From Justice Kagan’s observation that a decision in favor of the plaintiff could affect millions of public sector workers to Justice Alito’s surprise at seeing a union brief include an argument that the Constitution originally did not grant public employees free speech rights, the U.S. Supreme Court was full of impassioned discourse during Monday’s oral arguments in Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al. Despite the many insightful questions and comments directed to the four attorneys arguing before the Court, the voice of the one person each attorney was trying to convince was never heard.

Justice Gorsuch is likely the deciding voice at the conference table in Janus. The same issue – whether requiring public sector employees to pay union fees (“fair share” or “agency” fees) unconstitutionally compels speech – was previously before the Court in Friedrichs v. California Teachers Association. However, the Court was unable to enter a precedential decision because of a four-four split on the issue after Justice Scalia’s death. Now the question of whether to overturn Abood v. Detroit Board of Education, which allowed such fees in 1977, is again directly before a full Court.

A decision in favor of overturning Abood would mean that public sector employees could choose to stop paying agency fees. From the employee’s perspective, the ability to withhold those payments is a constitutional right because funding collective bargaining is inherently political speech. From the union’s perspective, fees that only fund collective bargaining over employment matters such as wages and benefits are analogous to an employee individually addressing those things to his/her government employer, which the Court has held is not constitutionally protected free speech.

A few of the Justices noted the consequences such a holding could have on existing collective bargaining agreements as a reason to uphold Abood, based on the principle of reliance on the former decision as a reason to uphold that precedent. In response, plaintiff’s counsel emphasized the predominance of this practice as a reason for reversing Abood, if it does not meet constitutional muster.

Justice Gorsuch has not been shy about participating in oral arguments during his tenure on the Supreme Court Bench. Thus, Monday’s silence in this important case was likely a tactical decision to listen, think, and analyze instead of asking questions that might stoke additional speculation about his views.

Because of that silence, we are left with interesting tidbits about Justice Kennedy’s argument preparation habits (apparently perusing a relevant 1961 concurrence the night before argument) and thoughts of whether a modern framework would change the result of Marbury v. Madison (Justice Breyer’s skepticism of applying a “modern framework” in this case led to his wondering if similar attempts would go back to the source of judicial review) but with little insight into the possible content of a majority or plurality opinion.

Husch Blackwell’s Labor and Employment team is monitoring the case and will provide you with a prompt analyze of the decision in Janus once it is released. Please contact the Labor and Employment team with any questions.

Peter Robb, the new General Counsel for the NLRB, issued GC Memo 18-02 on December 1, 2017 that puts the Regional Offices on notice that any “significant legal issues” are to be submitted to Advice. Significant legal issues are defined to “include cases over the last 8 years that overruled precedent and involved one or more dissents, cases involving issues that the Board has not decided, and any other cases that the Region believes will be of importance to General Counsel.”  The Memo goes on to further cite specific examples of Board Decisions that might support issuance of complaint “but where we also might want to provide the Board with an alternative analysis.”  Not surprisingly, these decisions go to a number of cases in which the Obama Board expanded their regulation regarding concerted activity, handbook rules, work stoppages, Weingarten rights, the joint employer standard, unilateral changes, and dues checkoff, among other matters.  No doubt that with this Memo the way in which the workplace will be regulated by the NLRB will be subject to a number of long awaited changes.

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.