the hospital's action, the nurses have filed another set of unfair labor
practice charges against the hospital with the NLRB, and are appealing to local and state
officials for help in ending this conflict.
The key issue blocking a settlement is Baystate Health's demand to eliminate the
requirement that the employer pay overtime for consecutive hours worked beyond the
end of an eight, ten or twelve hour shift, according to the union. The nurses adamantly
oppose this practice because they know this protection is in place in all MNA/NNU
hospital contracts (encompassing 70 percent of the hospitals in Massachusetts) and is a
policy at most of the few non-union hospitals as well.
Settlement provides back pay, other relief, to workers not hired by company that
bought former employer’s assets
The NLRB announced on February 7 a settlement under which World Class Corrugating,
LLC, will pay nearly $120,000 in back pay and other relief to a group of employees who
had previously worked for Wheeling Corrugated Company, whose assets World Class
purchased in bankruptcy, and who were prevented from working for the new company.
When Wheeling, a roofing and siding business in Louisville, Kentucky, went bankrupt in
2012, World Class purchased some of their assets in a bankruptcy proceeding, according
to the Board. World Class then began similar operations and employed Wheeling’s
managers and supervisors. The NLRB said that in order avoid a bargaining obligation
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with International Brotherhood of Teamsters (IBT) General Drivers, Warehousemen &
Helpers, Local 89, the collective bargaining representative of Wheeling’s unit employees,
World Class directed a temporary hiring agency to ensure that former employees of
Wheeling were not hired in numbers that would permit them comprise a majority of the
new World Class workforce.
When the union sought recognition, the company also refused to recognize or bargain
with it, the NLRB said, and unilaterally changed the employees’ terms and conditions of
employment, including making changes to their health and retirement benefits.
After the Board authorized action seeking Section 10(j) injunctive relief, which, if so
ordered by the district court, would have required the World Class to stop its alleged
unlawful conduct, hire Wheeling unit employees, and recognize and bargain with the
Union, Region 9 settled the matter.
The settlement provides that World Class will hire or place on a preferred hiring list 18
employees who had previously worked for Wheeling, pay nearly $120,000 in back
pay, pay more than $11,000 in reimbursement for expenses incurred by the workers as a
result of the company’s conduct, and provide the workers with retroactive pension fund
contributions.
The Board also noted that successful bargaining between the World Class and the union
led to a mutually acceptable CBA that is currently in effect at the workplace.
Board mulling over new arbitration deferral standard, invites briefs
The NLRB has invited those who are interested to file briefs regarding the issue of
whether the Board should continue, modify or abandon the Olin/Spielberg arbitration
deferral standard. The current standard requires the NLRB to defer to an arbitration
award when: (1) the arbitration proceedings are fair and regular; (2) all parties agreed to
be bound; (3) the contractual issue considered by the arbitrator is factually parallel to the
unfair labor practice issue (and the arbitrator was presented with the relevant facts); and
(4) the resulting decision is not “clearly repugnant” to the National Labor Relations Act.
The party opposing deferral carries the burden of proof.
NLRB General Counsel Richard F. Griffin, Jr., has asked the Board to adopt a different
standard,discussed in GC Memorandum 11-05, under which the party urging deferral
would bear the burden of showing: (1) the CBA 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 meets that burden, the Broad would defer unless the award was clearly
repugnant to the Act.
The Board is inviting briefs regarding the arbitration deferral standard to be filed in
Babcock & Wilcox Construction Co. Inc., 28-CA-022625. The questions that interest the
Board are these:
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Should the Board adhere to, modify, or abandon its existing standard for postarbitral deferral under Spielberg Mfg. Co., 112 NLRB 1080 (1955), and Olin
Corp., 268 NLRB 573 (1984)?
If the Board modifies the existing standard, should the Board adopt the standard
outlined by the General Counsel in GC Memorandum 11-05, or would some other
modification of the existing standard be more appropriate, for example, shifting
the burden of proof, redefining “repugnant to the Act,” or reformulating the test
for determining whether the arbitrator “adequately considered” the unfair labor
practice issue?
If the Board modifies its existing post-arbitral deferral standard, would
consequent changes need to be made to the Board’s standards for determining
whether to defer a case to arbitration under Collyer Insulated Wire, 192 NLRB
837 (1971); United Technologies Corp., 268 NLRB 557 (1984); and Dubo Mfg.
Corp., 142 NLRB 431 (1963)?
If the Board modifies its existing post-arbitral deferral standard, would
consequent changes need to be made to the Board’s standards for determining
whether to defer to pre-arbitral grievance settlements under Alpha Beta, 273
NLRB 1546 (1985), review denied sub nom. Mahon v. NLRB, 808 F.2d 1342 (9th
Cir. 1987); and Postal Service, 300 NLRB 196 (1990)?
In answering these questions, the Board invites submission of empirical and other
evidence. Briefs by parties and amici not exceeding 50 pages in length should be filed
with the Board in Washington, D.C. on or before March 25, 2014. Briefs can be filed
electronically at http://mynlrb.nlrb.gov/efile — contact Gary W. Shinners, Executive
Secretary, National Labor Relations Board, for assistance.
Union election at VW plant could usher in new labor model, but at the risk of losing
state-sponsored incentives
By Pamela Wolf, J.D.
Things are heating up as a controversial NLRB-conducted election is poised to begin on
Wednesday, February 12, at Volkswagen’s Chattanooga, Tennessee, plant, and workers
are faced with a difficult choice. Unfair labor practice charges filed earlier in the
organizing campaign were dismissed against both the company and the United Auto
Workers, who have since entered into a stipulated election agreement. Should the workers
opt for bargaining representation by the UAW, the United States may see its first
European-style “work council” — but VW’s state-sponsored incentives may also come to
an end. Voting will continue through Valentine’s Day on Friday, February 14.
Transplanted labor-relations model? The UAW has touted the potential development
as a positive move for VW workers, noting that “Every major VW assembly facility in
the world, with the exception of the Chattanooga facility, has worker representation and a
seat on the VW Global Works Council.”
12
“VW is a company that is globally recognized as being at the forefront of respecting the
basic human rights of workers to organize and collectively bargain as spelled out in the
United Nations Guiding Principles on Business and Human Rights, the International
Labor Organization's Declaration on Fundamental Principles and Rights at Work, and the
Organization for Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises,” according to the UAW.
In Germany, unions bargain for wages, while works councils weigh in on job security,
safety, and other plant-specific matters. How the UAW’s role would intermesh with a
works council is unclear.
The UAW, nonetheless, has cited favorably to VW's Global Labor Charter, its Social Charter
and its principles for the use of temporary workers. The Labor Charter establishes annual
labor-management meetings and gives employee bodies the right to hold workforce
meetings at least once a year during which management informs the workforce on the
economic situation and developments in the area of human resources and social matters,
the union said.
“Volkswagen is a company that has extensive experience with union representation and
the UAW believes the role of the union in the 21st century is to create an environment
where both the company and workers succeed,” the union said.
Opposition in state Senate. Not everyone is pleased about the potential for UAW
representation and a seat on the VW Global Works Council. According to media reports,
the state of Tennessee has put up almost $600 million in incentives for the VW assembly
plant to be located in the state.
However, should the election result in union representation, those incentives could dry
up.
In a statement sent to Employment Law Daily, Tennessee Senator Bo Watson (R-Dist. 11)
explained: “Should the workers at Volkswagen choose to be represented by the United
Auto Workers, then I believe any additional incentives from the citizens of the State of
Tennessee for expansion or otherwise will have a very tough time passing the Tennessee
Senate. I do not see the members of the Senate having a positive view of Volkswagen
because of the manner in which this campaign has been conducted.”
Watson said that, clearly, “every member understands and respects the right of workers to
choose whether to collectively organize or not.” However, the voting employees need to
be aware of all the potential consequences of their vote, he added.
“I have heard from citizens in my District and it has been widely reported that
Volkswagen has promoted a campaign that has been unfair, unbalanced, and, quite
frankly, un-American in the traditions of American labor campaigns,” Watson noted.
“Tennessee is a ‘Right To Work’ State, the Tennessee Senate has affirmed this many
times, and Tennessee has built its reputation as a pro-business state,” Watson pointed out.
13
“I believe the members of the Tennessee Senate will not view unionization as in the best
interest of Tennessee.
The Governor, the Department of Economic and Community Development, as well as the
members of this delegation, will have a difficult time convincing our citizens to support
any Volkswagen incentive package. Our job will be made exponentially more
challenging.
“The citizens of Tennessee have invested over ½ billion dollars in Volkswagen.
Volkswagen’s success is important to us. Anything that could have a negative effect on
Volkswagen’s success is important to all the citizens of Tennessee and the decisions that
Volkswagen makes has an impact on other Tennessee businesses.”
All eyes will be watching as the workers’ ballots are counted. Whether workers will vote
to support the union in the midst of “potential consequences” that include the loss of
state-sponsored initiatives that benefit their employer — and the controversy over a
European-style “work council” in the U.S. — remains to be seen.
Board soliciting briefs on whether its jurisdiction extends to religiously affiliated
university
The NLRB has invited interested parties to submit briefs on the question of “whether a
religiously affiliated university is subject to the Board’s jurisdiction, and whether certain
university faculty members seeking to be represented by a union are employees covered
by the National Labor Relations Act or excluded managerial employees.”
The case at issue is Pacific Lutheran University (19-RC-102521). SEIU Local 925 filed a
petition to represent a unit of all non-tenure-eligible contingent faculty who taught a
certain number of hours at this Tacoma, Washington-based university. According to the
university, however, the Board lacks jurisdiction because the school is a religiously
operated institution not subject to the NLRA and certain faculty in the petitioned-for unit
are managers.
The Board has specifically asked parties and amici to address one or more of the
following questions:




What is the test the Board should apply under NLRB v. Catholic Bishop, 440 U.S.
490 (1979), to determine whether self-identified “religiously affiliated educational
institutions” are exempt from the Board’s jurisdiction?
What factors should the Board consider in determining the appropriate standard
for evaluating jurisdiction under Catholic Bishop?
Applying the appropriate test, should the Board assert jurisdiction over this
Employer?
Which of the factors identified in NLRB v. Yeshiva University, 444 U.S. 672
(1980), and the relevant cases decided by the Board since Yeshiva are most
significant in making a finding of managerial status for university faculty
members and why?
14
Briefs should be filed with the Board on or before March 28, 2014; they can be filed
electronically at http://mynlrb.nlrb.gov/efile — contact Gary W. Shinners, Executive
Secretary, National Labor Relations Board, for assistance.
Number of major work stoppages, participation of workers down in 2013
On Wednesday, February 12, the DOL’s Bureau of Labor Statistics (BLS) released its
data on major work stoppages across the United States in 3013. There were 15 major
strikes and lockouts involving 1,000 or more workers and lasting at least one shift. This
number, which reflects only those beginning in 2013, is down from the 19 major work
stoppages that began in 2012.
These major work stoppages in 2013 idled 55,000 workers — considerably fewer than
the 148,000 workers idled in 2012. As to the effective number of days made idle by
major work stoppages, there were 290,000 such days in 2013, compared to the
substantially greater 1.13 million days made idle in 2012.
According to the data for 2013, two-thirds of major work stoppages lasted three or less
workdays. State and local government accounted for 60 percent of major work stoppages
beginning in 2013. Over half of major work stoppages beginning in 2013 took place in
California.
Which work stoppages are at the top of the list? The longest and most days idle of any
major work stoppage that began 2013 was between the New York City Public Schools
and the Amalgamated Transit Union Local 1181 — 8,000 workers were involved, with
effectively 176,000 made idle. The greatest number of workers involved in a major work
stoppage last year involved the University of California Medical Centers and American
Federation of State County and Municipal Employees Local 3299 (including the
University Professional and Technical Employees Union for one day), which affected as
many as 18,800 workers.
Other notable work stoppages beginning in 2013 included the Bay Area Rapid Transit
(BART) and the Service Employees International Union Local 1021 and the
Amalgamated Transit Union Local 1555. BART was involved in two major work
stoppages occurring in July and October, the BLS reported.
About the report. The BLS major work stoppages series began in 1947. “Major work
stoppage” includes both worker-initiated strikes and employer-initiated lockouts that
involve 1,000 workers or more and lasting at least one shift. The BLS does not
distinguish between lockouts and strikes in its statistics.
The Bureau obtains information on work stoppages from reports from the Federal
Mediation and Conciliation Service, state labor market information offices, BLS Strike
Reports from the Office of Employment and Unemployment Statistics, and from media
sources. The BLS also contacts one or both parties involved in the work stoppage
(employer or union) to verify the duration and number of workers idled by the stoppage.
15
The BLS calculates “days of idleness” by multiplying the number of workers involved in
the strike or lockout by the number of days workers are off the job. The number of lost
workdays for every major work stoppage is based on a 5-day workweek (Monday
through Friday), excluding Federal holidays.
New labor model is out, as Volkswagen workers vote against UAW representation,
but new breed of opposition shows its face
By Pamela Wolf, J.D.
On Valentine’s Day, February 14, the United Auto Workers (UAW) announced that the
workers at Volkswagen’s Chattanooga plant in the end had voted against what could have
been the beginning of a new, European-style labor model for the United States. Had the
workers opted for UAW representation, the union had promised to establish a works
counsel with Volkswagen for the presumed improvement of labor-management relations
and a better outcome for employees as they worked collaboratively with their employer
on workplace issues. While the new European-style works council is no longer an
immediate possibility, the nasty battle that played out in the run-up to the election may
have produced a new breed of opposition to worker representation.
The workers rejected union representation by a vote of 712 to 626, following what some
characterized as unprecedented and inappropriate threats by legislators who injected
themselves into an election that proceeded via a stipulated agreement between the union
and the employer.
On the eve of the first day of voting, Tennessee Senator Bo Watson (R-Dist. 11)
explained in a statement sent to Employment Law Daily: “Should the workers at
Volkswagen choose to be represented by the United Auto Workers, then I believe any
additional incentives from the citizens of the State of Tennessee for expansion or
otherwise will have a very tough time passing the Tennessee Senate. I do not see the
members of the Senate having a positive view of Volkswagen because of the manner in
which this campaign has been conducted.”
Watson was referring to the more than half a billion dollars in aid that had previously
been provided by the state to Volkswagen and its effort to persuade the employer that
Tennessee was the best location for the new plant.
“Tennessee is a ‘Right To Work’ State, the Tennessee Senate has affirmed this many
times, and Tennessee has built its reputation as a pro-business state,” Watson pointed out.
“I believe the members of the Tennessee Senate will not view unionization as in the best
interest of Tennessee.
The Governor, the Department of Economic and Community Development, as well as the
members of this delegation, will have a difficult time convincing our citizens to support
any Volkswagen incentive package. Our job will be made exponentially more
challenging.
16
“The citizens of Tennessee have invested over ½ billion dollars in Volkswagen.
Volkswagen’s success is important to us. Anything that could have a negative effect on
Volkswagen’s success is important to all the citizens of Tennessee and the decisions that
Volkswagen makes has an impact on other Tennessee businesses.”
On February 12, the day voting began, U.S. Senator Bob Corker (R-Tenn.) issued a statement
apparently intended to persuade workers to vote against unionization: “I’ve had
conversations today and based on those am assured that should the workers vote against
the UAW, Volkswagen will announce in the coming weeks that it will manufacture its
new mid-size SUV here in Chattanooga.”
The statement pointed to Corker’s work as the city’s prior mayor to develop the 1,200
acre Enterprise South Industrial Park that is the home of Volkswagen's North American
manufacturing headquarters. “Much of the negotiation that led to Volkswagen choosing
Chattanooga occurred around the dining room table of Corker’s Chattanooga home,”
according to the statement.
Some have expressed concern over the implication created by the statement that Corker
was privy to inside information indicating that workers would fare better if they rejected
the union, and whether in fact, that implication was true.
“We commend Volkswagen for its commitment to global human rights, to worker rights
and trying to provide an atmosphere of freedom to make a decision,” said UAW Region 8
Director Gary Casteel, who directs the union’s Southern organizing. “Unfortunately,
politically motivated third parties threatened the economic future of this facility and the
opportunity for workers to create a successful operating model that that would grow jobs
in Tennessee.”
“We are outraged at the shameful tactics Sen. Corker, Governor Haslam and their
billionaire and special interest buddies employed to squelch the legal right of these
Volkswagen workers to form a labor union,” said Amalgamated Transit Union (ATU)
International President Larry Hanley.
“Corker’s claims that a new Volkswagen product would be built in Chattanooga if
workers voted against joining the UAW was a politically motivated threat to the
economic future of these workers and their families.”
The ATU, however, praised Volkswagen and I G Metall for remaining neutral in the
union vote, respecting the workers’ rights and their freedom to make a decision.
The Communications Workers of America (CWA) called Corker’s behavior “particularly
outrageous,” noting that four years ago the Senator had opposed President Obama's plan
to rescue the auto industry and General Motors, “despite the fact that a large GM
assembly plant in Spring Hill, Tenn., was a critical part of the economy for thousands of
working families.” According to the union, the plant is now thriving with 2,000 new jobs,
owing to cooperation between GM and the United Auto Workers.
17
Moreover, pointing to Corker’s proclamation on the eve of the NLRB vote that a new
VW product would be built in Chattanooga if workers voted against union representation,
the CWA said: “We should all demand that the Senator prove that assertion since he set
the stage for workers to choose between representation and participation and having work
in the years ahead. The Governor and state legislative leaders took the ‘stick approach’
and said there would be no new incentives for VW if the workers voted for the union.”
University of California workers prepared to strike over wage and safety issues
More than 21,000 workers at the University of California (UC) have voted to go on
strike, the American Federation of State, County, and Municipal Employees (AFSCME)
Local 3299 reported on Saturday, February 15. During three days of voting, some 96
percent of the university’s service workers and patient care employees approved the
strike authorization. The university’s food workers, custodians, respiratory therapists, and
other service workers characterize the contract dispute as coming down to fair wages and
safe staffing.
The strike authorization was approved by 8,300 service workers, who the union says are
the lowest-paid career employees in the UC system. In addition, more than 13,000 Patient
Care Technical Workers voted to authorize a sympathy strike. Both units are represented
by AFSCME Local 3299, which has been negotiating with UC officials for more than a
year.
The union has promised to remain at the bargaining table, however, despite the strike
authorization. The dates and duration of the strike have yet to be determined by the
union’s bargaining team.
“AFSCME has and will continue to bargain in good faith, but we will not negotiate
against ourselves,” said AFSCME 3299 Bargaining Team Member and Patient Care
Technical Worker Tim Thrush. “If UC is willing to make progress, we are willing to
work around the clock to reach a settlement. But make no mistake, the decision to avert a
strike lies solely with UC.”
Todd Stenhouse, a union spokesman, reportedly has said that while the union has
repeatedly made concessions, it won’t budge when it comes to fair wages and safe
staffing. He also criticized the UC system for its increased spending on administration.
“There are 7,000 UC employees that make more than the governor of California,”
Stenhouse said. “It’s the sweetest deal in all of California, and you have to be a UC
executive to get it.”
According to Stenhouse, janitors and groundskeepers that maintain the university’s
world-famous campuses earn an average salary of just $36,000 per year — with 99
percent of the union’s members being income-eligible for some form of public assistance.
“I am encouraged to see that after more than 20 months of negotiations it appears that
progress is being made between the UC and AFSCME 3299,” Lt. Governor and UC
18
Regent Gavin Newsom purportedly told his more than 117,000 Facebook fans with
regard to developments prior to the strike authorization. “After years of giving huge
salaries to executives, it is time for the UC to show its lowest paid workers that they are a
valued part of the UC family.”
FLRA soliciting amici briefs on whether open period for filing decertification
petitions applies to individuals
The Federal Labor Relations Authority (FLRA) is soliciting amici curiae briefs on a
significant matter in a pending case to which the Federal Service Labor-Management
Relations statute (5 U.S.C. 7101-7135) and its regulations at 5 CFR Part 2422 may apply.
The issue concerns whether Sec. 7111(f)(3) of the statute and Part 2422.12(d) of the
Authority’s regulations (relating to the period during which a decertification petition may
be filed) apply to decertification petitions that are filed by individuals. The FLRA’s notice
soliciting amici briefs is slated for publication in the Federal Register on Monday,
February 24.
Background. On February 18, 2014, the FLRA granted an application for review of the
Regional Director’s (RD’s) decision and order dismissing the petition in National
Aeronautics & Space Administration, Goddard Space Flight Center, Wallops Island,
Virginia, No. WA-RP-13-0052, 67 FLRA 258 (2014) (NASA).
The petitioner argued that the Authority should grant his application because the RD’s
decision raised an issue for which there is an absence of precedent. According to the
petitioner, the FLRA has never specifically held that the open period described in Sec.
7111(f)(3) of the statute applies to decertification petitions filed by individuals. The
petitioner based this claim on the Authority’s decision in 90th Regional Support
Command, Little Rock, Arkansas, 56 FLRA 1041 (2000) (Support Command), order
granting application for review vacated and application dismissed as moot, 57 FLRA 31
(2001).
Based on Support Command, the FLRA found in NASA that there is an absence of
precedent as to whether Sec. 7111(f)(3) of the Statute and Part 2422.12(d) of the
Authority’s regulations apply to decertification petitions filed by individuals, and it
granted the application for review on this basis.
Question for briefing. Because the FLRA believes this matter is likely to be of concern
to agencies, labor organizations, and other interested persons, it has opted to solicit amici
briefs addressing the following question:

Do Sec. 7111(f)(3) of the statute and Part 2422.12(d) of the Authority’s
regulations apply to decertification petitions filed by individuals?
In answering that question, the FLRA said the parties should address any pertinent
considerations of: (1) statutory construction; (2) legislative history; (3) applicable
precedent; and (4) policy.
19
Briefs. The format and service requirements for the briefs are set forth in the FLRA
notice. Briefs must be received on or before March 31, 2014, and should be mailed or
delivered to Gina K. Grippando, Chief, Case Intake and Publication, Federal Labor
Relations Authority, Docket Room, Suite 200, 1400 K Street NW, Washington, DC
20424-0001, among other requirements.
UAW asks NLRB to set aside Volkswagen election results due to misconduct of state
officials, special interest groups
By Pamela Wolf, J.D.
The United Auto Workers announced on Friday, February 21, that it has filed objections
with the National Labor Relations Board over what the union sees as interference by
politicians and outside special interest groups in the representation election held at
Volkswagen’s Chattanooga plant February 12 through 14. The union is asking the NLRB
to set aside the election results due to third-party misconduct and to hold a new election.
The result of the controversial balloting was not what the UAW had in mind. By a vote of
712 to 626, the workers at the plant voted against what could have been the beginning of
a new, European-style labor model for the United States. Had the workers opted for
UAW representation, the union had promised to establish a works counsel with
Volkswagen for the presumed improvement of labor-management relations and a better
outcome for employees as they worked collaboratively with their employer on workplace
issues.
The final ballot, according to some observers, followed unprecedented and inappropriate
threats by state officials and special interest groups who injected themselves into an
election that would have otherwise been conducted without the usual acrimony as it
proceeded by stipulated agreement between the union and the employer.
Interference. Calling foul, the UAW said the campaign included publicly announced and
widely disseminated threats by elected officials that state-financed incentives would be
withheld if workers exercised their protected right to form a union. The union also
pointed to threats by U.S. Senator Bob Corker (R-Tenn.) related to promises of a new
product line that would be awarded to the plant if workers voted against UAW
representation.
The union also recounted what it saw as Tennessee Senate Speaker Pro Tem Bo Watson’s
(R-Dist. 11) summary of threats by state officials to the Volkswagen workers who were
poised to cast their votes: “I believe the members of the Tennessee Senate will not view
unionization as in the best interest of Tennessee. The Governor, the Department of
Economic and Community Development, as well as the members of this delegation, will
have a difficult time convincing our colleagues to support any Volkswagen incentive
package.”
20
In the UAW’s eyes, these threats were very significant because state financial incentives
were a key component in Volkswagen’s decision to locate in Tennessee and are
necessarily a key component to the company’s future decisions related to expansion and
full capacity utilization in Chattanooga, as well as the heightened job security that would
accompany such an expansion.
The union offered up a collection of threats made by the state officials and the manner in
which they were disseminated both in the public media and directly to the voting
workforce, promising to further flesh out the collection in the Board investigation to
follow in the wake of the UAW’s objections.
Third-party misconduct. Relying on precedent established in Westwood Horizons
Hotel, 270 NLRB 802, 803 (1984), the UAW is asking the Board to set aside the results
of the election at the Chattanooga VW plant based on third party misconduct that has
“created ‘a general atmosphere of fear or reprisal rendering a free election impossible.’”
According to the union, the relevant five-factor test supports the conclusion that the
election should be set aside.
The nature of the threat, the diminishment of job security if the workers voted for the
union, “is, like the threat of a plant closing, among the most serious that can occur,”
UAW asserts. “The threat was directed at the entire bargaining unit and was known to
every potential voter in this extremely high visibility campaign. Moreover, the threat to
eliminate state incentives was made by powerful political leaders who, in fact and in the
reasonable perception of the employees, were quite capable of putting their threat into
effect.”
Worse than that, according to the union, was the “fist” of the state officials’ threats
regarding tax incentives for a new product line that was “amplified by the ‘velvet glove’
of a United States Senator who claimed to have ‘assurance’ from the Company that the
new product line would be a reward for a ‘No’ vote.”
Employees under these circumstances “undoubtedly treated this information with utmost
seriousness and accepted it as true,” the UAW said. The union pointed to the “No2UAW”
Facebook page, purportedly at the center of the debate on the campaign, which “placed
beyond doubt” how Senator Corker’s threats were to be read by the Volkswagen
workforce — the website linked to media reports of Corker’s statements in “The
Chattanoogan” and allegedly provided this host comment: “Our choices just became
clearer … UAW or B-SUV… Chattanooga Will Get New Line of SUVs if UAW Is
Not Approved.”
“This resonates as a classic ‘fist inside the velvet glove’ threat: if you vote against the
Union, you will be rewarded, but if you go the other way you will be punished,” the
UAW contends. “Senator Corker knew exactly what he was doing: he was purporting to
deliver from the Employer, in the midst of the Election, a promise of benefit if workers
voted against the UAW, and a threat to withhold that benefit if [the Volkswagen] workers
exercised their protected right to vote for the Union.” This “shameful conduct” alone,
according to the UAW, and especially when combined with the related conduct of the
21
state officials, is ample reason for the Board to grant the union’s objections and prevent
the Volkswagen workers “from being deprived of a free and uncoerced choice.”
South Jersey contracting firm will pay $400,000 to resolve gender bias allegations,
work with union to increase female recruitment
A South Jersey mechanical contracting company has agreed to pay a total of $400,000 to
resolve allegations that it violated the law and state Equal Employment Opportunity
(EEO) rules by failing to employ female plumbers on jobs it handled, including many
publicly-funded projects, according to New Jersey Acting Attorney General John J.
Hoffman and the Division on Civil Rights. Under terms of the settlement Falasca
Mechanical, Inc. of Vineland, Cumberland County, will pay the state $250,000 and pay a
female plumber $150,000 to resolve allegations that it repeatedly hired less experienced
and less qualified male plumbers over her, and overall failed to make a good-faith effort
to employ female plumbers while handling millions of dollars in public works jobs.
Under the same settlement, Plumbers and Pipefitters Local Union No. 322 has agreed to
join with Falasca in a cooperative effort to increase female recruitment into the union. A
non-paying party to the settlement, Local Union 322 also has agreed to increase training
and employment opportunities for female plumbers during the next three apprenticeship
cycles. Local Union 322 and Falasca have an ongoing labor agreement, and under that
arrangement, Falasca staffs its projects by requesting workers from the union.
The female plumber is a journeyman and member of Local Union 322. She was
employed by Falasca continuously from mid-December 2006 through January 2009, and
prior to that had worked on occasional jobs for the contractor dating back as far as 2000.
At the end January 2009, she was laid off by Falasca for economic reasons. She alleged
to the Division on Civil Rights that, despite her experience and prior employment
relationship with the contractor, she was repeatedly passed over when Falasca
subsequently was hired to handle both private and public projects and sought plumbers
through Local Union 322.
Among the private projects for which Falasca was hired was the 2009 construction of a
new Virtua Hospital facility in Voorhees Township, Camden County, which required
work on medical gas systems. Despite her 13 years of overall experience, the female
plumber alleged, and despite her holding a certification in medical gas installation, she
was passed over by Falasca and Local Union 322 for less experienced male plumbers,
some of whom were not certified in medical gas installation.
The Division’s Investigative Findings were that Falasca failed to hire or request a single
female plumber while handling 29 public works contracts — including schools,
municipal buildings, state buildings, a medical center and a prison — that yielded
approximately $93 million in revenue for the company.
Settlement Agreement. In addition to the monetary terms of settlement, Falasca has
agreed to work with Local Union 322 to comply with state-targeted hiring goals for
22
female workers, including contacting affiliated unions and hiring “out of territory” female
union members if necessary. Relative to every public contract it is awarded, the company
will keep specific records of its efforts to reach targeted hiring goals for women. The
records are to be kept for at least three years, and must include records of all individuals
requested or referred from a labor union, as well as those interviewed or hired.
Additionally, the company will develop its own antidiscrimination and EEO Rules
compliance policy, provide copies of the policy to the Division on Civil Rights, and
distribute it to all unions with whom Falasca has a collective bargaining or other type of
labor agreement. The contractor will provide mandatory training on its antidiscrimination
and EEO rules compliance policy to all project managers, foremen, hiring personnel and
Local Union 322’s Business Manager. The training must be conducted by a qualified
individual with a background in, and knowledge of, the LAD and civil rights law.
Reporting and monitoring provisions are built into the settlement to ensure Falasca’s
compliance.
In addition, Local Union 322 and Falasca have agreed to engage in a joint cooperative
effort to strengthen female recruitment into Local Union 322, and increase opportunities
for female plumbers. As part of that effort, Local Union 322’s Joint Apprenticeship
Training Committee (JATC) has committed to its own outreach and recruitment efforts to
attract more female participants in the apprenticeship program.
Local Union 322 also has agreed to undertake outreach to students in at least three
vocational-technical high schools during each of the next five academic years, including
the 2013-2014 academic year. The purpose of such outreach will be to provide
information about the plumbing industry as a career, and to encourage first and second
year female students to pursue careers in the trade.
Under terms of its agreement with the State, Falasca makes no admission of wrongdoing
or liability.
NLRB schedules public meeting on controversial accelerated election rules
By Pamela Wolf, J.D.
The NLRB is holding a public meeting on its controversial proposal amending the rules
that govern representation case procedures, according to a notice scheduled for
publication in the Federal Register on February 26. Interested parties are invited to attend
the meeting, which will be held on April 10 and 11.
In a move largely anticipated among labor law experts, on February 6 the NLRB reissued a proposed rule revising the Board’s rules and regulations governing
representation-case procedures — the so-called “quickie election” rule. According to the
Board, the new version is substantively identical to the prior proposal, which the Board
rescinded after being forced to retreat from its appeal of a district court decision invalidating
the much fought-over revisions due to a quorum issue. Under a stipulation of voluntary
dismissal, the agency’s appeal was dismissed by the D.C. Circuit on December 9, 2013.
23
At the upcoming public meeting, persons who have previously requested to speak may
share their views on the proposed amendments, which were published at 79 FR 7318, and
make other proposals for improving representation case procedures. Those who wish to
speak at the meeting are required to submit a Request to Speak in a form that is described
in the notice — it must be received by the Board no later than March 31. Those who
submit a Request to Speak are not required to also submit a Request to Attend, which
also is mandatory.
All speakers must be prepared to answer questions from the Board. The notice contains a
detailed list of the issues that will be addressed at the meeting, which fall into the
following categories:








Petitions and Pre-Hearing Issues: Whether or how procedures should be revised
concerning the petition, electronic filing and service, the showing of interest, and
employee notices.
Pre-Election Hearings: Whether or how pre-election litigation procedures should
be revised.
Voter Eligibility Lists: Whether or how the rules should address voter lists.
Requests for Review: Whether or how to amend the process for Board review of
the decision and direction of election.
Timing of Elections: Whether or how the rules should address the scheduling of
the election.
Post-Election Hearings: Whether or how post-election hearing procedures should
be amended.
Other Post-Election Procedures: Whether or how post-election Board review
procedures should be amended.
Other Issues.
The meeting will be held at the Margaret A. Browning Hearing Room (Room 11000),
National Labor Relations Board, 1099 14th Street, NW, Washington, DC 20570, starting
at 9:30 a.m. each day. The NLRB said that additional days of meeting may be scheduled
for April 8 and/or 9.
Companies and unions resolve labor disputes after Board files Sec. 10(j) petitions
The National Labor Relations Board has announced the separate settlements of two labor
disputes following Board authorization to obtain injunctive relief against each employer.
The Board has become more aggressive in its efforts to use this Section 10(j) tool.
First Transit, Inc. In the most recent instance, nationwide transportation-management
company First Transit, Inc., had obtained a transit contract in 2011 to operate Red Apple
Transit, a passenger bus company in Farmington, New Mexico. The full-time and regular
part-time drivers at Red Apple were represented by the Sheet Metal, Air, Rail and
Transportation Workers (SMART).
24
On May 13, 2013, the Board authorized its Region 28 to pursue an injunction against
First Transit for withdrawing recognition from the union. The company also purportedly
made unilateral changes in the terms and conditions of Red Apple drivers’ employment
that included cuts in wages and benefits without giving SMART a chance to bargain on
the proposed changes. First Transit also allegedly failed to provide relevant information
the union requested in order to carry out its representational duties.
On June 13, 2013, after the Sec. 10(j) petition was filed in the district court, the parties
agreed to a settlement under which First Transit would cease and desist its unfair labor
practices, recognize and bargain with the union, provide the requested information to the
union, and rescind the unilateral changes made to the Red Apple drivers’ terms and
conditions of employment. The Board approved the settlement agreement on November
21, 2013. In late 2013, the First Transit and SMART agreed on mutually acceptable terms
and conditions of employment for the employees and signed a CBA.
Merit House, LLC. In the earlier case, the Board on October 17, 2013, had authorized
pursuit of an injunction against Merit House, LLC for refusing to recognize and bargain
with the Service Employees International Union District 1199, which represented about
25 predecessor employees hired by Merit House. The Board directed the Region to seek a
cease and desist order and an interim bargaining order.
On February 6, 2014, after the injunction petition was filed, the Regional Director
approved a bilateral settlement agreement under which Merit House had agreed to
recognize and bargain with the Union.
General Counsel updates list of matters to be referred to the Division of Advice
By Pamela Wolf, J.D.
NLRB General Counsel Richard F. Griffin, Jr. has updated the list of matters that
Regions should submit to the Division of Advice due to the need for centralized
consideration of certain issues to help the Board provide a clear and consistent
interpretation of the Act. The list, last issued on April 12, 2011, is important to employers
because it provides much insight into the Board’s policy priorities.
Set forth in Memorandum GC 14-10, the new directive identifies three categories of
matters that should be submitted to the Division of Advice: (1) those involving GC
initiatives or areas of the law and labor policy of particular concern to the GC; (2)
relatively rare, difficult legal issues and those where there is no governing precedent or
the law is in flux; and (3) updates to casehandling matters traditionally submitted.
Notably, among those that remain on the list under the first category are cases involving
the issue of whether employees enjoy a Section 7 right to use an employer’s email system
or that require application of the discrimination standard announced in the Board’s
Register Guard decision, which held there was no employer duty to provide union access
to the employer’s email network.
25
As to the second category, the GC has added to the list cases involving novel issues that
arise from the application of the Board’s 2012 decision in Alan Ritchey, specifically with
regard to: (1) whether the employer has demonstrated “exigent circumstances” that
permitted unilateral discipline; (2) what is the appropriate remedy for a failure to engage
in pre-discipline bargaining; and (3) what suffices for purposes of good-faith bargaining
in these circumstances. The GC also listed cases involving mandatory arbitration
agreements with class action prohibitions that are not resolved by the Board’s D.R. Horton
decision or subsequent advice memoranda. The Board’s ruling in D.R. Horton has
generated much controversy and was overruled by the Fifth Circuit in December 2013.
In the final category, Griffin continues to include requests to seek Section 10(j) injunctive
relief and for investigative subpoenas post-complaint.
LEADING CASE NEWS:
2d Cir.: Court lacked jurisdiction over employee suit against union under LMRDA
where he was not union member or member “in substance”
By Ronald Miller, J.D.
A federal district court did not err in dismissing an employee’s claim brought under the
Labor-Management Reporting and Disclosure Act (LMRDA) after concluding that it
lacked subject matter jurisdiction because the employee was not and never had been a
member, or member in substance of a Teamsters local, ruled the Second Circuit.
Although the appeals court clarified that the LMRDA confers subject matter jurisdiction
over claims brought by members in substance, in this instance, it concluded that the
employee failed to plead facts establishing that he was in fact a member “in substance”
(Brady v International Brotherhood of Teamsters, Theatrical Drivers and Helpers Local 817,
February 3, 2014, Lohier, R).
Denial of union membership. The employee filed suit against the union and two of its
officers, alleging that the defendants violated the LMRDA by denying him membership
in the union in retaliation for his complaints about a union member. At various times, the
employee sought and obtained work through the union’s hiring hall. While working on a
film set, the employee criticized a union member for not distributing promised cash per
diem payments to drivers for the set. The next year he was passed over for membership in
the union and told by a union official that the refusal was in retaliation for his criticism
relating to the per diem payments. Later, the employee requested a membership
application from a newly elected union official. However, the official refused to provide
one.
The union’s Constitution established three “Formal Requirements” for union membership
for an “eligible applicant:” (1) the applicant “shall have executed a written application for
membership,” (2) the applicant “shall have tendered the initiation fees and one month’s
26
dues,” and (3) “[t]he local shall have accepted his application and dues.” According to the
employee’s complaint, he satisfied the eligibility requirements and therefore was entitled
to receive a membership application. The employee claimed that the union’s refusal to
provide him with an application or grant him membership was retaliatory in violation of
the LMRDA.
The district court held that it lacked subject matter jurisdiction because the employee
failed to plead facts affirmatively establishing that he was a member or a member in
substance of the union. This appeal followed.
Union member “in substance.” On appeal, the employee acknowledged that he was not
formal member of the union, but asserted that he was a union member “in substance.” As
an initial matter, the Second Circuit clarified that the LMRDA confers subject matter
jurisdiction over claims brought by members in substance as well as formal union
members. Title I of the LMRDA guarantees certain rights to “[e]very member of a labor
organization,” and creates a right of civil action for union members to enforce those
rights. Because “Title I regulates only the relationship between the union and its
members, not other relationships,” subject matter jurisdiction under the LMRDA exists
only where the plaintiff is a member of the defendant union.
The LMRDA defines a member, in relevant part, as “any person who has fulfilled the
requirements for membership in [a labor] organization.” The Second Circuit agreed with
the Third Circuit’s reasoning in Hughes v Local Number 11 of International Association
of Bridge, Structural and Ornamental Ironworkers, and adopted the “member in
substance” formulation articulated in that case, and also recognized by the Seventh and
Ninth Circuits.
Membership acceptance not ministerial act. Applying that formulation to the present
case, the employee argued that he qualified as a member in substance because he was
eligible to be a member and the membership requirements were purely ministerial.
However, the appeals court disagreed. The union’s Constitution did not require that it
accept every eligible applicant for membership. Rather, it had discretion over
membership decisions. Thus, even had the employee applied, the union would have
retained the discretion to accept or reject his application. There was no provision in the
union Constitution that required it to accept all eligible applications. Moreover, the fact
that the union only rarely exercised its discretion to reject an eligible applicant did not
disable it from rejection of the employee’s application.
Finally, the court rejected the employee’s argument that the union should not be able to
“profit” from its alleged bad faith refusal to provide him with an application. Because the
employee was not a member or member in substance of the union, the district court was
without jurisdiction to entertain this argument. The union’s denial of membership to the
employee was not a wrong that was redressable under the LMRDA. Thus, the judgment
of the district court was affirmed.
The case number is: 13-2038-cv.
27
Attorneys: Eugene G. Eisner (Eisner & Mirer) for John Brady. Eugene S. Friedman
(Friedman & Wolf) for International Brotherhood of Teamsters, Theatrical Drivers and
Helpers Local 817. Thomas J. O'Donnell, pro se. Francis J. Connolly, JR., pro se.
2d Cir.: State court action challenging arbitral award, CBA provision did not toll
limitations period for claim against union
By Lorene D. Park, J.D.
In an issue of first impression, the Second Circuit ruled that an employee’s claim against
his union for breach of the duty of fair representation, which accrued upon issuance of the
final arbitration award, was not tolled by the pendency of his separate state court action
seeking to confirm or deny the arbitral award. Also rejected was the employee’s
argument that a provision in the collective bargaining agreement which allowed for the
appeal of arbitral decisions meant that the arbitration award was not final until confirmed
by a court. As such, the appeals court affirmed the dismissal of his claim against the
union as untimely (Kalyanaram v American Association of University Professors at the New
York Institute of Technology, Inc, February 3, 2014, Droney, C).
Arbitration. The employee was a professor in the School of Management at the New
York Institute of Technology (NYIT). A number of students sent a letter to NYIT
administration complaining of sexual harassment and race discrimination by the
employee and NYIT issued him two termination letters. He challenged his termination
through arbitration under his union’s CBA. The arbitrator issued an interim award as to
one group of students; dismissing some allegations but finding enough cause to suspend
him for a semester.
At a subsequent hearing on the allegations of the second group of students, anonymous
emails criticizing NYIT were addressed and the employee denied sending them.
Thereafter, NYIT produced documents showing his IP addresses were the source of the
emails and issued a third termination letter. The arbitration culminated in an “Interim
Award of Arbitrator,” in which the arbitrator found just cause under the CBA to
terminate the employee. He moved to reconsider but on October 13, 2009, the arbitrator
issued a “Final Award of Arbitrator,” adopting its interim award but ordering that the
employee remain on leave for a year while seeking new employment. It also required that
NYIT not disparage him to potential employers.
The employee filed a petition to vacate the final award, which was denied by the New
York Supreme Court on June 2, 2010. The court confirmed the award and the employee
appealed to the Appellate Division, which affirmed on December 2, 2010. While he was
contesting the final award in state court, he also made various submissions to the
arbitrator, who retained the authority to implement the final arbitral award. He challenged
the way NYIT had implemented the award and, through a series of “supplemental
awards,” the arbitrator resolved those disputes.
28
Lawsuit against union. While the employee’s petition to vacate was pending in state
court, he filed the instant suit in federal court against the union for breach of its duty of
fair representation. He alleged the union did not adequately represent him in the
arbitration and prevented his attorney from fully participating. Granting partial judgment
on the pleadings under Rule 12(c), the district court dismissed the DFR claim as timebarred to the extent it concerned the union’s conduct in arbitration. He appealed.
Claim accrued upon final arbitral award. The primary question on appeal was when
the employee’s DFR claim against the union accrued. Under Second Circuit precedent, a
claim accrues “no later than the time when plaintiffs knew or reasonably should have
known that such a breach of the duty of fair representation had occurred, even if some
possibility of nonjudicial enforcement remained,” the appeals court noted. Here, since the
gravamen of the employee’s complaint was that the union failed to adequately represent
him during arbitration, his DFR claim accrued on the date of the arbitration award. The
employee argued that the DFR claim was timely, even though it was not filed in the
district court for nearly 11 months after the final award, based on the state court action
that was pending through 2011 and based on the fact that the arbitrator continued to issue
additional orders into 2011.
Effect of CBA and state court action. The employee argued that the DFR claim did not
accrue, and the limitations period did not begin, until the arbitral award was confirmed in
state court. He pointed to language in the CBA stating that the “decision of the arbitrator
shall be final and binding subject to appeal by either party to the applicable court.” Based
on this, he argued that the arbitration process was not considered over until such judicial
confirmation had occurred. Disagreeing, the appeals court explained that the arbitral
award was final and binding when issued and that the CBA simply recognized that
awards may later be confirmed or vacated. The “subject to appeal” clause merely avoided
any controversy as to the parties’ pre-existing right to appeal. It did not provide that his
DFR claim did not accrue while a judicial action to confirm or vacate the final arbitration
award was pending.
Also unavailing was the employee’s argument that the state court action tolled the sixmonth limitations period. The appeals court first noted that the applicable statute of
limitations for his DFR claim was based on NLRA Sec. 10(b) and because the federal
limitations period applied, federal tolling rules also applied. The Second Circuit had not
previously addressed the question of whether the statute of limitations on a DFR claim is
tolled during litigation in state court to confirm or set aside an arbitration award. And,
although equitable tolling has been recognized in other contexts where pursuing a
separate administrative remedy is a precondition to filing suit, such tolling has not been
available where an optional, parallel avenue of relief was pursued.
Here, the employee’s suit in state court to vacate the arbitration award was a “parallel”
avenue of relief to his DFR claim. First, the state court action could be pursued
independently of his DFR claim (success in state court was not a prerequisite to his claim
against the union). Second, the purposes of the two avenues of relief differed. The state
court action provided relief for a narrow set of possible defects in the arbitration process
29
while the DFR claim aimed to remedy violations of the union’s duty “to serve the
interests of all members without hostility or discrimination toward any, to exercise its
discretion with complete good faith and honesty, and to avoid arbitrary conduct.” For
these reasons, the state court proceedings did not toll the limitations period for the
employee’s DFR claim against his union.
Effect of subsequent arbitration proceedings. The employee also argued that his DFR
claim was timely because the arbitrator’s final award on October 13, 2009 was not
actually final, since the arbitrator later issued supplemental awards. Rejecting this
contention, the Second Circuit noted that the subsequent awards merely effectuated the
final award. Moreover, it was clear that the final award constituted the final decision of
the arbitrator on whether the employee’s termination was justified and indeed it bore the
heading “Final Award.” Consequently, the employee’s DFR claim accrued when the final
award issued and the dismissal of his claim as untimely was affirmed.
The case number is: 12-3630-cv.
Attorneys: Amelia Kristin Tuminaro (Gladstein, Reif & Meginniss) for American
Association of University Professors at the New York Institute of Technology, Inc. David
Thomas Azrin (Gallet Dreyer & Berkey) for Gurumurthy Kalyanaram.
3d Cir.: Collective bargaining agreements not impermissibly indefinite in duration;
offending provision subject to severability clause
By Ronald Miller, J.D.
A district court’s grant of declaratory judgment in favor of a union finding that collective
bargaining agreements between the union and an employer were indefinite, contrary to
aims of federal labor law and terminable by either party with reasonable notice was
vacated and remanded by the Third Circuit in an unpublished decision. Although the
appeals court agreed with the district court that a contractual provision allowing the
employer, at its complete discretion, to extend the agreements to other jobsites rendered
the agreements indefinite, it nevertheless concluded that the offending provision was
severable pursuant to a severability clause. What remained of the agreements was not
indefinite because they terminated upon the occurrence of a specified event. Judge
Vanaskie filed a separate opinion concurring in part and dissenting in part (International
Union of Operating Engineers, Local Union No 542 v Allied Erecting & Dismantling Co, Inc ,
February 4, 2014, Van Antwerpen, F).
The parties entered two CBAs pertaining to work dismantling a closed steel plant. The
project is ongoing and the union expects it to continue for at least another five years.
Included in the contract was a provision stating that in the event the employer procured
dismantling work within the union’s jurisdiction, it could elect, at its complete discretion,
to extend the agreement to those other jobsites. Additionally, each agreement provided
that they would terminate upon completion of the project. The agreements also contained
a severability clause.
30
Nearly 20 years into the project, the union notified the employer that it intended to
terminate the agreements and requested negotiations on successor agreements. In
response, the employer filed a complaint with NLRB, alleging such notice violated the
NLRA. An NLRB regional director dismissed the charge and the employer appealed. The
NLRB held the appeal in abeyance pending proceedings in this case. The appeal was
terminated following issuance of the district court’s decision.
Termination provisions. The union requested that the district court declare the
agreements were terminable upon reasonable notice, which the union claimed it provided.
The employer countered that the termination provisions were valid and sought a
declaration that the agreements remained in effect until completion of the project. The
District Court held that the agreements were of “indeterminate duration” and were
“inconsistent with the aims of federal labor law;” therefore, the parties could terminate
them upon reasonable notice. The employer appealed.
As an initial matter, the Third Circuit observed that labor contracts of indefinite duration
contravene federal labor policy and are terminable at will. However, a contract may
terminate upon a specified event rather than a predetermined date. Relying on the
Eleventh Circuit’s ruling in Montgomery Mailers’ Union No. 127 v. Advertiser Co., the
district court had concluded that the agreements here were of indefinite duration because
one party could extend the agreements indeterminately, thereby, indefinitely freezing
wages and benefits and preventing workers from negotiating pay raises and additional
benefits, which was an untenable result.
Severability. On appeal, the employer argued that the agreements were not indefinite
because they terminated upon the occurrence of a specified event — the completion of
the demolition project at the steel mill. However, the appeals court agreed with the
district court that the employer’s complete discretion over whether to extend the
agreements to other jobsites rendered the agreements indefinite. Because the provision
granted the employer the power to “extend” the agreements; it did not create “new and
separate” agreements. Consequently, the agreements were indefinite because one party
unilaterally controls the termination event. Thus, the Third Circuit concluded that
permitting the contractual provision to extend the agreements indefinitely into the future
“would be inconsistent with the aims of federal labor law.”
Nevertheless, the appeals court found that the offending provisions should be severed
pursuant to the severability clause in the agreements. What remained at that point was not
indefinite because it terminated upon the occurrence of a specified event — completion
of the demolition project. This outcome was consistent with federal labor policy
promoting labor relations stability and not permitting one party to unilaterally repudiate
CBAs during the agreed-to term. Thus, the appeals court vacated the district court’s
declaratory judgment in favor of the union.
Partial dissent. Judge Vanaskie agreed with the majority’s conclusion that the extension
provision in the CBAs was unenforceable. However, he parted company with the
majority with respect to its holding that the CBAs were not of indeterminate duration.
31
The dissent observed that the project had already spanned more than three decades since
the agreements were negotiated, and there was no end in sight for the project. Therefore,
he found that the project was the quintessential example of an indeterminate duration.
The case number is: 13-2160.
Attorneys: Edward R. Noonan (Eckert, Seamans, Cherin & Mellot) for Allied Erecting &
Dismantling Co., Inc. Regina C. Hertzig (Cleary, Josem & Trigiani) for IUOE, Local
Union No. 542.
8th Cir.: Union members’ claims alleging union botched bargaining over plant
closure time-barred
By Lisa Milam-Perez, J.D.
Union members’ claims that the Teamsters union failed to adequately represent their
interests during negotiations with an employer to secure their transfer to another facility
when their plant was slated for shutdown were time-barred, the Eighth Circuit held.
Affirming a district court’s grant of summary judgment to the union on their LMRA Sec.
301 claims, the appeals court held the members should have known of the union’s alleged
breach of its fair representation duty at the point they filed an NLRB charge against the
union. The court rejected their contention that their claims accrued at the later date when
an arbitrator ruled on the union’s related grievance against the employer (Becker v
International Brotherhood of Teamsters, Local 120, February 3, 2014, Riley, W).
Negotiations over plant closure. When US Foods announced it would close its Eagan,
Minnesota, facility, the union representing workers at that plant filed a grievance seeking
to bar its closure. The union and the company then began negotiating over the plant
closing and tried to reach a deal in which the Eagan employees would transfer without
loss of seniority or pension to the company’s Plymouth facility, also in the state. The
union secured a tentative facility closure agreement with the employer settling the
grievance, but the deal was contingent upon approval by both the union pension fund that
covered the Eagan employees and the plan that covered Plymouth employees. The
trustees of the Plymouth pension plan rejected the agreement. As a result, workers who
were moving from Eagan to Plymouth would lose all seniority and pension benefits; they
would come in as new hires.
A few weeks later, several displaced Eagan employees filed an unfair labor practices
charge against the union with the NLRB, alleging the union failed to fairly represent
them when it engaged in negotiations with the company that were designed “to serve
interests other than the represented employees.” The Board dismissed the charge, finding
insufficient evidence of a violation. When their appeal of the NLRB dismissal was
denied, the union members hired private attorneys to force the union to pursue a
grievance and arbitration against the company.
The union arbitrated the dispute and an arbitrator denied the union’s grievance. Less than
six months later, the union members turned to the courts, filing a hybrid Sec. 301 claim
32
against the union and the employer. The district court dismissed the claims against the
company, finding no allegations of any wrongdoing; it also ruled the complaints against
the union were time-barred by the six-month statute of limitations applicable to Sec. 301
claims. At issue on appeal was a dispute over when the union members’ Sec. 301 claims
against the union accrued.
Third Circuit ruling not on point. “In the face of formidable precedent,” the union
members contended the precise issue at hand — the “tolling [of] the limitations period
during a related arbitration proceeding” — was one of first impression in the circuit, and
thus urged the Eighth Circuit to follow Third Circuit case law that supported their theory.
That theory was that the Sec. 301 claims only accrued on the date in 2010 when an
arbitrator issued an award resolving the union’s grievance against the company. As such,
their suit was filed well within the six-month limitations period. The Third Circuit’s 1987
holding in Childs v. Pennsylvania Federation Brotherhood of Maintenance Way
Employees aligned nicely with their reasoning. But the facts of that case were
distinguishable, the appeals court noted. In Childs, the plaintiff alleged the union
breached its duty of fair representation “as to the arbitration proceeding,” because the
union could have cured the alleged breach while the arbitration proceeding was ongoing.
But here, the union members’ complaint was over the union’s handling of the facility
closure agreement, while the grievance decided by the arbitrator involved the CBA
between the union and the company. When it arbitrated this dispute, the union was not
trying to remedy an ostensible breach of its duty of fair representation in negotiating the
facility closure agreement. So the Third Circuit’s holding, albeit a favorable one for the
union members, simply did not apply here.
Arbitration decision unrelated. Although the union members had to push the union into
filing the grievance, and it was factually related to the larger circumstances of their job
loss due to the plant closure, the union’s grievance against the employer was unrelated to
the union members’ complaint against the union. The arbitration award denying the
union’s grievance addressed only whether the company violated the Eagan CBA when it
closed that facility and transferred work to its other plant. In fact, the arbitrator noted that
the company had “strongly suggested” that union officials (acting as trustees of the
Plymouth pension fund) acted in bad faith toward the union’s members by not supporting
the closure agreement. However, the arbitrator also said it was unnecessary to make a
finding of fact on this point since it was unnecessary to a decision on the merits of the
case before him. Regardless of the outcome of the arbitration, any grievance the union
members may have had with their union over its negotiations of the facility closure
agreement “would have remained unresolved by the arbitration,” the appeals court said.
Thus, it was not inclined to connect the two disputes in order to extend the time in which
the union members could file a Sec. 301 complaint against the union.
Rather, the union members’ claim accrued way back in 2008 when they filed an NLRB
charge against the union. At that point, the union members certainly knew of the union’s
alleged breach of its duty of fair representation. Their Sec. 301 complaint, filed two years
later, was properly dismissed as time-barred.
33
The case number is: 12-3846.
Attorneys: Brian N. Niemczyk (Hellmuth & Johnson) for Mark R. Becker. Martin J.
Costello for Intl. Brotherhood of Teamsters Local 120.
8th Cir.: Union VP’s statements that employee abused others, threw weight around
are actionable; defamation claim revived
By Kathleen Kapusta, J.D.
Reviving a steel company employee’s defamation claim, the Eighth Circuit found that
fact issues existed as to whether statements made by a union vice president at a factfinding meeting concerning a workplace dispute — in which he claimed that he received
20 complaints regarding the employee, that the employee had been verbally abusive to
others for the past five years, and that he had been harassing his crew for at least that long
— were false. Because that was enough to make the statements actionable, and because
they were not subject to a qualified privilege, the appeals court reversed a district court’s
grant of summary judgment to the defendants on this claim (Thomas v United Steelworkers
Local 1938, February 20, 2014, Shepherd, B).
The employee and union member worked as a team leader for six years. During that time,
his first manager recalled receiving only one complaint about his treatment of his crew
over a five-year period. The only complaint the second manager received was from a
crew driver who was scolded by the employee for not following the company’s safety
procedures. Specifically, the crew driver alleged that the employee yelled at him and told
him “No wonder the crew said you were a dumb f---ing truck driver.”
The statements. Because the driver reported the incident as harassment, a fact-finding
meeting was called. Although the driver stated that the employee had apologized and that
he didn’t feel he’d been harassed, the union VP replied that he had received 20
complaints on the employee; the employee had been verbally abusive to others for the
past five years; he had been making threats and throwing his weight around for the past
five years; he was “an absolute prick;” “I’m tired of [his] crap;” and “I’m not going to put
up with [his] sh-- anymore.” He also alleged said that “if I had it my way [he] would be
off the property.” Two days later, he was removed as team leader.
Voluntary dismissal of federal claims. After learning that the local and national unions
both declined to investigate further, the employee sued both asserting violations of the
LMRDA and the LMRA, a violation of the Minnesota Whistleblower Act, and state-law
claims of defamation, tortious interference with contract, and conspiracy.
Lower court proceedings. In granting the defendants’ motion for summary judgment
and dismissing the complaint, the district court acknowledged the employee’s admission,
in his memorandum in opposition, that the collective bargaining agreement was not
implicated and that he was therefore dismissing all of his claims except the defamation
and breach of union constitution claims. After finding that the breach of union
34
constitution claim was not properly before it because it was not raised in his second
amended complaint, the court denied leave to further amend. Finally, it granted summary
judgment on the defamation claim.
Jurisdiction. As an initial matter, the appeals court addressed the employee’s contention
that his statement in his memorandum in opposition to summary judgment that he was
“dismissing all claims except the defamation claim and the breach of union constitution
claim” removed all the federal claims on which the district court based its subject matter
jurisdiction. Disagreeing, the appeals court found that the employee could not unilaterally
dismiss or withdraw his federal claims in a memorandum in opposition to a summary
judgment motion so as to strip the lower court of its jurisdiction.
Rather, after 21 days had passed from the filing of his second amended complaint, the
employee was required to either obtain the consent of the opposing parties or seek the
permission of the district court to amend his complaint, the court explained. Accordingly,
his federal claims were not withdrawn from the second amended complaint and remained
before the district court until they were dismissed by the court in its order. Because his
purported dismissal was nothing more than an abandonment of his claims, the district
court retained jurisdiction over the case.
Defamation claim. Turning to the merits of the employee’s defamation claim, the court
pointed out that defamation under Minnesota law requires proof that (1) the alleged
defamatory statement was communicated to someone other than the plaintiff; (2) was
false; and (3) tended to harm the plaintiff’s reputation and lower the plaintiff in the
estimation of the community. Here, the court found that because the statements at issue
were made before company and union representatives and concerned the employee’s
activities in his profession, third-party communication and harm to reputation were
satisfied.
Falsity. As to the falsity element, the appeals court agreed with the district court’s
determination that that the VP’s statements that the employee “is a prick,” he was “tired
of [the employee’s] crap,” and he was “not going to put up with his sh-- anymore” were
all statements of his subjective view or opinion and, by themselves, were not actionable
as a matter of law. The court, however, disagreed with the district court’s conclusion
regarding the remaining statements. Here, it found that the VP’s statements that he had
received “20 complaints” about the employee, that he “has been verbally abusive to
others for the past five years,” and “has been making threats and throwing his weight
around for the past five years,” were all statements asserting that the employee had been
harassing his crew for at least five years. It was of no consequence that his statements
included adjectives and characteristics rather than specific acts.
Further, the court pointed out, the statements were capable of being proven false. The VP
in his deposition could only recall seven complaints he had received about the employee,
none of which involved threats to his crew and only one that referenced the employee’s
alleged use of abusive language. In the court’s view, this cast serious doubt as to the truth
of his statements altogether. In addition, the court found that the inaccuracies in the
35
statements were substantial enough to create a fact issue as to their truth; accordingly, the
statements were actionable.
Qualified privilege. The court next found that the statements were not subject to a
qualified privilege. Here, the narrow investigation of one incident between the employee
and his crew driver was not the proper occasion for the VP to make statements about the
employee’s alleged previous behavior. Even assuming that the meeting was the proper
occasion to bring up those incidents, the VP’s failure to investigate any of the complaints
prior to making his statements prevented his statements from being based upon
reasonable or probable cause. Specifically, the VP did not have any records of the
complaints, all of the complaints were anonymous, and he did not investigate any of them
to see if they could be substantiated. Notably, the court observed, he admitted that he
could not do anything about the complaints because under company policy, complaints
are deemed not credible when anonymously made. Thus, because the VP had no reason
to believe in the truth of the complaints, he was not privileged to make any statements
relating to them.
The case number is: 12-3625.
Attorneys: Mark Wentworth Bay (Peterson & Engberg) for United Steelworkers Local
1938. Judith Kahn Schermer (Law Office of Judith K. Schermer) for Dave Thomas.
10th Cir.: Employer’s challenge to grievance arbitration award fails because it did
not timely move to vacate; order setting aside award reversed
By Lisa Milam-Perez, J.D.
A district court erred in setting aside an arbitration award in favor of the United Food and
Commercial Workers where the employer had never brought a timely action to vacate,
the Tenth Circuit held, reversing the lower court with instructions to enforce the
arbitrator’s decision. Although the lower court found the award failed to draw its essence
from the bargaining agreement, the appeals court declined to entertain the substance of
the award, or the employer’s challenge to it, given its untimeliness (United Food &
Commercial Workers Local No 7 v King Soopers, Inc, February 28, 2014, Hartz, H).
Grievance over unruly customer. A UFCW-represented employee of a King Soopers
grocery store filed a grievance complaining that the retailer created a hostile work
environment by failing to protect him from a “disagreeable customer.” The grievance
went to arbitration, and an arbitrator concluded the dispute was arbitrable even though it
related to customers, who are not subject to the CBA between the union and employer.
Citing statutes providing workplace protections, policies promulgated by King Soopers’
parent company, and other considerations, the arbitrator found the employer had a duty to
protect employees against a hostile work environment and had breached that duty. Thus,
he ordered King Soopers to “take all steps necessary” to protect against a hostile work
environment, including establishing a “zero-tolerance policy for violence, with
appropriate notices to employees and the general public.” The arbitrator also ordered the
36
employer to exclude the problem customer “until the parties are satisfied with his
behavior.”
Refusal to comply. King Soopers did not comply with the award — but nor did it seek to
vacate it in court. Only when the union sued to enforce the award did the employer assert
that it was unenforceable. In answering the union’s LMRA Sec. 301 complaint, the
employer argued the parties had not agreed to arbitrate disputes over a hostile work
environment created by a customer, and also that the award conflicted with the CBA’s
reservation of rights clause. The employer also urged that nothing in the CBA authorized
the arbitration award — which was the result of the arbitrator’s “own brand of industrial
justice,” in its view — nor the remedy imposed.
The district court found the employer’s affirmative defenses were time-barred because
they were not raised as the basis for an action to vacate the award within the 90-day
limitations period under the Colorado Uniform Arbitration Act. Nevertheless, the lower
court declined to enforce the award because it agreed with the employer that the award
did not draw its essence from the CBA.
Challenge to award untimely. The Tenth Circuit reversed. Although King Soopers
could have brought a timely action to vacate the award on the same ground adopted by
the district court, it did not do so, the appeals court noted. “King Soopers has not
suggested, and we cannot see, why it could not have gone to court to vacate the
arbitrator’s award on the same grounds that it later invoked to oppose its confirmation.”
Thus, it held the employer could not raise that defense against the union’s action to
enforce the award.
The appeals court noted the case at hand was indistinguishable from its 1987 ruling in
Int’l B’hood of Elec. Workers, Local Union No. 969 v Babcock & Wilcox. In that case,
the appeals court held an employer may not evade the time limit to bring an action to
vacate an arbitration award by waiting until an enforcement proceeding before it raises its
challenge. In addition to this controlling precedent, the appeals court noted, its conclusion
also finds support in decisions of other circuits, including the Third, Seventh, and Eighth
Circuits.
“There is nothing peculiar about ruling that a potentially meritorious argument is barred
by delay in raising it,” wrote the court. Quoting too the Second Circuit, it observed that
when the limitations period has run without a vacation of the arbitration award, “the
successful party has a right to assume the award is valid and untainted, and to obtain its
confirmation in a summary proceeding.” To this, the Tenth Circuit added: “That is
particularly true in labor arbitration, where labor peace is threatened by the prolongation
of disputes.”
The employer relied to no avail on language found in the Supreme Court’s 1960 decision
in United Steelworkers v. Enterprise Wheel & Car Corp. An arbitrator “does not sit to
dispense his own brand of industrial justice,” the High Court stated. “[H]is award is
legitimate only so long as it draws its essence from the [CBA]. When the arbitrator’s
37
words manifest an infidelity to this obligation, courts have no choice but to refuse
enforcement of the award.” However, the appeals court pointed out, in that case, there
was no issue as to the timeliness of the employer’s challenge to the enforcement of the
arbitrator’s award. So the Supreme Court did not reach the question.
Nor could King Soopers find support in the lower-court cases it cited; none stood for the
assertion that courts are always entitled to independently review the enforceability of an
arbitrator’s award, “even when the party opposing enforcement has waived its affirmative
defenses by failing to move to vacate the award within the applicable limitations period.”
In the end, the employer “cites no case in which a court has held that a party to an
arbitration agreement can raise such an argument to oppose enforcement of an arbitration
award despite the party’s failure to move to vacate the award within the limitations
period.”
Remedy within arbitrator’s authority. The employer’s additional defense, that the
arbitrator lacked authority to impose a remedy, failed as well. King Soopers argued that
even if the arbitrator had authority to decide that it had breached the CBA, he had no
authority to order a remedy. But Babcock & Wilcox disposed of this argument too, the
appeals court said. There, the employer contended the arbitration body lacked jurisdiction
to hear the particular dispute because the issue should have been decided under the
grievance procedure established in a different agreement. But the Tenth Circuit held that
the argument was barred because it had not been timely raised in a motion to vacate.
Here, King Soopers contended that even if the arbitrator could hear the dispute, he did
not have authority to order a remedy. “But if untimeliness can bar a challenge that the
arbitration agreement did not authorize the arbitrator to decide the merits of the dispute
and impose a remedy,” the court reasoned, “a fortiori it bars a challenge that the
arbitration agreement, even if it authorized the arbitrator to decide the merits of the
dispute, did not authorize the arbitrator to impose a remedy.”
King Soopers also insisted that the arbitrator’s lack of authority deprived the federal court
of subject matter jurisdiction, and a lack of subject-matter jurisdiction defense can be
raised at any time. However, a lack-of-authority defense does not implicate federal-court
jurisdiction, the appeals court said, since federal courts have jurisdiction under Sec. 301
over suits alleging a violation of a CBA. Here, the union alleged that the company
violated the CBA by not complying with the arbitration award. That claim fell squarely
within federal court jurisdiction under the LMRA. And once a federal court has Sec. 301
jurisdiction, “the defendant’s affirmative defenses do not ordinarily deprive it of subjectmatter jurisdiction.”
Policy argument unavailing. Finally, King Soopers contended on policy grounds that it
should be allowed to wait until an enforcement action before raising its objection to an
arbitration award. This argument also ran contrary to the holding in Babcock & Wilcox
and, at any rate, was unpersuasive, the Tenth Circuit found. The employer asserted that
requiring it always to move to vacate an improper arbitration award would be a waste of
resources because the union may not even bother to attempt to enforce the award. But the
38
employer offered no evidence that “unions regularly, or even occasionally, do not pursue
their arbitration victories,” the appeals court said.
“If a union does not often bring actions to enforce awards, that is likely because
employers generally comply.” Nor was there evidence that an employer would realize
any significant saving in resources by refusing to comply with an arbitration award and
waiting to see whether the union brings an enforcement action.
Because the employer could have, but failed to raise its arguments in a motion to vacate,
it was foreclosed from raising them to challenge the union’s enforcement action initiated
after the time to move to vacate has expired. Thus, the district court’s order vacating the
arbitration award was reversed.
The case number is: 12-1409.
Attorneys: John P. Bowen for United Food & Commercial Workers Int'l Union, Local
No. 7. Raymond M. Deeny (Sherman & Howard) for King Soopers, Inc.
11th Cir.: Statements of company owner sufficient to cause project supervisor to
reasonably believe employer wanted him to sign CBAs
By Ronald Miller, J.D.
A federal district court did not err in entering judgment in favor of the trustees of a union
benefit funds based on an employer’s failure to make contributions to the funds as
required by a collective bargaining agreement, ruled the Eleventh Circuit in an
unpublished decision. Contrary to the employer’s contention, it failed to demonstrate any
clear error on the part of a magistrate judge that would cause the appeals court to reject
his factual findings that a project supervisor was told to sign two union contracts. Rather,
the statements by the company owner were sufficient to cause the project supervisor to
reasonably believe the employer wanted him to sign the agreements, and thereby, bind
the employer to a second CBA (Gay v Brencorp, Inc, February 4, 2014, per curiam).
The employer entered negotiations with the union after Anheuser-Busch contracted with
it to install certain equipment at its Jacksonville, Florida brewery. The employer sent a
letter to the union proposing to staff the project with union labor and pay wages and
benefits according to the union’s CBA. However, the employer proposed that the
agreement would self-terminate after completion of the project. The union responded by
sending the employer two copies of the CBA and asking that it sign and return one copy.
Thereafter, the parties had an extended conversation in which they reiterated their
positions on whether they would enter into a one-job agreement or the standard CBA for
a three year period favored by the union.
Signing of CBAs. A union member from an Atlanta-based union local was assigned as
project supervisor by the employer. According to the project supervisor, he believed that
the parties had already reached an agreement when he traveled to Jacksonville three to
39
four weeks after beginning work on the project. However, he was advised by the union’s
business manager that despite the employer’s preference for a one-job agreement, the
union would not provide labor if the employer did not sign the CBA. Thereafter, the
project supervisor spoke with the employer about the need to sign a CBA. When the
project supervisor signed the agreement its three-year term was set to expire only 28 days
after signed and 25 days after the project began. Consequently, the union asked the
employer to sign a second agreement shortly thereafter. The employer stated that he
could only recall telling the project supervisor to sign the first agreement, and that he
learned the project supervisor signed the second agreement only after the project had
been completed.
The employer made all benefit fund contributions the CBA required of that labor.
However, the employer thereafter worked on other jobs covered by the second CBA
without making the required contributions, prompting the union to commence this action.
Credibility determinations. Following a bench trial, a magistrate judge made two
credibility determinations, first finding the project supervisor’s testimony more credible
than the employer’s and second that the employer did tell the project supervisor to sign
the second CBA. Having made these factual findings, the magistrate judge concluded
that: (a) the project supervisor had actual authority to sign the first CBA, (b) he had
actual authority to sign the second CBA, and (c) the employer ratified the project
supervisor’s signing of the CBAs. On appeal, the employer argued that the magistrate
judge erred as to each of these conclusions.
Willful blindness. On appeal, the Eleventh Circuit found no clear error in any of the
magistrate’s factual findings, and agreed with his legal conclusions. Here, the magistrate
found that the employer’s written or spoken words or other conduct, reasonably
interpreted, caused the project supervisor to believe that the employer desired him to sign
the agreements. Moreover, the appeals court determined that given that the employer and
union were in the midst of contentious negotiations about whether the employer would
sign a CBA, that the Union expressed great reluctance to provide labor if it did not sign
the CBA, that the owner told the project supervisor (sarcastically or otherwise) to sign the
CBA, that the Union then provided labor without any further negotiation, and that the
owner never asked either the project supervisor or the Union what had happened to
resolve the CBA issue, the employer’s purported failure to learn that the CBA had been
signed on its behalf amounted to willful blindness. Thus, even if the employer did not
actually know the project supervisor signed the CBAs, the magistrate judge did not err in
imputing such knowledge to him under a theory of willful blindness.
Consequently, the appeals court agreed with the magistrate judge’s conclusion that the
project supervisor was authorized to bind the employer to the second CBA.
The case number is: 13-13075.
Attorneys: Henry Leon Holbrook III (Holbrook Akel Cold Stiefel & Ray) for W.W. Gay.
Peter R. Olson (Olson Law) for Brencorp, Inc.
40
11th Cir.: Federal court wrongly enjoined Alabama’s ban on public employees’
payroll deductions for union political activities
By Lisa Milam-Perez, J.D. and Ronald Miller, J.D.
A federal district court in Alabama erred in enjoining enforcement of Alabama Act No.
2010-761, which prohibits state and local government workers from arranging, “by
payroll deductions or otherwise,” to make financial contributions to organizations that
use any portion of those payments for “political activity,” the Eleventh Circuit ruled.
Guided by the Alabama Supreme Court’s ruling in response to the circuit court’s certified
questions, the appeals court found the state’s public employee unions were unlikely to
succeed on their First Amendment challenge to the state law based on their contention
that it infringes on their free speech rights (Alabama Education Association v State
Superintendent of Education, February 5, 2014, Dubina, J).
Payroll deductions. Alabama Code Secs. 36-1-4.3 and 36-1-4.4 authorize public
employees to request that the state comptroller arrange for the payment of membership
dues for employee organizations by payroll deduction. There is tension between this
statute and Alabama Code Sec. 17-17-5, which prohibits public employees from using
government resources for any “political activities.” In 2010, the comptroller reevaluated
its interpretation of Sec. 17-17-5 and changed its policy regarding salary deductions.
Because the comptroller could not ascertain what portion of the salary deductions were
passed to the political action committee, he ceased all salary deductions designated for
the AEA. Thereafter, the legislature amended Sec. 17-17-5 to codify the comptroller’s
position, forbidding state and local government employees from arranging “by salary
deduction payments to a political action committee or payments to a membership
organization that used any portion of the dues for political activity.” Moreover, under the
Act, any organization seeking to arrange dues deductions was required to certify that
none of the membership dues would be used for political activity.
The Alabama Education Association (AEA), which collects a large percentage of its dues
through salary deductions, filed suit alleging the statute unconstitutionally infringed on its
First Amendment rights as well as those of its members. (Other public employee unions
filed similar challenges.) The AEA moved for a preliminary injunction barring
enforcement of the Act, arguing that it was both unconstitutionally vague and overbroad.
A federal district court agreed, reasoning that the statute reached beyond salary
deductions to the personal political contributions of government employees. The district
court also found that the term “political activity” was unduly vague. Thus, it enjoined
enforcement of the new law. The state defendants appealed to the Eleventh Circuit.
Question certified. Concluding the issue was best left to the state high court to address in
the first instance, the Eleventh Circuit certified to the Alabama Supreme Court the
question of whether Alabama Act No. 2010-761 impermissibly impinges on free speech
rights protected by the First Amendment. The question turned entirely on how the state
Act was interpreted: If it was meant only to reach payroll deductions for organizations
engaged in electioneering activities, then it presents no constitutional problems.
41
However, a statute with broader reach may implicate First Amendment concerns,
observed the appeals court. Because the question of state law had not been addressed by
the state supreme court (or the state appellate courts), the Eleventh Circuit certified the
following questions: (1) Is the “or otherwise” language in the statute limited to the use of
state mechanisms to support political organizations, or does it cover all contributions by
state employees to political organizations, regardless of source?; and (2) does the term
“political activity” refer only to electioneering activities?
While it awaited the state high court’s ruling, the appeals court modified the district court
injunction, allowing the state to enforce the statute to the extent that it restricts payroll
deductions for organizations engaged in electioneering activities.
State high court weighs in. The Alabama Supreme Court held the statute prohibited only
the use of state mechanisms to make payments to political action committees, and was
not meant to prohibit members from making payments to those organizations by other
means. The state high court also took an expansive view of “political activity,”
construing the law as prohibiting more than just “electioneering activities” on behalf of or
in opposition to candidates for elected offices. Chief Justice Moore filed a partial dissent.
The unions had argued that the “or otherwise” language in the Act is overbroad and that it
could be read to prohibit a state employee from paying dues to organizations such as the
AEA or from making donations to a political action committee, even if the state is not
involved in facilitating those payments in any manner. The state countered that the Act
may be read to prohibit only state facilitation of payments to organizations such as the
AEA, and state facilitation of donations to a political action committee, and that the
members of such organizations remained free to make payments or donations by private
means. The Alabama high court concluded the Act prohibited only the use of state
mechanisms to support political organizations. The language of Sec. 17-17-5 clearly
provided that the government must be involved in arranging for the payment of the state
employee’s membership dues for the Act to apply; therefore, private forms of payment
are not prohibited. The court also found it persuasive that penalties for violating the Act
apply only to the organization to which the dues are made and only when the dues are
facilitated by the state.
Consequently, the court held, the term “or otherwise” in the statute does not refer to any
manner of payment to organizations engaged in political activity, but only to payment to
such organizations in the form of a salary deduction.
Next, the Alabama court held the term “political activity” as used in the statute referred to
more than just electioneering activities. It noted that the word “political” has a rather
expansive definition in its legal usage, and that the term precedes a list of seven specific
categories of activities set forth in Sec. 17-17-5(b)(1)a.-g. that embrace more than
electioneering. By their plain language, subparagraphs a. and c. define political activity,
within the context of “political communication,” as including, but not limited to,
communications that mention the name of a political candidate. Thus, these two
subparagraphs cannot be read as limiting political activity to only electioneering
42
activities. Similarly, subparagraph e., which defines political activity as “phone calls for
any political purpose,” goes beyond electioneering, as does subparagraph f., which
defines political activity as “distributing political literature of any type.” Consequently,
the term “political activity” was not limited to activity on behalf of or in opposition to
candidates for elected offices.
Lower court erred. With the dispute returned to its hands, the Eleventh Circuit reiterated
that under the U.S. Supreme Court’s decision in Ysursa v Pocatello Educ Assn, a properly
conceived ban on salary deductions to organizations engaged in political activity is
constitutional. And, since the Alabama Supreme Court concluded its state law was
properly conceived, the appeals court found the district court erred in enjoining its
enforcement. (In doing so, the appeal court added, the lower court had applied the wrong
legal standard. Because the Act does not reach constitutionally protected conduct, the
state needed only demonstrate a rational basis to justify the prohibition on payroll
deductions going to organizations engaged in political activities.)
The state high court readily resolved the unions’ concerns that the statute’s “or
otherwise” language was overbroad. “Every member of the Alabama Supreme Court
agreed that the language in question, in the context of the entire Act, prohibits only the
use of state mechanisms to support politically active organizations,” the appeals court
noted, and does not bar employees from making private payments that are not facilitated
by their government employers. “This compels the conclusions that the Act only declines
to promote speech, rather than abridging it, and that the Act does not implicate any
constitutionally protected conduct, much less a substantial amount.” Accordingly, the
unions would be unable to demonstrate a substantial likelihood of success on the merits
of their claim that the statute was unconstitutionally overbroad.
Nor would the union plaintiffs likely succeed on their challenge to the statute as void for
vagueness. The Alabama Supreme Court indicated that the term “political activities” as
used in the Act reached more than “electioneering activities.” Yet the definition of
political activities, “even prior to the Alabama Supreme Court’s elucidation of the Act,”
gave the unions and their respective PACs ample warning that they were engaged in
“political activities” as defined by the statute, and gave the individual union members
warning that arranging for payroll deductions to these organizations was prohibited.
Because some of the unions’ conduct “indisputably falls within the Act’s definition of
political activity,” they cannot bring a facial challenge arguing the term is vague based on
other applications.
Because the unions were not substantially likely to succeed on the merits of their
challenge to the Alabama law, the district court erred in granting a preliminary
injunction.
The case numbers are: 11-11266, 11-11267 and 11-12609.
Attorneys: James W. Davis for State Superintendent of Education. Sam Heldman (The
Gardner Firm) for Alabama Education Assoc.
43
11th Cir.: Third time no charm for foreign labor organizers seeking U.S. forum;
they should have mentioned Guatemalan “blocking law” before
By Lorene D. Park, J.D.
In a suit involving the alleged torture of union officers for their activities in Guatemala,
the Eleventh Circuit pointed out that the plaintiffs had failed to argue that a Guatemalan
forum would be unavailable to them when the issue of forum non conveniens was
previously litigated, that they had a strategic reason for not informing the district court of
a Guatemalan forum non conveniens blocking law, and that gamesmanship was not to be
rewarded. Consequently, the appeals court affirmed the denial of their Rule 60(b) motion
for reinstatement (Aldana v Del Monte Fresh Produce NA, Inc, February 6, 2014, Marcus, S).
The plaintiffs are Guatemalan citizens and former officers of a labor union representing
banana workers at a plantation in Izabal, Guatemala. They claimed that in 1999, in
retaliation for their union activities, a private security force kidnapped and tortured them
on the plantation. They were allegedly threatened with imminent death if they did not
sign resignation letters and make radio announcements of the union’s defeat. They have
since been granted asylum in the U.S.
Filing suit in a federal court in Florida, the plaintiffs alleged that the security force was
employed by Del Monte Fresh (a Delaware corporation) and Bandegua (a Guatemalan
corporation), and that these entities are wholly owned by Del Monte, Inc., which has its
principal place of business in Florida. In prior proceedings, the case was dismissed twice;
the second time based on forum non conveniens. The plaintiffs were unsuccessful in their
appeal of the second dismissal. There, the Eleventh Circuit concluded that Guatemalan
courts were “adequate,” despite the plaintiffs’ concerns with safety and corruption. The
appeals court also found that Guatemalan courts were “available,” when the plaintiffs did
not contest that Guatemala possesses jurisdiction over the case and did not argue that a
Guatemalan forum was unavailable.
Guatemalan “blocking” statute. Having exhausted their options in the U.S., the
employees filed a complaint in Guatemala but the court refused to hear the claims based
on the country’s blocking statute, which states that the theory of forum non conveniens
“is declared unacceptable, inapplicable, and invalid when invoked to prevent the trial
from continuing in the defendant’s domicile courts.” It further provides that an action
“validly filed abroad by a national plaintiff before a competent judge shall extinguish
national jurisdiction” and that “[i]n the event a foreign judge is informed of the scope of
this law and he declines to hear the case submitted to his jurisdiction, Guatemalan courts
may reassume jurisdiction . . . .” The Guatemalan court concluded that it did not have
jurisdiction because the plaintiffs had already filed a lawsuit before a competent court in
Florida.
Return to Florida. Rather than appealing the Guatemalan court’s decision, the plaintiffs
returned to the Florida court to move for reinstatement on the grounds that relief in a
Guatemalan forum was not available. The district court refused to reopen the case,
44
finding no exceptional circumstances under Rule 60(b)(6). Specifically, on this record,
the plaintiffs could not justify their failure to mention the blocking law or the
unavailability of a foreign forum to the district court during the prior proceedings.
No reinstatement. Affirming, the Eleventh Circuit first noted that Rule 60(b) “seeks to
strike a delicate balance between two countervailing impulses: the desire to preserve the
finality of judgments and the ‘incessant command of the court’s conscience that justice
be done in light of all the facts.’” The first five provisions provide relief under specific
facts that do not apply here and the sixth provision provides a catch-all allowing relief
from a judgment for “any other reason that justifies” it. Under Eleventh Circuit
precedent, Rule 60(b)(6) motions must demonstrate that “circumstances are sufficiently
extraordinary to warrant relief.”
At no point in the prior forum non conveniens litigation did the plaintiffs argue that a
Guatemalan forum was unavailable or cite to the Guatemalan blocking law. Instead, they
dwelled on the alleged inadequacy of Guatemalan courts and cited “continued violence
against trade union leaders.” With the plaintiffs having expressed no concerns about the
availability of a Guatemalan forum, the district court did not condition dismissal on a
Guatemalan court accepting jurisdiction. Furthermore, the unavailability of that foreign
forum was not unforeseeable and indeed the plaintiffs were aware of the blocking law,
having previously cited it in a separate state court action.
Gamesmanship not rewarded. The appeals court also noted that the plaintiffs had a
strategic reason for not mentioning the blocking law, because it provided that if a
“foreign judge” (here, the Florida court) had been informed of the scope of the law and
still declined to hear the case, Guatemalan courts would have heard the case. So the
plaintiffs might have refrained from mentioning the blocking law because to inform the
court about it would have made Guatemalan availability more likely. To the Eleventh
Circuit, this gamesmanship should not be rewarded.
Moreover, the appeals court found no abuse of discretion in the district court denying
Rule 60(b)(6) relief when the plaintiffs chose not to pursue a reasonable appeal in the
Guatemalan courts and instead returned to Florida. That rule “does not reward a party
that seeks to avoid the consequences of its own ‘free, calculated, deliberate choices,’”
stated the court.
The case number is: 12-16143.
Attorneys: Lazaro Fernandez, Jr. (Stack Fernandez Anderson & Harris) for Del Monte
Fresh Produce N.A., Inc. Terrence Patrick Collingsworth (Conrad & Scherer) for Angel
Enrique Villeda Aldana.
NLRB: Employee discharge for comments about employee workloads and salary of
newly hired executive unlawful
By Ronald Miller, J.D.
45
An employer acted unlawfully by discharging an employee for his protected concerted
activity based on his comments at a lunch meeting regarding employees’ heavy
workloads and the fact that the company could have hired more engineers for the salary it
was paying a newly hired executive, ruled a three member panel of the NLRB.
Additional, the panel agreed with an administrative law judge’s determination that the
employer maintained an overly broad confidentiality rule in its employee handbook that
employees could reasonably construe to prohibit discussion of wages and other
conditions of employment (MCPc, Inc., February 6, 2014).
During a team building lunch, the employee voiced a complaint about the heavy
workload for engineers — a well-known complaint — and urged the employer to hire
additional engineers to alleviate workloads. In support of his position, the employee
mentioned the recent hiring of a corporate executive, and stated that, for the $400,000
salary the company was paying the executive, it could have hired additional engineers.
Other employees at the meeting agreed with his assessment. The employer later
discharged the employee based on his comments, finding that he improperly accessed
computer files to discover the executive’s salary in violation of the company’s
confidentiality policy.
Protected concerted activity. Here, the Board found that the employee engaged in
concerted activity when discussing with other employees their terms and conditions of
employment — staffing shortages resulting in heavy workloads—which constituted
protected concerted activity. Furthermore, the employer acted unlawfully by discharging
the employee for his protected concerted activity. The concerted nature of the his actions
was evident in the fact that the discussion about employee workloads occurred at a group
meeting characterized as involving “team building” by the group’s supervisor, and that
two coworkers expressed agreement with his comments.
Moreover, the Board rejected the employer’s contention that its discharge of the
employee was lawful under NLRB v Burnup & Sims, because it was based on a good-faith
belief that the employee obtained confidential information about executive pay by
improperly accessing its computer records. Here, the employer did not contend that the
employee engaged in misconduct in the course of his concerted protected activity of
voicing concerns about the employee’s conditions of employment. Rather, it contended
that he improperly accessed confidential records sometime prior to his protected
concerted activity. However, even assuming the applicability of Burnup & Sims, and that
the employer honestly believed the employee improperly accessed computer records, the
General Counsel established that the purported misconduct did not, in fact, occur.
Accordingly, the Board affirmed the law judge’s finding that the employer violated Sec.
8(a)(1) by discharging the employee for his protected concerted activity.
Confidentiality rule. Turing to the employer’s confidentiality rule, the Board agreed
with the ALJ’s ruling that the employer violated Sec. 8(a)(1) of the NLRA by
maintaining an overly broad confidentiality rule. The language of the employer’s rule
stated that, “dissemination of confidential information within [the company], such as
personal or financial information, etc., will subject the responsible employee to
46
disciplinary action or possible termination.” In this instance, the Board found that
employees would reasonably construe the rule to prohibit the discussion of wages and
other conditions of employment with their coworkers, which is activity protected by Sec.
7 of the Act.
The slip opinion is: 360 NLRB No. 39.
Attorneys: Dean F. Falavolito (Burns White) for MCPc, Inc. Alan Blanco (Rothman
Gordon) for Jason Galanter.
NLRB: Supervisor’s comments about worker’s Facebook posts did not violate
NLRA, but baseball hat policy did
By Marjorie Johnson, J.D.
A supervisor’s comments to an employee about his Facebook posts, which criticized the
employer and made reference to the union, did not violate the NLRA because evidence as
to the circumstances of the posts was too vague to establish protected activity, an NLRB
panel ruled, reversing an ALJ in part. However, the panel affirmed the ALJ’s finding that
the employer’s policy prohibiting employees from wearing any baseball caps other than
company caps was overbroad and violated Sec. 8(a)(1) of the Act (World Color (USA) Corp,
February 12, 2014).
Facebook posts. From late September 2010 through March 2011, the employee — a lead
press operator and member of the union’s negotiating committee — posted comments on
his Facebook page criticizing the employer and discussing the union, initially in response
to another individual’s post. The employee was Facebook friends with several coworkers,
including his shift supervisor, with whom he also socialized outside of work.
Meanwhile, a decertification petition had been filed and employees subsequently voted to
decertify the union. While certification of the election results was pending, business
began to decline and the pressroom manager met with the shift supervisors to discuss the
downturn. At the meeting, the supervisors identified each shift’s best press operators and
decided who would be reassigned. Neither the union nor Facebook was mentioned at this
meeting.
Afterwards, the shift supervisor with whom the employee was Facebook friends advised
him that he was one of the many reassigned press operators. When he asked why the
reassignments were happening, the supervisor stated that it was not always about
production and asked him if he did not think that management knew about his Facebook
posts.
Facebook comment not threatening. The ALJ erroneously found that the supervisor’s
comment violated Sec. 8(a)(1). Specifically, the ALJ concluded that the employee could
have reasonably believed that his reassignment was retaliation for his Facebook posts,
and that the posts constituted protected activity. Reversing, the Board panel held that the
47
record failed to establish that the employee’s Facebook posts constituted protected
activity.
The NLRB has found that Facebook posts among employees about terms and conditions
of employment may be protected concerted activity. However, in the instant action, the
record did not include a printout of the employee’s posts and it provided scant evidence
regarding their nature. Thus, there was no evidence that the posts concerned terms and
conditions of employment or that they were intended for, or in response to, the
employee’s coworkers. Rather, the testimony indicated only that the employee posted
unspecified criticisms of the employer and unspecified comments about the union over a
period of 5 or 6 months, and that he responded to another unidentified person’s initial
post. Based on this limited evidence, the panel declined to infer that the employee’s posts
amounted to protected concerted activity.
Moreover, although the supervisor’s statement implied that the employer had reacted
adversely to critical posts, this was insufficient to bridge the evidentiary gap. An
employer may violate Sec. 8(a)(1) even where an employee has not engaged in protected
concerted activity; here, however, there was no showing that the supervisor’s statement
was directed at, or in response to, either actual or suspected protected concerted activity
by the employee. There was also no showing that the employee could have reasonably
understood the supervisor’s statement as interfering with, restraining, or coercing him
from engaging in such activity.
Baseball hat policy prohibited. However, the panel affirmed the ALJ’s finding that the
employer’s policy prohibiting employees from wearing any baseball caps other than
company caps was overbroad and violated Sec. 8(a)(1). It was undisputed that the policy,
on its face, prohibited employees from engaging in the protected activity of wearing caps
bearing union insignia. Moreover, the ALJ correctly concluded that this prohibition was
not part of the employer’s company uniform policy and that the asserted special
circumstances for the prohibition lacked merit. However, the result would be the same
even if the cap policy was part of the company uniform policy, the Board said. An
employer cannot avoid the “special circumstances” test simply by requiring its employees
to wear uniforms or other designated clothing, thereby precluding the wearing of clothing
bearing union insignia, explained the panel.
The slip opinion is: 360 NLRB No. 37.
Attorneys: Jason Kearnaghan (Sheppard Mullin) for World Color (USA) Corporation.
Anton Hajjar (O'Donnell, Schwartz & Anderson) for Graphic Communications
Conference of the International Brotherhood of Teamsters, Local 715-C.
NLRB: Discipline of union activists upheld despite employer’s prior unfair labor
practices
By Ronald Miller, J.D.
48
A divided three-member panel of the NLRB determined that an employer did not engage
in unfair labor practices by disciplining three employees, two of whom were actively
involved in union organizing efforts prior to a union election. The majority also rejected
the union’s contention that pre-petition unfair labor practices should have been
considered in determining whether to overrule its objections to the employer’s election
activity. However, the Board did find a Sec. 8(a)(1) violation that an administrative law
judge had not addressed. Chairman Pearce filed a separate opinion dissenting from the
majority’s finding that the employer’s discharge of an employee who violated two rules
was lawful under Sec. 8(a)(3) (Flamingo Las Vegas Operating Co, LLC, February 12, 2014).
In an earlier decision, the NLRB found that the employer had committed several unfair
labor practices during a union’s campaign to organize its security guards. Now the Board
was faced with allegations of additional unfair labor practices and several union
objections to the conduct of an election. The ALJ dismissed all of the unfair labor
practice allegations and recommended overruling the objections.
As an initial matter, the law judge determined that the employer did not unlawfully
discriminate against an employee — the primary union proponent — by telling him that
he could not harass coworkers on the casino floor and that if he did not stop, it would file
a charge with the NLRB.
Following the election, the employer received complaints from at least three employees
that he asked how they voted and why. The employee was summoned to the security
director’s office and asked to cease his conduct. The Board majority agreed with the ALJ
that the employer did not violate Sec. 8(a)(3) by its statements to the employee.
However, the ALJ did not consider the General Counsel’s additional allegation that the
statements independently violated Sec. 8(a)(1). Specifically, the General Counsel argued
that the statements constituted the oral promulgation of a rule that unlawfully prohibited
employees from engaging in union activity. The Board declined to find that the employer
promulgated a new rule because the statements were directed solely to the employee and
they were never repeated to other employees as a general requirement. Nonetheless, the
statements were found to be unlawful. The threat to file a charge with the NLRB because
of the employee’s protected activity had a reasonable tendency to interfere with his
exercise of his Sec. 7 rights.
Written warning. Next, the Board determined that the employer did not violate Secs.
8(a)(3), (4) and (1) of the NLRA by issuing a written warning to a security guard
regarding his response to a fight outside the casino. After reviewing a video recording of
the fight, a supervisor prepared the warning because of the employee’s delay in providing
assistance to a fellow guard. Although the employee had testified against the employer
during previously unfair labor practice proceedings, the Board agreed with the ALJ that
the employer’s disciplinary conduct was not unlawful. However, observing that the law
judge did not apply the analytical framework established in Wright Line, the Board did
not rely on his legal analysis.
49
The General Counsel made his initial showing that the employee’s testimony at the Board
proceeding was a motivating factor for his discipline. The employee’s testimony was
protected activity, and the employer’s security investigations manager, who ultimately
approved issuance of the written warning, knew about it. Antiunion animus was also
shown by the timing of the warning and the unfair labor practices committed during the
organizing drive. However, the employer showed that it would have issued the warning
even if the employee had not testified at the earlier hearing. Ten witnesses had testified
that a security officer in the employee’s position must respond to a fight on the sidewalk,
and even without back-up, the officer had a duty to get closer and assess the situation.
Further, officers are free to leave their posts in case of an emergency. Therefore, the
employee’s failure to respond to the fight plainly violated the employer’s policies.
Employee discharge. The discharge of an employee who admittedly violated the
employer’s policy against using personal cell phones while on duty, and who also
miscounted a delivery of chips, was lawfully discharged, concluded the NLRB majority.
Although the employee campaigned for the union during the organizing drive, he
deliberately kept his activity secret from management, so there was no evidence that the
employer was aware of his Sec. 7 activity. Nonetheless, the General Counsel argued that
the employer discharged the employee to discourage employees’ union activities
generally.
However, even assuming that the General Counsel made his initial showing that
discouraging other employees’ union activities was a motivating factor for the
employee’s discharge, the employer showed that the employee would have been
discharged even absent any union activity. Before the incidents in question, the employee
had received two final written warnings, one more than was provided for under the
employer’s progressive discipline policy. Moreover, the record demonstrated that the
employer had disciplined employees in the past for both infractions. The next step was
separation from employment, which the employer imposed. Accordingly, the allegation
that the employee’s discharge violated Sec. 8(a)(3) was dismissed.
Election objections. Finally, finding no merit to the union’s election objections, the
Board agreed with the judge’s recommendation to overrule them. As an initial matter, the
Board rejected the union’s contention that it should consider pre-petition conduct in
determining whether to overrule its objections. Here, the union merely argued broadly
that the pre-petition conduct was part of an ongoing antiunion campaign that continued
after the union’s petition, rather than showing that the pre-petition conduct lends meaning
and dimension to related post-petition conduct. Although two unfair labor practices
occurred during the critical period and would normally warrant setting aside the election,
the union offered no evidence that the critical-period threats were disseminated to any
other employees. Accordingly, the Board majority concluded that unlawful threats could
not have affected the election.
Partial dissent. Chairman Pearce would have found that the employer violated Sec.
8(a)(3) by its discharge of the employee who violated company rules. He framed the
question as whether the employer unlawfully discharged the employee to discourage
50
other employees’ union activities by using him as an example of earlier threats to be less
lenient in administering discipline if employees were to select the union as their
representative. Pearce would find that the General Counsel made a strong initial showing
under Wright Line, and that the employer failed to rebut that showing by demonstrating it
would have discharged the employee even in the absence of union activity.
The slip opinion is: 360 NLRB No. 41.
Attorneys: John D. McLachlan (Fisher Phillips) for Flamingo Las Vegas Operating
Company, LLC. Scott A. Brooks (Gregory, Moore, Jeakle Brooks) for International
Union, Security, Police, and Fire Professionals of America (SPFPA).
NLRB: “Road supervisors” not involved in employee discipline so not statutory
supervisors
By Ronald Miller, J.D.
“Road supervisors” for a taxicab service were not statutory supervisors within the
meaning of Sec. 2(11) of the NLRA, ruled a three-member panel of the NLRB. Although
an employee handbook granted the road supervisors “paper authority” to discipline or
recommend discipline of drivers, in actual practice, they never exercised such authority.
The Board has consistently held that paper authority not exercised does not make an
employee a supervisor. On the other hand, the Board agreed with the finding of an
administrative law judge that an employer acted unlawfully by discharging six employees
during a union organizing campaign so as to warrant a second election (Lucky Cab Co,
February 20, 2014).
In 2010, the union commenced an organizing campaign among the drivers of a taxicab
service, led by a committee comprised of 13 employees. The union notified the employer
of the organizing campaign and filed an election petition. The employer campaigned
against the union with employee meetings and flyers. It discharged six employees,
including five members of the organizing committee, and a sixth who assisted in
soliciting union support. Ultimately, the union lost the election and filed timely
objections and unfair labor practice charges.
The NLRB agreed with an administrative law judge that in meetings with the employees
and in its campaign flyers, the employer unlawfully threatened employees with futility of
seeking union representation and loss of employment benefits and security. Moreover,
the Board agreed that the six discharges were unlawful and that the unlawful discharges
warranted setting aside the election. Additionally, the Board found that the employer
unlawful instructed an employee not to discuss her discipline with coworkers. However,
the Board reversed the law judge’s finding that the employer’s “road supervisors” were
statutory supervisors, and so dismissed interrogation and threat allegations based on
conduct by one of the road supervisors.
51
“Road supervisors” as statutory supervisors. The Board first addressed whether the
“road supervisors” were statutory supervisors. The ALJ found that the road supervisors
were statutory supervisors based on their role in the disciplinary process. Relying on that
determination, the ALJ concluded that a road supervisor unlawfully interrogated an
employee about his union activities and threatened him with bodily harm if he refused to
answer. Here, the Board found that the record showed that the road supervisors’ role in
the disciplinary process was merely reportorial and not indicative of supervisor status.
The road supervisors performed the same functions as other taxi drivers but had
additional duties, including resolving disputes among drivers and between drivers and
passengers, assisting drivers when their cabs break down, and completing paperwork for
drivers involved in accidents.
An employee handbook stated that road supervisors had direct supervisory authority to
discipline employees up to issuing warnings, and could recommend further
administrative action including termination. However, all three road supervisors testified
that in actual practice they only reported misconduct by drivers, and prepared a
supervisor’s daily report (SDR) detailing their observations of drivers’ violations of
company rules and traffic infractions during the course of their shifts. These infractions
could generate some type of disciplinary action up to termination, but nowhere on the
form was there a place for the road supervisor to record the imposition or even the
recommendation of discipline. Rather, it was up to the director of operations to determine
whether their observations would result in discipline.
Applying the principles of Franklin Home Health Agency, the NLRB determined that the
evidence failed to establish that the road supervisors were statutory supervisors. In
deciding to the contrary, the ALJ relied on the employee handbook’s statement that road
supervisors had the authority to discipline or recommend discipline. However, the Board
has consistently held that the mere grant of “paper authority” that is not exercised does
not make an employee a supervisor. Here, the road supervisors testified uniformly that
they neither disciplined nor recommended discipline of drivers. Further, none of the
SDRs submitted by the road supervisors prescribed any level of discipline or
recommendation of discipline against any driver. In light of the actual practice, the Board
rejected the law judge’s reliance on the “paper authority.”
Discharges. However, the Board agreed with the ALJ that the employer unlawfully
discharged six employees in response to their efforts to organize its drivers. Here, the
General Counsel met his burden of showing that the employees’ protected conduct was a
motivating factor in the employer’s decision to discharge them. It was undisputed that all
six employees engaged in protected organizing activity. They conducted their organizing
activities both on and off the employer’s property. The union informed the employer of
its organizing campaign by letter. Moreover, the employer’s animus towards the
employees’ organizing activities was well supported by the record. Also, persuasive
evidence that the employer’s reasons for the discharges were pretextual further supported
findings of animus.
52
Discriminatory rules. In a matter unaddressed by the law judge, the NLRB also found
that the employer acted unlawfully by orally promulgating and enforcing an overly broad
and discriminatory rule prohibiting employees from discussing discipline issued to them.
An employer violates Section 8(a)(1) when it prohibits employees from speaking with
coworkers about discipline and other terms and conditions of employment, absent a
legitimate and substantial business justification for the prohibition. Here, the instruction
by the employer’s HR manager clearly interfered with the employee’s Sec. 7 right to
discuss her discharge with coworkers who were witnessing her being escorted from the
employer’s premises, as well as other employees.
Representation case. Finally, where three of the discharged employees were terminated
during the critical period before the election, the Board found such conduct objectionable
and warranted ordering a second election. Here, the employer argued that Board
precedent, in Dal-Tex Optical Co., with respect to setting aside an election because
employer conduct during the critical period interfered with the election results was not
applicable. However, the Board rejected that contention because the Dal-Tex presumption
has never been applied to Sec. 8(a)(3) violations. Finding that the facts of this case
provided no basis to break new grounds, the Board determined that the election must be
set aside.
The slip opinion is: 360 NLRB No. 43.
Attorneys: Frederick C. Miner (Littler Mendelson) for Lucky Cab Co. Sidney H. Kalban
for Industrial, Technical and Professional Employees Union, OPEIU Local 4873.
Labor consultants were employer’s agents; their threats, promises to remedy
grievances properly attributed to employer
By Ronald Miller, J.D.
A labor relations consultant was an agent of an employer and acting within the scope of
his agency when he unlawfully solicited employee grievances and promised to remedy
them, ruled a three-member panel of the NLRB. Further, a second labor relations
consultant (a stipulated agent of the employer) acted within the scope of his agency when
he interrogated and threatened an employee. As a result, the Board found without merit
the employer’s contention that the statements of the consultants should not be imputed to
it (Pratt (Corrugated Logistics), LLC, February 21, 2014).
The NLRB applies common-law principles of agency when examining whether an
individual was acting as an agent of an employer in the course of making a particular
statement or taking a particular action. The Board may find agency based on either actual
or apparent authority to act for the employer. “Apparent authority results from a
manifestation by the principal to a third party that creates a reasonable basis for the latter
to believe that the principal has authorized the alleged agent to perform the acts in
question.” The test is whether, under all the circumstances, employees “would reasonably
believe that the [alleged agent] was reflecting company policy and speaking and acting
53
for management.” In addition, an employer may have an employee’s statements
attributed to it if the employee is “held out as a conduit for transmitting information
[from management] to other employees.”
In this instance, there was ample evidence to support an administrative law judge’s
finding that the first labor consultant was the employer’s agent. The employer’s logistics
manager, HR manager, and dispatcher directed employees to meet with the consultant on
company time in an employer conference room on several occasions. As a result, the
employer held the consultant out as a conduit for transmitting information from the
employees to management and from management to employees. Moreover, during those
meetings, the consultant violated the Act when it asked employees if they had any
complaints or would like to see any changes, and promised employees that they would
see changes “real soon.”
The second consultant regularly directed and assigned work to the employees. In this
capacity he served as a “link between employees and upper management” and helped to
“implement company policies on the production floor.” Thus, the employer empowered
both labor consultants to deal with its employees on its behalf.
The Board also found that both consultants acted within the scope of their agency when
they engaged in unlawful conduct, such as making threats to employees, coercively
interrogating an employee, implying that employees’ union activities were under
surveillance, and soliciting employee grievances with the promise to remedy them. Under
such circumstances, the consultants’ unlawful conduct was properly attributable to the
employer.
The slip opinion is: 360 NLRB No. 48.
Attorneys: Jeremy Meyer (Cleary, Josem & Trigiani) for Teamsters Local 773. Eric
Stuart (Ogletree Deakins) for Pratt [Corrugated Logistics], LLC.
NLRB: Protest by nonunion employees over lack of wage increases was protected
under NLRA
By Ronald Miller, J.D.
In a nonunion setting, a three-member panel of the NLRB determined that an employer
acted unlawfully in its response to an employee work stoppage to protest the lack of a
wage increase. Additionally, the Board determined that the employer acted unlawfully by
threatening employees because they engaged in the work stoppage, and that it unlawfully
transferred work to a Mexican facility because of the work stoppage. On the other hand,
the Board found that the statements and conduct of the employer on the first day of the
strike could not reasonably have led employees to believe that they had been fired on that
day, where it actually invited them to return to work (Amglo Kemlite Laboratories, Inc.,
February 21, 2014).
54
Transfer of production work. The employer operated several facilities around the
world, including an Illinois facility, where it manufactured specialty lighting equipment.
Production employees at the Illinois facility were not represented by a union and had not
received a wage increase in many years. One morning, nearly all production employees
ceased work after their morning break and gathered to protest the employer’s failure to
grant them wage increases. While the employer conceded that the work stoppage was
protected at the outset, it contended that the employees lost the protection of the NLRA
when they remained inside the facility for several hours after the employer repeatedly
told them that it would give them a wage increase and that they should leave if they were
not going to work. The protest continued for several more
days.
Ultimately, the 50-plus strikers who held out and had not returned to work made an
unconditional offer to return to work under the pre-existing terms and conditions of
employment. The employer reinstated all but 22 of the holdouts. About a month later, it
told those individuals that it did not have jobs for them due to the economy and its
movement of production work to its Mexico facility. They were placed on a preferential
hiring list.
Exceptions to law judge’s determinations. The complaint alleged that the employer
unlawfully discharged all the strikers on the first day of the work stoppage, made an
unlawful statement to the strikers, and unlawfully transferred work from the struck plant
to its Mexico facility. Following a hearing, an administrative law judge found that the
employer had not in fact discharged any of the strikers, but acted unlawfully by
accelerating the layoff of the 22 employees who were not reinstated. The employer filed
exceptions arguing that the complaint should have been dismissed in its entirety. The
General Counsel likewise filed exceptions, asserting that it was illogical for the ALJ to
find that the employer accelerated a plan to lay off employees when there was never a
plan to lay off anyone prior to the strike. Additionally, the General Counsel excepted to
the law judge’s failure to find that the employer made unlawful threats of reprisals.
Protected nature of work stoppage. On review, the NLRB pointed out that the Sec. 7
right to engage in concerted activity for the purpose of mutual aid or protection is
“afforded equally to nonunion employees and union employees.” Although an onsite
work stoppage can be a form of economic pressure protected by the Act, “[a]t some
point, an employer is entitled to exert its private property rights and demand its premises
back.” Thus, the employees’ Sec. 7 right to engage in activity on the employer’s property
must be balanced against the employer’s asserted private property rights.
Applying the factors identified by the NLRB in Quietflex Mfg. Co., the Board found that
the employees’ work stoppage retained the protection of the NLRA at least until the
employer’s officials left the production area after discussing the employees’ demand for a
wage increase.
The employees stopped work for a reason entitled to the Act’s protection — to pressure
their employer to grant them wage increases. The in-plant work stoppage was peaceful
and did not interfere with the employer’s production to any greater extent than if the
55
employees had simply left the facility and picketed outside. In addition to being
nonviolent, the employees did not damage any machinery or product, and did not deny
anyone access to the property. Further, the employees remained on the property without
working for a limited period of time — approximately two hours. Because the employees
were unrepresented they had no established formal grievance procedure. Finally, none of
the employees’ shifts had ended as the employer’s officials left the production area, and
they made no attempt to seize the employer’s property. Thus, the relevant factors
supported a finding that the employees’ work stoppage retained the protection of the Act.
With respect to the employer’s contention that the employees lost the protection of the
Act by remaining inside the facility for about four hours after repeatedly being told by
officials that the employer would not raise their wages, the Board found it unnecessary to
decide whether they lost that protection, concluding that the employer condoned the
employees’ conduct. The Board explained that the employer frequently invited the
strikers to return to work and reinstated all but 22 of the strikers without consequences.
Additionally, the employer claimed that the only reason it did not reinstate those 22
strikers was because it did not have jobs for them.
Discharge threat. Next, the NLRB determined that the ALJ erred in denying a motion by
the General Counsel to amend the complaint to allege an unlawful threat to discharge half
of the employees, and found that such a threat of reprisal violated Sec. 8(a)(1). When the
employees asked if they could speak with the owner about their wage demand, a
company official responded that he would tell her “to get rid of half of you.” The Board
found merit in this exception. Further, the Board determined that the matter was fully
litigated because the employer did not object when evidence about the threat was
adduced during the hearing and failed to question the witness about the relevant
statement on cross-examination. The employer also failed to question the official who
made the remark after evidence about the statement was admitted. Moreover, the motion
amended the existing complaint allegation to conform to the evidence adduced.
The Board also agreed with the General Counsel that the law judge applied the wrong
legal test for determining whether the employer actually discharged the strikers;
nevertheless, even applying the correct test, it was determined that the employer did not
in fact do so. The test of whether an employer has discharged employees is whether the
employer’s words and conduct would reasonably lead employees to believe that the
employer has terminated them. Here, the employer’s words and conduct, including
requests that employees return to work could not reasonably have led employees to
conclude that they had been fired that day. Accordingly, the Board dismissed the
complaint allegation that the employer discharged all the strikers on the first day of the
work stoppage.
Transfer of work. The ALJ made no express finding regarding the allegation that the
employer unlawfully transferred work from its Illinois facility to its Mexico facility in
retaliation for the employees’ strike. Here, the Board agreed with the General Counsel
and found that the employer violated Sec. 8(a)(1) by taking adverse action against the
employees because of their protected concerted activities. The critical question was
56
whether the employer’s challenged action was motivated by the employees’ protected
activity. In this instance, the compelling record evidence persuaded the Board that the
employer did indeed transfer work in retaliation for the employees’ work stoppage.
The employer was plainly aware of its employees’ work stoppage. It also manifested
animus toward that activity. Among other things, the employer implicitly warned
employees that if they continued striking, it would transfer work to a foreign facility. The
same day, it also explicitly threatened that the owner would fire half of the strikers.
Further, the suspicious timing of the work transfer — so soon after the onset of the strike
— likewise supported a finding of unlawful motivation for the transfer. Moreover, the
employer failed to show that it would have transferred the work when it did for
nondiscriminatory reasons. Thus, the Board found that the transfer of work from Illinois
to Mexico was unlawful because it was unlawfully motivated by the employees’ strike
activity.
The slip opinion is: 360 NLRB No. 51.
Attorneys: No Attorney Available for Beata Ossak. Philip Miscimarra (Morgan, Lewis &
Bockius) for Amglo Kemlite Laboratories, Inc.
NLRB: Hospital unlawfully gave preferential treatment to incumbent union over
rival in union election
By Lisa Milam-Perez, J.D.
Seton Medical Center improperly allowed the SEIU-UHW to campaign during work time
during a union election pitting the incumbent union against its rival NUHW, a threemember NLRB panel held. Adopting a hearing officer’s finding of unlawful employer
interference, the Board set aside the SEIU win and ordered a second election (Seton
Medical Center/Seton Coastside, February 20, 2014).
The National Union of Healthcare Workers (NUHW, now affiliated with the California
Nurses Association), filed objections after the SEIU-UHW won an election at the
healthcare facility by a 301-271 vote (with 19 votes opposed to having any union). A
hearing officer found the employer interfered with the election by discriminatorily
allowing SEIU preferential access to the facility for electioneering purpose, to the
detriment of the rival union. The Board agreed and, finding this violation a sufficient
basis to set aside the election, it relied only on this finding and declined to reach other
allegations of objectionable election conduct.
The employer’s written solicitation and distribution policy provides that non-employees
“may not, at any time, solicit or distribute literature or other items of any kind or for any
purpose on Seton Medical Center/Seton Coastside property.” Employees were
specifically notified that unions were not allowed to campaign in work units or to disrupt
hospital business or patient care.
57
Nonetheless, the employer routinely condoned work time solicitation by nonemployee
representatives of SEIU–UHW, the evidence revealed, while denying the same
opportunities to nonemployee reps of NUHW. This violated the employer’s own facially
neutral solicitation policy, and the preferential treatment had no basis in the access
provisions of the CBA then in effect with SEIU-UHW.
Among the evidence of preferential treatment for the incumbent union was a pre-shift
“huddle” in one department, attended by 15 employees along with nonemployee SEIU–
UHW representatives. During the huddle, the department supervisor told employees the
union reps were there to speak with them and that the employees could stay or leave. The
reps then campaigned for employees’ supporting the coming election, while the
supervisor was still present. NUHW witnesses described several other instances of
nonemployee SEIU–UHW reps soliciting votes and attempting to persuade employees,
while on work time, to support the incumbent union.
Moreover, Seton management was clearly on notice that SEIU–UHW reps were
appealing to employees on work time. NUHW sent a letter to the employer complaining
that employees were “being bothered while on duty by SEIU–UHW paid staff,” and that
SEIU–UHW was electioneering and soliciting “during working time.” The rival union
also reported to the employer that SEIU-UHW reps were included in department staff
meetings for the purpose of campaigning. But the employer never responded to NUHW,
addressed the allegations, or took any action based on the reports of work-time
solicitation.
“Although it would have been objectionable in any case,” the Board said, the preferential
treatment given to SEIU–UHW was inconsistent with the employer’s own rules and
policies. In addition to the written solicitation policy, the employer had informed
employees at the onset of the critical period that unions were not allowed to campaign in
work units, “nor are they allowed to disrupt hospital business or patient care.” But the
employer knowingly waived this policy for SEIU–UHW representatives and not for
NUHW reps. There was no assertion here that the employer’s neutral policy was
inconsistent with the CBA in effect at the time, or that the contract required Seton to
grant this particular type of access to SEIU–UHW.
“Especially considering the relatively narrow margin of victory in the election,” held the
Board, “we find that the objectionable conduct is sufficient to warrant a second election.”
The slip opinion is: 360 NLRB No 49.
Attorneys: Barbra Arnold (Jeffer Mangels Butler & Marmaro) for Seton Medical
Center/Seton Coastside. Benjamin Jacob Siegel (Siegel and LeWitter) for National Union
of Healthcare Workers. SEIU United Healthcare Workers-West (SEIU-UHW), pro se.
NLRB: Employer unlawfully created impression of surveillance when manager
advised open union supporter, “friend to friend,” to “watch his back”
58
By Lisa Milam-Perez, J.D.
A rehabilitation and nursing facility unlawfully created the impression that an open union
supporter’s activities were under close surveillance when a manager advised the
employee to “watch his back” and “tone it down,” a divided NLRB panel held, rejecting
a law judge’s contrary finding (Woodcrest Health Care Center, February 27, 2014).
Conversations. An assistant director of the healthcare facility had two conversations
with an open union supporter about an ongoing organizing drive. In the first
conversation, the employee told the assistant director that the union was planning several
events that month related to the organizing drive, and said that “if management would
have listened to their employees, the union would never be here.” The assistant director
responded, “I heard your name; your name has been popping out a lot.”
Their second conversation occurred later that month, shortly after the employee was
quoted in a local newspaper article about the organizing drive. He was quoted as stating
that he wanted improvements in working conditions and that “the union can make things
better for the workers and for the patients.” Upon passing the employee in the lunch
room, the assistant director said,
“Oh, it’s the famous boy.” The employee then followed the assistant director to an office.
There, the assistant director informed him that the director of nursing had removed copies
of the newspaper containing the article from the lobby. The nursing director also
distributed a memo about the article to the management team, and mentioned the
employee by name several times at a management meeting, the employee was told. “Just
watch your back, be careful, careful about what you say,” the assistant director reportedly
told the employee. “[D]o what you have to do, come to work early, and then just . . . do
your job and go home.” He also advised the employee to “tone it down a little bit” and to
keep his views about the union “under wraps.”
Law judge’s finding. In dismissing the allegation that these comments created an
impression of surveillance, the judge noted that the employee was “a very visible and
vocal supporter” of the union and that, far from trying to hide his support for the union,
the employee saw his union advocacy as “social activism for all to observe.” Reasoning
that an employer’s passive observation of employees engaged in open Section 7 activity
does not violate Sec. 8(a)(1), the judge found the “popping up” and “famous boy”
comments would not cause the employee, or other employees, to reasonably assume their
union activities had been placed under surveillance. Nor would the comments about the
newspaper article being removed from the lobby, or the references to the employee
during management meetings.
“Watch your back.” However, the ALJ did not address the employee’s uncontroverted
testimony that the assistant director warned him to “watch his back” and to keep the
union talk under wraps. The assistant director admitted that he told the employee “friend
to friend” to “tone it down a little bit.” This overlooked testimony was “highly
significant,” according to the Board. Based on Board precedent, it warranted a finding
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that the statements would reasonably cause the employee to assume that his union
activities were under surveillance.
Friendship irrelevant. Prior Board decisions have rejected the argument that the friendly
relationship between the manager and the employee militated against finding a violation.
Even in the context of a friendship, a manager’s statement “would reasonably convey a
warning to [the employee]: ‘Be careful. Management’s watching you,’” the Board has
held. Here too, the comments could be construed as a warning that the employer had
moved from “routine observation” of the employee’s actions to “closely monitoring the
degree and extent of his union activity, open or not,” and as further warning that the
employee might face reprisal if he continued to engage in such activity.
Member Johnson dissents. Rejecting the majority’s findings on this allegation, Member
Johnson would adopt the ALJ’s dismissal of the charge. In his view, the assistant
director’s comments did not infer that the employee was being closely monitored; rather,
they suggested only routine observation by the employer of the employee’s open, public
union activity. Indeed, the employee was an open and active union supporter, Johnson
noted, whose activities were well known in the workplace.
Moreover, Johnson found it significant that the assistant director was not the employee’s
supervisor and that the pair had a friendly relationship, as well as the fact that the
employee had initiated the two conversations — both of which occurred only after he
began to openly support the union. Johnson rejected the majority’s view that it was
immaterial who initiated the discussions, or that the conversants were friends.
Other findings affirmed. The three-member panel affirmed the law judge’s additional
finding that the employer coercively interrogated employees, both during and after the
union organizing campaign as well as after the union was certified as the employees’
bargaining representative. Also adopted was the ALJ’s finding that the employer violated
Section 8(a)(3) by announcing and implementing a reduction in healthcare premiums and
copays for all employees except those who were eligible to vote in the representation
election.
The slip opinion is: 360 NLRB No. 58.
Attorneys: James Monica (Littler Mendelson) for Woodcrest Health Care Center.
NLRB: Falsely invoking name of manager in attempt to gain information legitimate
basis for discharge of union steward
By Ronald Miller, J.D.
An employer did not violate the NLRA by discharging an employee who served as a
union steward because her conduct was not protected by the Act, ruled a three-member
panel of the NLRB. In this instance, the employee was discharged after she attempted to
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gain information by dishonestly invoking a manager’s name to an HR representative
(Encino Hospital Medical Center, February 25, 2014).
As a union steward, the employee had assisted a coworker in processing a grievance.
Ultimately, the grievance was settled when the coworker resigned and the employer
agreed not to contest her claim for unemployment benefits. However, in an effort to
determine whether the employer would contest the coworker’s claim, the steward falsely
stated to an HR rep that a manager had said that he or another individual would attend the
unemployment compensation hearing. Upon learning of the deception, the manager
launched an investigation of the matter and the steward was subsequently discharged
based on her conduct and her overall disciplinary record.
The Board has held that, in certain circumstances, an employee may lose the protection of
the Act by engaging in conduct that is deliberately deceptive or maliciously false where
there is no necessary link between the deception or falsification and the protected
conduct. In this instance, an administrative law judge found that the steward engaged in
deception that was neither an integral nor a necessary part of her assistance of the
coworker when she tried to gain information by fabricating a conversation with the
manager and dishonestly invoking the manager’s name to the HR rep. Thus, the Board
agreed that the steward’s conduct was not protected by the Act.
The NLRB also agreed based on the credibility findings of the ALJ that the steward’s
unprotected conduct was the reason that she was discharged. As a result, the Board
found it unnecessary to pass on the law judge’s finding that the General Counsel failed to
carry his initial burden under Wright Line, of demonstrating that the steward’s protected
activity was a motivating factor in her discharge.
The slip opinion is: 360 NLRB No. 52.
Attorneys: Jonathan A. Siegel (Jackson Lewis) for Encino Hospital Medical Center.
Monica Guizar (Weinberg, Roger, & Rosenfeld) for SEIU United Healthcare WorkersWest.
Hot Topics in WAGES HOURS & FMLA:
President signs EO raising minimum wage to $10.10 for federal contract workers
On February 12, just as promised in his State of the Union address, President Obama
signed an Executive Order (EO) raising the minimum wage to $10.10 an hour for federal
contract workers. According to a White House fact sheet, the new EO will not only
benefit the hundreds of thousands of people working under contracts with the federal
government who are making less than $10.10 an hour, it will also improve the value that
taxpayers get from the government’s investment. Boosting low wages will reduce
turnover and absenteeism, while also increasing morale and improving incentives for
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workers, all of which leads to higher productivity overall, the White House said, pointing
to studies.
The new EO will:
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Raise the minimum wage to $10.10 an hour effective for new contracts beginning
January 1, 2015. The higher wage will apply to new contracts and replacements
for expiring contracts.
Benefit hundreds of thousands of hardworking Americans, including nursing
assistants providing care to veterans at nursing homes, concessions workers in
national parks, people serving food to U.S. troops, and individuals with
disabilities working to maintain the grounds on military bases.
Increase the tipped minimum wage to ensure that tipped workers earn at least
$10.10 overall, through a combination of tips and an employer contribution.
Employers are currently required to pay a minimum base wage of $2.13 per hour
— a rate that has not changed in over 20 years — and if a worker’s tips do not
add up to the minimum wage, the employer must make up the difference.
Employers now will be required to pay a minimum base wage of $4.90 for new
federal contracts and replacements for expiring contracts put out for bid after
January 1, 2015. That amount increases by 95 cents a year until it reaches 70
percent of the regular minimum wage, and if a worker’s tips do not add up to at
least $10.10, the employer will be required to pay the difference.
Cover individuals with disabilities working under service or concessions contracts
with the federal government. Under current law, workers whose productivity is
affected due to their disabilities may be paid less than the wage paid to others
doing the same job under certain specialized certificate programs. Now those
workers will be guaranteed $10.10 an hour.
Improve value for the federal government and taxpayers. According to one study,
when Maryland passed its living wage law for companies contracting with the
state, there was an increase in the number of contractors bidding. Higher
competition can help ensure better quality. Because the increase will take effect
for new contracts and replacements for expiring contracts put out for bid after the
effective date of the order, contractors will have time to prepare and price their
bids accordingly.
In his State of the Union address, President Obama pledged to both take executive action
wherever he can and to work with Congress to increase opportunity for all Americans.
Consistent with that pledge, the President said he will continue to work with Congress to
raise the minimum wage for all Americans and pass the Harkin-Miller bill so that all
workers will be entitled to at least a $10.10 minimum wage.
Domino’s Pizza franchisee to pay $1.28M to resolve FLSA suit
By Pamela Wolf, J.D.
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Under a plan approved by a bankruptcy judge in the Southern District of New York, a
Domino’s Pizza franchisee will settle an FLSA lawsuit by paying $1.28 million to 64
current and former employees who were either part of a conditionally certified class or
had individually filed claims in the bankruptcy court. In total, there were about $3.23
million in wage claims filed in bankruptcy court against debtor DPNY, Inc., and related
parties. Although the settlement has received all necessary approval, no payments will be
made until the effective date of DPNY’s Confirmed Plan of Reorganization.
The case was initiated in the federal district court (No 10 Civ 7100) in September 2010,
when the named plaintiffs filed a FLSA suit against DPNY, Inc., for wage law violations
at its four locations. They were purportedly paid improperly at the lower tipped wage
rate, required to go without breaks and to pay for their own uniforms. In March 2011, the
district court approved a stipulated conditional certification of the FLSA suit. But in
March 2012, DPNY filed a petition for Chapter 11 bankruptcy relief.
The aggrieved workers filed claims in the bankruptcy court for not less than $3,231,509
for unpaid wages, liquidated damages, reimbursement of expenses for uniform laundering
and bicycle repairs, as well as compensatory damages for retaliation claims, costs and
attorneys’ fees.
Judge James M. Peck has approved a settlement agreement under which the workers will
receive cash payments totaling $1,232,000, less their individual shares of tax
withholdings and wage deductions. Forty percent of the $1.23 million is attributable to
unpaid wages, 50 percent to non-punitive, liquidated damages, and 10 percent to
reimburse laundering and bicycle repairs.
In lieu of certain requests for restatement by some claimants, an aggregate amount of
$50,000, less withholding taxes and wage deductions, will be awarded in addition to their
proportionate share of the larger settlement; this is attributable to back pay.
The workers were represented by the Legal Aid Society of New York and Shearman and
Sterling, LLP. The agreement awards $28,572 to Legal Aid for costs and attorneys’ fees,
and costs of $71,000 to Shearman and Sterling.
In addition to the monetary relief, the agreement requires that DPNY:
 Pay all employees an hourly rate of $7.25 (or minimum wage if it’s increased) for
all time worked at DPNY stores until New York enacts a split-wage law;
 Comply with current law concerning providing uniforms, winter jackets, and
boots to delivery workers at no charge;
 Provide all employees reimbursement up to $50 annually for boots and/or foul
weather gear;
 Reimburse delivery workers for the purchase and repair of bicycles; and
 Provide delivery workers five paid sick days annually.
DPNY and all of the other defendants deny the FLSA allegations and disavow any
liability.
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Bill would make FMLA to apply to employers with at least 25 employees, add
parental involvement and family wellness leave
By Pamela Wolf, J.D.
Representative Carolyn B. Maloney (D-NY) on Wednesday, February 5, introduced a bill
that would amend the Family and Medical Leave Act of 1993 to expand its protections to
a greater number of employees and to additional types of protected leave. Unveiled 21
years after the FMLA was signed into law by President Bill Clinton, HR 3999 would
amend the FMLA to cover employers with 25 or more employees, rather than the current
coverage threshold of 50 or more employees. It would also permit employees to take
parental involvement leave and family wellness leave.
Parental involvement. If enacted, the proposed legislation would provide parental
involvement leave for employees to participate in or attend activities sponsored by a
school or community organization that is related to a program of the school or
organization that the employee’s son, daughter, or grandchild attends.
Family wellness. The family wellness leave would apply to routine family medical care
needs, including medical and dental appointments of an employee’s son, daughter,
spouse, or grandchild, or to attend to the care needs of elderly relatives, including visits to
nursing homes and group homes.
Amount and substitution. The bill provides that employees are entitled to up to four
hours of parental involvement or family wellness leave during a 30-day period and up to
24 hours in a 12-month period. Employees would be able to elect, or the employer could
require, substitution of any accrued paid vacation leave, personal leave, or family leave.
In the case of family wellness leave, employees would also be permitted to elect, and
employers could require, substitution of accrued medical or sick leave; however,
employers would not be required to provide any paid medical or paid sick leave for
circumstances under which they would not normally provide such paid leave.
Notice of leave. Employees would be required to give the employing agency at least
seven days’ notice of their intention to take parental involvement or family wellness
leave. However, when taking family wellness leave, employees would in addition be
required to “make a reasonable effort” to schedule the leave so to avoid unduly disrupting
the employer’s operations, subject to the health care provider’s approval (if any were
involved).
“No one should have to fear that they’ll lose their job if they need to take medical leave
or care for a family member,” Representative Maloney said in a press release. “The
landmark Family and Medical Leave Act sought to end that insecurity by guaranteeing 12
weeks of unpaid leave.
Unfortunately, nearly 40 percent of workers are not covered by that law because they
work in businesses with fewer than 50 employees. The Enhancement Act will expand the
FMLA’s protections to businesses with 25 or more employees, giving millions more
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people the peace of mind that if they need to take sick leave they won’t lose their job.
Every American deserves the rights afforded by the Family and Medical Leave Act and
this legislation would help us reach that goal.”
The proposed legislation has been referred to the House Committee on Education and the
Workforce, as well as the Committees on Oversight and Government Reform, and House
Administration for consideration of any provisions that fall within the jurisdiction of
each.
Cincinnati Bengals on the receiving end of cheerleader’s wage and hour class
complaint
By Pamela Wolf, J.D.
A former cheerleader for the Cincinnati Bengals has filed a class wage and hour lawsuit
against the football team for its purported failure to pay minimum wage to the “BenGals” for the work they perform both on and off football field. According to the
complaint, the team’s cheerleaders spend more than 300 hours a year “working for the
Bengals organization,” yet make far less than Ohio minimum wage for their mandated
efforts.
The plaintiff asserts that the Ben-Gals are required to attend a minimum of 6-8 hours of
mandatory practices each week from late May through December. They also must appear
at no less that 10 “charity” functions each season and are required to pose for and
promote a Ben-Gals calendar. The total mandatory practice time, public appearance time,
time spent at Paul Brown stadium on game days, and time posing for and promoting the
Ben-Gals calendar comes to “well over 300 hours a year,” the complaint alleges. Yet, the
cheerleaders purportedly are paid at most, only $90 for each home game at which they
cheer.
According to the complaint, the revenue generated by some 30 Ben-Gals each year by
promotional appearances and the calendar for which they pose is retained by the
Cincinnati Bengals. Based on a 2003 Forbes Magazine article, the complaint puts that
estimated revenue at “just over $1 million.”
The complaint appears to dispel the notion that the Bengal’s cheerleader wage payment
approach is an industry standard by pointing to Super Bowl Champion Seattle Seahawks,
an organization that provides “an hourly wage and any applicable overtime required by
law, for all hours worked.” The complaint also points to the only other sports
organization in Ohio that uses cheerleaders – the Cleveland Cavaliers basketball team –
which purportedly “pays its cheerleaders for ‘rehearsals, games, appearances/promotions
and dance clinics.’”
The former cheerleader who brought the action alleged that during the 2013 season, she
was a non-exempt employee who “worked well in excess of 300 hours” for the team and
appeared at 10 home games, but was only paid $855 — a pay rate of less than $2.85 an
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hour despite Ohio’s minimum wage that year of $7.85 an hour. She said that once she
was informed that she had made the squad following tryouts, she was instructed to fill out
and return both a W-4 form and a direct deposit payment agreement.
The plaintiff alleges that she was hired after she filled out this paperwork and only then
received the “Ben-Gal Rules,” under which she was restricted from taking certain other
types of employment, and would be punished by being forced to “sit out” games if she
missed any mandatory practices — what the plaintiff considered a “severe” measure
given that she was only paid for appearing at games. Under the alleged rules,
cheerleaders can only miss four practices a season — being tardy two times is equal to an
absence; 16 or more minutes tardy is an absence; and a total of five absences is cause for
termination, except if one of them is for a cheerleader’s own wedding.
Cheerleaders must also appear at the stadium well before the appointed practice time to
“weigh-in” and prepare to practice with “full hair and make-up,” as purportedly required.
If not selected to appear at a game, cheerleaders are required to spend the first half of the
game visiting with fans and can leave at half-time, although they are encouraged to stay
beyond that point to assist in field activities, according to the complaint — for this they
are paid $45. When the plaintiff missed a game to attend a funeral, she allegedly was paid
$45 dollars for working no less than 6 hours of such work, less than the state minimum
wage.
According to the complaint, the cheerleaders must provide their own transportation to
and from appearances, pay for specialized clothing, make-up, skin tanning and other gear,
for which they are not reimbursed, which further lowers their effective wage.
The plaintiff asserts minimum wage claims under FLSA; Article II, Section 34a of the
Ohio Constitution; and the Ohio Minimum Fair Wage Standards Act. She requests
certification of a FLSA collective class and a Rule 23 class for the state law claims and
seeks unpaid wages, liquidated damages, attorneys’ fees and costs, among other things.
Construction company owner sentenced for failure to pay prevailing wages on NYC
affordable housing project
A Bronx-based construction company, Applied Construction Inc., and its owner,
Mohammad T. Riaz, manager, Mohammad Arshad, and two foremen, Zbigniew
Lakomiec and Socrates Carrera, have been sentenced for failing to pay prevailing wages
to workers on a public works construction project at a residential building in the Bronx,
according to New York State Attorney General Eric T. Schneiderman. The project was
financed and overseen by the New York City Department of Housing Preservation and
Development (HPD). Applied Construction Inc. and Riaz pleaded guilty to felony
charges and paid nearly $500,000 in restitution. That money will go to 16 workers.
Applied and Riaz are barred from government construction jobs for five years.
Applied Construction Inc. and its owner, manager and foremen were required by law and
by their contract with the city to pay prevailing wages to workers on an affordable
housing project, located at 2865 Kingsbridge Terrace in the Bronx, between November 9,
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2011, and August 30, 2012. Rather than pay the workers at the legally required hourly
rates, the defendants paid the workers a fraction of the lawful rate and did not provide
supplemental benefits.
To conceal their scheme, Riaz and Arshad underpaid some of their workers by paying
them in cash and excluding those workers on certified payroll reports submitted to HPD.
In addition, some workers who were listed on the reports were given the amount of
money as listed on the certified payroll reports but were then required to return a portion
of their wages to the defendants.
The defendants were arrested on March 6, 2013, and March 11, 2013, and charged with
Grand Larceny in the Second Degree, which carries a maximum term of 5 to 15 years in
prison. Riaz was also charged with three counts of Money Laundering in the Second
Degree. Other charges include Scheme to Defraud, Falsifying Business Records, and
Offering a False Instrument for Filing and Violation of Workers Compensation Law.
The project, funded in part with taxpayer dollars, was administered by New York City's
Department of Housing Preservation and Development and was subject to prevailing
wage requirements.
On November 20, 2013, Applied Construction Inc. pleaded guilty to a violation of
Scheme to Defraud in the First Degree, a class E Felony, and Riaz pleaded guilty to a
violation of Workers Compensation Law Sec. 52(1)(a), a Class E felony. These
defendants paid $490,000 in restitution and will be barred from doing any government
work in New York for five years. In addition, the defendants paid more than $2,000 to
the New York State Department of Labor for unemployment insurance taxes, and
defendant Riaz will have to complete 200 hours of community service. The defendants
were sentenced to a conditional discharge.
Defendant Arshad's company, Spindle Construction Inc., pleaded guilty to a violation of
Scheme to Defraud in the First Degree, a class E Felony, and defendant Arshad pleaded
guilty to Facilitation in the Fourth Degree, a class A misdemeanor. These defendants had
to pay a fine of $1,500 and were sentenced to a conditional discharge. Defendant Arshad
has completed 100 hours of community service.
Defendant Lakomiec pleaded guilty to Facilitation in the Fourth Degree, a class A
misdemeanor and was sentenced to a conditional discharge. Lakomiec completed 40
hours of community service. Defendant Carrera pleaded guilty to Petit Larceny, a class A
misdemeanor and was sentenced to a conditional discharge and 10 days of community
service.
The sentencing in this case follows the civil resolution of two unrelated cases also
involving underpayment of workers at affordable housing projects developed by HPD. In
March 2013, Attorney General Schneiderman announced a settlement of nearly $1
million from Procida, a general contractor on two affordable housing projects for seniors
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in Brooklyn, followed by a $600,000 settlement with another contractor, Masonry
Services, Inc., in August 2013.
American Airlines agrees to wage increases for workers at NYC airports
American Airlines has agreed to terms requested by the Port Authority of New York &
New Jersey to increase wages and work to provide holiday pay for its employees at JFK
and LaGuardia airports in New York City, New York Governor Andrew M. Cuomo
announced on February 21.
On January 27, Port Authority Executive Director Patrick Foye sent a letter to the CEOs
of four major airlines — Delta, JetBlue, American, and United airlines — that operate in
JFK and LaGuardia airports requesting an immediate improved wage and benefits
package for their employees. The request covers 8,000 workers at the two airports.
The agreement reached with American Airlines fulfills all the requests outlined in the
letter. Under the terms of the agreement, American Airlines will work with its vendors in
New York to raise the hourly wages by $1 for those contracted employees making $8 to
$9 an hour, and will raise the wage to $10.10 an hour by early 2015 for all LGA and JFK
employees. In addition, American Airlines will work to ensure workers receive Martin
Luther King Jr. Day as a paid holiday and vendors provide retroactive pay for last
month’s holiday.
“Today, we are pleased to announce that American Airlines has stepped up to do the right
thing by agreeing to provide fairer compensation for these hardworking employees at
JFK and LaGuardia airports,” Governor Cuomo said. “This year, we are making major
investments to improve the state’s two busiest airports, and that will only be possible
when the workers who keep them running every day are paid properly. On behalf of over
a thousand workers who will benefit from this agreement, I commend American Airlines
for taking this important action.”
Michael Minerva, American Airlines Vice President of Government and Airport Affairs,
said,
“American Airlines and American Eagle Airlines value our partnership with the Port
Authority of New York and New Jersey, and we appreciate the hard work and service
employees provide our customers every day. By taking action to improve wages, we are
bolstering our commitment to create world-class places to work.”
Durham School Services will pay $1.25 million to settle Baltimore school bus
drivers’ class action for unpaid wages
Baltimore school bus drivers and attendants have reached a $1.25 million wage
settlement with their employer, Durham School Services, the transportation contractor for
Baltimore City Public Schools, according to Teamsters Local 570. The settlement covers
damages for 366 class members over unpaid wages dating back to 2010.
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Durham School Services is the second-largest school bus company in the United States
and a subsidiary of National Express Group PLC, a United Kingdom-based multinational
transportation company.
The settlement stems from a class action lawsuit filed in March 2013 asserting claims to
recover wages owed by Durham for hours spent on pre- and post-trip inspections of the
buses, which ensure the safety of the buses that transport children to school. The suit also
included claims for time workers spent fueling and cleaning the buses, as well as time
spent in initial training, for which they claimed they were not paid. The lawsuit also
alleged that the company either failed to pay workers for all overtime, or failed to pay
overtime in a timely manner.
The union said that this is not the first time Durham School Services has settled over
unpaid wages. In 2012, Durham settled a statewide class action lawsuit with school bus
workers in California. Those workers won a $7-million back pay award for unpaid
wages.
In the current case, a federal district court has preliminarily approved the $1.25 million.
A hearing is set for April 4.
FLSA allegations resolved against hospitality industry employer, former
McDonald’s franchisee, drywall installer
The Department of Labor recently announced the separate resolutions of three unrelated
cases leveling charges of FLSA violations against an employer in the hospitality industry,
a former McDonald’s franchisee, and a drywall installation company. One of the
employers purportedly also deducted excessive rent for substandard employer housing
provided to student workers in the J-1 visa program.
Aspen Skiing Co. After the DOL’s Wage and Hour Division (WHD) investigation found
FLSA minimum wage, overtime, and recordkeeping violations, Aspen Skiing Co. in
Aspen agreed to pay $108,796 in back wages and liquidated damages to 300 employees.
The investigation was conducted under an enforcement initiative focused on
strengthening compliance in Aspen’s hospitality industry, where hotels and restaurants
employ many low-wage workers.
Under the settlement, Aspen Skiing agreed to comply with the FLSA at all of its
locations, including the Aspen-area mountains of Buttermilk, Aspen Mountain, Aspen
Highlands, and Snowmass. The company committed to specific measures to prevent
future violations from occurring, including updating its company handbook; providing
FLSA training to managers; hiring a third party to review and ensure employees who are
classified as exempt from overtime pay are properly classified and compensated for all
work hours; implementing procedures to accurately track and compensate employees for
work performed beyond scheduled work shifts; and promoting FLSA compliance among
vendors and contractors with whom Aspen Skiing does business.
Cheung Enterprises LLC. Former McDonald's franchisee Cheung Enterprises LLC and
its president, based in Middletown, Pennsylvania, have agreed to pay $205,977 in back
wages and liquidated damages to 291 employees, including 178 foreign student workers
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hired under the U.S. State Department's J-1 visa program. A WHD investigation found
FLSA minimum wage and overtime violations at the company's six locations across
central Pennsylvania.
Investigators from WHD’s Wilkes-Barre District Office found Cheung Enterprises made
improper deductions from employee paychecks, bringing the rate of pay for some
employees below the federal minimum wage of $7.25 per hour. The firm also allegedly
failed to pay student workers properly. Other employees did not receive the overtime
premium required by the FLSA. Investigators determined that the company charged the
student workers excessive rent that was deducted from their paychecks for substandard,
employer-owned housing.
In addition to paying back wages and liquidated damages, Cheung Enterprises and its
president agreed to pay a $5,000 civil money penalty for the willful nature of the
violations and will comply with the FLSA overtime and recordkeeping provisions in the
future. The company president no longer operates any McDonald's franchises.
Summit Drywall Inc. The DOL has obtained a consent judgment in federal court in
Washington that orders Issaquah-based drywall installer Summit Drywall Inc. and its
owner to pay $550,000 in overtime back wages and liquidated damages to 384 current
and former employees. The judgment resolves allegations arising from a WHD
investigation and subsequent DOL lawsuit finding that the company violated FLSA
overtime and recordkeeping provisions from October 15, 2009, through April 15, 2013.
The WHD established that Summit Drywall failed to pay employees overtime at timeand-a-half their regular rates of pay for all hours worked beyond 40 in a workweek, as
required by the FLSA, the DOL said. Investigators also found that employees working as
drywall hangers and tapers were paid on a piece-rate basis and were not compensated for
all hours worked, including time spent traveling and transporting equipment to the job
site. This caused additional violations of FLSA overtime requirements. The employer
also purportedly failed to keep accurate and complete records of hours worked, as
required.
In addition to the $275,000 payment in back wages and an equal amount in liquidated
damages, the consent judgment requires specific action on the part of the employer. If
Summit Drywall chooses to use a piece- rate compensation system, it must calculate the
piece earnings on an individual basis. The company will also maintain accurate records of
hours worked; provide its employees the documentation of their hours worked with each
paycheck and the regular rate on which their weekly wage is calculated; provide training
to all employees on the requirements of the FLSA; and take steps to promote awareness
in the drywall industry of employers’ obligations under the FLSA by writing and
submitting an article to appear in an industry publication that addresses the obligations of
drywall employers under the FLSA. The article will promote a code of conduct that
includes adherence to employment law.
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“This is a victory,” said Janet Herold, the DOL’s regional solicitor in San Francisco. “In
this region, long hours and low wages are prevalent in the drywall industry. This consent
decree sends the unambiguous message that the department will not permit the
underpayment of workers’ wages in piece-rate schemes, such as those at issue here.”
Union leader says federal workers should get 4-percent raise next year instead of
anticipated 1-percent proposal
The American Federation of Government Employees (AFGE), reacting to reports that the
federal budget will include only a 1-percent pay raise for federal employees next year, is
demanding that these public servants be awarded a 4-percent raise instead. Putting it in
context, federal workers have endured three years of pay freezes as well as the
consequences of sequestration.
On Tuesday, February 25, AFGE National President J. David Cox Sr. called on President
Obama to provide federal employees with a 4-percent pay raise next year. Anticipating its
unveiling next week, he said that the fiscal 2015 budget’s proposed 1-percent across-theboard pay raise for federal employees and members of the military is “a pitiful amount
that does little to help federal workers recover from a three-year pay freeze, higher
retirement contributions and the loss of pay due to sequestration-related furloughs last
year.”
Cox called his own 4-percent proposed alternative “a modest and affordable increase that
will help employees keep up with rising living costs, including higher retirement and
healthcare expenses.”
The union president said that since 2010, federal employee wages have increased 3
percent, while prices have risen 9 percent, pointing out that this did not include out-ofpocket expenses for sequestration-related furloughs, retirement contributions, and
healthcare premiums. In salary alone, according to Cox, federal employees are more than
6 percent worse off under the Obama Administration.
He also noted that federal employees have weathered three consecutive years of pay
freezes and that new workers are now required to pay substantially more toward their
retirement. These cuts, he said, amount to $120 billion in lower wages and benefits for
federal employees during the next decade, without even taking into consideration to
sequestration furloughs.
“The president must send a strong message that inflicting pain on federal employees was
a miserable failure,” according to Cox. “The administration punished federal workers in
order to endear itself to those who despise the federal workforce, and it didn't work. “If
the president truly wants to put an end to austerity and the decline of the middle class,
there is no better place to start than with his own employees.”
LEADING CASE NEWS:
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5th Cir.: Caregivers in group home employees, not independent contractors;
overtime claims survive
By Lisa Milam-Perez, J.D.
Caregivers in a group home for individuals with developmental disabilities were
employees, not independent contractors, the Fifth Circuit held in an unpublished decision.
As such, they were entitled to proceed with their FLSA overtime claims, the appeals
court held, affirming the decision of a district court (Chapman v ASUI Healthcare and
Development Center, February 3, 2014, per curiam).
The plaintiffs worked for ASUI Healthcare and Development Center, a healthcare
provider that contracts with the state to provide assistive services for individuals with
mental disabilities in an assisted living setting. The caregivers’ duties included cooking,
cleaning, and assisting clients with medication. Their shifts typically started at 3:00 pm
and concluded at 9:00 am the next morning. Although they stayed at the group homes
overnight, the caregivers were not paid for the “down time” from 10:00 p.m. to 6:00 a.m.
Asserting that they were entitled to compensation for this down time, they filed suit to
recover unpaid overtime wages.
Employees, not independent contractors. Although the caregivers were ostensibly
hired as independent contractors, and they signed contracts acknowledging that status, the
economic reality test reflected that they were statutory employees, the Fifth Circuit
found, pointing out that “neither a defendant’s subjective belief about employment status
nor the existence of a contract designating that status is dispositive.” Looking to the
multiple factors set forth in the economic reality test, the appeals court concluded the
caregivers were so dependent on ASUI that they were employees; they were clearly not
in business for themselves.
ASUI controlled all meaningful aspects of the relationship between the caregivers and the
company. It hired the caregivers — who worked for the company for several years — and
assigned them to their respective group homes. It also set their work schedules and
determined their hourly pay (and pay increases). And, beyond their hourly wage, the
caregivers had no opportunity for further profit, and bore no risk of loss. Their only
investment was the purchase of their uniforms. Finally, although the caregivers went
about their daily cooking and cleaning tasks relatively free from supervision, that did not
transform them into independent contractors.
Individually liable. Nor did the district court err by concluding that ASUI’s vice
president and program manager was the caregivers’ statutory employer under the FLSA,
having exercised substantial operating control over their employment. She hired the
caregivers, personally ensuring that criminal background checks were performed and
letters of reference secured. She assigned them to their group homes, set their rate of pay,
and personally reviewed their hours and compensation. She also scheduled them to cover
for employees who did not show up. Moreover, it was ASUI’s president who told one of
the plaintiffs that she would not be paid for certain hours worked, and the president’s own
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testimony showed that on various occasions she exercised authority and control by
authorizing the billing specialist to pay the direct caregivers for certain time.
No companionship services exemption. Also, contrary to the employer’s contention, the
FLSA’s companionship services exemption did not apply. The caregivers were not
working in private homes within the meaning of the FLSA exemption. Although the
clients resided in the living units (albeit in groups of three), the homes were maintained to
facilitate the provision of assistive services. “But for their receipt of assistive services
from ASUI, the clients would not necessarily be living in these units,” the appeals court
noted.
Summary exhibits. ASUI next challenged the trial court’s admission of summary
exhibits in determining damages. Finding no abuse of discretion, the appeals court
observed the summaries were based on ASUI’s own records and/or the caregivers’
testimony, and the court was fully able to compare the summaries with the primary
evidence. Although the chart preparer was not available for cross-examination, “this was
a bench trial, not a jury trial.” The employer was able to argue about claimed inaccuracies
in the challenged evidence, and the court expressly took those assertions into account.
Liquidated damages. Finally, the appeals court upheld the district court’s award of
liquidated damages. While the court had discretion not to award liquidated damages, the
employer would first have to show it acted in good faith and with a reasonable ground for
believing it was not violating the FLSA. Here, the only seeming evidence of good faith
was the president’s agreement with defense counsel that ASUI had spoken to an attorney
and an unnamed consultant when determining that the caregivers were not employees.
But there was no further explanation or discussion about any investigation by ASUI into
the caregivers’ employment status. Thus, the lower court did not abuse its discretion by
refusing to omit a liquidated damages award.
The case number is: 13-20081.
Attorneys: Mark S. Siurek (Warren & Siurek) for Vera Chapman. Joseph Rutherford
Willie, II (Willie & Associates) for A.S.U.I. Healthcare and Development Center.
6th Cir.: Female guard not returned to her former position at end of maternity
leave gets FMLA claim reinstated
By Marjorie Johnson, J.D.
A female security guard who attempted to return to her post after a six-week unpaid
maternity leave, but was told there was no work for her at that location, could advance
her FMLA interference claim despite the employer’s assertion that she should have asked
for a reassignment. Reversing a district court’s grant of summary judgment against her,
the Sixth Circuit, in an unpublished decision, held that in light of the employer’s lack of
clarity and its failure to give its employees notice of how to proceed upon completion of
FMLA leave, triable issues of fact existed as to whether she was “laid off” during her
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leave, whether a similar job existed to which she could have returned, and whether she
was made aware of the existence of that job (Clements v Prudential Protective Services, LLC,
February 3, 2014, Merritt, G).
“Laid off” following leave. The employee was hired by Prudential Protective Services
(PPS) in 2006 and was assigned to work in the New Center (NC) complex, where she had
previously worked as a security guard for many years under other employers. She was
assigned to work under the same supervisor that she had worked under with her prior
security companies. The supervisor scheduled employees and had the authority to
approve vacation requests.
The employee became pregnant with her second child in 2008 and gave birth to him in
June 2009. She gave her NC supervisor notice of her pregnancy and, as he had done with
her first pregnancy in 2006, he told her to call him when she was ready to return to work
and he would put her back on the schedule. Although he claimed that he told her that she
needed to contact the main office in order to properly schedule her maternity leave,
neither of them ever contacted the main office prior to the beginning of her leave. No
paperwork was filled out relating to her time off from work and she was not paid during
this time. Moreover, it was undisputed that nobody at PPS ever spoke with the employee
about her FMLA rights prior to her maternity leave. The company did not provide
employees with information regarding the Act, other than referring them to the text of the
FMLA if they inquired about it and placing a wall poster at certain locations where
guards signed in and out for their shifts.
Six weeks after her leave began, the employee attempted to contact her NC supervisor to
request that she be put back on the schedule. Since he was on an extended leave due to
the death of his mother, she spoke to another individual, who relayed messages to the
supervisor on her behalf.
The supervisor instructed that person to tell the employee that security guard hours at the
NC complex had been cut due to lack of business, so he could not put her back on the
schedule. Although he claimed that he also advised the employee to report to the main
office to request an assignment to a different site, she denied having ever received such a
message.
The employee visited the main office twice in the ensuing months to receive paperwork
for unemployment benefits and to obtain verification that she was not working so that she
could defer her credit card payments. At a subsequent visit, she received a layoff letter
prepared by an HR employee, stating that she was “currently laid off,” that she “left on
maternity leave on May 23rd,” and that when a position became available, she would be
“called back to work.” She also spoke with the VP of operations, who told her that she
was not laid off since there were jobs available at other sites. However, she neither
requested nor was offered a position. PPS subsequently stopped authorizing her
unemployment benefits and credit card deferments. She continued calling the NC
supervisor on a weekly basis for the next few months, but was not put back to work at the
NC complex.
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Lower court: no prejudice to employee. PPS contended the employee failed to follow
its “usual and customary” notice requirements for requesting leave since she did not
contact the main office prior to taking leave. However, since she asserted that the
company had no “usual and customary” leave procedures, the district court found a
factual dispute existed as to PPS’s compliance with the FMLA’s notice requirements, and
also as to her compliance with the statute’s employee notice provisions. If PPS failed to
fulfill its own duties regarding notice to employees under the Act, it could not defeat her
interference claim by alleging that she did not follow procedures that did not exist, the
lower court reasoned. However, it ultimately granted summary judgment against her,
ruling that she did not show that she suffered any prejudice as a result of any failure by
PPS to provide the requisite notice.
The Sixth Circuit noted that the employee was granted the requested leave, so the record
supported the district court’s ruling that she suffered no prejudice as it related to her
ability to take FMLA leave. However, it was unclear whether she suffered prejudice as to
her right to return to her previous position or an equivalent position. The company’s lack
of internal procedures for employees preparing to take leave, for those on leave, and for
those seeking to return from leave were the source of remaining factual disputes.
Lack of clarity revives claim. The record was also unclear whether the employee was
laid off or failed to request reassignment to another security job. Notably, it was disputed
whether the NC supervisor instructed her to report to the main office to request a new
assignment. It appeared that she knew that she could go to the main office to receive a
new assignment, but that she did not think that she needed to do so. Instead, she filed for
unemployment and apparently wanted to wait for an opening at the NC complex. She
seemingly believed that she had the choice to either receive unemployment or be
reassigned to a different location. This belief was consistent with the HR employee’s
letter stating that she was “laid off,” which was drafted so that she could provide proof to
the unemployment office that no suitable position for her existed at the company.
These inconsistencies in PPS’s interaction with the employee, as well as the lack of
communication, led to the confusion about her status with the company. Indeed, PPS had
virtually no written policies for any aspect of its business and its VP of operations
described the hierarchy of the reporting system as “kind of loose.” No paperwork of any
kind was prepared by him or anyone else when an employee went on leave and there was
no written procedure for instructing employees about leave or any forms for an employee
seeking leave to fill out.
In sum, it was unclear whether the guard was “laid off” or whether PPS wanted her to
return to work at a location other than the NC complex. In light of this lack of clarity and
the company’s failure to give its employees notice of how to proceed upon completion of
FMLA leave, PPS was not entitled to summary judgment.
The case number is: 13-1414.
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Attorneys: Dominic Nathan Hamden (Law Office of Dominic Nathan Hamden) for
Prudential Protective Services, LLC. Heidi T. Sharp (Burgess & Sharp) for Telitha L.
Clements.
9th Cir.: Removal of claims against Michaels Stores for improper classification of
managers did not run afoul of CAFA’s 30-day time limit
By Kathleen Kapusta, J.D.
A federal district court erred in remanding for a second time a lawsuit against Michaels
Stores on behalf of its California store managers — in which they alleged that Michaels
improperly classified them as exempt from overtime — on the basis that the removal ran
afoul of the Class Action Fairness Act’s (CAFA) 30-day time limit, the Ninth Circuit
ruled. As a preliminary matter, the appeals court found that the action was not moot
based on the state court’s subsequent decision to certify the class because “post-filing
developments do not defeat jurisdiction if jurisdiction was properly invoked as of the
time of filing.” The district also erred in finding that Michaels failed to demonstrate that
the amount in controversy exceeded the $5,000,000 threshold (Rea v Michaels Stores, Inc,
February 18, 2014, per curiam).
First remand. After the plaintiffs brought the present action against Michaels, it
removed the case within 30 days to federal district court under CAFA. The district court,
however, remanded finding that CAFA’s $5,000,000 amount-in-controversy requirement
was not met because the plaintiffs expressly disclaimed any recovery for the class over
$4,999,999.99. Subsequently, the Supreme Court, in Standard Fire Insurance Co v
Knowles, held that attempted damages waivers were ineffective and would not defeat
removal under CAFA.
Second remand. The day after the opinion issued, Michaels removed again under CAFA
and the district court again remanded, holding that the removal ran afoul of CAFA’s 30day time limit. In the alternative, it held that Michaels failed to show that the amount in
controversy exceeded $5,000,000.
Mootness. As a preliminary matter, the appeals court rejected the plaintiffs’ argument
that the appeal was moot in light of post-remand developments. They contended that
because a class was now certified in state court, the damages waiver in their complaint
was binding despite Standard Fire. They further argued that because the certified class
was significantly smaller than the proposed class, it could not possibly recover more than
$5,000,000. Finding that it need not consider whether either of these propositions were
correct, the court pointed out that the general rule is that “the amount in controversy is
determined from the pleadings as they exist at the time a petition for removal is filed.”
Here, the court stated, the plaintiffs continue to claim damages for wage and hour
violations against Michaels and Michaels continues to dispute them; thus, the case was
not moot.
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Timeliness. As to timeliness, the court observed that the removal statutes generally
require a party to remove a case within 30 days of receiving the complaint. However, “if
the case stated by the initial pleading is not removable, a notice of removal may be filed
within 30 days after receipt by the defendant, through service or otherwise, of a copy of
an amended pleading, motion, order or other paper from which it may first be ascertained
that the case is one which is or has become removable.” Thus, the 30-day period for
removal starts to run from the defendant’s receipt of the initial pleading only when that
pleading affirmatively reveals on its face the facts necessary for federal court jurisdiction.
In addition, if the complaint or amended pleading does not reveal that the case is
removable, the 30-day time period never starts to run and the defendant may remove at
any time.
Here, the appeals court observed that the district court first remanded the case on grounds
that subsequently became incorrect. Then, Michaels removed it again the day after the
Supreme Court’s decision in Standard Fire. When the company first received the
complaint, it had a damage waiver, purporting to waive any recovery over $4,999,999.99,
one penny shy of the jurisdictional threshold. At that time, the Ninth Circuit’s decision in
Lowdermilk v US Bank Nat’l Ass’n controlled. In Lowdermilk, the court held that such
damage waivers were valid and effective, unless the defendant could prove to a “legal
certainty” that damages exceeded $5 million. Thus, under the controlling law at the time
Michaels received the complaint, it did not affirmatively reveal on its face the facts
necessary for federal court jurisdiction, so the initial 30-day removal period was never
triggered, the court explained.
The plaintiffs argued, however, that the district court could not sustain a successive
removal attempt based on the same ground as the first. Disagreeing, the court found that
CAFA explicitly allows review of remand orders. Moreover, the court pointed out, the
Supreme Court’s decision in Standard Fire is “a relevant change of circumstances . . .
justify[ing] a reconsideration of a successive, good faith petition for removal.” Thus, the
second removal was proper.
Alternative holding. Turning to the district court’s alternative holding in which it found
that Michaels’ evidence failed to demonstrate that the amount in controversy exceeded
the $5,000,000 threshold, the court noted that it was unclear which legal standard, “legal
certainty” or “preponderance of evidence,” the district court applied to Michaels’
evidence of the amount in controversy. While the court’s remand order mentioned the
preponderance of the evidence standard, at the time it issued its order, the Lowdermilk
“legal certainty” standard was still Ninth Circuit law, the appeals court pointed out.
However, after the district court issued its remand decision, the Ninth Circuit held in
Rodriguez v AT&T Mobility Services that the Lowdermilk “legal certainty” test was no
longer good law in light of Standard Fire, and that the preponderance of the evidence
standard applied instead.
Here, the appeals court found that if the district court applied the Lowdermilk standard,
reversal would be required under Rodriguez. If it applied the preponderance of the
evidence standard, its finding that the amount-in-controversy requirement was not met
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was clearly erroneous. Thus, regardless of what standard was applied, the appeals court
found that reversal was required.
Amount in controversy. To prove the amount in controversy, Michaels submitted
evidence that store managers worked more than 45 hours a week, which would entitle
them to over $5,000,000 if the plaintiffs prevailed. The district court, however, faulted
Michaels for only showing that the managers were expected to work 45 hours or more
each week rather than showing they actually worked that amount. But, the appeals court
pointed out, the managers testified that they did work 45 hours or more each week. There
was no evidence that the expectation of 45 hours or more was not met. Thus, under the
preponderance of evidence standard, Michaels established “that the potential damages
could exceed the jurisdictional amount.” Because there was substantial, plausible
evidence that the damages at issue exceeded $5,000,000, and no evidence at all to the
contrary, the district court’s finding that Michaels failed to prove that the amount-incontroversy requirement was met was clearly erroneous even under the preponderance of
the evidence standard, the appeals court held.
The case numbers are: 14-55008 and 8:13-cv-00455-GW-AGR.
Attorneys: Jesse A. Cripps (Gibson, Dunn & Crutcher) for Michaels Stores Inc. David J.
Gallo (Law Offices of David J. Gallo) for P. Rea.
9th Cir.: Jury could find that employee purposefully chose not to have time off
count as FMLA leave though it could have qualified; judgment for employer
affirmed
By Lorene D. Parks, J.D.
Affirming judgment for an employer on an employee’s FMLA and state law claims, the
Ninth Circuit ruled that, contrary to her assertions, it was legally possible to refuse
FMLA protections by choosing not to designate FMLA-qualifying leave as such. Further,
the evidence supported the conclusion that the employee had taken FMLA leave in the
past but had reasons for choosing to use vacation time instead because that would
preserve all 12 weeks of FMLA leave for future use. The appeals court also affirmed the
district court’s order denying the employer’s motion for costs (Escriba v Foster Poultry
Farms, Inc, February 25, 2014, Gilman, R).
The employee worked in the poultry processing plant for 18 years. On November 18,
2007, she met with her supervisor to request “vacation” time to care for her sick father in
Guatemala. The supervisor gave her a piece of paper confirming two weeks of
“vacation.” The employee alleged that she sought a week or two of additional unpaid
leave but the supervisor said no. The supervisor, who does not speak Spanish, had a
follow-up meeting with the employee, including another supervisor who could interpret.
He asked the employee if she needed more time in Guatemala to care for her father and
she said “no.” Hearing this, the supervisor asked the interpreter to repeat the question and
the employee again answered “no.” She also testified later that she intended to request
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vacation time, not “family leave.” The supervisor filled out the vacation paperwork and
told her in English to visit HR if she decided to ask for more leave.
According to the employee, she then went to the facility superintendent, who speaks
Spanish, and asked if he could give her one or two weeks more leave. He said no but told
her to bring a doctor’s note when she returned to work. According to his testimony,
however, the employee asked “strictly” for “vacation time” and not “family leave.” He
also testified that when she asked what to do if she could not return by December 10, he
told her to “fax or send a note” to HR.
Termination. Soon after arriving in Guatemala, the employee decided to stay longer than
planned. On direct examination she said she tried to contact the employer to extend her
leave but on cross-examination she contradicted herself when asked why she didn’t call
her employer to report the delay; she answered “I just couldn’t think about it. I didn’t
remember.” She also conceded that she spoke to her husband, who also worked for the
employer, but never told him to contact HR on her behalf. She was ultimately terminated
for failing to comply with the employer’s “three day no-show, no-call rule.”
The employee filed suit alleging violations of the FMLA, the California Family Rights
Act (CFRA), and public policy. (Because identical standards applied to the FMLA and
the CFRA and violations of either would violate California public policy, the Ninth
Circuit referred to all three causes of action as arising under the FMLA.) The jury
returned a verdict in favor of the employer and the employee renewed a motion for
judgment as a matter of law. Denying the motion, the court concluded that substantial
evidence supported the jury’s finding that she had “knowledge of FMLA leave and how
to invoke it,” yet unequivocally declined to take more time or to request FMLA leave.
The court also denied the employer’s motion for costs.
Refusing FMLA rights is not “legally impossible.” On appeal, the employee contended
that it was undisputed she told her supervisor and the superintendent she needed time off
to care for her ailing father, which she argued automatically entitled her to FMLA
protections. In her view, the employer was required to provide her with notice of her
FMLA rights regardless of whether she expressly declined to designate her leave as such.
She argued that refusing to exercise FMLA rights as soon as they are available is “legally
impossible.”
As an initial matter, the appeals court noted that the FMLA does not expressly state
whether an employee may defer the exercise of FMLA rights. However, applicable DOL
regulations provide guidance, stating that after an employee alerts the employer of the
desire for FMLA-qualifying leave, the “employer will be expected to obtain any
additional required information through informal means.” Further, during this “informal”
process, the employee is expected to “provide more information.” Though the “employee
need not expressly assert rights under the FMLA or even mention the FMLA,” the
employer “should inquire further of the employee if it is necessary to have more
information about whether FMLA leave is being sought by the employee, and to obtain
the necessary details of the leave” (emphasis added by the court).
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To the appeals court, the “employer’s obligation to ascertain ‘whether FMLA leave is
being sought’ strongly suggests that there are circumstances in which an employee might
seek time off but intend not to exercise his or her rights under the FMLA.” And
practically speaking, holding that simply referencing an FMLA-qualifying reason triggers
the Act’s protections would put employers in an untenable situation if the employee’s
stated desire was not to take FMLA leave, because the employer could be liable for
forcing FMLA leave on the unwilling employee. Accordingly, the court concluded that
an employee can affirmatively decline to use FMLA leave, even if the underlying reason
for seeking leave would qualify for FMLA protection.
The court further noted that declining FMLA leave is not the same thing as a “waiver”
which involves trading the right to take FMLA leave for some other benefit offered by
the employer and is prohibited. It also pointed out that a waiver is the “voluntary
relinquishment of a known right” but “affirmatively declining the present exercise of a
right in order to preserve it for the future is fundamentally different from permanently
relinquishing that right.”
Evidence supported verdict. The employee fared no better on her argument that the
verdict was not supported by substantial evidence. The Ninth Circuit pointed out that
after the first meeting, the supervisor had an interpreter ask the employee twice if she
needed more time in Guatemala but she said “no.” Then the supervisor told her to visit
HR if she wanted more leave. A jury hearing this could conclude the supervisor inquired
further about whether the employee sought FMLA leave and the employee clearly
indicated she did not intend to take FMLA leave. Indeed, the fact that she approached the
supervisor instead of HR was telling because, as she conceded, the supervisor had
approved her past vacation requests while HR had handled all of her requests for FMLA
leave. In addition, witnesses corroborated the supervisor’s testimony.
Furthermore, the evidence suggested the employee knew that HR approved FMLA leave,
and not her supervisor, because she had successfully requested FMLA leave on fifteen
prior occasions. A reasonable inference would be that if she wanted FMLA leave, she
would have arranged for it with HR. The court also noted that the employer introduced
evidence explaining why the employee might have declined FMLA leave at that time.
Under its policies, FMLA leave runs concurrently against the balance of accrued vacation
until vacation time is exhausted; then the employee may remain on unpaid leave until a
total of 12 weeks elapses. But if an employee declines FMLA leave, the employee can
first take paid vacation and then still have the full 12 weeks of FMLA leave remaining.
The jury could have concluded from this that the employee here sought to preserve her
future FMLA time.
Prior FMLA usage. According to the employee, the district court also erred in admitting
irrelevant and highly prejudicial evidence about her prior FMLA leave, which she
claimed had “no bearing on whether she gave statutory notice.” The lower court
permitted the evidence on the limited issues of whether there was a policy and procedure
in place for FMLA leave, whether it was applied consistently, whether the employee
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followed it on prior leaves, and whether she knew the policy and procedure applied to the
circumstances here. Finding no error, the Ninth Circuit pointed out that the employee’s
argument rested on the erroneous assertion that simply mentioning an FMLA-qualifying
reason for an absence triggers the Act’s protections and that it is “legally impossible” to
refuse FMLA rights. But nothing in the FMLA precludes an employee from deferring the
exercise of FMLA rights. Thus, the district court did not err in admitting the evidence of
her prior FMLA usage and the judgment in favor of the employer was affirmed.
Order denying costs. In its cross-appeal, the employer contended that the district court
erred in denying it costs. The court had based its decision on the employee’s limited
financial means, the financial disparity between the parties, the chilling effect that taxing
costs might have on future FMLA cases, and the fact that the case involved close issues
of substantial public importance. The appellate court found no abuse of discretion in any
of these reasons or in the ruling. In particular, it noted the importance of the case was
evident by a Department of Labor letter explaining that cases like the employee’s
“establish parameters of what constitutes sufficient employee notice,” which is
“particularly important to the public interest.” It also noted that the employee has had
trouble securing employment while the employer is a multistate operation that made
approximately two billion dollars in 2007 and 2009.
The case numbers are: 11-17608 and 12-15320.
Attorneys: William A. Lapcevic (Arata Swingle Sodhi & Van Egmond) for Foster
Poultry Farms, Inc. Elizabeth Kristen (The Legal Aid Society) for Maria Escriba.
Ill. Sup. Ct.: Challenges to constitutionality of Illinois Employee Classification Act
fail following amendments to statute
By Ronald Miller, J.D.
A unanimous Illinois Supreme Court rejected a construction contractor’s facial
constitutional challenges to the Illinois Employee Classification Act (ECA). The court
first found that the contractor’s due process challenge to the pre-amended Act’s
enforcement provisions was rendered moot by amendments to the ECA. However, the
court did not address the contractor’s procedural due process claim on its merits because
it could not evaluate the correctness of the appellate court’s judgment on that issue. With
respect to the appellate court’s finding that the ECA’s exemption provision was not
unconstitutionally vague, the state high court affirmed that judgment, rejecting the
contractor’s assertion that it was impossible to know how to comply with the exemptions
(Bartlow v Costigan, February 21, 2014, Kilbride, T).
A construction contractor brought suit challenging the constitutionality of Illinois’
Employee Classification Act (ECA), 820 ILCS 185/1. The Act sought to address the
practice of misclassifying employees as independent contractors in the construction
industry. It creates a broad presumption that any individual “performing services,” as
statutorily defined, for a construction contractor is an employee of that contractor.
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However, the Act exempts independent contractors, sole proprietors, or partnerships that
can satisfy statutory criteria showing that they effectively operate independently of the
construction contractor.
Construction industry targeted. In September 2008, the Illinois Department of Labor
began an investigation of the plaintiff contractor after receiving a complaint that it was
violating the Act by misclassifying its employees as independent contractors. In February
2010, the IDOL made a “preliminary determination” that the contractor had misclassified
ten individuals as independent contractors. The following month, the IDOL sent the
contractor notice of a second investigation. In response, the contractor filed this action
seeking declaratory judgment and injunctive relief against the Director of the IDOL, who
was charged with enforcing the provisions of the ECA.
According to the plaintiff, the IDOL’s actions caused uncertainty on “how to continue in
their business in compliance with [the Act].” The contractor alleged that the ECA was
unconstitutional because it violates: (1) the special legislation clause of the Illinois
Constitution in that it subjects the construction industry to more stringent employment
standards than other industries; (2) the due process clauses of the U.S. and Illinois
Constitutions because it does not provide an opportunity to be heard and is impermissibly
vague; (3) the prohibition against bills of attainder in the U.S. Constitution because it is a
legislative act that inflicts punishment without a judicial trial; and (4) the equal protection
clauses of the U.S. and Illinois Constitutions because no other industry is subjected to the
same standards when seeking to hire independent contractors. The lower courts rejected
the contractor’s facial challenges to the constitutionality of the ECA.
Amendments to ECA. During the pendency of this appeal, the ECA was substantively
amended to require the IDOL to provide notice of alleged violations within 120 days of a
complaint and to conduct a formal administrative hearing regarding violations. The
amendments also reduced civil penalties to $1,000 per day for an employee
misclassification. As a result, the Illinois high court directed the parties to brief the issue
of whether the amended statute should be applied to this case and, if so, whether the
constitutional challenges have been rendered moot.
The contractor argued against retroactive application of the amended ECA, but the court
agreed with the IDOL that the amended Act must be applied to this case. The court
observed that when the contractor brought this action there was no final determination
regarding its violation of the Act and no penalties assessed. Thus, the IDOL’s ability to
enforce the Act against the contractor depends on its future compliance with the new
enforcement requirements.
Due process claim moot. The Illinois high court first addressed the contractor’s
procedural due process claim — specifically, the contractor’s contention that the Act
improperly authorizes the IDOL to perform “a judicial function” without providing a
proper hearing and other procedural safeguards. However, it noted, the Act’s enforcement
procedures underlying the due process challenge were substantively replaced during
pendency of this appeal; thus, the procedural due process claim was moot. Declaring the
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pre-amendment Act’s enforcement system unconstitutional and entering an injunction
against its use would have no practical effect because the IDOL lost the ability to use that
system when the amended statute took effect.
Vagueness challenge. The contractor next argued that Sec. 10 of the ECA, providing
statutory exemptions from the Act, was unconstitutionally vague. Because the
amendments did not alter the language of Sec. 10, the vagueness challenge was not
rendered moot. The contractor contended that because an ordinary person could not
determine whether a contractor has complied with the Act, or whether an individual
qualifies for exemption under that provision, “impossibility of compliance means that the
Act provides no standard of conduct at all.”
The Illinois high court has recognized that “[a] statute can be impermissibly vague for
either of two independent reasons: (1) if it fails to provide people of ordinary intelligence
a reasonable opportunity to understand what conduct it prohibits, or (2) if it authorizes or
even encourages arbitrary and discriminatory enforcement.” A review of the plain
meaning of Sec. 10 demonstrated that its provisions provide a person of ordinary
intelligence a reasonable opportunity to understand what conduct the Act prohibits, the
high court found. Likewise, the provisions were sufficiently detailed and specific to
preclude arbitrary enforcement.
Equal protection guarantees. The contractor also asserted that the ECA violated the
Illinois Constitution’s prohibition against special legislation and the federal and state
constitutional guarantees of equal protection. Observing that these challenges were raised
in a cursory fashion, the court declined to consider them, finding the contractor forfeited
the claims by failing to brief them fully before the court.
The case number is: 115152.
Attorneys: Mary Ellen Margaret Welsh for Joseph Costigan. Jana Yocom (Jana Yocom,
P.C.) for Rhonda Bartlow.
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