The United States Supreme Court settled a controversy that had been brewing for half a decade as to whether the Federal Arbitration Act (“FAA”) made enforceable individual agreements to arbitrate employment-related claims in the face of the National Labor Relations Act (“NLRA”) which is seen to protect individuals’ rights to join together and participate in protected “concerted activity” under Section 7 of the NLRA. In a 5-4 decision, written by Justice Neil Gorsuch, the Court found such class or collective action waivers in arbitration agreements to be enforceable and overturned the decision of the Seventh Circuit in Epic Systems Corp. v. Lewis, (7th Cir. 2016), while resolving a split in the Circuits on this issue. With the resolution of this uncertainty, many other employers may consider individual arbitration agreements, waiving class or collective action, for their employees. Continue Reading A Significant Victory for Employer Use of Individual Arbitration Agreements
Husch Blackwell recently issued a legal alert regarding the decision by the U.S. Supreme Court to strike down federal gambling prohibition. The decision was handed down in a 6-3 opinion on May 14, 2018. A little over a week later, our Rudy Telscher talks with Katie Strang of The Athletic to discuss the impact the decision by SCOTUS will have on the MLB, the players’ union and labor relations as a whole.
Rudy is a Partner in Husch Blackwell’s St. Louis office and has experience as lead counsel in CDM Fantasy Sports v. Major League Baseball, in which his team made new law in turning back Major League Baseball’s attempts to monopolize the $1.5 billion per year fantasy sports industry in proceedings from the district court through Supreme Court.
The Athletic article answers the question, “How much baseball betting will we actually see?”
The National Labor Relations Board found that a union committed an unfair labor practice by repeatedly blocking ingress and egress to a hotel for periods of one to four minutes. The opinion provides details about the union’s picketing efforts as a part of an organizing campaign. The blockage occurred during at least ten separate occasions over the course of more than a month. The Board adopted the ALJ’s decision holding that the picketers’ actions of standing in front of vehicles for minutes at a time, many driven by hotel valets, attempting to enter and/or exit the hotel violated Section 8(b)(1)(A) of the National Labor Relations Act.
As the dissent notes, this decision is significant because there were no allegations of violence and because the blockage lasted such short periods of time. Regardless, the Board determined that the union’s repeated, intentional blockage of drivers, including employees, would reasonably tend to coerce or intimidate employees in the exercise of their Section 7 rights.
Although injunctive relief was not sought in this situation, the NLRB’s decision in Unite Here! Local 5 (Acqua-Aston Hospitality, LLC) provides management with support for prompt relief in similar circumstances. Contact Husch Blackwell’s Labor and Employment team with any questions or to discuss options for responding to union activity in your business.
On December 14, 2017, the National Labor Relations Board (the “NLRB” or the “Board”) overruled Obama-era precedent involving two highly controversial decisions governing employee handbooks and joint employment standards.
Earlier this year, President Trump appointed two Republicans to the five-member NLRB resulting in a 3-2 Republican majority for the first time in a decade. As anticipated, the new “Trump Board” is beginning to dismantle a series of decisions that many believed to unfairly favor unions.
New Standard Governing Employee Handbooks
In a split 3-2 decision, the Board majority in . overturned its 2004 Lutheran Heritage standard, which had been used in recent years to render countless employer policies and rules unlawful. The former standard provided that a policy or rule is unlawful if employees could “reasonably construe” the language to bar them from exercising their rights under the NLRA, such as discussing terms and conditions of employment. For the past several years, the Lutheran Heritage standard has been heavily criticized for failing to take into account legitimate business justifications associated with employer policies, rules and handbook provisions in addition to yielding unpredictable and sometimes contradictory results. For example, the standard has deemed unlawful policies that require employees to “work harmoniously” or conduct themselves in a “positive and professional manner.”
Although MSHA and OSHA are members of the same governmental group, their respective areas of authority and the industries affected by them can cause misperceptions. In a recent article via ROCK Products, Safety and Health attorneys Brad Hiles and Ben McMillen explain the inter-agency agreement between MSHA and OSHA, outline “blurred line” cases and the factors typically examined by courts and commissions in such cases.
Missouri’s new Republican governor has indicated that he fully supports right-to-work legislation, which failed to get past previous governor Jay Nixon in its last go-round. With that being the case, what would a right-to-work law mean for the employers in the state who have collective bargaining agreements with labor organizations?
First, right-to-work legislation does not result in any collective bargaining agreement suddenly being null and void. It is a very limited, surgical deletion of the union security clause from contracts. And, while we do not know exactly what the law may provide, it will likely be something along the lines of previous legislation. In other words, it will provide that any union security clause will be null and void and no employee shall be required to pay any dues or fees or similar charges to any labor organization as a condition of employment.
Accordingly, if an employee is not a union member and has not signed a dues check-off authorization card, the employer can cease deducting dues from the employee’s paycheck when the right-to-work law takes effect. However, an employer’s legal obligation is different if any employee has signed a valid dues check-off authorization card as such authorizations will likely be enforced, as a separate lawful agreement between the employee and the union. The reason is that even after the effective date of a right-to-work law, an employer who has agreed to a dues check-off provision in the collective bargaining agreement may have a contractual obligation to continue to remit monthly dues to the union for employees who have signed dues check-off authorizations. However that provision can be revoked.
The National Labor Relations Act provides some guidance in terms of the revocation process. In particular, it permits employers to deduct monies for dues “provided that the employer has received from each employee on whose account such deductions are made a written assignment which shall not be irrevocable for a period of more than one year or beyond the termination of the applicable collective bargaining agreement, whichever is sooner.” Hence, while there may be an ongoing obligation beyond the effective date of the right-to-work legislation, there is a process for employees to revoke that authorization at a later point in time and not be responsible for any dues going forward.
The end result is that without financial support from a majority of the employees a union may simply walk away from the collective bargaining agreement they have with an employer as it simply is not cost effective to maintain the relationship. Hence while right-to-work legally only impacts union security and dues check-off, from a practical standpoint it may result in a defacto decertification of the union.
In a prior post, we discussed the Department of Labor’s issuance of a new final rule that expanded disclosure requirements for companies that hire union avoidance consultants. The Department’s new “persuader” rule required employers to report the hiring of such consultants whenever these third parties engaged in indirect persuader activities (e.g., planning employee meetings, training supervisors to conduct meetings, and drafting or providing speeches to be made to employees), whereas the previous rule required disclosure only when the consultants engaged in direct contact with workers.
Subsequent to the DOL’s publication of the final version of the rule in late March, business groups and law firms sued to invalidate the rule. Several states joined the case later as intervenors. On November 16, a federal judge in Texas entered a “permanent injunction with nationwide effect,” blocking the DOL from enforcing the rule. Judge Sam R. Cummings of the Northern District of Texas, had previously issued a preliminary injunction relating to the rule back in June. In that earlier ruling, the Court had found that the rule effectively eliminated the Labor Management Disclosure Act’s advice exemption, was arbitrary capricious, and constituted an abuse of discretion. In last week’s decision, the Court granted the Plaintiffs’ summary judgment motions and converted the preliminary injunction into a permanent injunction.
The Obama administration now faces the decision of whether to appeal the ruling, as they did with the Court’s preliminary injunction. However, it is unlikely that the Fifth Circuit Court of Appeals would make any rulings on these issues prior to the inauguration of President-elect Donald Trump, after which the Department’s positions and strategy may change dramatically. We will continue to keep you apprised of developments related to the persuader rule.
In a recent decision, Heinsohn v. Carabin & Shaw, the Fifth Circuit found that an employee’s “self-serving” testimony created a material fact question. The Court also included language that should be of concern for employers when seeking summary judgment.
In Heinsohn, the Court reversed summary judgment in a pregnancy discrimination case in which the employer fired a legal assistant for making mistakes on the job that she denied making. The Fifth Circuit found that an employee’s “self-serving” deposition testimony created genuine issues of fact as to the employer’s alleged legitimate, nondiscriminatory reasons for terminating Heinsohn. Continue Reading Fifth Circuit Makes it Easier for Plaintiffs to Defeat Summary Judgments
Executive, Professional and Administrative employees are exempt from overtime requirements if they meet three tests: the salary level test; the salary basis test; and the duties test. As I am sure you have heard, new overtime regulations raise the required annual salary level from $23,660 to $47,476 (or $913 each week). Under the new salary level test, which goes into effect on December 1, 2016, exempt employees paid less than $47,476 no longer qualify for exempt status. So what is an employer to do? Here are some potential options:
1. Retain Exempt Status. Increase the employee’s annual salary to at least $47,476 and the employee will remain exempt. Please note, however, that the rules establish a mechanism for automatically updating the salary and compensation levels every three years; thus, you may be required to again increase the employee’s salary in three years to meet the new threshold. Additionally, the employee still needs to meet the duties test, and this is a good time to review compliance with that test. This is the only option that does not require the employer to track the employee’s work hours.
a. Example. Currently an exempt employee has an annual salary of $41,600 ($800 weekly) and, therefore, no longer passes the new salary test. Employer raises the employee’s annual salary to $47,476. Employee retains the exemption from overtime pay under the new regulations.
2. Convert to Hourly. Convert the exempt employee from a salary to an hourly wage and begin paying overtime for more than 40 hours worked in a week. The employer must begin tracking the hours worked by the employee. Overtime hours can be controlled by limiting or forbidding overtime without the employer’s express approval.
a. Example. Currently exempt employee has an annual salary of $41,600 ($800 weekly). Employer converts the employee to the equivalent hourly wage of $20 an hour ($800 ÷ 40 hours). The employee’s overtime rate would be $30 an hour ($20 x 1.5). Thus an employee who works 45 hours during one week would be paid $950 (($20 x 40 hrs) + ($30 x 5 hrs.)). Assuming the employee averages working 45 hours a week during a year, this equates to an annual salary of $49,400 ($950 a wk x 52 wks). Under these particular facts, it would be cheaper to pay the employee the $47,476 annual salary and have the employee remain exempt.
3. Remain Salaried, but Pay Overtime. Have the employee remain on a salary, but pay overtime when the employee exceeds 40 hours in a workweek. This will require the employer to track the employee’s time. The regular rate will be calculated by dividing 40 hours into the weekly salary and then paying 1 ½ times that amount for overtime hours. This may be a good option where an employee enjoys the status of a salaried employee and doesn’t want to become an hourly employee. Overtime hours can be controlled by limiting or forbidding overtime without the employer’s express approval.
a. Example. Currently exempt employee has an annual salary of $41,600 ($800 weekly). Employer retains the employee at this salary, but pays the employee overtime for any hours worked over 40 in a week. The employees overtime rate would be $30 an hour (($800 ÷ 40) x 1.5). Thus, an employee who works 45 hours during one week would be paid $950 ($800 + (30 x 5)). Assuming the employee averages working 45 hours a week during a year, this equates to an annual salary of $49,400 ($950 x 52). Please note that the employee is paid the same amount whether he is paid hourly or paid a salary. Under these particular facts, it would be cheaper to pay the employee the $47,476 annual salary and have the employee remain exempt.
4. Fluctuating Workweek Plan. Use the Fixed Salary/Fluctuating Work Week plan, which is approved by the DOL regulations. Under this plan, the employee is paid a fixed salary that covers the straight time for all hours worked, including overtime hours. Thus, overtime is paid at a ½ time rate (compared to 1 ½ time rate) for the hours worked over 40 hours. Under this plan, the regular rate must be calculated each week (by dividing the total number of hours worked by the fixed salary). Certain conditions, including prior employee agreement and paying the same salary when the employee works less than 40 hours in a week, are necessary to use this plan. Continue Reading Employer Options Under the New DOL Regulations
As you may recall, The Davis-Bacon Act applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair of public buildings or public works. This week, The United States Court of Appeals for the District of Columbia struck down an attempt by the DOL to significantly expand the Davis-Bacon Act. The Act requires that contractors on federal and DC government construction projects pay prevailing wages and fringe benefits to the workers on such projects. DOL sought to apply the Act to CityCenterDC, which is a mixed-use development on the site of the DC Convention Center.
For more information about the recent ruling on this Public-Private Partnership project, visit a this original blog post by my colleague Hal Perloff on Husch Blackwell’s The Contractor’s Perspective blog.