6.29.17

News & Analysis

The Good, the Bad and the Ugly

NEWS & ANALYSIS
Trump nominations on track to fill open seats on the NLRB - After a slow start, President Trump is taking the steps to fill more slots at various agencies, including the National Labor Relations Board. On June 20, he announced the nomination of attorney Marvin Kaplan to fill one of the two open NLRB seats that are expected to go to Republican nominees. As reported previously, Mr. Kaplan is counsel for a commissioner at the Occupational Safety Health and Review Commission, which hears OSHA matters. Earlier this week, the Administration announced the nomination of William Emanuel, a management-side labor and employment lawyer, to fill the other vacancy. After the nominees’ anticipated confirmation by the Senate, the Board will have a Republican majority. Chairman Philip Miscimarra, a Republican appointed by President Obama, has a term ending in December 2017. The two Members who are Democrats have terms that expire after his. Chairman Miscimarra could accept another term if nominated.

U.S. Department of Labor restores Wage and Hour Division’s Opinion Letter policy after Obama DOL eliminated it - In a big change from the Obama years, Secretary of Labor Alexander Acosta announced on June 27 that the Wage and Hour Division of the DOL is reinstituting the previously longstanding practice of issuing “Opinion Letters” to interested parties to provide them with guidance on issues of federal wage-hour law in particular situations. The DOL under President Obama halted the 70-plus-year practice in 2010, and instead issued general guidance in the form of Administrator Interpretations. This was consistent with the prior administration’s general emphasis on enforcement and employer penalties.

In a news release, Secretary Acosta said that the Trump DOL is committed to helping employers and employees understand their labor responsibilities so that employers can concentrate on growing their businesses and creating jobs. To facilitate employer and employee understanding of the law, the DOL is establishing a website that will be designed to allow employers and other interested parties to review existing Opinion Letters and to submit requests for new Opinion Letters.

The shift in emphasis from enforcement and penalties to positive compliance assistance is a welcome one for employers.

U.S. Department of Justice changes course and now opposes NLRB position on arbitration agreements waiving class and collective actions - In a brief filed with the U.S. Supreme Court on June 16, the U.S. Department of Justice, now under Attorney General Jeff Sessions, changed its position and supports the employers in multiple cases that involve challenges to arbitration agreements that contain class or collective action waivers. The NLRB (still, for the time being, with a Democratic majority) has taken the position that class or collective action waivers in arbitration agreements unlawfully interfere with employees’ right to engage in “concerted activity” under the NLRA. As we have previously reported, the U.S. Courts of Appeal that have addressed the issue are split, with some agreeing with the NLRB and some rejecting the NLRB position. Not surprisingly, the DOJ under President Obama sided with the NLRB.

Court delays Persuader Rule appeal for six months while waiting for final regulations rescinding the Rule - As we recently reported, the Trump DOL on June 12 issued a Notice of Rulemaking to rescind the regulation issued by the Obama DOL that attempted to narrow the “advice exemption” under the so-called “Persuader Rule” of the Labor-Management Reporting and Disclosure Act. Last year, a federal judge in Texas issued a nationwide, permanent injunction against enforcement of the rule. The DOL under President Obama appealed, and that appeal was pending when President Trump took office. The Trump DOL then asked for the appeal to be stayed while the DOL reconsidered its position. Employer groups actually opposed the stay request, contending that the DOL should simply drop the appeal. But on June 15, the U.S. Court of Appeals for the Fifth Circuitgranted the stay for a period of six months.

THE GOOD, THE BAD AND THE UGLY
Jobless in Seattle as “Fight for $15” claims low-wage workers as victims? - A recently released study from University of Washington researchers indicates that relatively high minimum wage increases are likely to decrease the work hours and employment of relatively low paid workers. The report was commissioned by the City of Seattle to study the impact of Seattle’s ongoing series of minimum wage increases that will reach $15 per hour on July 1. The Seattle study indicated that a recent minimum wage increase from $11 per hour to $13 per hour caused a 3 percent increase in hourly wages for a low-wage worker group (those making less than $19 per hour) but a 9 percent reduction in hours worked for that group, on average netting a loss of income of $125 per month, per worker. The number of low-wage jobs in the Seattle study decreased by about 7 percent compared with a control group.

Progressive commentators, journalists and economists promptly criticized the study based on claimed flaws. Nevertheless, this is not the only study that has shown minimum wage increases often have negative effects on employment. In other words, the laws of fundamental classical economics apply. There is some elasticity in the job market, and employers can and often will use substitutes for relatively low-wage labor when minimum wages rise. If the goal of minimum wage increases is to “fix” income inequality, the Seattle study, which is ongoing, appears to demonstrate that targeting employers of relatively low-wage workers with minimum wage requirements is a distortion of the labor market that not only does not produce the intended results, but also may actually harm the intended beneficiaries. We will be watching for the effects of the next Seattle increase, to $15 per hour, and will report back.

Cell phones are the new frontier for NLRB - In RHCG Safety Corp., the Board unanimously decided that a supervisor’s text message to an employee, “U working for Redhook or u working in the union?” was unlawful interrogation. The Board, significantly including Republican Chairman Miscimarra, rejected the employer’s argument that text messages are not coercive. Texting may seem informal to employers and employees alike, but the method is often irrelevant to the determination of lawfulness of a communication related to union issues. Employers should consider developing rules for supervisor texting related to their work, as well as record retention policies to attempt to deal with the nearly countless electronic communications that are “out there.”

In the same case, the two Democrats on the Board took an expansive interpretation of the new “quickie election” rules and decided that an employer must provide a union with email and telephone number information for eligible employees that is found solely on personal cellphones of its supervisors when the employer provides a voter list for a Board election. Under the rules, employers are required to provide voter lists to the union within two business days of an election decision by an NLRB Regional Director. The lists must include “available” home and cell phone numbers, and email addresses. Even though culling through and collecting information from supervisors’ cell phones is likely to be arduous, intrusive, and mistake-prone, the Board now views the information on a supervisor’s cell phones as “available” to the employer. Chairman Miscimarra dissented from this part of the decision, noting the practical problems that the ruling creates for employers, including the fact that the “quickie election” rules do not let employers obtain a definite determination on supervisory status until after the election occurs, and after the voter lists are provided. Look for a change in the Board’s position on this issue when the Board has a Republican majority and an opportunity to revisit the issue. 

Court agrees with NLRB that employer unlawfully discharged employee for calling his supervisor a “NASTY MOTHER F***ER” on Facebook and other workplace profanity during union organizing - The U.S. Court of Appeals for the Second Circuit recently enforced the NLRB panel majority decision in Pier Sixty, LLC, that an employer unlawfully discharged an employee for the “protected concerted activity” of cussing about a supervisor on Facebook two days before a union election. Among other things, the employee posted, “Bob [the supervisor] is such a NASTY MOTHER F***ER don’t know how to talk to people!!!!!! F**k his mother and entire f***ing family!!!!What a LOSER!!!! Vote YES for the UNION!!!!!!!” (Asterisks not in original.)

The Board, after adopting an ALJ’s factual findings, had applied a “totality of factors” standard to determine whether the conduct warranted protection under the National Labor Relations Act or was so “opprobrious” as to lose the Act’s protection. The Board majority found the outburst protected because generally, among other factors, the employer had tolerated such comments previously, the employee had not disrupted the event in front of customers, and the employer had, in the Board majority’s view, demonstrated hostility to the union that made the comments part of the campaign debate about management conduct.

On review, the Second Circuit, while not endorsing the “totality of circumstances” standard of the Board and acknowledging that the conduct at issue sat “at the outer bounds of protected, union-related comments,” gave deference to the Board’s interpretation of the Act and its finding that the conduct was not so opprobrious as to lose the protection of the Act. The court gave weight to the fact that the Board could have reasonably determined that the conduct was part of the campaign debate, that the employer had tolerated such conduct previously, and that Facebook was a key means for employee communications in organizing. The court also found that it was reasonable for the Board to determine that the employee had not done anything disruptive in front of customers.

Although these decisions may prompt amazement, if not outrage, from employers, the decisions should serve as a reminder of the importance of consistently enforcing rules with respect to employee misconduct and insubordination. The outcome might have been different if the employer had been able to prove that it consistently disciplined employees for foul-mouthed behavior. The decisions should also serve as a reminder that employee conduct during union organizing campaigns is often given special protected status by NLRB regional offices and Board members even though the NLRA has no language conferring special protected status. Thus, any discipline of employees during a union campaign has a heightened risk for employers.  That being said, a change in majority on the Board from Democrat to Republican should give employers a more level playing field.

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