Vorys on Labor

Vorys on Labor

Insights for the Labor Relations Professional

Ohio Federal Lawsuit Challenges Union Members’ Rights to Resign From Union

Posted in Union Membership

On April 29th, the latest test of the Janus v. AFSCME, Council 31, 138 S. Ct. 2448 (2018) decision was filed.  Janus made it unconstitutional to require public sector employees to become union members and pay union dues as a condition of employment and effectively eliminated union “fair share” fees.

In this latest challenge, three employees of Kent State University sued the Council 8 AFSCME, Kent State University, and University Trustees challenging the restrictions the union placed on members that limit when they can resign from the union and stop paying union dues.  The case was filed in the United States District Court for the Northern District of Ohio and is captioned Annamarie Hannay, et al. v. American Federation of State, County, and Municipal Employees, Ohio Council 8, et al., Case No. 5:19-cv-00951-JRA.

Two of the employees at issue in Hannay signed union dues authorization cards from AFSCME.  Those cards could only be revoked during a “window” period that begins 45 days and ends 30 days prior to each anniversary year of the union contract.  A member had to provide notice of intent to resign from membership in order to stop union dues from being deducted from the paycheck during this narrow period.  Assuming a three year contract, this would only permit resignation from the union during a 15-day period every three years.

Under Janus, an employee must affirmatively consent to union membership and a waiver of his or her free speech constitutional rights.  Hannay is the most recent of many cases being filed to challenge AFSCME’s notice window to opt-out of the union.  It is currently unclear whether this type of opt-out window will be permissible.  Therefore, the District Court will be challenged to determine whether the union’s restriction is constitutional and whether it provides members with a fair opportunity to opt-out of the union and relieve themselves of the obligation to pay union dues.

Until this issue is finally resolved, the labor professional should exercise care in the drafting of dues check-off contract language.

Three Times a Charm? UAW Files Third Election Petition to Represent VW Chattanooga Workers

Posted in Union Organizing

On April 9, 2019, the UAW filed a third election petition with the NLRB to represent workers at Volkswagen’s manufacturing facility in Chattanooga.  With this new petition, the UAW seeks to represent about 1,700 production and maintenance workers at the VW facility.

In 2014, the UAW lost an election to represent the same VW group by a vote of 712 to 626. Following the defeat, the UAW filed a second petition to represent a micro-unit of about 165 skilled maintenance workers at the Chattanooga plant.  The UAW won the vote.  But, VW filed objections to the election and refused to bargain with the UAW.   The case has been sitting at the NLRB ever since.

Apparently, rather than wait for the NLRB to rule on the micro-unit issues, the UAW thought the time was right to try again for the whole VW production and maintenance group.  It’s challenging times for the UAW, however.  Just a few days before the UAW filed the third VW petition, the federal judge overseeing the criminal cases in the UAW’s corruption scandal wrote that the UAW’s Joint Training Center was a willing co-conspirator that colluded with Chrysler and the UAW to funnel money from Chrysler to UAW officers in exchange for major bargaining concessions. With former UAW Vice President Norwood Jewell’s recent guilty plea, the total number of those UAW and Chrysler officials criminally convicted now stands at eight.

These criminal convictions have led to class action civil lawsuits by UAW members who got laid off as a result of the UAW’s negotiations with Chrysler.

Consequently, there is ample fodder for those in Chattanooga wanting to oppose the UAW’s new election attempt.

A Bad Week for Unions: The NLRB and NLRB GC Focus on Union “Membership” and the Money

Posted in Union Membership, Unions

The NLRA permits employers and unions to agree to “union security” clauses in a collective bargaining agreement.  This clause requires employees to join the union (and pay dues) or lose their job with the employer.

Congress imposed this “membership” obligation on employees to eliminate what some call the “free rider” problem.  The NLRA requires a union to represent all employees in a bargaining unit.  Without the union security provision, an employee might reap the benefits of the union contract, but not pay dues to the union that secured those benefits through negotiations.

The U.S. Supreme Court has held, however, that the “membership” that is required may not be “full” membership.  Unions incur all sorts of expenses, some of which are not “germane” to the union’s obligation to negotiate a contract with the employer.  Thus, the Court has held, employees who must “join” the union must only pay for those union expenses that are “necessary” for the union to deal with the employer on labor-management issues.  This is often referred to as “financial core” membership.

Last Friday, the NLRB returned to the question of what constitutes “necessary” expenses that are germane to collective bargaining.  In a case involving a dispute over the amounts a union spent on lobbying, the NLRB held that those expenses are not “necessary” for collective bargaining.  Accordingly, the union could not charge those who objected to payment of “full” union dues.

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Nondiscriminatory Signage Ban Deflates Scabby the Rat

Posted in Strikes, Unions

The Seventh Circuit recently ruled that a municipality’s nondiscriminatory ban of all private signs from the public roads and right-a-ways could be used to take down Scabby the Rat.  Scabby is a giant, inflatable balloon that is available in sizes 6 to 25 feet tall.  (The website the court cited in its opinion is here, for the curious!)  Unions have historically used Scabby (or other inflatables) to draw attention to labor disputes by posting him outside the workplace.

In 2014, in Grand Chute, Wisconsin, Local 330 of the Construction and General Laborers’ Union learned of a masonry company it said was not paying area standard wages and benefits.  To protest these practices, the Union installed a 12-foot version of Scabby.  The Union’s protest went smoothly the first day.  On the second day, however, Grand Chute’s code enforcement officer (yes, there was only one) went to the Local’s president and told him that the Union would need to deflate Scabby because the rat violated the town’s sign ordinance.

Upon removing the rat, the Union sued the town in federal court.  The Union argued that the ordinance violated its First Amendment rights because the town was selectively enforcing the ban to silence Scabby.  After the town won at the trial court level, the Union appealed.

On appeal, the court explained “there is no doubt that a union’s use of Scabby to protest employer practices is a form of expression protected by the First Amendment.”  But a municipality can implement a ban on all private signs from the public roads and right-of-ways (including Scabby), so long as (1) the ordinance is content-neutral and nondiscriminatory, and (2) the town does not selectively enforce the ban to permit messages that the town approves while prohibiting messages by unpopular speakers.  Because Grand Chute’s sign ordinance was content-neutral and the evidence showed that the town had consistently enforced the ban, the court of appeals upheld the district court’s ruling in favor of the town.

For the labor professional caught up in a union dispute, the decision is a helpful reminder to check the zoning and signage ordinances of the localities where the labor dispute has arisen.  There may be limitations on the tactics the union employs to confront the employer or advise the public of the dispute.

NLRB Revisits and Clarifies Test for Independent Contractors; Overturns 2014 NLRB Decision

Posted in Independent Contractors, Union Organizing

The Trump NLRB continues to revisit, and overturn, Obama-era decisions.  Late last week, in SuperShuttle DFW, Inc., the NLRB revisited the test for determining when a worker is an independent contractor, and in the process overruled the Obama NLRB’s decision in FedEx Home Delivery.

First, however, a little background information.  As we have previously discussed, employees may join unions; independent contractors may not.  Thus, whether a worker is an employee or an independent contractor is extremely important.

To determine whether a worker is an employee or an independent contractor, the NLRB applies a test that the United States Supreme Court articulated 50 years ago in NLRB v. United Insurance Co. of America.  The United Insurance test looks at ten factors, such as how much control the worker exercises over his work, the amount of skill required to do the work, who supplies the tools and workplace, and how the worker is paid.

“Entrepreneurial opportunity” is not explicitly listed as one of the factors, but the NLRB has over time recognized that entrepreneurial opportunity is an important principle by which the enumerated factors can be evaluated.  In 2014, however, the Obama NLRB, confronted with a decision from the D.C. Circuit Court of Appeals, decided FedEx Home Delivery v. NLRB.  At issue was the roles that “entrepreneurial opportunity,” one the one hand, and “control,” on the other, would play in the NLRB’s analysis.  The FedEx NLRB decided that entrepreneurial opportunity was merely a part of the analysis of a single factor in the United Insurance, 10-factor test.

In SuperShuttle, the Trump NLRB held that FedEx had not given enough weight to entrepreneurial opportunity.  In the NLRB majority’s own words:

[W]e find that the Board majority in FedEx, based on a mischaracterization of the D.C. Circuit’s opinion…, impermissibly altered the Board’s traditional common-law test for independent contractors by severely limiting the significance of the entrepreneurial opportunity to the analysis.

The proper role of entrepreneurial opportunity, the NLRB further explained, is as an element of the employment relationship that should be considered throughout the application of the United Insurance test:

[E]ntrepreneurial opportunity, like employer control, is a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain.  Indeed, employer control and entrepreneurial opportunity are opposite sides of the same coin:  in general, the more control, the less scope for entrepreneurial initiative, and vice versa.

The NLRB applied this test to determine whether franchisees who operated shared-ride vans for SuperShuttle Dallas-Fort Worth were employees or independent contractors.  The NLRB found that the franchisees were independent contractors, emphasizing that their control over their work schedules and ability to accept or reject work revealed that they had “significant opportunity for economic gain and significant risk of loss.”

NLRB Member McFerran (D) critiqued the majority’s decision in a lengthy dissenting opinion.  She explained, among other things:  “The majority’s position rests on the premise that ‘entrepreneurial opportunity’ is the core concept of the traditional common-law agency test.  There’s no support for such a claim.”

This decision is an important one, particularly for those employers that rely upon independent contractors to accomplish core business functions.  The NLRB’s action makes it more likely that an employer can defend an independent contractor classification, at least from an NLRA perspective.  This in turn limits risks associated with unionization, including organizing and collective bargaining.  Employers should be generally wary on other legal fronts, however, as the classification of a worker as an independent contract will also implicate potential liability under other laws like the Fair Labor Standards Act.

Joint Employer Issue at the NLRB: Update on Recent Activity

Posted in NLRB, Rulemaking

The joint employer issue at the NLRB continues to be a hotbed of activity.  We last updated our readers on this issue in mid-December.  Here’s what has happened since then:

Developments in the Courts.  At the end of the year, the U.S. Court of Appeals for the D.C. Circuit ruled in the appeal of the Obama Board decision that started it all:  BFI v. NLRB.  The court refused to enforce the NLRB’s order finding joint employer status.  It did so, however, not because it rejected the use of indicia of “indirect control” in the joint employer determination, but rather because the NLRB’s factual analysis in BFI “failed to differentiate between those aspects of indirect control relevant to status as an employer, and those quotidian aspects of common-law third-party contract relationships.”

Rulemaking.  The NLRB continues to move its rulemaking process forward.  The comment period was extended again, however, in light of the D.C. Circuit’s decision.  The current deadline for comments is January 29, 2019.

Congressional Opposition.  Chairman Ring (R) responded last week to a letter from Congressional Democrats who urged that the NLRB withdraw its proposed rulemaking.  Chairman Ring declined to do so, indicating that the NLRB’s majority continued to believe that notice and comment rulemaking was the best way to address the lack of guidance and clarity that exists in BFI.  A copy of the letter is here (pdf) for those interested in the details.

For labor professionals, the current state leaves much to be desired.  The refusal to enforce the NRLB’s order in BFI means there is reason to question its continuing viability.  Clearly, the NLRB’s proposed rule is intended to limit the extent to which “indirect control” plays into the analysis, but that rule is months (at least) from being finalized.  All of this looming at the same time as we start to hear of presidential contenders for the 2020 race, which will clearly have an impact on the NLRB’s alignment on these issues.  So, the best course is going to be to check with a trusted labor law advisor for the most suitable path forward for your particular company and industry.

Will Nathaniel Ogle Get His Money Back? Defendant Files Motion to Dismiss in Ogle v. Ohio Civil Service Employees Association

Posted in Courts, Union Membership

Janus v. AFSCME has opened the door for nonmember employees to sue unions for collecting fair share fees, and employees are taking action.  As readers of this blog know, Janus holds that requiring employees to pay a fee to a union without the employee’s affirmative consent is a violation of the First Amendment.  As discussed in our previous blog post, Nathaniel Ogle sued last year, on behalf of himself and others, to enjoin OCSEA from “requiring the payment of fair share fees as a condition of employment” and to collect damages for fair share fees collected before Janus was decided.  OCSEA has responded by filing a Motion to Dismiss.

The Motion argues that Ogle cannot demonstrate an actual or imminent injury in fact, and therefore lacks standing to sue, because OCSEA “promptly complied” with Janus and did not receive any fair share fees from any employee “attributable to the time after Janus was decided.”  According to OCSEA, Ogle cannot sue based on a now defunct law absent a “credible threat of enforcement.”  OCSEA has responded to Ogle’s demand for the return of his fair share fees by raising “the good-faith defense to liability for damages available to private parties sued under 42 U.S.C. § 1983.”  Here, OCSEA argues that it can presume statutes on the book are valid, even where nonbinding dicta critical of the statute’s constitutionality exist, without fear of being liable for damages.  For those interested in reading more, Defendant’s Motion to Dismiss is here.

Plaintiff refutes OCSEA’s standing and good faith defense arguments in its Opposition to Defendant’s Motion to Dismiss.  Here, Ogle argues that he has standing to sue so long as Ohio Rev. Code § 4117.09(C), the Ohio statute that allowed for the collection of “fair share fees” from nonmember employees, remains on the books.  Plaintiff also claims that “OCSEA cannot invoke a good faith defense,” as no such defense exists for deprivation of First Amendment Rights under § 1983.  For those interested in reading more, Plaintiff’s Opposition to Defendant’s Motion to Dismiss is here.

Stay tuned to vorysonlabor.com for additional updates.

Student Worker Unions are Here to Stay…For Now

Posted in Union Organizing

In 2016, in Columbia University, the NLRB held that students at private institutions have a right to organize. The 3-1 decision overruled a 2004 decision in Brown University, which found that graduate assistants were not employees and thus did not have a statutory right to unionize. Since the Columbia University decision, the NLRB’s makeup has shifted — and it is uncertain whether the NLRB under the Trump Administration would still side with student workers.

In 2018, unions at Yale University, University of Chicago, and Boston College seeking to represent student workers withdrew their petitions for recognition pending review by the NLRB. The unions explained that they would rather seek voluntary recognition from the schools than risk an unfavorable decision from the NLRB under the Trump Administration.

Last month, the Union of Grinnell Student Dining Workers (“UGSDW”) continued this trend, backing down from its attempt to unionize student workers at Grinnell College in Iowa. In November, student workers at Grinnell overwhelming voted in favor of unionization, and the NLRB ordered an election. Grinnell appealed the decision, arguing that the NLRB should reconsider whether student employees have a right to organize. The UGSDW explained that it was withdrawing its petition “in recognition of the national consequences of our fight, and the flimsy possibility of a fair ruling before the Trump labor board.”

For now, Columbia University is still good law, and student workers still have the right to unionize. At the same time, however, it appears safe to say that unions are strategically avoiding any case that would allow the Trump-era NLRB to overturn this decision. Whether the unions’ strategy, and Columbia University, can last until the next presidential administration is yet to be seen. Stay tuned for updates.

NLRB Pushes Back Deadline for Submitting Comments on Joint Employer Rule

Posted in NLRB, Rulemaking

The NLRB’s rulemaking on the joint employer issue has again been delayed.  Earlier this month, the AFL-CIO filed a memorandum (pdf) alleging that business groups secretly had “extensive input” on the proposed rule.  The AFL-CIO requested a 30-day extension of the time to submit comments on the proposed rule.

On Monday, the NLRB announced that it was pushing back the deadline for submitting comments.  Commenters now have until mid-January 2019 to submit comments on the proposed rule.  The NLRB published its proposed rule in September, and the comment period, which was initially set to expire on November 13, 2018, and had previously been extended to December 13, 2018, will now run until January 14, 2019.  Commenters may respond to a comment made during the comment period until January 22, 2019.

Almost 30,000 comments have been made so far about the proposed rule on joint employers.  The NLRB will consider these comments as it drafts a final rule on joint employers.  As we discussed on this blog in September, the proposed rule, as it is current written, would narrowly define joint employers as “employers [who] share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, supervision, and direction.”

 

Senate Finance Committee Holds First Hearing on Changes to Ohio Prevailing Wage Law

Posted in Legislation, Prevailing Wage

Last year we reported on S.B. No. 72, introduced by State Senator Matt Huffman (R), which would modify Ohio law to limit the scope of prevailing wage requirements in Ohio. After being referred to the Finance Committee in March 2017, word about S.B. 72 was mum until this week, when the committee held its first hearing on the bill. To recap, S.B. 72 would make multiple key changes to Ohio law, including eliminating the requirement that political subdivisions (i.e., cities and other public entities) pay prevailing wages on “public improvements.” For a full discussion of the bill itself, see our March 2017 blog post.

Senator Huffman provided testimony on the bill, explaining its aims and proposed benefits to Ohio public projects. Huffman testified that S.B. 72 “would make participation in prevailing wage guidelines permissive, rather than required, for local governments, institutions of higher education, and mental health and specialty districts.” By allowing political subdivisions to selectively apply the Ohio prevailing wage, “smaller, rural districts” that lack the large tax base of major cities can avoid the cost barriers that the prevailing wage imposes, many times “up to 10-20% more than the [local] market rate,” according to Huffman. Huffman also testified that “many bigger cities will agree to pay the mandated wage,” but other, smaller governments are “unable to pay a higher wage,” and are “in many cases not moving projects forward due to increased costs….” Huffman believes that S.B. 72 will allow these smaller political subdivisions to move forward with needed public projects.

S.B. 72 would also relieve local governments from the extensive documentation process needed to comply with the prevailing wage law, which Huffman called “a significant burden.” Huffman further testified, “many contractors do not even want to bid a job if it is a mandated wage project due to the heavy paperwork necessary from their end.”

The Committee will continue to consider S.B. 72, and make any changes the Committee believes necessary before potentially sending the bill to the floor of the State Senate for a vote. Vorysonlabor.com will keep you updated on the status of S.B. 72, and whether action is taken prior to the end of the “lame duck” session in the state legislature.