Be sure to download our 15 minute podcast about employment laws in Brazil. Baker McKenzie partner Kerry Weinger introduces Leticia Ribeiro from Sao Paulo to talk about employment laws in Brazil and give an overview of what has changed in 2017 as well as what we can expect for the year ahead.

Key Takeaways:

  1. With the labor reform, it is time to revisit local practices, policies and agreements, and confirm that they are consistent with the new law
  2. While it is important to adjust to the new provisions of the labor code, it is important to do so with caution as we are hearing that the labor court judges might be a bit resistant to some changes that were recently introduced
  3. With the very near implementation of the eSocial program, multinational employer must be ready to start the required reporting and that the information reported will not create any issues

Download now on iTunes | Android | Stitcher | TuneInGoogle Play.

We are pleased to report that a California federal judge put to rest claims by a proposed class of Kiewit Infrastructure West Co. workers that they weren’t given adequate meal breaks and rest periods, saying the company was exempted from liability by a valid collective bargaining agreement.

In reconsidering a portion of his November ruling that granted the construction and engineering services provider partial summary judgment over various wage and hour claims brought by lead plaintiff Peter Zayerz under the California Labor Code, Judge Gutierrez acknowledged he had mistakenly failed to consider in his earlier decision whether the company was exempt from liability for the meal and rest period claims by a collective bargaining agreement that was in place between 2012 and 2015, the time period in which Zayerz’s claims arose.

“The court concedes that it failed to consider a material issue of law in its prior order, namely that the governing CBA exempts defendant from liability under the labor code for the meal and rest period claims,” Judge Gutierrez said.

With that, Judge Gutierrez awarded Kiewit summary judgment on all remaining claims and closed the case. Kiewit is represented by our own Arthur J. Rooney, Todd K. Boyer, Benjamin R. Buchwalter, Alexis Hawley and Melissa Logan.

The case is Peter Zayerz v. Kiewit Infrastructure West Co. et al., case number 2:16-cv-06405, in the U.S. District Court for the Central District of California.

Find the write-up in Law360 HERE.

Manufacturers and retailers that have long relied on a complex web of contractors and subcontractors to supply necessary parts and materials may face a new risk. A recent decision limiting the effectiveness of a no-strike clause in a collective bargaining agreement may create an additional risk to that supply chain, if not to the employer’s own uninterrupted operations.

No-Strike Clauses

  • Most CBAs contain some form of a no-strike clause. They are intended to protect against any interruption to production due to labor unrest during the term of the agreement.
  • The Supreme Court has long deemed a strike in violation of a no-strike clause a breach of the collective agreement which a federal district court could enjoin.
  • BUT — that assumption may no longer be wholly valid as demonstrated by a recent decision by a federal district court. Just Born, Inc. v. Local Union No. 6, Bakery Workers, 2017 BL 466136 (ED Pa. 2017).

Continue Reading Supply Chain Interruption Risk From Mid-Term Strikes

The NLRB closed out its busy week of reversing Obama-era standards in two more high-profile decisions, this time addressing the duty to bargain and bargaining unit determination (see our previous post covering work rule and joint employer standards). On Chairman Phillip Miscimarra’s final day in office, the Board’s two key decisions: (1) returned to a standard returning to broader employer rights to make unilateral changes without providing a union notice and an opportunity to bargain; and (2) eliminated the “micro-unit” bargaining unit standard that constricted employers’ ability to expand proposed bargaining units to include other employees who share a community of interest with those of the proposed unit.

Impact on Employers

The return to previous standards of unilateral change analysis will allow employers more discretion in changing terms of employment consistent with past practice. This benefit to employers most commonly arises with company-wide changes to health insurance plans. Under the previous standard, an employer could be forced to delay implementation of health insurance changes until it had provided notice to the union and an opportunity to bargain, even in the face of longstanding past practice. Many employers with medical plans covering union and non-union employees will have less interruption during open enrollment plan changes.

Elimination of the “micro-unit” standard of bargaining unit appropriateness substantially reduces a union’s ability to cherry pick favorable groups of employees to win elections. Unit determination will return to a more holistic review of shared “community of interest” rather than proceeding based on the union’s extent of organizing. Ultimately, the decision will give employers more ability to defend against union organizing campaigns and keep unions from obtaining representation through small pockets of employees amongst a larger department or facility.

Continue Reading NLRB Rounds Out Return To Pre-Obama Standards With Duty to Bargain And Unit Determination Decisions

In a flurry of high-profile decisions issued on the eve of NLRB Chairman Phillip Miscimarra’s term’s expiration, the NLRB has announced employer-friendly standards reversing recently adopted analyses and restoring the historical analyses in perhaps the two most watched (and criticized) categories of employer unfair labor practice (ULP) charges: (1) evaluating work rules for impact on protected concerted activity (formerly the Lutheran Heritage analysis); and (2) joint employer liability (formerly the Browning-Ferris analysis).

Impact on Employers:

As a result of the “new” work rule analysis, employers will be less likely to face scrutiny of employee handbook provisions. Employers now have broader discretion to implement and enforce handbook provisions relating to civility in the workplace and workplace safety (i.e., no cell phone/camera policies, social media). Employers who have dramatically trimmed employee conduct policies have some freedom to reinstate more usable and effective rules, but should note that this area of law is almost certain to fluctuate based on the presidential administration in power.

With the reversal of the joint employer analysis, employers will have less labor risk (bargaining obligations and strikes) when engaging third parties like staffing companies, temporary workers, or co-located workers. Critically, the prospect of becoming bound to a bargaining obligation with  another entity’s employees will be substantially less likely. Avoiding joint employer liability will focus more limiting actual control and direction of non-employees and less on the contractual arrangements with other entities supplying those employees. While this change is unlikely to dramatically change the scope of outsourcing, employers can have more certainty of the scope of potential ramifications and liability in using third party workers.

Continue Reading Signaling Major Change, NLRB Yanks ‘Joint Employer’ Standard And Adopts A More Pro-Employer Stance On Workplace Policies

Many of the NLRB initiatives established during the previous administration could soon be no more.

On December 1, 2017, the new NLRB General Counsel, Peter Robb, issued a memorandum that rescinded numerous memorandums and initiatives of his predecessor, and set forth the types of future charges that should be submitted to his office for advice. Highlighting the list of the seven expressly-rescinded memorandums are:

  • GC 11-04 (Default Language). This 2011 memo instructed all NLRB Regional Offices to include certain “default language” in all informal and compliance settlement agreements that provided that if the Charged Party/Respondent failed to comply with the terms of the settlement agreement, the underlying complaint would be re-issued and summary judgment would be entered in favor of the GC. The only issue that could be raised to the Board is whether the Charged Party/Respondent, in fact, defaulted on the terms of the settlement agreement.
  • GC 12-01 (Guideline Memorandum Concerning Collyer Deferral). This 2012 memo changed the previous deferral policy, directing NLRB Regional Offices to stop deferring Section 8(a)(1) and (3) cases where arbitration will not be completed within a year. If the grievance arbitration was not likely to be completed within one year and deferral was deemed inappropriate, the Region was instructed to conduct a full investigation on the merits of the charge.

Continue Reading New NLRB GC Peter Robb Spells Relief For Besieged Employers

In July 2017, amid political turmoil and protests by the opposition and the labor unions, president Michel Temer sanctioned a new law implementing the controversial labor reform in Brazil.

Some of the law’s most significant changes impacting US multinationals include:

  • Labor Rights Negotiation: Agreements negotiated between companies and employees may override statutory requirements relating to labor rights such as: vacation usage, work shift, flextime arrangements, reduced meal breaks and remote work, among other points. However, some labor protections, such as FGTS deposits, minimum wage, 13th salary and vacation pay cannot be subject to negotiation.
  • Waivers and Releases of Labor Rights: Employees with college degrees who receive monthly salaries greater than or equal to twice the limit of benefits from the National Social Security Institute (INSS) will be able to negotiate valid release agreements and waive labor rights.
  • Outsourcing: It is now possible to hire service companies to provide services and activities even for those that fall within the company’s core business.
  • Remote Work: The parties to a remote work agreement shall agree on the use of equipment and payment of related business expenses (such as for electricity and internet access). The employee does not have to keep time records.
  • Dismissal for cause: Possibilities of discharge for cause by the employer are expanded beyond the situations under the current rules. Among these are loss of qualification necessary to the employee’s profession, such as a driving license, if caused by the employee’s intentional misconduct.
  • Termination by Mutual Agreement: Termination can be agreed between the parties, in which case severance will be reduced.
  • Mass layoffs: Collective terminations, also known as mass layoffs, will no longer need the agreement of the labor union. The same rules applicable to individual terminations shall apply to collective terminations.
  • Litigation: Employees will have to pay for court costs relating to any pleas that later are deemed groundless. Requirements for filing labor lawsuits are stricter and it will be easier to impose penalties against plaintiffs for litigating in bad faith by filing frivolous suits.

We thank our friend Leticia Ribeiro, a partner at Trench, Rossi e Watanabe (a Brazilian law firm with a cooperation agreement with Baker McKenzie), for her valuable contributions to this post. And, for more information, please contact your Baker McKenzie lawyer.

On Monday, September 26, the U.S. Senate voted and confirmed William Emanuel as the newest member of the National Labor Relations Board.  Emanuel is a long-time management-side labor and employment attorney, who was nominated by President Trump in June to fill the vacant NLRB seat.  With Emanuel’s confirmation, the NLRB has a Republican majority for the first time in ten years.

As previously reported here, President Trump also recently nominated Peter Robb to serve as the next General Counsel for the NLRB.  Robb has worked as a management-side attorney in private practice since 1985.  If confirmed, Robb would be the first Republican to serve as NLRB General Counsel since 2010.

With Emanuel’s confirmation to the NLRB, as well as Robb’s nomination for General Counsel, several of the previous administration’s union-friendly decisions are expected to be rolled back.

The White House announced on Friday, September 15, 2017, that President Donald Trump has nominated Peter B. Robb to serve as the next General Counsel for the National Labor Relations Board.  Robb is a management-side labor and employment attorney, who currently practices in Vermont.  Robb previously worked as a field attorney for the NLRB, a supervisory attorney for the Federal Labor Relations Authority, and then as the Chief Counsel to former NLRB member Robert Hunter (a Republican), who was appointed to the Board in 1981 by President Reagan.  In 1985, Robb began private practice representing company management in labor and employment law.  As the General Counsel, Robb would decide which issues to put before the NLRB for resolution.  A rollback of a number of union-friendly decisions is expected. Continue Reading Trump Announces Nomination For NLRB General Counsel – What It Means For Employers

After a contentious confirmation process, on April 7, 2017, the Senate confirmed Tenth Circuit Judge Neil Gorsuch to fill the Supreme Court seat that has been vacant since the death of Justice Antonin Scalia in February 2016. On April 10, 2017, Gorsuch, a former clerk of current Justice Anthony Kennedy, was sworn in by Kennedy. Now that Gorsuch has taken his oath, he is ready to participate in the Supreme Court’s next round of oral arguments, which are set to begin on April 17. Continue Reading Neil Gorsuch Fills Vacant Supreme Court Seat