On February 4, 2021, House Democrats reintroduced the Protecting the Right to Organize Act of 2019 (PRO Act). The sweeping labor legislation, which would return many provisions of current labor laws to their pre-1947 status, would create new claims and impose punitive penalties and strengthen a number of union and employee rights. The legislation has
President Biden did not waste any time after taking office on January 20, 2021. Shortly after the Presidential Oath of Office was administered, Biden signed 17 executive actions, which either impact the workplace or provide insight into what may be forthcoming under the new administration for employers.
A Flurry of Executive Orders on Day One
Biden issued a memorandum to agencies to freeze all last-minute regulations put in motion by the prior administration as President Trump was leaving office. Notably, these regulatory “freeze memos” are not uncommon for incoming administrations to issue. This pause on the prior administration’s last-minute regulations will give the Biden administration the opportunity to evaluate the so-called “midnight regulations” and determine if they will become final, be amended, or rescinded altogether.
He also issued an Executive Order reinforcing that Title VII prohibits the federal government from discriminating on the basis of sexual orientation or gender identity. The Order references the recent Supreme Court case of Bostock v. Clayton County (blogged about here). Specifically, the Order states “[i]t is the policy of my Administration to prevent and combat discrimination on the basis of gender identity or sexual orientation, and to fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity or sexual orientation.” The Order notes that laws that prohibit sex discrimination (specifically referencing Title IX, the Fair Housing Act, and section 412 of the Immigration and Nationality Act) also prohibit discrimination on the basis of gender identity or sexual orientation.
Businesses engaging independent contractors have new guidance from the Department of Labor (DOL) for determining whether an individual is an employee or independent contractor, but the guidance may never take effect. On January 6, 2021, the DOL issued a final rule for determining whether an individual is an employee or independent contractor. The rule focuses on whether workers are economically dependent on another business–making them more likely to be an employee of that business, and entitled to the minimum wage and overtime under the Fair Labor Standards Act (FLSA)–or are economically dependent upon themselves, making them true independent contractors.
Continue Reading DOL Announces Final Rule for FLSA Worker Classification Focused on Economic Dependence-But Its Future is Uncertain
Ahead of President-Elect Biden’s inauguration in January, employers have a preview of what is likely to come in the form of stronger union and employee rights. On February 6, 2020, the House of Representatives passed the Protecting the Right to Organize Act of 2019 (commonly known as the “PRO Act”), which contains ambitious changes to the current labor landscape. Changes include expanding the scope of joint employer under the National Labor Relations Act (NLRA), narrowing the definition of “supervisor” under the NLRA, expanding the right to strike to include secondary boycotts among other strikes, and providing additional avenues for workers to participate in collective or class actions. While the Senate has not acted on the bill since it was passed by the House, employers would do well to keep an eye on the revival of the PRO Act or any similar legislation. As an update to our recent blogpost on the PRO Act (here), we highlight two changes below that threaten employers if the PRO Act becomes law.
Banning Class Action Waiver in Arbitration Agreements
The PRO Act amends the NLRA to prohibit any employer attempt to execute or enforce any agreement whereby an employee promises not to pursue any class or collective actions. Notably, this provision in effect would overrule the Supreme Court’s decision in Epic Systems Corporation v. Lewis, 138 S. Ct. 1612 (2018). The Epic Systems Court held that an arbitration agreement waiving the right to proceed collectively under the Fair Labor Standards Act (FLSA) is enforceable, subject to generally applicable contract defenses, such as fraud, unconscionability, or duress. Moreover, the Court held that a class action waiver in an arbitration agreement did not violate employees’ rights under the NLRA. In contrast, the PRO Act’s amendments to the NLRA specifically provide that notwithstanding the Federal Arbitration Act (the federal statute authorizing arbitration agreements), an employer’s attempt to enforce class action waivers in an arbitration agreement would be an unfair labor practice under the NLRA.
Non-union employers historically have been little concerned by labor unrest. They will be in for a rude awakening if the Protecting the Right to Organize Act (PRO Act) is signed into law during a Biden administration. The sweeping rewrite of the National Labor Relations Act (NLRA) occasioned by the PRO Act has serious ramifications for union represented workforces as well. The PRO Act would remove the existing ban on secondary strikes, and remove the ban on recognitional strikes lasting over 30 days. The PRO Act would also legalize the intermittent strike and the partial strike. Additionally, the PRO Act bans the permanent replacement of strikers and prohibits terminating employees who engage in strikes. Below, we discuss several ways the passage of the PRO Act would change the labor landscape.
Continue Reading PRO Act Likely to Bring Labor Unrest to Main Street
Parties before the National Labor Relations Board (“NLRB” or the “Board”) often wonder whether it is worthwhile to appeal adverse rulings or respond when favorable rulings are received. Two recent appellate court decisions demonstrate the value of sticking with an argument from start to finish.
A Winning Formula
First, in Davidson Hotel Company v. NLRB (D.C. Cir. 2020), the D.C. Circuit recently took the highly unusual step of rejecting an NLRB determination as to the appropriate unit for bargaining at a small, full-service hotel in Chicago. For context, the NLRB had determined that the Davidson Hotel’s employees should be segregated into three separate bargaining units: a unit of front desk employees, a unit of housekeeping employees, and a unit of food and beverage employees. The union petitioned the Board to certify a single unit of housekeeping employees and food and beverage employees.
The Board’s Regional Director decided that a unit consisting of the housekeeping and the food and beverage employees was not an appropriate unit because it did not include the front desk employees, and he dismissed the union’s petition for an election. The Regional Director reached his decision by applying the NLRB’s “community of interest” test, under which the NLRB examines: (1) whether employees in the proposed unit have sufficient commonality in working conditions and job duties (among other factors) such that bargaining as a collective group is possible; and (2) whether employees in the unit have such distinctive interests from those who are excluded-here, the front desk employees-such that they should bargain separately. In his order dismissing the union’s initial petition for a single bargaining unit of housekeeping and food and beverage employees, the Regional Director decided that the unit did not have distinctive interests from the front desk workers, but he hinted that two separate units (one for housekeeping and another for food and beverage) might be appropriate.
Following his cue, the union promptly filed two petitions seeking one election in the housekeeping unit and a second election in the food and beverage service unit. Again, the union did not seek to represent the front desk employees. This time, the Regional Director found that the community of interest test was satisfied and he certified the two units. When an election was held, the union prevailed in both units.
It is customary to read of employees claiming retaliation against their employer. The U.S. Court of Appeals for the Seventh Circuit’s recent decision in Bator v. District Council 4, Graphic Communications Conference represents the almost unheard of — employees claiming retaliation at the hands of their union instead.
In Bator, union members simply wanted …
The “days of boys will be boys” must end, said Circuit Judge Brown in Consolidated Communications, Inc. v. NLRB, 837 F.3d 1, 18 (D.C. Cir. 2016), a case involving strike misconduct. Heeding her directive, on July 21, 2020, the three grown “boys” at the NLRB decided that profane outbursts occurring during otherwise protected activities could be cause for termination. General Motors LLC, 369 NLRB No. 127 (2020). In the past, the NLRB has allowed some leeway for impulsive behavior of an employee when such misconduct is part of the “res gestae” of an employee’s protected activity. See, e.g., KHRG Employer LLC, 366 NLRB No. 22 (2018) (setting forth relevant test). But no more. Now, special rules will not apply to employees who violate an employer’s otherwise lawful rule mandating civility in the workplace just because the violation was part of the res gestae of a protected activity. This is good news for front line supervisors and managers who had to endure abusive conduct solely because it occurred during a labor-management meeting or in some other form of protected concerted activity.
Continue Reading NLRB Says, “#*!%@*” Could Get You Fired
A CEO who becomes entangled in human resources functions by terminating an employee in a distant locale could expose himself to personal jurisdiction (and personal liability) there, the D.C. Circuit Court of Appeals recently held in Urquhart-Bradley v. Mobley, No 19-7716 (D.C. Cir. June 30, 2020).
The message to executives is clear: a termination conversation could count as sufficient contacts for purposes of personal jurisdiction, even if the employee being terminated is in another state and even if the conversation itself was via telephone and not in person. In Urquhart-Bradley, a panel of the D.C. Circuit Court of Appeals (Srinivasan, Chief Judge, Garland, and Millett, Circuit Judges) joined a list of courts that have refused to apply the “fiduciary shield” doctrine, which provides that a nonresident corporate agent generally is not individually subject to a court’s jurisdiction based on acts undertaken on behalf of the corporation. Where the fiduciary shield does not apply, employers are cautioned to leave termination conversations to HR or in-house counsel to keep executives from being haled into court in another jurisdiction.
On June 23, 2020, the National Labor Relations Board (“NLRB”) ruled that newly-represented employees can be disciplined under existing disciplinary policies even if no bargaining has occurred. 800 River Road Operating Company, Inc., 369 NLRB No. 109 (2020). For the first eighty years of the National Labor Relation Act’s existence, this had been the law of the land. A surprise decision four years ago in Total Security Management Illinois, 364 NLRB No. 106 (2016), upended this rule by requiring an employer to bargain with its employees’ newly certified representative (union) before “serious” discipline could be imposed. The 800 River Road decision returned an employer’s bargaining obligation to that historical and long-standing status – discipline consistent with an existing disciplinary policy is permissible even if the employer has not bargained about the discipline with the employees’ representative. The 800 River Road decision places a premium on well-crafted employee handbooks and disciplinary policies and a solid record retention policy to demonstrate the employer’s record of enforcement.
The decision is only the most recent decision in the long-running debate over the proper interpretation and application of the unilateral change doctrine enunciated by the Supreme Court in NLRB v. Katz, 363 U.S. 736 (1962). In Katz, the Court held that upon commencement of a bargaining relationship, employers “are required to refrain from making a material change regarding any [mandatory] term or condition of …employment…unless notice [of the change] and an opportunity to bargain is provided to the union.” (Slip op.3). Immediately following this sweeping generalized holding, employers ceased providing annual wage increases under existing compensation policies. The NLRB responded by creating the “dynamic status quo” policy. The dynamic status quo exemption to the Katz rule is applied when an employer’s practice or the policy itself becomes a term or condition of employment.