News & Analysis

The Good, the Bad and the Ugly

Winners and losers feel effects of the Presidential election - For winners, Philip Miscimarra, who was Acting Chairman of the National Labor Relations Board, gave up “acting” and got real with appointment as NLRB Chairman. With two Democrats still on the Board and two vacant seats, Chairman Miscimarra, currently the lone Republican, continues to be outvoted 2-1 on many decisions of importance. Meanwhile, NLRB General Counsel Richard Griffin, an Obama appointee, stays in charge of Board policy on issuing complaints in unfair labor practice cases and their settlement. General Counsel Griffin has indicated that he does not intend to step down before his term expires in November 2017.

As we have mentioned, three Republican labor lawyers have been mentioned as possible nominees to fill the two vacant slots on the Board. Once the Board has a Republican majority, it may take a more balanced approach on issues including representation cases, employer handbooks and policies, deferral to arbitration, and the “employee” status of college students.

Another winner is R. Alexander Acosta, who was confirmed by the Senate as Secretary of Labor and was sworn in on April 28. Secretary Acosta is expected to chart a new path for the Department of Labor. Press reports indicate that he has chosen a deputy for his team, but others need to be brought on board before important policy positions are staked out. At this point, we believe the DOL will adopt a less-adversarial, more “assistance-oriented” approach with employers, and the agency may withdraw its appeal of the preliminary injunction against the DOL’s overtime rule. The injunction was issued last November, only about a week before the rule was to take effect.

The “loser” side includes the Service Employees International Union and the AFL-CIO. The SEIU recently announced budget cuts of 30 percent for the coming year. Similarly, the AFL-CIO in late February announced that it was reorganizing and cutting staff, with reports of several dozen employees losing jobs.

Antitrust, labor issues form strange brew with Uber, Lyft drivers in Seattle - With its coffee known ‘round the world, Seattle now has “stirred up” an interesting mix of labor law and antitrust law as applied to the on-demand economy taking shape across the world. In 2015, Seattle enacted an ordinance designed to help labor unions organize drivers of Uber and Lyft. (Uber and Lyft apparently assert that their drivers are independent contractors.) Two lawsuits were filed challenging the ordinance, including one by the U.S. Chamber of Commerce. In that lawsuit, a federal judge issued a preliminary injunction to stop enforcement of the law while the ligation proceeds. A Teamsters local union is seeking to use the law to get names and addresses of drivers so that it can try to organize the drivers. The Chamber contends that the ordinance violates federal and state antitrust law to the extent that it would allow independent contractors (that is, the drivers) to form a cartel (that is, the union) in order to engage in price fixing. Alternatively, the Chamber argues the ordinance is preempted by the National Labor Relations Act. Many classical economists contend that labor unions are price-fixing collectives seeking anti-competitive power in a relevant market. We will keep you posted as this case percolates through a likely appeal, no matter which side wins.

“Gimme just a little more time” — Trump Administration asks courts for time to reconsider positions Obama team advanced - Attorneys at the U.S. Department of Labor and the Acting Solicitor General are now reporting to a new President with a different philosophy and policy priorities. On at least two high-profile pieces of litigation of great importance to employers, the Trump representatives have asked courts for more time to file briefs.

First, in late April, the Acting Solicitor General asked the U.S. Supreme Court to extend the deadline for filing initial briefs in three cases that involve agreements in which the employee waives the right arbitrate on a class, collective or group basis. The Court extended the deadlines from April 28 to June 9. As we have previously reported, the NLRB, with the longstanding Democratic majority and General Counsel, has pushed its theory that the National Labor Relations Act’s protection of concerted activity makes such agreements “unlawful interference” and void. U.S. Courts of Appeal have split on the issue.

Many employers have entered into arbitration agreements of this sort with employees in order to avoid going to court, which is typically more expensive than arbitration and sometimes leaves both employees and employers without a cost-effective forum for employment disputes. According to the Acting Solicitor General’s request to the Court, “[t]he current briefing schedule [was] no longer adequate for the government [because] ... [t]he Acting Solicitor General engaged in a process of reviewing the position of the United States” must “consult with new leadership.”

The Administration is also reconsidering its position in two pending cases concerning the so-called “Persuader Rule” (previously discussed here and here). A federal judge in Texas issued a nationwide injunction blocking enforcement of the rule on June 27, 2016, but cases in federal district courts in Arkansas and Minnesota were put on hold. The DOL appeal of the Texas court injunction is pending. Now, in recent status reports to the courts in the Arkansas and Minnesota cases, the DOL has requested two more months to reassess its position. The request has been granted in the Arkansas case through July 3. There has not been a decision yet on the request in the Minnesota case. The result here seems fairly clear, and many commentators watching the issue expect the Trump team to reverse the position taken by the Obama Administration.

RAs at George Washington University get schooled on “quickie election” rule - As we previously reported, early this winter an SEIU local filed a petition with the NLRB seeking to represent student Resident Advisors. The RAs’ status as “employees” under the NLRA was hotly contested by the University and drew media attention as the first case at the NLRB involving college RAs. The RAs have appointments for a school year, and receive free housing and a $2,500 stipend for their service. In April, Region 5 of the Board, based in Baltimore, decided that the student RAs were “employees” under the Act largely because they were paid for their service. Under the Board’s “quickie election” rules, the university had little real opportunity to challenge the Region decision, and an election was scheduled for May 3.

Press reports now indicate that the union withdrew its petition literally on the eve of the election date. Ironically, it apparently was the Board’s “quickie election rules” that were a determinative factor, with the union spokesperson indicating that the union withdrew because it had only five days to campaign for votes and that “those 5 days happened to be in the middle of your exams.” In response to the last-minute withdrawal by the union, student RAs who had supported the organizing effort commented on Facebook that they “were not consulted in the decision and were upset that RAs will not have the opportunity to express their favor or disfavor for unionization. We do not agree with the decision to cancel the vote.” Some might say, “that’s how this works – Labor Relations 101.”

Federal court in California agrees: College football players aren’t “employees” - Joining the holding of the U.S. Court of Appeals for the Seventh Circuit in Berger v. NCAA, a federal district court in California has found that college football players are not “employees” for purposes of the Fair Labor Standards Act or California Wage orders. Dawson v. NCAA involved players in the Pacific Athletic Conference (PAC-12) in Division I of the National Collegiate Athletic Association. Ken Sulzer, Steve Katz, and Sarah Kroll-Rosenbaum from Constangy’s Los Angeles-Century City Office represented the NCAA and the PAC-12. Don Prophete of our Kansas City Office represented the NCAA and three colleges, and Jim Goh of our Denver Office represented one college, in the Seventh Circuit Berger case.

Yale TAs go on “hunger strike” – if “eating” counts as “not eating” - Graduate Teaching Assistants from certain academic departments at Yale University organized and voted for a union (Unite Here Local 33) in February, and the union has been negotiating with Yale for a first contract. According to press reports, students and the union recently announced they would engage in a hunger strike because Yale was not meeting their bargaining demands. But then the group’s idea of a “hunger strike” leaked on Twitter. The rules indicated that the strike was symbolic and that students could leave and get food if they got hungry. “Hey, ya gotta eat,” and “we hear the pizza in New Haven is really good.” (The TAs reportedly get a stipend of $30,000 per year, free university tuition, and university-paid healthcare coverage.)

Fat cat overpowers “Scabby the Rat” in Big Apple street fight - A businessman in Manhattan grew tired of a huge inflatable rat put in front of one of his buildings by a labor union that objected to the fact that his renovation contractor was using workers from a rival union. Instead of lawyering up, the businessman unleashed a feline frenzy with a much larger inflatable cat. Scabby looked positively mousy by comparison, and its union keepers did not stick around for the news crews that were sure to arrive. They deflated Scabby and took off. According to the New York Post, “Scabby” was first deployed in 1990 and was American-made in Illinois. Where the fat cat was made and first unleashed is unknown.

Management getting under employees’ skin? - According to an Associated Press report from early April, technology company Biohax Sweden has injected itself into the data security and privacy debate. The company makes a microchip that uses what is called Near Field Communication. The chip collects data and can serve functions such as opening doors, starting printers, or serving as a mobile payment device, much like a smart phone. The microchip can also track worker movements and time spent in various places. Perhaps because the chips are new and not yet used in ways that workers consider intrusive, workers with the chips report being happy to try something that is about “the future.” More than 150 workers at a Swedish startup workspace called Epicenter have agreed to have the chips implanted, apparently in their hands.

This appears to be the first widespread microchip use for humans. Despite the convenience of not needing to carry keys, passcodes, or wallets, a microbiologist at the Karolinski Institute in Stockholm warns that hackers could gain large amounts of information from the chips. He says, “Conceptually you could get data about your health, you could get data about your whereabouts, how often you are working, how long you are working, if you’re taking toilet breaks and things like that.” And he indicates that chips will present some ethical dilemmas as they become more sophisticated. Sounds like a good issue for employers to watch and think through.

Union time on the taxpayers’ dime ($) - A recent story by the Washington Free Beacon based on a report by the federal Office of Personnel Management indicates that, in 2014, the latest year the statistic is available, federal government employees spent nearly 3.5 million hours doing union business. The cost was $162.5 million for non-governmental work activity that apparently counted toward the employees’ bonus and retirement pension credits. The time, which is euphemistically called “official time,” can be recorded as work time even though there is no managerial control or tracking of how the time is spent. This has been authorized since the passage of the Civil Service Reform Act of 1978, but in March, Rep. Jody Hice (R-GA), introduced the Official Time Reform Act in an attempt to put some constraints on the practice. According to Rep. Hice, in one year the Department of Veterans Affairs paid full salaries to 300 employees who spent 100 percent of their time working on union business and none — zero — on their official government jobs. The House Oversight and Reform Committee on March 10 approved the legislation on a largely party-line vote. The legislation now goes to the House floor for a vote at an undetermined time.

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