In SouthCoast Hospital Group, Inc. the NLRB originally found that the Hospital violated 8(a)(1) and (3) of the Act by maintaining and enforcing a hiring/transfer policy (HR 4.06) in which the Hospital gave preference to unrepresented employees over represented employees when filling positions at its non-union facilities.  The Hospital, in responding to these allegations at hearing, stated that it was simply trying to make the playing field level, as under the collective bargaining agreement, those employees who were under its coverage had a preference over non-union employees in filling such positions.  The Board supported the Administrative Law Judge’s finding that, under NLRB v. Great Dane Trailers, the Hospital failed to establish a legitimate and substantial business justification for the rule’s maintenance and enforcement.  Member Miscimarra dissented over the reasoning of the other panel members in this matter and, on appeal, the First Circuit endorsed Miscimarra’s position in finding that the Hospital’s reasoning was legitimate and not unlawful.  In particular, the First Circuit reminded the Board that “[I]t is neither our function nor the Board’s to second guess business decisions.  While the Board remains free to reject that proper business justification on the grounds that it is illogical, or that it is not reasonably adapted to the achievement of a legitimate end, it may not invalidate an employment policy that accomplishes a legitimate goal in a non-discriminatory manner merely because the Board might see other ways to do it.”  The Court then went on to state that, “SouthCoast adopted HR 4.06 in an effort to treat its union and non-union workers more evenhandedly when filling vacant positions.  HR 4.06 achieves this goal by treating non-union employees more like union members than they otherwise would be treated.  Because SouthCoast’s chosen method was reasonably adapted to achieve its stated goal, the Board lacked the power to reject HR 4.06 simply because it is not identical to the union hiring policy or because SouthCoast might have achieved its goals through alternative means that were more beneficial to its union employees.”

While the Board adopted the First Circuit’s decision as the law of the case, obviously it did so with great chagrin.  Hence, others adopting this policy in jurisdictions outside the scope of the First Circuit should take heed, as the Board may press this issue once again.

The U.S. Solicitor General changing positions, the NLRB issuing a follow-up letter to oral arguments and the grave observation that a ruling for employees would invalidate agreements covering 25 million employees all reflect the contentious nature of the consolidated cases before the Supreme Court challenging the ability of an employee and employer to agree to limit resolution of legal claims to individual arbitration.

Continue Reading The Enforceability of Arbitration Agreements Covering 25 Million Employees Wait on a Divided Supreme Court

Imagine: in a region where hiring and retaining competent employees is becoming increasingly difficult, a multi-national company announces it will build a plant and employ more than 10,000 workers over the next few years. The pressure to get and keep your best employee has just increased, and the ripple effect touches every aspect of this competitive employment situation. Seeking to maintain your competitive position at a time when employees are being wooed to leave, you may want to explore using noncompetition and nonsolicitation agreements, but are they enforceable? What happens when a well-qualified employee applies for an open position, but informs you that she signed a noncompetition, nondisclosure agreement with her current employer? How will that impact your hiring decision?

Continue Reading Is Your Workforce Secure?

On August 7, 2017, a Fifth Circuit panel ruled, in a divided decision, that a class-action waiver can be enforceable even without an arbitration agreement being involved. In that case, the Convergys Corporation required its applicants to sign a class-action waiver even though it was not contained in an arbitration agreement. The Convergys Corp. v. National Labor Relations Board (NLRB) ruling rejected a NLRB decision holding that the company cannot require its job applicants to sign class action waivers that prevent them from suing the company.

Continue Reading The Fifth Circuit Strengthens Employers’ Right to Use Class Action Waivers

For many of us who have been watching the changes made in various administrative agencies the appointments by President Trump to fill the two empty positions on the NLRB is a key start in making changes in a number of over-reaching decisions during the Obama administration. With the changeover to a new General Counsel in November the transformation will be complete.

Employers have been frustrated for some time with the numerous case decisions and policies developed by the NLRB in recent years which simply micromanage the workplace. The announcement of these appointments, frankly, is a breath of fresh air after many, many years of putting up with decisions that are not only damaging to the economy, but an embarrassment in terms of the ill-founded basis for many of the opinions which were issued by the Board. We need a much more balanced viewpoint of the workplace and hopefully we are on the right path to make that a reality.

On May 30, 2017, Governor Eric Greitens signed the Fairness in Public Construction Act, SB 182, into law.  The Bill was introduced by Senator and Assistant Majority Leader, Bob Ondear and modifies Missouri’s law relating to project labor agreements (“PLAs”).

Under the current law, the State or any agency or political subdivision of the State may require private construction firms that are bidding to work on a public construction project, to enter into a PLA regardless of whether the firm typically uses union labor or not.  SB 182 repeals this provision and prevents a state, any agency of the state, any political subdivision, or any instrumentality thereof, from requiring bidders to enter into PLAs.

The Bill prohibits the state and any agency, instrumentality, or political subdivision of the state, from requiring or prohibiting bidders from entering into PLAs when contracting for the construction, repair, remodeling, or demolition of a facility.  Moreover, the Bill prohibits the state, any agency, political subdivision, or instrumentality of the state, from encouraging or giving preferential treatment to bidders who enter or refuse to enter into agreements with a labor organization.  The Bill further prohibits any discrimination against such bidders for entering or refusing to enter into agreements.

The law takes effect August 28, 2017.

The National Labor Relations Board issued an Order on May 3, 2017 in which it made clear that the Board does not wish to exercise its discretionary authority to expand Weingarten Rights to non-union employees via rule making.  The potential for the expansion of the Weingarten Rights to non-union employees has been in place ever since the Board issued its position in 2004 in the case of IBM Corporation, 341 NLRB 1288, whereby it limited Weingarten Rights to union shops.  However, this is an issue which the Board has flip-flopped on during most of its existence.  At times it has allowed Weingarten to be applied in a non-union setting, and then changed its mind and reverted back to the current situation where Weingarten only applies in a union environment.  Regardless of the motivation behind making this determination, it is good news that the Board, at this point in time, has decided not to expand Weingarten to the vast majority of the workplaces.

More and more it seems disputes are occurring over what information the EEOC may subpoena from employers. On April 3, 2017, the U.S. Supreme Court issued its ruling in McLane Co. v. EEOC, weighing in on the standard of review on appeal when district courts either enforce or quash an EEOC subpoena. Last week in a post on our Technology, Manufacturing & Transportation Industry Insider, Stephen Cockerham and Leslie Brockhoeft discussed the process of appealing such an issue and provided insight and background on the case itself.

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Several recent updates regarding the new Department of Labor (DOL) fiduciary rule have caused confusion for our clients. On March 1, 2017, the DOL announced a proposed delay of the new fiduciary rule and prohibited transaction exemptions that were set to become applicable on April 10, 2017. The DOL requested that all comments on the proposed delay be submitted by March 17, 2017. Once the DOL reviews the comments, it will publish a final rule, which could either retain the April 10 applicability date or delay the applicability date 60 days or more.

In addition, the DOL will conduct economic and legal analysis that could change the requirements of the rule.

It is not certain when the DOL will publish its final rule. On March 10, 2017, the DOL issued Field Assistance Bulletin 2017-01, which provides that the DOL will not enforce the rule as of April 10 if a rule is issued after that date and delays the applicability date. If there is no delay in the applicability date, the DOL will not enforce the rule if affected parties comply with the requirements within a “reasonable period.” Importantly, however, the guidance does not shield advisors or financial institutions from private lawsuits.

We outline a brief summary of the rule and provide client recommendations in a white paper on the topic.