Collective Bargaining
and the NLRB
PRESENTED BY:
ANDREW J. MARTONE
ADAM C. DOERR
HESSE MARTONE, P.C.
(314) 860-0300
Overview

Today’s National Labor Relations Board

Expansion of “joint employer” doctrine

Construction Negligence -- Illinois Supreme Court Amicus Brief

Survey Workers under the Prevailing Wage Act

MPRA of 2014 and Central State’s “Rescue Plan”

Expanding employee rights -- drug testing, social media
Expanded “Joint Employer” Rule

For 30+ years (until August, 27 2015):

Two or more separate employers are “joint employers” of a
single workforce if they “share or codetermine essential
terms and conditions of employment”
 Hiring,

firing, discipline, supervision, direction
In 2002, Board specifically required “direct and
immediate” control. Airborne Express, 338 NLRB No. 72
(2002).
Expanded “Joint Employer” Rule

Browning-Ferris, 362 NLRB No. 186 (August 27, 2015)
 Emphasized
 Focused
common-law test of “employer”
on “right to control” (regardless of
whether that right is exercised)
Expanded “Joint Employer” Rule

In addition, control need not be direct; indirect – even
“very attenuated” -- control may suffice


Browning-Ferris, 362 NLRB No. 186, *18 (August 27, 2015)
Significantly increased risks for:

“Double breasted” operations

Franchisees

Staffing agencies

General contractors
Expanded “Joint Employer” Rule –
General Contractors and Subs

GCs, subs may be “joint employers” where contracts
provide GC with the right to control (even indirectly)
workforce
 Standard
contracts routinely include such general rights of
control (right to enforce safety policies, right to remove
workers…)

GCs may also face increasing liability under Occupational
Safety and Health Act through OSHA’s Multi-Employer Citation
Policy

Already may be liable under less-stringent “controlling” employer test

Now may be liable as “exposing” employer
Expanded “Joint Employer” Rule –
Moving Forward

Distance your company from any related entities

Avoid contract language granting control
(including indirect right to control) non-employees

Focus contract language instead on other parties’
exclusive responsibilities
Survey Workers Update

Survey Workers and the Prevailing Wage Act

Round I: Ambush in August, 2013
 Unions
succeeded in creating new prevailing wage
classification for “Survey Workers”

Round II: Chicago Court Battle, April 2014
 We
Win – Cook County Court stays the inclusion of Survey
Workers in the IPWA

Round III: IDOL Battle, October 2014
 Split
Decision – a narrower Survey Worker category’s included
in the IPWA
Survey Workers Update

Survey Workers and the Prevailing Wage Act

Round IV: Administrative Appeal, October 2015
 We
win – Director of IDOL rescinds Determination and reset
the clock

Round V: Back to Court, November 2015
 Unions
appeal in Cook and St. Clair Counties
Construction Negligence
- Ill. Supreme Court Amicus Brief

Carney v. Union Pacific Railroad Co., Case 118984

Union Pacific RR sold bridges, contracted for their removal

Contractor-purchaser hired subcontractor to help with bridge
removal

Employee of subcontractor was injured when the subcontractor
failed to secure one side of the bridge, allowing it to fall and
crush the employee’s leg

Injured employee sued Union Pacific Railroad for failing to
exercise its “retained control” with reasonable care
Construction Negligence
- The Rule

Generally, one who hires an independent contractor is not liable for
the negligence of that contractor

But a duty of care arises when the hiring party retains sufficient
control over the work, such that it may be liable if it fails to exercise
that control with reasonable care.


Restatement (Second) of Torts, § 414
Question Presented in Carney v Union Pacific Railroad:

Did Union Pacific RR retain sufficient control to give rise a § 414 duty
of care?
Construction Negligence
- The Rule
Restatement (Second) of Torts, § 414, cmt c
“In order for the rule stated in this Section to apply, the employer must
have retained at least some degree of control over the manner in which
the work is done. It is not enough that he has merely a general right to
order the work stopped or resumed, to inspect its progress or to receive
reports, to make suggestions or recommendations which need not
necessarily be followed, or to prescribe alterations and deviations. Such a
general right is usually reserved to employers, but it does not mean that
the contractor is controlled as to his methods of work, or as to operative
detail. There must be such a retention of a right of supervision that the
contractor is not entirely free to do the work in his own way.”
Carney v. Union Pacific RR
- Union Pacific’s “Control”

Sold bridge “as is, where is, with all faults”

Contractor responsible for “all superintendence” of the bridge
removal work

Union Pacific was never on site, never supervised work, and
never instructed as to means of work

Union Pacific had general rights to stop, change and/or
approve the work, which was required to be done in a
“workmanlike manner”
Carney v. Union Pacific RR
- Illinois Appellate Court’s Ruling

Found Union Pacific retained sufficient control such that it
may be liable under Section 414 because:

Work was required to be done in “workmanlike manner” to UP’s
“satisfaction”

UP had right to terminate work or remove incompetent/unsafe workers

UP had right to change work

UP’s security personnel occasionally drove by worksite

UP did not require sequencing plan

UP visited worksite after accident and recommended alternative
method for removing subsequent bridges

2014 IL App (1st) 130105, ¶ 32 (Nov. 26, 2014)
Carney v. Union Pacific RR
- Impact of Appellate Court’s Ruling

Subjects virtually every project owner and general
contractor to costly liability

(while own employer shielded by Workers Comp)

Standard construction contracts often grant such general rights

Ignores comment c, which expressly requires more:
It is not enough that he has merely a general right to order the work
stopped or resumed … There must be such a retention of a right of
supervision that the contractor is not entirely free to do the work in
his own way.
Carney v. Union Pacific RR
- Negligent Hiring

On separate claim, plaintiff alleged that Union Pacific
negligently hired the independent contractor


Restatement (Second) of Torts, § 411 allows cause of action to “third
persons” injured as a result of such negligent hiring
Issue: is a worksite employee a “third person” covered by Section 411?
Carney v. Union Pacific RR
- Negligent Hiring

Appellate Court found question of fact as to whether
plaintiff was even a “worksite employee”
 Because
the plaintiff had another job, and was still
“learning” this business
 But
he had successfully obtained workers’ compensation
benefits
Carney v. Union Pacific RR
- Amicus Brief

AGCI filed an amicus brief with Illinois Supreme Court

Urging Court to adopt appropriate “retained control” standard

Explaining that the type of “control” retained by Union Pacific is
insufficient as a matter of law

And explaining that an employee who recovers workers’
compensation benefits cannot claim that he is not an
employee in a subsequent lawsuit for the same injuries
Carney v. Union Pacific RR
- Amicus Brief
Stay tuned for decision of Illinois Supreme Court
MPRA of 2014 and
Central States’ Rescue Plan


Pension Fund Troubles

Two recessions in 2000s

Declining union membership / increasing retirees
Multiemployer Pension Reform Act of 2014

Attempt to “save” Pension Funds

Severely underfunded multiemployer pension funds may
reduce benefits for active and retired employees to avoid
insolvency
Central States’ Increasing Retiree Ratio
www.cspensionrescue.com
MPRA of 2014 and
Central States’ Rescue Plan


Central States – one of the most critically
underfunded pension funds in existence

Paying out almost 3.5 times more in benefits than it
receives in contributions

Absent further action, anticipates insolvency in 11 years
Central States proposed an MPRA “Rescue Plan”

Anticipated to be effective July 1, 2016
MPRA of 2014 and
Central States’ Rescue Plan

Central States’ Rescue Plan details:

No reductions for retirees 80 years of age or older, or to
disability benefits
 Retirees
75 to 80 years old protected from benefit reductions
on a sliding scale

“Orphan” participants required by law to face maximum
reductions (to 110% of PBGC-guaranteed amount)

Non-orphans’ benefits tied to employer’s contributions
made on participant’s behalf
MPRA of 2014 and
Central States’ Rescue Plan


Additional details:

Phase-out of early retirement benefits for participants with 20
years of service (from 62 to 65 by 2025)

Benefits accrual reduced from 1% of contributions to 0.75% of
contributions
Plan is subject to a vote by participants


But U.S. Treasury could still permit implementation of the Rescue
Plan if the Fund is found “systemically important” by the Treasury
And Employers wanting to take advantage of a decrease in
withdrawal liability cannot do so for 10 years after plan’s
implementation
Expanding Employee Rights
- Drug Testing

Implementation of drug testing policy is a “mandatory
subject of bargaining”

Requires bargaining with Union in absence of “clear and
unmistakable” waiver

Broad zipper clauses and management rights provisions
not enough
 express
reference to drug testing required
Expanding Employee Rights
- Drug Testing

Increasing protections for employees re drug testing:

Ralphs Grocery Co., 361 NLRB No. 9 (July 31, 2014)

Employee visibly impaired; odd and erratic behavior
 (even
unable to tie his shoes)

Directed to take drug test due to suspicious behavior

Employee requested union representation, but rep unavailable

Employee directed to take drug test or be subject to termination
Expanding Employee Rights
- Drug Testing

In Ralphs Grocery, NLRB held:


Employee was unlawfully terminated in violation of his
Weingarten rights to union representation
Once Union representation is requested, Company must

(1) wait for representative to become available;

(2) offer to allow (but do not require) the employee to proceed
without representation; or

(3) proceed with disciplinary determination on information
otherwise available
Expanding Employee Rights
- Drug Testing

Manhattan Beer, 362 NLRB No. 192 (Aug. 27, 2015)

Employee injured on the job

Next day spoke to Manager about possible assignment
 Employee
 Had
“reeked” of marijuana; and
“glassy and bloodshot” eyes

Manager offered assignment conditioned on a drug test

Employee requested union representative
Expanding Employee Rights
- Drug Testing


Manhattan Beer

Employee called two reps – one was unavailable, the other was
off that day and refused to accompany the employee

Employment terminated for refusal to take drug test
Board ruled the employee’s termination unlawful

Employee must be given “reasonable period of time” to obtain
representation
Illinois’ Compassionate Use of Medical
Cannabis Pilot Program Act

Went into effect January 1, 2014 (scheduled for 2018
“sunset”)

Illinois became 20th State to legalize marijuana in some way

Dispensaries now allowed to sell marijuana to individuals
with certain “debilitating medical conditions”

Still developing law - no Illinois court has yet addressed
this Act in employment context
Drug Testing and the Compassionate Use
of Medical Cannabis Pilot Program Act

Key limitations:

CDL holders not permitted to use medical cannabis

Private businesses may restrict use on their property

Employers may adopt “reasonable” regulations re consumption /
storage and drug testing (including zero-tolerance)

The Act does not provide a “medical use” defense.
Drug Testing and
Collective Bargaining

Unions push for limited (if any) drug tests


“Privacy” concerns related to mere “off duty” conduct
Unions ignore:
 Continuing
 Impact
effects of drug use
on Company image when employees seen using
 Impossibility

of detecting time of actual use / impairment
Employers should consider need for testing in negotiations
Expanding Employee Rights
– Social Media

NLRB finds social media policies unlawfully restrict
“protected concerted activity”

Costco Wholesale Corp., 358 NLRB 106 (2012)

Design Technology Group, LLC, 359 NLRB No. 96 (2013)

Hills and Dales General Hospital, 360 NLRB No. 70 (2014)

Novelis Corp., 2015 WL 400625 (2015)


Your Company, -- NLRB No. – (2016)?
Note: “Section 7” rights not limited to union workforce
Expanding Employee Rights
– Social Media

Protections now extend to use of Company e-mail

Purple Communications, Inc., 361 NLRB No. 126 (Dec. 11, 2014)
Employee use of email
(1) for “statutorily protected communications”
(2) on nonworking time
must presumptively be permitted if employees given email access.

Employer’s burden to prove “special circumstances” to justify
restriction to maintain production or discipline
Social Media
– Moving Forward

Be clear and specific re prohibited social media / email use:

Threatening, harassing, discriminatory or obscene material

Disparaging statements the employee knows to be false

Company’s proprietary, financial, strategic information
Concluding Thoughts
Questions / Comments?
Andrew J. Martone
Adam C. Doerr
Hesse Martone, P.C.
(314) 860-0300