Federal Court Washes Away New York City’s Pro-Union Ordinance

A New York City ordinance requiring car wash companies to post a higher surety bond if they do not sign a union bargaining agreement covering their employees is invalid because it unlawfully favors unionization, and therefore runs afoul of the National Labor Relations Act, a federal district court judge has ruled on May 26, 2017. Association of Car Wash Owners v. City of New York, No. 15 Civ. 8157.  The ordinance was signed by Mayor Bill de Blasio on June 29, 2015, and the lawsuit was filed in 2015 by the Association of Car Wash Owners representing 100 car washes within the City.

The Car Wash Accountability Law, also known as Local Law 62, required all car wash companies doing business in New York City to post a $150,000 surety bond in favor of employees. However, if a car wash signed a collective bargaining agreement or agreed to monthly audits of its pay practices by a third party, the bond would be reduced drastically to just $30,000! The bond was intended to cover possible employee wage complaints, customer complaints, or penalties imposed by the City.

Overturning the pro-union statute, the judge held the ordinance violated federal labor law by imposing a penalty on businesses that do not agree to enter into collective bargaining agreements with unions. Judge Hellerstein pointed out that some City Council members’ statements in support of the ordinance provided evidence against the City, since “the legislative history makes clear that a central purpose of Local Law 62 is to encourage unionization in the car wash industry.”

The court held that the local statute was preempted by the NLRA because “states may not legislate in opposition to a federal law.” The court held that the ordinance had the effect of “pressuring businesses to unionize, [which] is impermissible under the NLRA, as it inserts the City directly into labor-management bargaining.”

A Union Has Filed A Petition To Represent Your Employees: Make A List And Check It Twice!

Several deficiencies in a voter eligibility list justified rerunning an election that the employer had won, the NLRB has held, 2-1 (Chairman Philip Miscimarra dissenting in part). RHCG Safety Corp., 365 NLRB No. 88 (June 7, 2017).

The Board found that more than 90% of the voters’ addresses on the list provided by the employer were wrong, 15 of the 99 eligible voters were left off, and no phone numbers were provided (HR did not maintain them in its database) despite supervisors and foremen informally having this information and using it for work-related contacts with employees.

Beginning April 2015, under the new NLRB election rules, employers must provide an expanded voter eligibility list – including not only the names and home addresses required under the old rule, but also “available” home and cell phone numbers (as well as job titles, work locations, and “available” email addresses) to the union filing an election petition. On top of that, employers have only two days from finalization of the election details to assemble and serve this comprehensive list.

Employers must complete the list with care. Failure to provide a thorough and accurate list will be grounds for an “objection” filed by the union should it lose the election. The usual remedy is rerunning the vote if the company wins.

The problem with incorrect addresses and omitted names is straightforward, but what does the Board mean by “available” phone numbers and e-addresses? The rules’ preamble retains the traditional understanding that employers do not have to solicit information from voters in order to compile the list. So, does that mean HR’s information is sufficient under the new voter list rule? The Board in RHCG said no. That the employer did not keep formal HR records of employees’ phone numbers did not shield the company – because members of management had the information, and called employees for work reasons, the phone numbers were deemed “available” to the company. The employer should have investigated and collected these numbers from supervisors, the Board said.

Among other things, the employer argued its mistakes were inadvertent. The Board responded that a reason for the new rule is to maximize the “likelihood that voters will be exposed to the non-employer party arguments” concerning the election. Good faith by the employer is not necessarily relevant.

If your company is facing a Board election, be very careful in compiling the voter list. The NLRB’s election rules will be interpreted strictly. In our firm’s long experience, employer compilation of this list frequently is more time consuming than one might expect – that is underscored by the new rules (and now this case). Start assembling the needed data as soon as an election petition is filed.

Please contact Jackson Lewis with any questions about this and other developments.

Missouri Repeals Prevailing Wage Law in Government Contracting

Missouri Governor Eric Greitens has signed into law legislation generally forbidding public entities from requiring union wage rates be paid on public construction projects.

The legislation, signed into law on May 30, 2017, and set to become effective August 28, 2017, prohibits the “prevailing wage” (a wage rate calculated from wage and benefit scales set forth in collective bargaining agreements with local unions) from being imposed by localities on publicly funded projects for the “repair, remodeling, or demolition of a facility.” Public entities also cannot discriminate against, encourage, or give preferential treatment to union contractors, or those voluntarily adhering to union wage and benefit rates.

The existing prevailing wage law barred the use of such “prevailing wages” for projects procured by the state. Senate Bill 182 expands that prohibition to cover projects procured by “any political subdivision of the state.” The bill also expands the applicability of the prohibition by eliminating the requirement that a project be more than 50 percent publicly funded to be subject to the law.

Greitens, a Republican political newcomer, campaigned on a business-friendly platform. Greitens signed “right-to-work” legislation just weeks after taking office. For more on that legislation, read our article  Missouri Enacts Right to Work law.  Signing of Senate Bill 182 is seen as another campaign promise fulfilled.

Missouri legislators have been pushing both right-to-work and repeal of prevailing wage for years, but the previous governor had vetoed every effort.

Proponents of the repeal claim that the legislation was necessary to provide a level playing field for non-union contractors and that it will save money for local public entities. Opponents argue that the repeal will hurt local workers who now risk losing work to “outside” non-union contractors who can underbid contractors that are bound to union contracts.

The new law provides a legal remedy for violations, including the recovery of attorney’s fees and referral to the local prosecuting attorney or circuit attorney for investigation.

Jackson Lewis attorneys are available to answer any management inquiries regarding this and other workplace developments.

NLRB’s Budget Slashed: What Could It Mean To Your Business?

President Donald Trump has released a budget proposal reducing the National Labor Relations Board’s funding in fiscal year 2018 by nearly six percent. It also calls for significant staff reductions at a time when the agency’s caseload is projected to increase.

Under the proposal, the Board’s funding would be reduced by $16 million, from $274 million to $258 million, which would result in the lowest total operating budget for the Board since 2009. The reduced budget will require the Board to reduce staff from approximately 1,596 to 1,320 – well below the 15-year average of 1,700 full-time employees.

The NLRB had sought additional funding to “efficiently and effectively” process “comprehensive and complex cases,” such as “nationwide efforts to improve the wages … of retail and fast food workers,” “expanded use of mandatory arbitration clauses in employment” agreements, and the expanded use of technology and social media by employees to discuss employment outside the workplace, among other things.

The budget also includes an “administrative provision” prohibiting use of appropriations to adopt electronic voting in union representation elections. In the past, the NLRB had asked vendors to submit possible solutions on secure methods for electronic balloting, but had not acted on the subject.

What could the budget cut mean for your business? The budget has not been passed by Congress, and there likely will be significant congressional debate over funding of the NLRB (and other agencies, such as the Department of Labor, which also may face significant budget cuts). If the budget passes with significant cuts, expect the following:

  • The NLRB to ramp up the pressure on employers, unions, and employees to settle unfair labor practice charges early to avoid NLRB personnel having to travel to speak to potential witnesses.
  • The NLRB to loosen its time targets for deciding whether unfair labor practice charges have merit in the hopes that, given more time, a case can be settled.
  • The possibility of less-prepared NLRB witnesses in unfair labor practice trials because possibly overtaxed NLRB attorneys will not have been able to meet with witnesses as much as in the past.
  • Requests by the Board to administrative law judges to permit witness testimony by video to avoid having to pay witness travel costs.
  • The NLRB to struggle to process representation petitions quickly, which has been a key focus of the agency since the “quickie” election rules were implemented in April 2015.

Employers must adapt to these and other possible changes if the budget cut is approved. We will monitor the budgetary process and report on significant developments.

 

 

Labor Board Allows Evidence to Explain Employee Handbook Ban on Video Recording

The National Labor Relations Board has denied a motion for summary judgment by the NLRB’s General Counsel in a case involving Mercedes-Benz U.S. International Inc.’s maintenance of an employee handbook rule prohibiting the use of cameras and video recording devices without prior approval.

The 2-1 decision allows MBUSI to attempt to prove that: (1) the rule “furthers legitimate business interests, including the protection of proprietary and confidential information, the maintenance of safety and production standards, and open communication” by employees; (2) the rule is not per se unlawful under Section 8(a)(1) of the National Labor Relations Act because employees at the plant “did not understand the camera rule to restrict Section 7 activity” under the NLRA; and (3) “its business interests outweigh any Section 7 rights” that may be implicated by its maintenance of the rule.

The Board majority — Chairman Philip A. Miscimarra and Member Lauren McFerran — made it clear that it was expressing “no view” on the merits of the case. Thus, whether the company’s evidence at trial will be sufficient to win the day remains to be seen. Nevertheless, citing previous Board decisions reaching the same conclusion, the majority in the Mercedes-Benz U.S. International Inc. case rejected a lengthy dissent by Member Mark Gaston Pearce that would have found the no-recording rule unlawful on its face.

Employers with similar handbook rules that may be considered unlawful by the NLRB’s General Counsel, which has been waging war against common workplace rules of all types, may take comfort in the majority’s decision. Employers should review their handbooks and policy manuals carefully to make sure the rules within them do not “reasonably tend to chill employees in the exercise of their Section 7 rights” under the NLRA.

President to Nominate Republican Attorneys to Fill Labor Board Vacancies

Attorneys Marvin Kaplan and William Emanuel will be nominated by President Donald J. Trump to fill the two openings on the five-member National Labor Relations Board, according to the Daily Labor Report. Trump plans to nominate Kaplan and Emanuel by June, following completion of their FBI background checks.

If Kaplan and Emanuel are confirmed, the Board will have a 3-2 Republican majority. Emanuel is a labor attorney and Kaplan is counsel to the Commissioner of the Occupational Safety and Health Review Commission. For more, see Short List of Possible Trump NLRB Candidates Reported.

Following Senate confirmation of the new Board members, expect the Board to revisit and, perhaps, reverse its Obama-era rulings on class action waivers, joint employer, temporary workers, quickie elections, expansion of protected concerted activity (e.g., its impact on workplace policies), definition of appropriate bargaining units, the  status of college/university faculty and student athletes, among others.

In Fastest Elections, Union Victory Rate Soars

Unions fare better in the quickest elections under the National Labor Relations Board’s April 2015 “quickie” election rules, according to a Bloomberg BNA report. Unions have continued to win elections about 67 percent of the time overall since the implementation of the rules, according to the report. However, two years after the rules went into effect, in the fastest elections (i.e., those with less than two weeks between petition and the vote), the union “win rate” jumps to a staggering 82 percent.

The NLRB’s amendments to its election procedures have significantly reduced the average time between the filing of a representation petition by a union and the date of the election, from 39 days to 24 days, according to the report.

While advocates for management and labor disagree as to the intent and overall effect of the rules, the data makes clear unions fare better when employers have less time to discuss the possible effects of unionization with their employees. As the average time between petition and election falls, it is more important than ever for employers to educate supervisors about their rights and responsibilities in the event of a union organizing attempt and to create an environment where employees feel well-treated and therefore see no need for union representation.

 

 

 

NLRB Won’t Create Rule Extending to Nonunion Workers Right to Have Union Rep at Disciplinary Interview

The National Labor Relations Board has decided not to exercise its discretionary authority to engage in rulemaking at this time to reverse the Board’s decision in IBM Corp., 341 NLRB 1288 (2004), and extend Weingarten rights to nonunion employees. In Weingarten, the Supreme Court held that an employee has a right to re­quest the attendance of a union representative in any in­terview that he or she “reasonably fears may result in his discipline.”

The issue was before the Board as a result of a request by NLRB attorney Charles S. Strickler, Jr.

The Board’s action does not foreclose the possibility that it will reverse IBM Corp. if an appropriate case is presented to it.

Spending Bill Leaves NLRB Budget Unchanged From 2016, Nixes Electronic Voting

The National Labor Relations Board’s wish that its budget for fiscal year 2017 be increased over its FY 2016 budget apparently will not be granted.

According to Politico, at $274.2 million, Congress has left the NLRB’s budget unchanged from FY 2016. This is despite NLRB General Counsel Richard Griffin’s view, stated in a March 10, 2017, Memorandum to management personnel in the NLRB’s regional offices, that “years” of “flat fund[ing]” has had a “detrimental effect on the public.” Memorandum GC 17-02.

The NLRB had sought additional funding to “efficiently and effectively” process “comprehensive and complex cases” such as “nationwide efforts to improve the wages … of retail and fast food workers,” “expanded use of mandatory arbitration clauses in employment” agreements, and the expanded use of technology and social media by employees to discuss employment outside the workplace, among other things.

The spending bill also prohibits the NLRB from spending any money on issuing “any new administrative directive or regulation that would provide employees any means of voting through any electronic means in an election to determine a representative for the purposes of collective bargaining.”

Solicitor General Reviewing Government’s Position in Class Action Waivers Cases

Last week, the Supreme Court extended the deadline for initial briefs from April 28, 2017 to June 9, 2017 in three consolidated cases raising the issue whether arbitration agreements between individual employees and their employers that bar the employees from pursuing work-related claims on a collective or class basis are lawful under the National Labor Relations Act. Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP, et al. v. Morris, et al., No. 16-300; National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307. The Court granted the extension pursuant to a request by the Acting Solicitor General of the United States.

Raising the possibility the government may decide to change its position on whether such agreements are unlawful, in his request, the Acting Solicitor General wrote, “[T]he current briefing schedule is no longer adequate for the government [because] . . . [t]he Acting Solicitor General is engaged in a process of reviewing the position of the United States in these cases” and that he “must . . . consult with new leadership within the government.”

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