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Although the National Labor Relations Act was initially established to assist unions in organizing employees, its scope is much broader as it also protects employees’ rights to engage in “protected concerted activity.” The NLRB’s interpretation of what constitutes protected concerted activity has fluctuated over the years and, in particular, under the Obama administration it expanded significantly beyond its original scope.  In the Board’s recent decision of Alstate Maintenance, LLC the Board acknowledged a need to reset the standard as set forth in the Meyer’s Industries cases from the 1980’s, in particular, with respect to the scope of what is considered concerted activity.  In Meyers I, the standard was specified that in order to be concerted such activity must “be engaged in with or on the authority of other employees and not solely by and on behalf of the employee himself.”  In other words, individualized gripes or concerns are not sufficient.  And while this definition will no doubt be litigated further, the Board’s analysis in Alstate Maintenance, LLC provides guidance on what constitutes the current Board members’ understanding of concerted activity, which is a return to a more reasonable interpretation.

In Alstate Maintenance, LLC, a skycap employee (“Greenridge”), while working with three other skycaps, was informed by a supervisor that they were to assist with a soccer team’s equipment that was approaching the airport.  The single employee then remarked, “We did a similar job a year prior and we didn’t receive a tip for it.”  When the van arrived the skycaps walked away and did not provide assistance initially; but after the passengers entered the facility some of the skycaps began assisting them.

Importantly, the General Counsel’s case never alleged that the skycaps “walking away” from the van upon its arrival was part of the purported concerted activity.  Rather, the General Counsel merely argued that the single employee’s statement constituted protected concerted activity.  As was stated in the post-hearing brief by the General Counsel: “ . . . Greenridge was discharged because he engaged in protected concerted activity when he raised concerns to his direct supervisor in front of his coworkers about the possibility that he and his coworkers would not receive a tip for a job assignment.”  Contrary to the General Counsel, the Board found that there simply was not a group complaint brought to the attention of management.  There was no evidence, for example, that the tipping habits of soccer players had been a topic of conversation among the skycaps prior to Greenridge’s statement.  Nor did Greenridge’s use of the word “we” supply the missing group activity evidence.  Indeed, the Board agreed with the Administrative Law Judge, who credited Greenridge’s testimony in this regard, finding that his remark was simply an off-hand gripe about his belief that French soccer players are poor tippers.  The Board also discounted the General Counsel’s position that the comment qualifies as concerted activity because Greenridge made it in a group setting in the presence of his coworkers and his supervisor and used the first person plural pronoun “we”.

The Board distinguished a number of other cases in its decision, citing back to Meyers II, which required “record evidence that demonstrates group activities in order to find an individually urged complaint as a truly group complaint and that such an analysis must be based on the totality of the record evidence.”  In particular, the Board stated that

“the fact that a statement is made at a meeting in a group setting or with other employees present will not automatically make the statement concerted activity. Rather to be concerted activity an individual employee’s statement to a supervisor or a manager must bring a truly group complaint regarding a workplace issue to management’s attention or the totality of the circumstances must support a reasonable inference that in making the statement the employee was seeking to initiate, induce or prepare for group action.”

The Board even provided a checklist for further review of what might constitute concerted activity in these circumstances: 1) was the statement made in an employee meeting called by the employer to announce a decision affecting wages, hours, or some other term or condition of employment; 2) did the decision effect multiple employees attending the meeting;  3) did the employee who speaks up and responds to the announcement do so to protest or complain about the decision, not merely to ask questions about how the decision had been or will be implemented;  4) did the speaker protest or complain about the decisions’ effect on the workforce generally or some portion of the workforce and not solely its effect on the speaker himself; and 5) did the meeting present the first opportunity for employees to address the decision so that the speaker had no opportunity to discuss it with other employees beforehand.

What is also important is that, in a footnote, the Board stated that while they did not reach the issue in this case, they believed that other prior cases in this area arguably conflict with Meyers, including those in which the Board had deemed statements about certain subjects being “inherently concerted.”  Hence, it would appear that this line of cases is also ripe to be on the chopping block for further review and restriction in the days going forward.

Conclusion

Non-union employers are often blindsided by the concept of and prohibitions relating to concerted protected activity. Given the Board’s historical expansion of the concept over time, it is often difficult to recognize in the moment that an employee is engaged in concerted activity.  But the Alstate Maintenance, LLC decision should assist employers by making them aware of this often-forgotten protection under federal Law and provide additional guidance to employers when such circumstances arise in the workplace.

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.

Court steps
Supreme court steps. Washington, DC

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.”

Continue Reading NLRB Overturns Pro-Union Precedent Governing Employee Handbooks and Joint Employers

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.

Business People Handshake Greeting Deal Concept
Business People Handshake Greeting Deal Concept

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

Outdoor mall with people

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.