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.

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.

You have probably heard that Missouri joined 27 other states as a “Right-to-Work” state when Governor Greitens signed SB19 into law on Monday, February 6, 2016. Now you may be wondering what means for you.

The right-to-work law prohibits requiring employees to become a union member or to pay union dues as a condition of employment. The law will take effect to prohibit agreements that include these conditions on August 28, 2017. Once in effect, the law will apply to all agreements renewed, amended, or created. Current union employees must affirmatively revoke any existing agreements about dues in accordance with their CBA or other agreement in order to avoid contractual liability. The right-to-work law excludes federal employers and employees and those covered under the federal Railway Labor Act.

One exception to the law’s applicability has the potential to result in differing impacts on government contractors depending on where they perform their work. Section 7(3) of the enacted Senate Bill provides that the right-to-work law will not apply to “employers and employees on exclusive federal enclaves.”

Federal enclaves refer to certain federal property obtained with the consent of the state wherein the federal property lies. This can include military bases, federal facilities, and other national grounds within a state such as national parks or forests. Federal enclaves exist as a result of a United States Constitutional provision (Art. I, Section 8, Clause 17) but requires a nuanced analysis to identify because of requirements relating to when the federal government obtained the property.

Judge Gorsuch, as part of a Tenth Circuit panel, reviewed the issue of federal enclaves in Allison v. Boeing Laser Technical Services. That case illustrated several important aspects of the federal enclave doctrine such as the inability of state laws that are inconsistent with federal law to operate within an enclave and the relevance of the time that the property became an enclave to whether new state laws continue to apply to the property. If you conduct work on federal sites and have questions about whether the federal enclave exception applies to you, contact a Husch Blackwell labor and employment attorney.

Contractors not performing work on federal enclaves in Missouri should monitor attempts to reverse right-to-work via a referendum vote. Immediately after Governor Greitens signed the bill into law, a union federation (AFL-CIO) submitted a referendum petition with the Missouri Secretary of State’s office about the right-to-work law. This means that if AFL-CIO can compile enough signatures for a referendum, then the people of Missouri will vote in the November 2018 election on whether to keep right-to-work.

For more information on right-to-work legislation, see Husch Blackwell’s blog post Right-To-Work in Missouri – What Does It All Mean?

Over the last several months, we have covered judicial developments relating to the NLRB’s D.R. Horton doctrine.  As a reminder, since its D.R. Horton decision, the Board has taken the position that class-waiver provisions in arbitration agreements infringe on the rights of employees to engage in concerted activities and, therefore, violate the National Labor Relations Act.  In 2016, varying rulings from federal appellate courts created a circuit split, and on January 13, 2017, the Supreme Court of the United States granted certiorari in three cases (out of the Fifth, Seventh, and Ninth Circuits) that present the issue of whether these class-waiver provisions violate Section 8(a)(1) of the Act.

 

On January 26, 2017, the NLRB’s Office of the General Counsel issued Memorandum OM 17-11, for the purpose of providing guidance on how Regional offices should handle cases involving D.R. Horton issues during the pendency of the appeal.  The memo provides that:

 

  • where the Regional office has determined that a pending case has merit, Regional offices are directed to propose that the parties enter informal settlement agreements conditioned upon the Board prevailing before SCOTUS;
  • where informal settlement is proposed but rejected by the parties, Regional offices are directed to move forward on cases determined to have merit; and
  • where the cases involve opt in/opt out clauses in mandatory arbitration agreements (or are otherwise distinguishable from the Murphy Oil decision – the Board’s current controlling authority on the D.R. Horton issue), Regional offices are directed to hold such cases in abeyance.

 

Thus, to the extent companies want to avoid agency-level litigation prior to the Supreme Court’s disposition, they should emphasize the existence of opt in/opt out clauses in the agreements at issue or any other distinguishing factor that may persuade the Board to stay the case until the Supreme Court rules.

 

We will continue to provide updates on any developments on this important issue from the Courts or the NLRB.

Sometimes common sense is not so common. By a Memorandum dated January 31, 2017, the General Counsel of the NLRB has taken the position that student athletes at private colleges and universities are employees within the meaning of the National Labor Relations Act, notwithstanding the Board’s issuance of its decision of Northwestern University in 2015 in which it declined to exercise jurisdiction after a representation petition was filed by a union seeking to represent the Northwestern University’s football players.

So does that mean that if a football player has a serious health condition that the football coach will now have to provide FMLA to that player? Or, if the injury is more extreme, must the football coach then reasonably accommodate that player?  Or, pay overtime after 40 hours of practice?  Needless to say, you get my drift.  This has got to be one of the most ridiculous legal positions coming out of the NLRB in a long time.  Once again, the NLRB is extremely myopic and simplistic in terms of their view of the world, not taking into account the myriad of other issues that develop when such an ill-founded decision is made.  In particular, I am sure the NCAA is going to be thrilled with this approach by the Board.  Time and time again, after thorough review, the courts and other federal agencies have refused to adopt the viewpoint that such individuals are employees.  Indeed, as the 7th Circuit recently recognized in the case of Berger v. NCAA, 16-1558 (January 12, 2017), this issue has been settled for years and there is no reason to revisit it.  And while I am hopeful that in a matter of months, when we have a new GC in place at the Board, this memo will be made null and void, but in the interim we continue to have to put up with such nonsense being endorsed as our national labor policy.  Frankly, it is just embarrassing.

The legal environment for labor unions in Missouri, and across the nation, will change as a result of the 2016 state and national elections. In Missouri, the election of Eric Greitens as Governor and the supermajority of Republicans in the Missouri Senate signal the likely addition of Missouri to the list of states to have passed Right to Work laws. Missouri House Speaker Todd Richardson recently said that passing a Right to Work law “would probably be the No. 1 issue” for the start of the legislative session in January. If enacted, Missouri would become the 27th state to pass Right to Work legislation.

Right to Work laws prohibit the use of “union security” clauses as part of any collective bargaining agreement, meaning union membership cannot be a condition of employment. More significantly if membership is not mandatory, union dues will not be mandatory. For most unions, who receive the majority of their money from dues, this has the capacity to reduce or even eliminate their ability to organize, let alone administrate union contracts.

A Right to Work law in Missouri also has the potential of increasing the amount of leverage employers bring to the bargaining table. If employees begin to resign their union membership at a significant rate, an employer will have an increased ability to negotiate for its own priorities as the fear of a strike will be lessened. Furthermore, each union may have to evaluate at what point continued representation is cost effective if employees choose to leave the union and stop paying dues at a high rate.

Trump’s election to the White House will have a significant effect on national labor policy as well. Trump will nominate two people to fill the vacancies in the National Labor Relations Board (NLRB), thus influencing its direction for years to come. Employers who have transitioned to new rulings on franchises, joint employers, handbook policies and numerous other issues will likely see many of these rulings abandoned or sent to the bottom of the list when it comes to any enforcement agenda. Further, when it comes to the Department of Labor, the new overtime guidelines will likely receive close scrutiny by the new administration and it is likely the proposed changes in the Persuader Rule will be abandoned.

Finally, the executive orders that President Obama has issued over the past 8 years could be rescinded immediately, if a newly inaugurated President Trump decides to take such action. The Fair Pay and Safe Workplaces Executive Order and the Order Prohibiting Discrimination Based on Sexual Orientation and Gender Identity for federal contractors and subcontractors are just two of the likely targets of a Trump administration’s shift in labor and employment policies.

As the newly elected politicians take power, and newly appointment positions are filled, watch the Husch Blackwell Labor Relations Law Insider for updates.

In most situations the NLRB’s long established Weingarten doctrine can be applied in a fairly straight-forward fashion.  But I still get questions regarding the interplay of drug and alcohol testing when it comes to Weingarten.  This is probably due to the fact that the Ralphs Grocery Company decision, which issued in 2014, is a relatively new expansion of the Weingarten doctrine wherein an employee has the right to consult a union steward prior to taking a drug test.  And then more recently, in Manhattan Beer Distributors the Board expanded Weingarten rights further, in the context of drug and alcohol testing, as the Board established that an employee had a right to a union steward to be physically present for the alcohol or drug test.  An employer need only wait a “reasonable amount of time” for the union representative to be physically present; however, that time will be a function of the substance being tested for and the effect of time on the outcome of the test results.  In other words, alcohol will probably have a shorter timeline in terms of what is a reasonable period, versus marijuana, which stays in the system for days, if not weeks.

Again, the employee must request the union representation. There is no duty on the part of the employer, absent a contractual requirement otherwise, to seek out union representation for these circumstances.  So be aware of these new restrictions and apply them wisely, otherwise your discipline will more than likely be found unlawful and an otherwise clean discharge will turn into the nightmare of reinstatement and full backpay.

On Tuesday, October 18, the Occupational Safety and Health Administration announced that it will once again postpone the enforcement date of the “employee involvement” provisions of its new rule on drug-testing, retaliation claims, and accident reporting, entitled “Improve Tracking of Workplace Injuries and Illnesses,” 81 Fed. Reg. 29624 (May 12, 2016).  This is the second such delay since the final rule was published in May.  OSHA had initially planned for the rule to take effect in August, but the agency later announced a delay in enforcement that would last until November 1.  This second, most recent delay in enforcement is set to last until December 1.

 

The agency has implemented the second extension in response to a request from United States District Judge Sam Lindsay to delay the enforcement date. Judge Lindsay is presiding in a case filed in the U.S. District Court for the Northern District of Texas (in Dallas) in which the National Association of Manufacturers and other industry groups and private companies have sought injunctive relief to prevent enforcement of certain provisions in the new rule. TEXO ABC/AGC, et al. v. Thomas, et al., No. 3:16-CV-1998 (N.D. TX July 8, 2016).  Judge Lindsay informed OSHA (and the other parties) that the additional time was necessary for him to consider the plaintiffs’ request for a preliminary injunction, which would result in a nationwide stay in the enforcement of the rule until the rule has been fully litigated in the courts.

 

We will provide updates as this case continues to develop.

On September 2, the Second Circuit Court of Appeals issued its decision in Patterson v. Raymour’s Furniture Co., the most recent case in what has become an all-out war between employers and the NLRB over the use of class-waiver provisions in arbitration agreements.  The decision, consistent with prior Second Circuit precedent enforcing such waivers, maintains the status quo for an issue with a recently-formed circuit split (discussed in our prior post here).

Beginning with its decision in D.R. Horton, the Board has taken the position that class-waiver provisions in arbitration agreements infringe on the rights of employees to engage in concerted activities and, therefore, violate the National Labor Relations Act.  Prior to May 2016, each federal appellate court that addressed the issue had rejected the Board’s reasoning and enforced these types of arbitration agreements.  However, in May and August 2016, the Seventh and Ninth Circuits, respectively, issued decisions finding that such agreements violated the NLRA and were not entitled to enforcement under the Federal Arbitration Act.  These decisions created a circuit split with the Fifth, Eighth, and Second Circuits, each of which had previously enforced these types of agreements.

However, just as the Eighth Circuit doubled-down on its rejection of the NLRB’s position in June (Cellular Sales of Missouri, LLC v. NLRB), the Second Circuit in Patterson has refused to reverse course on the issue.  Unfortunately, the Court’s application of pro-employer precedent on this issue was less than enthusiastic.  First, the Court chose to issue its decision through a “summary order,” which holds no precedential value.  Further, rather than stating its actual agreement with the prior Second Circuit decision enforcing class-waiver provisions in arbitration agreements (Sutherland v. Ernst & Young LLP), the Court merely stated that it was “bound” by that prior holding until it is overruled, perhaps suggesting that an en banc Second Circuit should reevaluate the Court’s position on the issue.  Even more explicitly, the decision states, “If we were writing on a clean slate, we might well be persuaded . . . to join the Seventh and Ninth Circuits and hold that the EAP’s waiver of collective action is unenforceable.”

In sum, employers should be wary of taking too much comfort in the Second Circuit’s decision in Patterson.  Although an immediate reversal of Second Circuit precedent would have been devastating, employers would have preferred a more ringing endorsement of Sutherland’s holding.  Regardless, the enforceability of class-waiver provisions in arbitration agreements is an issue that is far from settled, and given the circuit split, the Supreme Court’s involvement will almost certainly be necessary.