Vorys on Labor

Vorys on Labor

Insights for the Labor Relations Professional

Class Actions Filed in Ohio Challenging Public Sector Employee Agency Fees and Union Dues

Posted in Courts, Union Membership

The landmark Supreme Court decision in Janus has now precipitated the filing of two new class actions, right here in Central Ohio.  Last week, public employees working at different public agencies, filed two class actions challenging not only the agency fees they have paid in the past, but also union dues they attempted to halt after the Janus decision issued.

As a quick recap, Janus held that public sector employees cannot be forced to pay mandatory agency fees to a public sector union if they are not a member of the union. In the Court’s words:  “Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collection such a payment, unless the employee affirmatively consents to pay.”  The Court reasoned that requiring payment of such fees is akin to forcing employees to subsidize the speech of public sector unions, in violation of their First Amendment free speech rights.

One of the two class actions, Ogle v. Ohio Civil Service Employees Association, AFSCME, Local 11, involves a class of agency-fee payers. The plaintiff, an employee of the Ohio Department of Taxation, brings class action claims on behalf of all public employees represented by the Ohio Civil Service Employee Association, an AFSCME Local in Ohio. The lawsuit seeks to have Ohio’s agency fee law declared unconstitutional in light of the Janus decision, along with obtaining back payments from the OCSEA for agency fees it has impermissibly taken from employees.

The significance of Ogle, however, is that it seeks not just to obtain repayment for all agency fees dating back to the decision in Janus this year, but potentially all the way back to 2012, when the Supreme Court issued a decision in Knox v. SEIU Local 1000, which began to outline the First Amendment case law that lead to the Janus decision. If plaintiffs are successful in forming a class, and obtaining payment for all agency fees taken dating back to 2012, the financial loss to public sector unions would likely be quite substantial.

The other case, Smith v. AFSCME, Ohio Council 8, involves employees of two agencies in different Ohio counties as well as an employee of a metropark, all public employers in Ohio.  Unlike Ogle, these employees allege that they were members of the union paying union dues, but then notified the union that they were resigning and did not consent to further deduction of dues from their pay.  Allegedly, the union denied the employees’ request, citing a provision in the documents the employees signed upon becoming members that establishes a “window period” during which membership may be rescinded.

In this case, the union allegedly had a practice of restricting employees to only being able to withdraw their union membership in the 15 days prior to the expiration of the current collective bargaining agreement. Further, the union also allegedly informs members that after they provide notice of withdrawal from the union, their withdrawal will not be processed for “at least” 30 days, which allegedly has resulted in collection of further dues and fees during that 30-day period after employees have announced they no longer want to be in the union.

Smith is significant, therefore, because it will be the first step to resolving the question of whether an employee who at one time joined a public sector union can rescind that agreement, and the dues obligation that comes with it.  Whether the circumstances under which the employee joined are relevant may also be decided.  Indeed, plaintiffs in Smith alleged that they only joined because they would have had to pay agency fees if they did not.  As discussed in my original post on Janus, this could be particularly significant because many unions, in anticipation of Janus, undertook significant efforts to get agency fee payers to join the union.  Stay tuned to vorysonlabor.com for further developments in these two cases.

NLRB Publishes Proposed Joint Employer Rule

Posted in NLRB, Rulemaking

On Friday last week, the NLRB (in a 3-1 decision) carried through on its previous announcement and published a notice of proposed rulemaking that would address the hotly contested joint employer issue.  “Joint employer” refers to the question of whether one business can be considered the employer of another business’ employees.  Think of situations like subcontracting, franchising, and temporary employment agencies, to name just a few.

The Obama NLRB adopted an expansive rule in the BFI decision, making it fairly easy for two employers to be considered joint employers.  In December 2017, the Trump NLRB overturned this decision in the Hy-Brand decision.  But, this decision was itself vacated earlier this year after the NLRB Inspector General determined that one of the Republican nominees should have recused himself; a conclusion that has generated significant controversy.

In the published notice, the NLRB majority proposes to adopt the following rule regarding joint employment:

An employer…may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction.

The NLRB majority goes further, and specifically addresses the concept of “indirect” or “potential” forms of control that BFI held could be used as indicators of a joint employer relationship: Continue Reading

Part 2: Will the Federal Government Take Over the UAW?

Posted in Union Organizing, Unions

Another shoe dropped on the growing UAW-Chrysler scandal.  Recently, Alphons Iacobelli, the former Chrysler VP of Labor Relations, was sentenced to 5½ years in federal prison for siphoning money from the joint UAW-FCA training center.  Mr. Iacobelli purchased a $350,000 Ferrari, $35,000 Mont Blanc pens, and built a pool in his backyard with money from the training center.  He also provided funds and gifts to UAW officials.

Mr. Iacobelli’s sentence follows the 18-month sentence of a former UAW official and wife of a deceased UAW VP who was responsible for negotiation with Chrysler.  Monica Morgan-Holiefield and her departed husband, General Holiefield, paid off their home mortgage and went on extravagant trips with funds from the UAW-Chrysler joint training center.

Thus far, four UAW officials and three Chrysler employees have been indicted.  The UAW and Chrysler’s stance has been the same:  these unlawful payments did not influence collective bargaining negotiations between the two.

But, the federal government sees it differently. The federal prosecutors are alleging that over $9 million from the training center were used to influence negotiations.  In the government’s sentencing memorandum filed with the court, the prosecutors stated, “FCA sought to obtain benefits, concessions and advantages in the negotiation and administration of collective bargaining agreements with the UAW in an effort to buy labor peace.  High-level officials of the UAW sought to enrich themselves and live lavish lifestyles rather than zealously work on behalf of the best interests of tens of thousands of rank and file members of their union.”

If the government’s allegations turn out to be true, then the government could move to oversee the UAW’s finances, just like it did with the Teamsters for over a decade.

Will Employers Get Their Email Systems Back? NLRB Invites Briefs on Purple Communications

Posted in Employee Handbooks, NLRB, Union Organizing

Last Wednesday, the NLRB issued a notice and invitation for parties to file briefs to address how the board should treat its previous decision Purple Communications, Inc., 361 N.L.R.B. 1050 (2014).  As we explained when Purple Communications was decided, the NLRB held that employees who were given access to their employer’s e-mail system for work-related purposes have a right to use that system for statutorily protected communications during non-working time.  A similar case has now come before the board, Caesars Entertainment Corporation, and the NLRB has invited interested parties to file briefs as to whether it should adhere to, modify, or overrule Purple Communications.

The governing rule from Purple Communications replaced the one from Register Guard, 351 N.L.R.B. 1110 (2007). Under Register Guard, employers could lawfully limit employees’ use of their email system for certain non-business-related activities, including statutorily protected communications, assuming that it did so in a non-discriminatory fashion.

Purple Communications, Inc. held that the Register Guard rule was “clearly incorrect,” and overruled it. The NLRB reasoned that the old rule gave too much consideration to employers’ property rights and not enough to employees’ rights to communicate about their employment.  The NLRB added that the old rule did not properly take into account the importance of e-mail as a vital means of communication.  It also drew a distinction between bulletin boards and copiers, on the one hand, and e-mail systems on the other hand, given long-established NLRB precedent permitting employers to prohibit non-business uses of the former. Continue Reading

DOL Formally Withdraws Persuader Rule

Posted in Department of Labor, Rulemaking

As previously anticipated on this blog, the Department of Labor (DOL) has formally rescinded the so-called “Persuader Rule.” Under court injunction preventing enforcement since November 2016, the DOL on Wednesday announced that the controversial rule had been withdrawn. In a press release, Deputy Assistant Nathan Mehrens stated:  “By rescinding this Rule, the Department stands up for the rights of Americans to ask a question of their attorney without mandated disclosure to the government.”

The Persuader Rule would have imposed greater reporting requirements on employers for communications involving union drives in the workplace. The rule would have required employers to disclose any “actions, conduct or communications” taken to “affect an employee’s decisions regarding his or her representation or collective bargaining rights.” This broadly would have included communications between an employer and their counsel regarding responses to unionization efforts, even where the employer’s counsel made no communications with employees directly.

This development is, of course, good news for employers.  With the rule rescinded, employers can remain assured that they will not need to report sensitive communications with their counsel.  Moreover, labor professionals can avoid what would have otherwise been a complicated, complex reporting process, and hindered the ability of employers, especially smaller ones, to obtain the legal advice needed to respond to union organizing activity.

Judge Kavanaugh and the NLRA: A Sampling of Opinions

Posted in Courts

Last week, as I’m sure everyone has now heard, President Trump announced his pick for the U.S. Supreme Court.  For those of you who missed it, President Trump nominated Brett Kavanaugh, a judge on the D.C. Circuit Court of Appeals.

Judge Kavanaugh has been involved in numerous decisions dealing with the NLRA.  Primarily, this is because the D.C. Circuit Court of Appeals is more likely than any other circuit to hear appeals from federal agency actions, including those from the NLRB.  Since his tenure on the bench started in 2006, Judge Kavanaugh has heard over fifty cases involving the NRLA.  Of the decisions in which Judge Kavanaugh has been involved, he has authored eight majority opinions and four dissents.

Judge Kavanaugh’s decisions suggest some deference to the NLRB’s decision-making authority, at least in certain situations.  Notably, in one of Judge Kavanaugh’s opinions, New York-New York, LLC v. NLRB, he held that it was within the NLRB’s discretion to decide whether it is a violation of the NLRA for a property owner to bar employees of an onsite contractor from distributing union-related handbills on the property.  Citing another decision that he was obligated to follow, Judge Kavanaugh stated that the NLRB had sole discretion to decide this issue, and that it “adequately considered and weighed the respective interests” in deciding the issue.  Thus, Judge Kavanaugh held that the NLRB’s decision that the property owner violated the NLRA should be enforced.

At the same time, however, Judge Kavanaugh is not reluctant to hold that the NLRB’s decision was wrong.  In fact, seven of his twelve authored opinions do just that. Continue Reading

Supreme Court Decision Strikes Down Mandatory Agency Fee Payments to Public Sector Unions

Posted in Courts, Unions

Today the U.S. Supreme Court issued a decision in the closely watched case of Janus v. AFSCME.  In a landmark ruling, the Court held that public sector employees cannot be forced to pay mandatory fees to a public sector union if they are not a member of the union.  As discussed in our previous blog post, this case involved a child support specialist in the Illinois Department of Healthcare and Family Services, who is not a member of the American Federation of State, County, and Municipal Employees (AFSCME), but nonetheless was required to pay agency fees to the union as a state employee.  Janus follows the Court’s 4-4 split on this issue back in March 2016 in an opinion issued following the death of Justice Scalia.

The pivotal vote in the 5-4 ruling was Justice Neil Gorsuch, who replaced Justice Scalia.   Justice Gorsuch was widely expected to side with those voting to overturn the law, just as Justice Scalia had been expected to vote in the previous case.  All the other justices voted the same as they did in March 2016.  The Court’s decision overturned a Supreme Court precedent from the 1970s that allowed public unions to collect mandatory fees from all employees, both union members and non-members.

The Court’s primary reasoning was that requiring nonconsenting employees to pay mandatory agency fees violated the First Amendment’s protection against subsidizing the speech of other private speakers. The justifications behind the old precedent, that agency fees promoted an interest in “labor peace” and avoided the risk of free riders, were insufficient.  Agency fees had not been shown to promote labor peace, especially because the federal government and numerous states had laws prohibiting such fees yet still had peaceful public sector labor relations.  Moreover, avoiding the risk of free riders was not a compelling enough reason to merit the violation of individuals’ First Amendment rights. Continue Reading

New NLRB Guidance Gives The Green Light On Common Sense Employee Work Rules

Posted in Employee Handbooks, NLRB

Last December, the NLRB recently established a new standard for determining the lawfulness of facially neutral employee handbook policies that “may” restrict the exercise of an employee’s NLRA rights.  As more fully discussed in our prior post, in Boeing Company the NLRB rejected its previous standard for reviewing employer rules and replaced it with a balancing test.   The NLRB also established three different categories of rules that it would examine in future decisions.  In creating the categories, however, the NLRB gave few examples of the types of rules that may fall into each category.

To provide clarity on the new standard, NLRB General Counsel Peter Robb (R) has now issued a 20-page Guidance on Handbook Rulings Post-Boeing.  In an overall victory for employers, the GC emphasizes that post-Boeing, ambiguities in employer work rules and handbook policies will no longer be interpreted against employers.  Instead of analyzing whether a work rule could be interpreted as restricting employee NLRA rights, the new standard will only prohibit work rules that would be so interpreted.

Examples Of Category 1 Rules Deemed Lawful

In the Guidance, the GC provides multiple examples of rules said to fall into Category 1.  Importantly, many of these common work rules previously had come under intense scrutiny by the Obama NLRB as potentially “chilling” employee NLRA rights.  Now, the GC has directed NLRB regional offices not to issue ULP complaints for rules such as: Continue Reading

Will the federal government take over the UAW?

Posted in Union Organizing, Unions

The scandal involving former UAW officials and Chrysler executives has expanded. The U.S. Justice Department has now labeled the UAW and Fiat Chrysler Automobiles (FCA) as co-conspirators in the bribery and corruption scandal. Now, the UAW faces possible criminal fines and potential federal government oversight of its finances.

So far, the federal investigation has resulted in the indictment of seven former UAW officials and Chrysler executives and six criminal convictions. Both the UAW and Chrysler had stated that the corruption was the result of a few rogue employees. But, on June 12, the U.S. Justice Department formally named both the UAW and FCA as co-conspirators to violate the federal prohibitions against an employer paying off union officials and union officials from accepting those payments.

The allegations involve millions of dollars of payments from FCA to UAW officials in charge of negotiating Chrysler’s union contracts. The payments were allegedly made through a jointly administered UAW-FCA worker training center. Based on the indictments, the allegations now span over six years, from 2009 to 2015, and cover the terms of three UAW Presidents, Ron Gettelfinger, Bob King, and soon-to-retire Dennis Williams.

In Ohio, the UAW faces two class action lawsuits that UAW officials accepted bribes from Chrysler to take company-friendly bargaining positions at the expense of UAW workers.

Meanwhile the federal investigation continues and has expanded to the joint UAW-GM Center for Human Resources.

New Developments on the Joint Employer Standard

Posted in NLRB, Rulemaking

The NLRB intends to publish a notice of proposed rulemaking on the joint employer issue sometime this summer.  The NLRB had previously announced its intent to consider rulemaking on this issue, and our prior post on the subject explains in detail the background of the issue for those who are unfamiliar.

The disclosure came in the body of a letter that Chairman Ring (R) wrote to Sens. Warren (D), Sanders (I), and Gillibrand (D), which was released today.  In a letter to Chairman Ring last month, these senators raised concerns about the NLRB’s announced intent to consider a rule on joint employer status, and referenced (among other things) the ethical issues associated with Member Emanuel’s (R) role in a prior case involving the joint employer standard.

So, apparently in just a few months, labor professionals will have a new proposed rule from the NLRB to consider.  As a result of proceeding through rulemaking, the public will have an opportunity to comment on the rule.  When details of the proposed rule become available, look for a summary of them on this blog.  Until a final rule is adopted or the NLRB holds to the contrary, however, the expansive rule favoring joint employer status, as announced in the BFI decision, will remain in effect.