Vorys on Labor

Vorys on Labor

Insights for the Labor Relations Professional

VW to Continue Micro-Unit Fight with UAW

Posted in Union Organizing, Unions

The NRLB recently gave the UAW an expected victory. As readers of this blog will recall, the UAW is seeking to represent about 165 skilled maintenance workers at the VW plant in Chattanooga. VW contended that the UAW should not be permitted to represent a micro-unit of 165 skilled maintenance workers in a manufacturing facility with over 1,500 production and maintenance workers. On April 13, 2016, the NLRB formally ruled in the UAW’s favor by denying VW’s appeal of the micro-unit question.

But, the legal battle is not over. Under the NLRA’s Byzantine procedures, the matter can only get to the federal court of appeals after the NLRB has ruled that VW has committed an unfair labor practice by refusing to bargain with the UAW as the representative of the 165 maintenance workers. So far, VW has refused to bargain, and the UAW has filed unfair labor practice charges with the NLRB. That unfair labor practice proceeding, however, is still in its early stages before the NLRB. Unless VW relents, that legal process will take about another two years before a federal appeals court rules on the micro-unit question.

Amid Legal and Political Challenges, DOL Issues Enforcement Policy for Its New Persuader Rule

Posted in Rulemaking, Union Organizing

On March 24, 2016, the Department of Labor issued its long-anticipated final rule regarding the advice exemption to the persuader rule in the Labor-Management Reporting and Disclosure Act (“LMRDA”). The new rule changes the test that has been in place for more than 50 years and significantly expands the types of activities and information that must be disclosed under the LMRDA.  More information about the new rule and its disclosure requirements can be found in our prior post.

Challenges to the Rule

In a swift response, industry associations and law firms filed three separate lawsuits in Arkansas, Minnesota, and Texas federal courts challenging the legality of the rule. The suits include parties such as the National Association of Manufacturers and National Federation of Independent Business, as well as law firms and law firm associations.

The three lawsuits assert similar claims, including violations of:

  • The Administrative Procedure Act;
  • The First and Fifth Amendments of the United States Constitution;
  • The National Labor Relations Act; and
  • The Regulatory Flexibility Act

A central argument to each complaint is that the new rule infringes on the confidentiality of the attorney-client communications between employers and their legal counsel. Each suit seeks to declare the rule invalid and enjoin DOL from implementing it.

The new rule faces political opposition, as well. On April 13, 2016, Representative Bradley Byrne (R-Alabama) introduced a Joint Resolution stating “[t]hat Congress disapproves the rule…and such rule shall have no force or effect.”  In light of the current political climate, however, labor professionals should not expect this legislative action to produce any actual reprieve from the DOL’s rule.

So, unless the court challenges are successful, the disclosure requirements will apply to employer-consultant agreements and arrangements entered into on or after July 1, 2016.

DOL Will Not Enforce Certain Disclosure Requirements

Perhaps recognizing the implications of the challenge to the persuader rule based on the attorney/client privilege, the DOL announced last week a “special enforcement policy” that becomes effective immediately. This policy applies to a different form, the LM-21 Receipts and Disbursements Report, which requires reporting of any payments the persuader made or received during the fiscal year as a result of arrangements of the kind requiring a Form LM-20 disclosure.

The LM-21 form is the subject of a separate DOL rulemaking process.  In its response to comments on the persuader rule, the DOL refused to delay the persuader rulemaking until the LM-21 rulemaking “caught up” to it.

Under the new special enforcement policy, those required to file a Form LM-20 (including attorneys) who must also file a Form LM-21 will not be required to complete two parts of the LM-21. Specifically, the DOL will not take enforcement action based upon a failure to complete the following Parts of Form LM-21:

  • Part B (Statement of Receipts), which ordinarily requires the filer to report all receipts from employers in connection with labor relations advice or services regardless of the purposes of the advice or services, and/or
  • Part C (Statement of Disbursements), which ordinarily requires the filer to report all disbursements made by the reporting organization in connection with labor relations advice or services rendered to the employers listed in Part B.

Additionally, consultants/attorneys are not required to maintain records solely relating to Part B and Part C. It appears that the persuader will still be required to complete Part D, which is a “Schedule of Disbursements for Reportable Activity.”

Importantly, this special enforcement policy is not permanent and may be changed/revoked upon 90 days notice. Therefore, there is no guarantee that the DOL will not require disclosure of such information in the future.

Stay tuned to this blog for additional developments on this and other topics.

Mandatory Union Fees Preserved By Supreme Court’s Deadlock

Posted in Courts, Union Membership

Today the Supreme Court issued a decision in the closely watched case of Friedrichs v. California Teachers Association, which keeps mandatory union fees for public employees alive.  In a one-sentence opinion, an equally divided Supreme Court simply affirmed the Ninth Circuit’s decision in favor of charging school teachers mandatory union fees.  The decision doesn’t apply to compulsory union membership in the private sector.

The Ninth Circuit based its brief decision on the Supreme Court’s 1977 decision in Abood v. Detroit Board of Education. Abood allows public employers to require all employees – both union and nonunion members – to pay union fees, so long as workers are not forced to pay a portion of the fees that covers political or ideological activities.

Following oral arguments on January 11, 2016, many predicted the Supreme Court would issue a 5-4 opinion against mandatory union fees for public employees, overturning the Abood precedent.  Justice Antonin Scalia’s questions appeared to indicate that he sided with the challengers.  With Justice Scalia’s passing, however, the justices emerged in a 4-4 deadlock.

The case was a very important one for organized labor.  In light of the split decision, it is likely this issue will arise again.  This opinion makes clear that the outcome will depend on the new justice.

The Persuader Rule has Arrived: A Must-Read for Employers

Posted in Rulemaking, Union Organizing

The DOL issued its new persuader rule today. The final rule is largely unchanged from the proposed rule that was originally published in 2011. As expected, the DOL’s new interpretation departs from decades of precedent to expand the definition of “persuader” activities while limiting the definition of “advice” activities. As a result of this new rule, employers face substantial reporting requirements related to agreements they enter into with consultants  and attorneys that could touch upon union organizing.  Moreover, the range of activities on which employers must report is substantially broader, given the DOL’s focus on what it calls “indirect” persuader activity.

Historically, employers were only required to report to the DOL after engaging third parties (e.g., consultants or attorneys) during an organizing campaign if the third parties directly communicated with employees.  Agreements or payments to entities or individuals providing advice to employers on how to communicate with employees did not need to be reported. The new rule, by contrast, requires employers to report the use of consultants or attorneys even if there is no direct contact with employees and the employer is free to accept or reject the consultant’s recommendations.

The new persuader requires employers to report when the consultants or attorneys the employer hires directly persuade workers or when the work has an “object” to persuade, even if there is no direct contact with employees.  This latter form of “indirect” persuasion can fall into one of the following four categories:

  1. Planning, directing, or coordinating managers to persuade workers;
  2. Providing materials to employers to disseminate to workers;
  3. Conducting seminars for supervisors or other employer representatives; and
  4. Developing or implementing personnel policies, practices, or actions to persuade workers.

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My Obligatory SCOTUS Nominee Blog Post….

Posted in Courts

So, by now, I’m sure everyone has heard that President Obama announced his pick for the U.S. Supreme Court last week.  In case you missed that, he selected Chief Judge Merrick Garland, from the D.C. Circuit Court of Appeals.  As a result, many have been writing about how Judge Garland has ruled in any given area of the law — even Sports Illustrated.  Since he has been on the bench for nearly two decades, there is a lot of material!

I decided to take a decidedly unscientific approach to the question of Judge Garland’s opinions involving the NLRB.  I looked at only those decisions and opinions since 2009.  After all, as regular readers of this blog know, there have been a number of very significant NLRB decisions in that time.

Here are some qualitative tidbits from my review: Continue Reading

An Invalid Appointment Makes For an Invalid Case

Posted in Courts, NLRB

Last week, a federal appeals court dismissed a petition for interim injunctive relief, but the problem wasn’t the petition—or even the facts supporting it. The problem was the Acting General Counsel of the NLRB who authorized the petition in the first place.

A petition for interim injunctive relief essentially requests that a court make the person accused of an unfair labor practice stop the behavior alleged by an unfair labor practice complaint while the NLRB processes the complaint. Such a petition requires, among other things, that either the General Counsel of the NLRB or a quorum of the NLRB itself authorize it.  Here, the Acting General Counsel—“Acting” since the General Counsel post was vacant at the time—authorized it.

Lafe E. Solomon was designated the Acting General Counsel for the Board in June 2010 after his predecessor resigned. While serving in this role, President Obama nominated him for the full-time job in January 2011.  In June 2013, Mr. Solomon authorized the petition against KTSS while simultaneously holding the position of Acting General Counsel and up for nomination for the permanent position.  Therein lay the problem.

The Federal Vacancies Reform Act authorizes the President to temporarily fill vacancies in offices in the Executive Branch that ordinarily require Senate confirmation, with the idea being that the work of such an office still needs to get done. It also provides for certain conditions in which an appointee for such an office may simultaneously serve in that office in an acting capacity—just as Mr. Solomon was doing when he authorized the petition.  The problem was that Mr. Solomon did not meet the conditions necessary to serve in an acting capacity in an office for which he was nominated permanently.

Since Mr. Solomon was invalidly holding his position as Acting General Counsel while up for consideration for the permanent position, he could not validly authorize the petition for interim injunctive relief against KTSS.  The court of appeals’ decision was consistent with a similar decision reached by another court of appeals last year.

While this sounds like a major victory—getting something tossed out over the technicalities of Presidential appointment powers—it does not stop the NLRB from pursuing various administrative complaints against KTSS that stemmed from unfair labor practice charges filed by a union. The case is significant, however, as another reminder of the major battle over Presidential nominations to the NLRB itself, which ultimately led to an important U.S. Supreme Court decision.

U.S. Chamber of Commerce Takes on the NLRB

Posted in Employee Handbooks

The U.S. Chamber of Commerce has released a biting analysis of the NLRB’s recent decisions that attack employers’ basic handbook policies. The lengthy report summarizes a number of decisions that find many basic handbook policies on courtesy, respect, and confidentiality in the workplace to be unlawful under the NLRA.  Many of these cases have been covered in earlier posts on this blog.  The report says these cases reflect a “wildly expansive” reading of the NLRA, and questions the impartiality of the NLRB.

The NLRB has rendered unlawful many common handbook policies designed to comply with anti-discrimination and anti-harassment laws. Thus, by outlawing such policies, the NLRB has placed employers in a tough spot, with the EEOC on one-side advocating decency and tolerance in the workplace and the NLRB on the other side outlawing or nitpicking the very policies designed to promote decency and tolerance in the workplace.  The Chamber’s report is entitled Theater of the Absurd:  The NLRB Takes on the Employee Handbook.

Lieutenant of Guards at U.S. Nuclear Site not a Supervisor, Says the NLRB

Posted in Supervisors

Doubling down on its ruling that a tugboat captain isn’t a supervisor, the NLRB again took on a narrow view of who qualifies as a supervisor under the NLRA. In a 2-1 ruling, the NLRB in G4S Government Solutions, Inc., 363 N.L.R.B. No. 113 (Feb. 10, 2016) held that an employer did not meet its burden of establishing that its lieutenants are supervisors.

The employer in the case was a private security contractor responsible for guarding the national nuclear stockpile, personnel, and government property at the Savannah River Site. The employer asserted that its lieutenants were supervisors, and therefore, could not vote in a union representation election.

cooling tower

Under the NLRA, to establish supervisory status, an employer must show that the person at issue possesses just one of the 12 indicia set forth in Section 2(11) of the NLRA, that the exercise of such authority requires the use of independent judgment, and that the authority is held in the interest of the employer.  At issue in this case were the functions of responsible direction, assignment, and discipline.

To establish responsible direction, the employer had to show that the lieutenants were held accountable for the performance and work of the employees they direct. The majority found the evidence lacking because only one example was provided of a lieutenant who had been disciplined in connection with the inadequate performance of subordinates. It was unclear whether the discipline was issued because of the subordinates’ inadequacies or the lieutenant’s own inadequacies.

To establish assignment, the employer was required to show the lieutenants possessed the authority to assign. The majority found a lack of evidence showing that assignment decisions involved more than routine judgment. Notably, there was no evidence as to what factors lieutenants could consider for temporary assignments or for arranging unscheduled training exercises, permanent assignments were based on seniority, and detailed procedures were already set forth in the collective-bargaining agreement regarding assigning overtime.

To establish discipline, the employer was required to show the lieutenants possessed the authority to issue or effectively recommend discipline. The NLRB found that the evidence did not support this, in part because the employer’s labor relations department reviewed all discipline prior to issuance.

In a dissenting opinion, Member Miscimarra (R) criticized the majority for narrowly construing the supervisory factors under the NLRA. The dissent urged the adoption of a common sense test, rather than the one articulated by the majority. The employer had had approximately 330 lower-level personnel. Under the majority’s view, excluding the 46 lieutenants, only 10 individuals were effectively supervisors over those 330 personnel. The dissent argued that this did not make sense.

For labor professionals, there are three key lessons to take away from this case:

  1. Do not assume that an employee who has the authority to direct other employees will qualify as a supervisor. Think about how you will prove, if the issue is ever raised, that the employee you claim to be a supervisor is being held responsible for the actions of their subordinates.
  2. If you are relying on the statutory power to “assign,” remember that you must demonstrate that those decisions are not routine.  Being able to establish the factors the employee must consider in making those determinations will assist in demonstrating “independent judgment and discretion.”
  3. It is important to consider whether any standard procedures the employer has adopted to assist lower level management in performing their jobs actually undermine the employer’s position that those individuals are supervisors under the NLRA.

Five Labor Law Developments For Your 2016 “To Do” List

Posted in Management, NLRB, Union Organizing

Last week I looked back at the five most important labor law developments in 2015. This week I look forward to the top 5 most important issues labor professionals should find a place for on their “to do” list this year:

  1. Prepare for the DOL persuader regulations. Going on five years now, the DOL has been working on a regulation that would alter a long-standing interpretation of a fairlyGold five obscure statute called the Labor-Management Reporting and Disclosure Act (LMRDA). Some prior posts discuss the details and implications of this rule.  It is likely that employers will see a final regulation in 2016.  Labor professionals not already familiar with the proposed rule and its potential impact an their business should spend time in early 2016 getting up to speed.
  2. Examine the impact of the NLRB’s new joint employer standard. In 2016, we should see some cases that will “flesh out” the new joint employer standard. Included in these may be the expansion of (or decision not to expand) this new standard to franchisor/franchisee, lender/borrower, or parent/subsidiary relationships, to name just a few the dissent in BFI raised.  Every labor professional should use 2016 to identify and address, if so desired, the joint employer risks that now lurk in the contractual arrangements and course of dealing employers have with temporary services firms, subcontractors, and others.
  3. Get ready for even more new rules on temporary employees from the NLRB. For many years, the NLRB held that, absent the consent of both a temporary services company and a company that used those employees (a “user employer”), the temporary employees could not be included in a bargaining unit made up of the user employer’s employees. During the Clinton Administration, the NLRB changed this rule, applying traditional “community of interest” factors which made it easier to include temporary employees in a bargaining unit of the user employer’s employees.  During the second Bush Administration, the NLRB reverted to its long-standing rule.  Most recently, the NLRB has invited amicus briefs on the question in a case called Miller & Anderson, Inc.  Such a request has typically foreshadowed a rule change, and usually not in a direction that is favorable for employers.  Thus, labor professionals should spend some time in 2016 planning for the possible ramifications of a change in this rule.
  4. Monitor the first full year of data from the NLRB’s quickie (or “ambush”) election rule. The rule will have been in effect for a full year as of April. Expect to see much analysis, including a post on this blog, of that data.  A full year of data should provide labor professionals a more reliable basis for evaluating the impact of the rule on the number of union elections held, the number of union wins, and the time between filing of a petition and holding the election.
  5. Watch the ongoing battles over mandatory union dues and fees. Whether an employee must join a union, or in the alternative pay a fee, as a condition of employment will be a hot issue in 2016. In the public sector, the U.S. Supreme Court heard arguments just last week on whether “agency fees,” which are mandatory payments to a union for union-represented public employees in about 20 states in the country (including Ohio), are an unconstitutional violation of the employee’s First Amendment rights.  In the private sector, the “right to work” movement has scored recent victories in Wisconsin, Indiana, and Michigan, and legislation was recently introduced in Ohio.  Expect state level efforts to continue on this front.

As was the case last year, the list could easily be longer. But these are a few of the areas that labor professionals will want to monitor so as to determine whether any proactive steps should be taken.

*Special thanks to my partner, Al Kinzer, for his contributions to this post.

Top 5 Labor Law Developments of 2015

Posted in NLRB

Top 52015 is over; 2016 has just begun.  So, what were the top developments in labor law in the past 12 months?  And, what should be at the top of the list for labor professionals to keep an eye on in 2016?  I will share some thoughts on these two questions over the course of the next couple of posts on this blog.

First, a look back at 2015:

  • The NLRB’s new joint employer test.  In August, the NLRB made it easier to prove that two different employers were jointly employing a group of workers.  In doing so, the NLRB’s decision holds very significant implications for union organizing and collective bargaining in industries ranging from the temporary employee services sector to the franchise community.
  • The “ambush” election rule.  Ok, so for the purists, you are correct — this isn’t technically a 2015 development; the NLRB published its rule in December 2014.  But, what we saw in 2015 was that the rule actually went into effect after legal challenges to the rule failed.  Early results suggested that the rule was having the precise impact that the NLRB intended:  average time from filing of the petition to hold an election fell.

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