Archive for the 'Labor & Employment' Category

NLRB Holds Engineering Firm Committed Unfair Labor Practice

By: Christopher S. Drewry

Over the course of the past year, the National Labor Relations Board (“NLRB”) is the federal agency that has arguably made the biggest push to expand its reach and relevance.  While the National Labor Relations Act (“NLRA”) has always protected the rights of all employees – both union and non-union – the focus of the NLRB has traditionally been on unionized workplaces.  However, the NLRB has shifted its focus from traditional labor matters toward the rights of non-union employees.  Such decisions have impacted companies on business-related issues involving their employment “at-will” disclaimers, social media policies, confidentiality of investigations, as well as other employee handbook policies.  Non-union companies involved in the construction industry (and even those not engaged in traditional labor activities) should take note of this trend by the NLRB, including a decision handed down last week in Jones & Carter, Inc./Cotton Surveying Company v. Teare.

In Teare, the NLRB addressed the viability of an employer’s confidentiality rule prohibiting discussions among employees about their salaries.  The case involved allegations that Jones & Carter, an engineering and surveying firm located in Houston, unlawfully maintained a rule in its employee handbook that prohibited such discussions.  Further, Teare was alleged to have been terminated because she engaged in concerted activities with other employees for the purposes of mutual aid and protection by discussing salaries and because she violated Jones & Carter’s unlawful rule.  One of the basic issues in the case was whether Jones & Carter’s confidentiality rule that prohibited employees from discussing their salaries was overly broad, thereby resulting in an unfair labor practice in violation of §8(a)(1) of the National Labor Relations Act (“NLRA”), which prohibits an employer from interfering with, restraining, or coercing employees in the exercise of their §7 rights (i.e., those rights to self-organize, to form, join, or assist labor organizations, to bargain collectively, and to engage in other concerted activities for  the purpose of collective bargaining).

At trial, Jones & Day said the employee was terminated for “harassing” other workers.  However, the Administrative Law Judge (“ALJ”) found that Teale was, in fact, fired for discussing salaries with other workers, and that sharing such information was a “pet peeve” of the company.  The ALJ and the NLRB (upholding the ALJ’s determination) held that the engineering firm unlawfully fired the employee for discussing salary information with co-workers, and ordered Jones & Day to offer reinstatement and to pay back wages for the time out of work.  Additionally, under the NLRB order, the company also must rescind its policy of forbidding employee discussion of salaries on the basis that the NLRA protects the rights of workers to discuss their terms and conditions of employment, including wages.  Ultimately, Jones & Day had to pay Teare (who declined reinstatement to her former position) back pay, 401(k) contributions, medical expenses and interest in the total amount of $107,000.

From an employment law standpoint, the NLRB’s decision that this type of confidentiality rule is prohibited is not unexpected in light of prior cases extending the trend toward increased transparency among employees at least with respect to salaries.  However, Teare is also part of the ongoing trend wherein the NLRB has sought to expand its reach to non-traditional labor matters and, more significantly, to non-union workplaces.  From that standpoint, Teare stands as yet another warning to both union and non-union employers alike to review and update their employee handbooks to account for the increased NLRB focus on employment policies and procedures.

Court Holds Recess Appointments to the NLRB Were Unconstitutional

By: Christopher S. Drewry

On January 25, 2013, the D.C. Circuit Court of Appeals handed down its decision in the case of Noel Canning v. National Labor Relations Board.  While the facts of the case itself involve an unfair labor practice charge against Noel Canning for allegedly refusing to reduce to writing and then execute a collective bargaining agreement, the key issue on appeal became whether President Barack Obama’s recent appointments to the National Labor Relations Board (“NLRB”) were legal.  Specifically, Noel Canning questioned the NLRB’s authority to issue its order on the basis that (1) the NLRB lacked authority to act because there was not quorum, as three members of the five-member NLRB were never validly appointed because they took office under recess appointments which were made when the Senate was not in recess, and (2) that the vacancies the three members filled did not occur during the recess of the senate, as required by the United States Constitution.

Flash back to one year ago in early 2012.  An administrative law judge had concluded that Noel Canning had violated the NLRA.  Thereafter, a three-member panel of the Board affirmed the findings in February of 2012.  At that time, the NLRB ostensibly had five members, two of which had been confirmed by the Senate in June of 2010, while the other three were all appointed by President Obama on January 4, 2012, purportedly pursuant to the recess appointments clause of the Constitution.  At the time of these appointments, the Senate was operating pursuant to a unanimous consent agreement which stated that the Senate would meet every three business days from December 20, 2011 through January 23, 2012.  During one of the sessions, the Senate acted to convene the second session of the 112th Congress and to fulfill its constitutional duty to meet on January 3rd as set forth in the 20th Amendment.

The long and the short of it is that the NLRB is not allowed to issue decisions unless it has three or more members.  President Obama invoked his recess appointment powers to appoint three members to the Board while Congress was on break.  By doing so, the appointees did not have to be approved by the Senate.  Under the Recess Appointments Clause, an appointment made during a recess expires upon conclusion of the following congressional session.

Based on this, Noel Canning asserted that the Board did not have a quorum for the conduct of business on February 8, 2012, that being the date that the NLRB issued its decision.  Noel Canning argued that the NLRB cannot act without a quorum of three members and that the NLRB lacked a quorum on that date because the recess appointments of the last three members of the Board were invalid under the Recess Appointments Clause of the Constitution – namely because there was not an actual recess and the vacancies to be filled did not arise during an actual recess (i.e. the vacancies occurred during a congressional session).  The D.C. Circuit Court agreed that the appointments were constitutionally invalid and the NLRB therefore lacked a quorum.

The outcome of this case is significant…at least for the time being.  With this decision, the NLRB now lacks authority to act since it only has two valid members.  Likewise, every decision that has been issued since the “recess appointments” on January 4, 2012 is subject to attack and/or challenge based upon the same arguments made by Noel Canning.  This includes a large number of cases where the NLRB has expanded its focus to areas beyond the traditional labor context, including non-unionized employers.  The aforementioned caveat “at least for the time being” is made because the Noel Canning decision will likely be appealed to the United States Supreme Court, who could overturn the D.C. Circuit.  And, even if the Supreme Court upholds it, President Obama will have an opportunity during his second term to appoint new members to the NLRB, either through the senate or via valid recess appointments that could continue the same policies pursued by the 2012 Board.  In the meantime, the NLRB is expected to move forward with issuing decisions and orders, notwithstanding the possibility that those decisions risk being declared void and unenforceable.

EEOC Focus: Hiring

By: Melanie M. Dunajeski

The EEOC issued its draft Strategic Enforcement Plan (SEP) in September, setting out nationwide enforcement priorities for the Agency in the coming years.  One of the major areas where it appears  the EEOC will be focusing its attention is in the recruitment and hiring process.  The EEOC will be looking past ostensibly “neutral” hiring practices to find out whether protected groups have been adversely impacted by how these practices are applied. For example, the SEP suggests pre-employment screening tools such as pre-employment tests, background screens, and date of birth screens in online applications that adversely impact protected groups will be the target of the EEOC’s investigatory process, and that the EEOC will be looking for opportunities to pursue class-based enforcement actions. The EEOC also listed hiring or recruiting practices that have the effect of channeling or steering individuals into specific jobs due to their status as a member of a particular protected group or a restrictive application process as other enforcement targets.

What can employers do? Employers should examine their recruitment and hiring practices from top to bottom, including the ways that a job is made known, the application that is used, the process for review of applications, interviewing,  testing, and decision making. Of particular concern is to be sure that there is a single, unified recruitment policy and procedure and that managers are not permitted to create their own de facto systems.  Employers should also take care to maintain all of the application and hiring records required by the EEOC. For those interested in reading the whole SEP, see http://www.eeoc.gov/eeoc/plan/sep_public_draft.cfm.

Recent Impact of Indiana’s Right-to-Work Law

By: Christopher S. Drewry

Earlier this year, Indiana became the 23rd state to enact a right-to-work (RTW) law (Ind. Code § 22-6-6 et seq.) in which workers cannot be compelled to pay union dues.  The statute applies to union contracts which were/are entered into, modified, renewed, or extended after March 14, 2012 and makes it a Class A misdemeanor to require an individual as a condition of employment to: (1) become or remain a member of a labor organization, (2) pay dues, fees, assessments, or other charges of any kind or amount to a labor organization, or (3) pay to a charity or third party an amount that is equivalent to or a pro rata part of dues, fees, assessments, or other charges required of members of a labor organization.

In a recent article in the Indiana Lawyer, some of the recent activity on Indiana’s RTW law was addressed, namely as it relates to the Indiana Department of Labor’s rule promulgation and ongoing litigation in state and federal court here in Indiana.

While passage of the RTW law took place in February of this year, the rules as to how it will be enforced are still being ironed out.  In June, the IDOL published notice of, and on a public hearing, which was held on July 10th, on the proposed rule was held in order to establish procedures for the filing and adjudication of complaints of violations of the statute.  As the article points out, the current plans suggest that the IDOL will finish promulgating its rules sometime this month, after which they will be reviewed by the attorney general and governor.  From there, as IDOL spokesman Bob Dittmer indicated, the rules will then be published and finalized, potentially by October 1st.

In addition to the rules regarding enforcement, there are other current issues that could impact the RTW law in Indiana.  Despite the statute stating that no one may be compelled to be a member of a union or pay dues for political activity or for general membership representation, litigation has nonetheless been initiated.  The article identifies one such case, United Steelworkers, et al. v. Mitch Daniels, et al., 45D01-1203-PL-19, in which the United Steelworkers Region 7 filed suit in Lake Superior Court alleging the RTW law violates a section of the state constitution that says “No person’s particular services shall be demanded, without just compensation.”  Essentially, the union has argued that they still are legally required to provide services to workers they represent, whether or not those workers are dues-paying members.  The State filed a motion for summary judgment, though no ruling has been issued at this time.  Additionally, the National Right to Work Legal Defense Foundation also intervened by filing an amicus brief on behalf of two steelworkers who said forced payment of dues violates their First Amendment right of freedom of speech.

In another similar case – James L. Sweeney, et al. v. Mitch Daniels, et al., 2:12-CV-81, filed in the U.S. District Court for the Northern District of Indiana – the International Union of Operating Engineers Local 150 challenged the RTW statute on grounds that it too, among other things, violates Article I Section 21 of the Indiana Constitution because it requires unions to render “particular services” without “just compensation”.  As in the United Steelworkers case, the State has filed summary judgment to dispense of the claims and is awaiting ruling on that motion.

Needless to say, between the IDOL’s much anticipated promulgation of rules and the ongoing litigation in the federal and state courts, the coming months should provide a great deal of insight on the application of RTW in Indiana and its impact on organized labor.

April 30th Deadline for Employers to Post NLRB’s Employee Rights Notice is On Hold

By: Robert J. Orelup

As the result of yesterday’s ruling by the D.C. Circuit Court of Appeals, the upcoming April 30, 2012 deadline for applicable employers to post the required NLRB employee rights notice has once again been delayed and is now put on hold.  The NLRB has since posted on its website that “[i]n view of the DC Circuit’s order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court.”  See NLRB News Release.

Recently, federal district courts in the District of Columbia and South Carolina have issued decisions addressing the legality of the NLRB’s notice posting requirement that was previously set to go into effect on April 30, 2012.  The D.C. Circuit of Appeals has ordered an expedited briefing schedule, with a following oral argument to take place in September 2012 to resolve the pending legal issues on appeal surrounding the NLRB’s notice.  As such, even if the NLRB were to prevail, it is likely that any required posting deadline would not be re-implemented by the NLRB prior to September or October 2012 at the very earliest.  We will continue to keep you updated on the legal developments related to the Employee Rights Notice and their impact on your company.

For additional information regarding this issue, please contact Bob Orelup of the DSV Labor and Employment Group via telephone (317) 580-4848, or directly via email (rorelup@DSVlaw.com). For more information about our law firm, please visit www.DSVlaw.com.

EEOC Issues New Age Discrimination Regulation

By: Melanie M. Dunajeski

The Age Discrimination in Employment Act (“ADEA”) prohibits employment discrimination against people who are 40 years of age or older. On March 29th, the EEOC issued its “Final Regulation on Disparate Impact and Reasonable Factors Other than Age.”  The final rule makes the EEOC’s ADEA regulations consistent with recent Supreme Court case law, and clarifies the “reasonableness test” embraced by the “Reasonable Factor Other than Age” (“RFOA”) defense.  Consistent with the Supreme Court’s 2008 holding in Meacham v. Knolls Atomic Power Laboratory, the new rule provides that RFOA is an affirmative defense in disparate-impact cases for which the employer bears the burdens of production and persuasion. This standard of proof is higher than a simple “rational basis”, since proof that an action was rational focuses on whether an articulated reason is a pretext for intentional discrimination.

The rule also encompasses the Supreme Court’s 2005 holding in Smith v. City of Jackson. “In Smith, the Supreme Court bluntly held that the RFOA provision is not a statutory safe harbor from liability for disparate treatment when the employer merely had a rational justification for its actions,” the EEOC stated. “The RFOA defense necessarily requires more than merely a showing that the employer’s action was not irrational or not arbitrary.” Noting in its preamble that factors such as “flexibility, willingness to learn and technological skills” are particularly susceptible to age-based stereotyping, the EEOC in its final rule also provides that giving supervisors unchecked discretion to engage in subjective decision-making might result in disparate impact against older workers, making it more important than ever that employers should take reasonable steps to limit, audit or oversee the discretionary actions of supervisors.  The full text of the rule can accessed through www.eeoc.gov.

If you have any questions about how this final rule may affect your employee handbook, policies or procedures, please contact the Labor & Employment attorneys at DSV.

Employers More Likely to Face Retaliation Charges

By: Melanie M. Dunajeski

Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits employment discrimination on the basis of race, color, religion, sex or national origin. It also prohibits retaliation against an employee or applicant for either opposing any practice that is unlawful under Title VII or participating in any Title VII proceeding or investigation.

Data released by the EEOC shows that a record 99,947 new charges of discrimination were filed in 2011. For the fifth year in a row, the number of charges of retaliation has risen, and retaliation charges are now more numerous than any other form of charge filed with the EEOC, comprising more than 37% of all charges.  In 2011 there were 37,334 charges of retaliation filed against employers, compared to 35,890 race discrimination charges and 28,534 sex/gender discrimination charges.  While race and sex/gender charges both decreased from 2010 to 2011, retaliation, national origin, religious, and age discrimination charges all increased.

The pattern of increasing retaliation charges has its genesis in the 2006 U.S. Supreme Court Case Burlington Northern v. White which increased the scope of retaliatory action to include any materially adverse action by an employer that might dissuade a reasonable worker from making or supporting a charge of discrimination.

Considering that an employee can prevail on a retaliation charge even if the original complaint of discrimination was without merit, it is more important than ever that employers take steps to  minimize the possibility of retaliation occurring and to prepare for the eventuality of a retaliation charge.  Policies and procedures should be reviewed to make sure that they include non-discrimination and harassment policies that include a strong statement against retaliation. Policies should also contain clearly stated and easy to follow complaint procedures for discrimination, harassment, and retaliation.  Policies should be redistributed to employees annually, and a record kept that the employee has received the policies.  Measures should be taken to ensure prompt, fair and evenhanded handling of employee disciplinary matters, and to ensure that comprehensive and contemporaneous records are made of disciplinary actions.  A uniform policy should be adopted with respect to the information that will be provided in response to requests for references for all former employees.

If you have questions about preventing and responding to charges of discrimination, contact our Labor & Employment Services Group or any of the DSV attorneys with whom you work.


Daniel M. Drewry

Daniel M. Drewry

Daniel M. Drewry

About This Blog

The DSV Construction Law Blog is hosted by Daniel M. Drewry. Dan is a Partner with the law firm Drewry Simmons Vornehm, LLP and concentrates his practice in the areas of Construction Law and Litigation, and Labor & Employment Law.

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