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.
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.
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.
Employers subject to a collective bargaining agreement (CBA) must proceed cautiously in determining how to handle dues checkoff and employee communications following implementation of any right-to-work laws. A recent decision by an Administrative Law Judge (ALJ) for the National Labor Relations Board (NLRB) declares that contractual dues checkoff provisions are not union security devices and thus may be enforceable despite a right-to-work law. Metalcraft of Mayville, Inc. v. District Lodge No. 10, 18-CA-178322 (2017) (Muhl, ALJ). The ALJ in Metalcraft interpreted Wisconsin’s right-to-work statute such that an employer could not unilaterally refuse to enforce dues checkoff, despite the existence of a state right-to-work law prohibiting such deductions. Instead, the ALJ found that the NLRA pre-empted state law, so dues checkoff remains a mandatory subject of bargaining, governed by federal law, regardless of the existence of a state right-to-work law prohibiting fees being deducted. And so the employer acted unlawfully in unilaterally discontinuing such deductions in violation of §8(a)5 of the NLRA.
Further, the Metalcraft decision also serves as an important reminder to employers to exercise caution in corresponding with employees about right-to-work laws. The ALJ held that a series of notices to employees containing employer-drafted questions and answers about the new right-to-work law violated §§8(a)(1) and (5) of the NLRA by undermining employees’ confidence in the union and directly dealing with employees. In that case, the employer presented no evidence it was responding to actual questions or requests for revocation of dues checkoff from employees; it phrased several questions in a manner disparaging the union; and it requested new authorizations for dues checkoff directly from employees.
The ALJ’s findings are consistent with other recent cases which have addressed the issue. In United Auto., Aerospace & Agric. Implement Workers of Am. Local 3047 v. Hardin Cty., Kentucky, the Sixth Circuit held that a county could not prohibit dues checkoff or hiring hall agreements because they were preempted by the NLRA, regardless of the existence of a valid right-to-work law. 842 F.3d 407, 410 (6th Cir. 2016). Similarly, an appeal is pending before the Seventh Circuit of a District Court decision which held, among other things, that dues checkoff does not amount to compulsory unionism and the NLRA preempts any regulation that imposes more stringent requirements than federal law. Int’l Union of Operating Engineers, Local 399, AFL–CIO v. Vill. of Lincolnshire, Illinois, No. 16 C 2395, 2017 WL 75742, at *11 (N.D. Ill. Jan. 7, 2017).
Employers with questions about how to handle dues checkoff or employee communications in preparation for implementation of right-to-work laws can contact a member of Husch Blackwell’s Labor and Employment team. For more information about right-to-work, see Husch Blackwell’s blog post: Right-to-Work in Missouri – What Does It All Mean?
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.
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.