Vorys on Labor : Labor Relations Lawyer & Attorney: Vorys, Sater, Seymour and Pease Law Firm: National Labor Relations

Opponents of Senate Bill 5 have satisfied the next hurdle in their effort to repeal the legislative effort to reform Ohio's public sector collective bargaining system.  Ohio's Secretary of State John Husted (R) certified yesterday that SB 5 opponents gathered 915,456 valid signatures.  A total of 1,298,301 signatures were originally submitted.

The next step of the process is for the Ohio Ballot Board to determine the actual language that will appear on the ballot.  That meeting is expected in August.

As noted in our prior post, the significance of this development for the labor professional relates to the effective date.  State law provides that SB 5 does not go into effect unless voters approve it in the November election.

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By Nelson Cary and Brad Gibson

Investigations by the NLRB's regional offices of alleged unfair labor practices don't usually get stopped in their tracks.  The unusual happened recently in Oklahoma, however, when a federal judge decided that the NLRA does not apply to the Chickasaw Nation ("Chickasaw"), a federally-recognized American Indian tribe.  The court ordered the NLRB's investigation to stop.

Chickasaw is governed by its citizen-elected government in accord with its own constitution.   Chickasaw’s government has three branches, and the executive branch conducts all tribal gaming activities, which are operated in accordance with a comprehensive body of federal and tribal law. The gaming facilities are operated pursuant to location-specific licenses issued by Chickasaw’s Office of Gaming Commissioner and all the gaming facilities are located on Chickasaw’s tribal trust property. One of those locations is the WinStar World Casino (“Casino”). 

The NLRB served the Casino with two unfair labor practice charges asserting violations of the NLRA. In response, Chickasaw agreed that the Casino is a tribal government enterprise and that, as a matter of tribal sovereignty, the NLRA does not apply. When the NLRB nonetheless scheduled an administrative hearing for June 1, 2011, Chickasaw filed a complaint in district court halt the NLRB’s proceedings.            

The district court granted the Chickasaw’s request. Under applicable precedent relied upon by the district court, “federal regulatory schemes do not apply to tribal governments exercising their sovereign authority absent express congressional authorization.” The court noted that the NLRA makes no explicit reference to Indian tribes, nor does anything in the NLRA’s legislative history indicate that Congress intended to abrogate tribal sovereignty. Accordingly, the court held that the NLRB did not have exclusive jurisdiction. 

Because there was a substantial likelihood Chickasaw would prevail in its claim for a declaratory judgment that it was not subject to the NLRA, the court granted Chickasaw’s request to prevent the NLRB from conducting further proceedings.

For labor professionals, it is important to recognize that this is a special case.  The Casino's ability to assert the Chickasaw's tribal sovereignty was critical to the outcome of this case.  In the vast majority of other cases, it is vital for an employer to actively defend itself from the beginning of an unfair labor practice proceeding.

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By Allen Kinzer and Nelson Cary

Recently, we alerted you to the U.S. Department of Labor’s effort to change the reporting requirements for businesses who engage external advisors in connection with union organizing issues. As we continue to review these proposed regulations, their scope becomes even more problematic for employers. 

For example, suppose you are a human resources professional or an in-house counsel for XYZ, Inc. In your role, you provide employee relations or labor and employment legal services to XYZ, Inc. and XYZ’s corporate affiliate, AB, LLC. These services are provided under a formal or informal agreement, and there is an accounting transfer of expenses from AB to XYZ for these services. Under the DOL’s new proposal, both AB and XYZ could be required to file reports about these services and the amounts charged for them.

At issue is Section 203 of the Labor-Management Reporting and Disclosure Act (LMRDA). It requires, among other things, that employers file reports with the DOL when they enter into an agreement with a consultant or contractor to persuade employees about unions. The DOL proposes to interpret Section 203 to require reporting when the contractor engages in “persuader activity,” which the DOL proposes to define as:

providing material or communications to, or engaging in other actions, conduct, or communications on behalf of an employer that, in whole or in part, have the object directly or indirectly to persuade employees concerning their rights to organize or bargain collectively. 

The DOL’s examples of “persuader activity” include:

• Developing employer personnel policies or practices designed to persuade employees; and
• Training supervisors or employer representatives to conduct individual or group meetings designed to persuade employees.

In our hypothetical, suppose XYZ’s in-house lawyer or HR professional drafts or revises an “open door” or complaint policy for AB’s employee handbook. Persuader activity? Or, XYZ’s in-house lawyer or HR professional trains AB’s supervisors on the Do’s and Don’ts of how to respond to questions from employees regarding unions. Persuader activity? Or, XYZ’s in-house lawyer or HR professional trains AB’s supervisors on how to respond to harassment complaints and how to properly and fairly discipline employees. Persuader activity?

Here’s the DOL’s guidance in its proposed interpretation: Does each activity directly or indirectly have the object of persuading employees concerning their rights to union representation? If yes, then the DOL’s proposal requires both XYZ and AB to report the arrangement between them and annually report the accounting transfers from AB to XYZ. The forms are the LM-10 for AB and the LM-20 and LM-21 for XYZ.

Given the intrusive scope of these rules, one would think the regulation would have elicited more comments. As of July 13, however, only 34 comments have been filed.  We anticipate that some of the major, business-oriented groups, like the U.S. Chamber of Commerce, will ultimately submit written comments.  The deadline for submission of formal comments to the DOL is August 22, 2011.  We will continue to monitor those submissions and update this blog with new developments.

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Last week, Governor Kasich (R) signed Ohio's biennial budget bill.  Among other items contained in the bill were changes to the state's prevailing wage law. 

At the outset of the legislative process, the Ohio House of Representatives proposed substantial changes to the prevailing wage law.  Those were summarized on this blog earlier this year.   While significant changes survived to the final bill, they are not as substantial as originally proposed. 

For example, while the monetary threshold at which prevailing wage applies is increased, it increases far less than the House's version, and then only incrementally.  Thus, the threshold for new construction rises to $125,000 on the effective date of the statute, then to $200,000 one year after the effective date, before reaching $250,000 two years after the effective date.  When first introduced, H.B. 153 called for a $5 million threshold for new construction of public improvements.

Another key area where the bill changed relates to "public/private partnership" projects.  These projects usually involve a private entity building a project of some type, but with the assistance of public funds, typically from government economic development programs.  As proposed, H.B. 153 not only deleted prevailing wage requirements applicable to certain Ohio economic development programs, but it also added language that would have likely excluded many projects supported by these programs from the law's definition of "public improvement."  The final version maintains language that exempts certain economic development programs from the prevailing wage requirement, but does not include the changed definition of public improvement.

The bill Governor Kasich signed last week also, among other things:

• Carves out projects relating to streets, roads, sewers, and the like, and makes them subject to a lower monetary threshold ($78,258, adjusted biennially by the Director of the Department of Commerce) than other public improvements;
• Deletes the requirement for prevailing wage on public improvements undertaken by, or under contract for, a port authority;
• Provides that prevailing wage need not be paid on any portion of a public improvement undertaken by a contractor that donates labor and materials for the construction of that portion of the public improvement;
• Limits liability in certain instances when a contractor exceeds the permitted apprentice-to-skilled worker ratio contained in a prevailing wage determination;
• Requires that, for purposes of establishing the prevailing wage rate, unions must file with the Department of Commerce the "relevant portions" of any union contract;
• Limits the liability of a contractor for the unpaid wages owed by its subcontractor, provided that the contractor made a good faith effort to ensure that its subcontractor paid prevailing wages; and
• Changes the enforcement provisions of the law by, for example, narrowing who may file a complaint and extending the period of time the Department of Commerce has to investigate the complaint.

For the labor professional, the changes to Ohio prevailing wage law will require close examination.  Particularly for those involved in public/private partnership efforts, the law contains material changes that may impact the cost of the project and the assessment of whether to accept offers of certain government incentives.  Contractors, developers, and other interested parties should consult with their counsel on how the new law could impact projects in which they are involved.

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