NLRB tightens deferral to arbitration

 As expected, the NLRB has narrowed the standard for deferral to arbitration.

The issue comes up when an employer disciplines an employee and there is a claim that the discipline violates both a collective bargaining agreement (CBA) and the National Labor Relations Act (NLRA). Two separate cases can get going in two separate forums. The CBA claim goes before a private arbitrator. The NLRA claim goes to the National Labor Relations Board.

The question is: Should both cases be allowed to play themselves out? Or should the NLRB simply drop its proceedings (“defer”) and let the arbitrator’s decision take care of things?

The new rules go like this: If the arbitration procedures appear to have been fair and regular, and if the parties agreed to be bound, the Board will defer to an arbitral decision if the party urging deferral shows that: (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permits the award. Babcock & Wilcox Construction Company (NLRB 12/15/2014).

Employer advocates are moaning that this new standard will lead to far fewer deferrals (true), unduly delay the final resolution of issues (true), and change the dynamics at the bargaining table (not likely).

I’m curious about whether the new rule will alter the parties’ tactics during the arbitration proceedings. Up until now it has been rare for the parties to explicitly authorize an arbitrator to decide a statutory unfair labor practice issue. Will they now start doing so?

NLRB: Employees can use the boss’ email system for union organizing

emailThis is a game changer.

The NLRB has reversed course, allowing employees to use the employer’s email system on non-working time to communicate about working conditions, unionizing, and other Section 7 protected matters.

Purple Communications (NLRB 12/11/2014):

At issue in this case is the right of employees under Section 7 of the National Labor Relations Act to effectively communicate with one another at work regarding self-organization and other terms and conditions of employment. The workplace is “uniquely appropriate” and “the natural gathering place” for such communications, and the use of email as a common form of workplace communication has expanded dramatically in recent years. Consistent with the purposes and policies of the Act and our obligation to accommodate the competing rights of employers and employees, we decide today that employee use of email for statutorily protected communications on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems. We therefore overrule the Board’s divided 2007 decision in Register Guard to the extent it holds that employees can have no statutory right to use their employer’s email systems for Section 7 purposes.

$1 in nominal damages plus $300,000 in punitive damages

moneyFor Title VII case, this does not violate due process.

A jury found the employer liable for sexual harassment and awarded only nominal damages (one dollar) plus $868,750 in punitive damages. The trial court cut the punitive damages to $300,000 due to a statutory cap. On appeal to the 9th Circuit, a three judge panel found the amount of punitives was constitutionally excessive and reduced the award to $125,000.

The en banc 9th Circuit resinstated the $300,000 punitive damages award. State of Arizona v. ASARCO LLC (9th Cir en banc 12/10/2014).

The 9th Circuit explicitly declined to “rigidly apply” the three guideposts set out by the US Supreme Court in BMW v. Gore, 517 U.S. 559 (1996). Why? Because the 9th Circuit was dealing with a statute that “rigidly dictates the standard a jury must apply in awarding punitive damages and narrowly caps hard-to quantify compensatory damages and punitive damages.” Thus, there is a satisfaction of the Supreme Court’s concern that a defendant “receive fair notice not only of the conduct that will subject him to punishment, but also the severity of the penalty” that may be imposed.

AS the 9th Circuit summarized it:

The statute [42 U.S.C. § 1981a] provides specific notice of proscribed conduct. It specifies the maximum amount of damages that can be awarded, and incorporates both specified compensatory and punitive damages within the cap. The $300,000 dollar amount of the cap provides an extremely limited potential for recovery, and has not changed, nor been adjusted for inflation, since its adoption in 1991. There is nothing in our consideration of the Gore factors that would alter that conclusion.

SCOTUS: No pay for 25-minute post-shift security screening

flsaUnanimous. Security screenings are noncompensable postliminary activities.

Integrity Staffing employs warehouse workers who work in warehouses. At the end of each shift the employer requires these employees to empty their pockets and go through a metal detector, and it’s claimed that it takes 25 minutes to wait for and go through this process.

The employees sued to get paid for this post-shift time, citing the Fair Labor Standards Act (FLSA). Although the 9th Circuit decided this time must be paid for, the US Supreme Court unanimously held that the time that the employees spent waiting to undergo and undergoing security screenings is not compensable under the FLSA. Integrity Staffing Solutions v. Busk (US Supreme Court 12/09/2014).

The Portal-to-Portal Act exempts employers from FLSA liability for claims based on “activities which are preliminary to or postliminary to” the performance of the principal activities that an employee is employed to perform.

The Supreme Court previously held that the term “principal activities” includes all activities which are an “integral and indispensable part of the principal activities.”

Keeping to this narrow view of what is compensable, the Court decided that —

An activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.

Examples of compensable time: the time battery-plant employees spent showering and changing clothes; the time meatpacker employees spent sharpening their knives.

Example of noncompensable time: the time poultry-plant employees spent waiting to don protective gear.

These ideas as applied in this case:

  1. Integrity Staffing did not employ its workers to undergo security screenings, but to retrieve products from warehouse shelves and package those products for shipment to Amazon customers.
  2. The screenings were not an intrinsic element of retrieving products from warehouse shelves or packaging them for shipment.
  3. The 9th Circuit improperly focused on the fact that the employer required this activity. That kind of analysis would swallow up the whole rule.

And, in a bow to collective bargaining (even though these workers are not represented by a union), the Court said that any argument that the employer could have drastically reduced the amount of time involved is “properly presented to the employer at the bargaining table, . . . not to a court in an FLSA claim.”

[For a list of current employment law cases, see US Supreme Court Watch.]

2013-2014 Labor & Employment Supreme Court Review

Professor Jeffrey M. Hirsch (University of North Carolina School of Law) has written an interesting piece reviewing the US Supreme Court’s 2013-2014 labor and employment law decisions.

The Supreme Court’s 2013-2014 Labor and Employment Law Decisions: Consensus at the Court

Abstract: “This Article is a review of the Supreme Court’s 2013-2014 labor and employment law decisions. Among the cases discussed are Harris v. Quinn, Lane v. Franks, Lawson v. FMR, Fifth Third Bancorp v. Dudenhoeffer, Heimeshoff v. Hartford Life & Accident Insurance Co., Sandifer v. United States Steel Corp., NLRB v. Noel Canning, and Burwell v. Hobby Lobby Stores. The Article notes the relative lack of sharp divisions among the Justices — a result that appears to largely be the result of a less controversial labor and employment docket. However, as some of even this year’s decisions show, sharp divisions on the Court still exist, and we’re likely to see a return to the usual ideological decisions in later terms.”

Definitely worth reading.


Block’s NLRB nomination is blocked, Lauren McFerran nominated

nlrbSharon Block never had a chance after the Noel Canning decision.

Republican Senators were unhappy that then NLRB Member Sharon Block continued in office even after lower courts had ruled that her recess appointment was constitutionally invalid, and more unhappy after the US Supreme Court’s Noel Canning decision confirmed the invalidity of her appointment. She stayed in office until August 2013, and became Senior Counselor to the Secretary of Labor. Anyhow, the President went ahead and nominated her to get back on the Board, and the GOP folks made it clear they would do whatever necessary to prevent Senate confirmation.

After the mid-term elections swept Republicans into control of the Senate, the President backed off, and dropped Block.

The new nominee is Lauren McFerran — nominated to replace Nancy Jean Schiffer, whose term expires December 16, 2014.

Lauren McFerran is Chief Labor Counsel for the Senate Committee on Health, Education, Labor, and Pensions (HELP Committee), a position she has held since 2010.  Since 2012, she has also served as Deputy Staff Director for the HELP Committee.  Ms. McFerran began on the HELP Committee as Senior Labor Counsel for Senator Ted Kennedy and Senator Tom Harkin in 2005, and served in that capacity until 2010.  Before her work for the United States Senate, Ms. McFerran was an Associate at Bredhoff & Kaiser, P.L.L.C. from 2002 to 2005.  From 2001 to 2002, she was a Law Clerk for Chief Judge Carolyn Dineen King on the United States Court of Appeals for the Fifth Circuit.  Ms. McFerran received a B.A. from Rice University and a J.D. from Yale Law School.

With the Senate’s new no-filibuster rule for such nominations, it is possible that the Senate might confirm McFerran before January when the Republicans take over. If not, the NLRB will be in a 2-2 Democrats-Republicans deadlock which will bring to a halt any new groundbreaking decisions.

An easy prediction: Between now and December 16 the Democrat-dominated Board will come out with several 3-2 decisions that will move everything to the left.

Law school closure

lawschoolThe future is not what it used to be.

Law school applicants are fewer each year. For many schools there are three choices: reduce the number of enrolled students, lower the minimum credentials of enrolled students, or close up operations.

Thomas M. Cooley Law School may have some advantage in that it has multiple campuses. So it makes sense to them to close one campus and have students finish out their law school careers at another campus. Any way you slice it, this is not the happiest news.

Here’s the story directly from Cooley:

Statement of Intent to Close

Western Michigan University Thomas M. Cooley Law School has notified its students that it intends to cease operations at its Ann Arbor campus on December 31, 2014, subject to the approval of teach-out plans submitted to its accrediting agencies, the Higher Learning Commission and American Bar Association – Section of Legal Education and Admission to the Bar.

This action follows implementation of a financial management plan announced July 1, 2014.

Anticipating the possibility of the closure, the Law School told its Ann Arbor students in August of accommodations it would provide them should the campus close. Those include:

  • early registration at other campuses
  • $1,500 cash stipend to help cover costs of attending a different campus
  • $3,500 stipend for a bar review course for graduates
  • specialized advising for registration, financial aid, housing and other issues
  • possible adjustment to available financial aid
  • additional consideration to students with special circumstances.

Starting January 2015, the affected Ann Arbor students may choose to take their classes at any of the Law School’s other campuses, including Lansing or Auburn Hills located about an hour away from Ann Arbor, Grand Rapids located about two hours away, or at its Tampa Bay, Florida campus. Travel to other campuses has historically been common amongst students, with more than 60 percent of Ann Arbor-based graduates over the last three years taking classes at more than one campus. The Law School has always admitted students to the school as a whole and not to a particular campus.

Announcement of the intent to cease operations at Ann Arbor awaited the required formal notice recently given by the school to its accrediting agencies, which must review the arrangement. The school and the accreditors will ensure that the affected students are provided the full range and quality of curriculum, instruction, and student services as all other students receive.


The New York Times on same-sex marriage

I rarely whine when a newspaper totally misses the point regarding a legal question. But I have higher expectations for The New York Times, especially when dealing with one of the central legal and political issues of our era. On Monday, this is what we were told [link]:

The Supreme Court’s decision to deny review of all five pending same-sex marriage cases, thereby clearing the way for such marriages in several states, puts it in line with an American public that supports same-sex marriage but says its legality should be left to each individual state to decide.

That statement turns reality on its head.

The Supreme Court’s action results in the legality of same-sex marriage being determined by federal judges, not by the individual states.


US Supreme Court opens with 7 employment law cases


October 6 is opening day at the US Supreme Court, and here are the employment law cases we are watching:

Integrity Staffing Solutions, Inc. v. Busk – Whether time spent in security screenings is compensable under the Fair Labor Standards Act, as amended by the Portal-to-Portal Act. Oral argument  October 8, 2014.

Department of Homeland Security v. MacLean – Whether certain statutory protections codified in the Whistleblower Protection Act, which are inapplicable when an employee makes a disclosure “specifically prohibited by law,” can bar an agency from taking an enforcement action against an employee who intentionally discloses Sensitive Security Information. Oral argument November 4, 2014.

M&G Polymers USA, LLC v. Tackett – Whether, when construing collective bargaining agreements in Labor Management Relations Act (LMRA) cases, courts should presume that silence concerning the duration of retiree health-care benefits means the parties intended those benefits to vest (and therefore continue indefinitely), as the Sixth Circuit holds; or should require a clear statement that health-care benefits are intended to survive the termination of the collective bargaining agreement, as the Third Circuit holds; or should require at least some language in the agreement that can reasonably support an interpretation that health-care benefits should continue indefinitely, as the Second and Seventh Circuits hold. Oral argument November 10, 2014.

Perez v. Mortgage Bankers Assoc – Whether a federal agency [Department of Labor] must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation. Oral argument December 1, 2014.

Young v. United Parcel Service – Whether, and in what circumstances, the Pregnancy Discrimination Act requires an employer that provides work accommodations to non-pregnant employees with work limitations to provide work accommodations to pregnant employees who are “similar in their ability or inability to work.” Oral argument December 3, 2014.

Mach Mining v. EEOC – Whether and to what extent a court may enforce the Equal Employment Opportunity Commission’s mandatory duty to conciliate discrimination claims before filing suit. Oral argument to be scheduled for January 2015 or later.

EEOC v. Abercrombie & Fitch Stores – Whether an employer can be liable under Title VII of the Civil Rights Act of 1964 for refusing to hire an applicant or discharging an employee based on a “religious observance and practice” only if the employer has actual knowledge that a religious accommodation was required and the employer’s actual knowledge resulted from direct, explicit notice from the applicant or employee. Oral argument to be scheduled for January 2015 or later.


SCOTUS takes up dress code vs. hijab case

hijabWhat notice does an employer need?

Samantha Elauf applied to be a model for the Abercrobie retail clothing company. She’s a Muslim and she wore a black hijab to her interview. Abercrombie has a dress code that requires employees to wear clothes consistent with the kinds of clothing that Abercrombie sells in its stores, and that specifically excludes wearing black. After the interview, Abercrombie did not hire Elauf, and the EEOC brought suit.

Heather Cooke interviewed Elauf. Cooke assumed Elauf was a Muslim and “figured that was the religious reason why she wore her head scarf.” However, during the course of the interview, Elauf never informed Cooke that she was Muslim, never brought up the subject of her headscarf, and never indicated that she wore the headscarf for religious reasons and that she felt obliged to do so, and thus would need an accommodation to address the conflict between her religious practice and Abercrombie’s clothing policy. Indeed, the topic of her headscarf never came up one way or the other.

The trial court granted partial summary judgment for the EEOC, and a jury awarded $20,000 in damages. The 10th Circuit reversed, ordering that summary judgment be entered in favor of Abercrombie. EEOC v. Abercrombie & Fitch Stores (10th Cir 10/01/2013). [Track it at]

The 10th Circuit ruled that the employer had no duty to accommodate Elauf’s religious practice. “Applicants or employees must initially inform
employers of their religious practices that conflict with a work requirement and
their need for a reasonable accommodation for them.” Elauf did not do so.

The issue presented in the EEOC’s cert petition:

Whether an employer can be liable under Title VII of the Civil Rights Act of 1964 for refusing to hire an applicant or discharging an employee based on a “religious observance and practice” only if the employer has actual knowledge that a religious accommodation was required and the employer’s actual knowledge resulted from direct, explicit notice from the applicant or employee.

My view:

  • At first I was surprised the Court granted cert in this case, thinking it was relatively trivial and technical.
  • However, I see a deep philosophical issue that should be important to all of us. It seems that the EEOC wants Abercrombie to assume Elauf was a Muslim, assume Elauf wore the hijab for religious (not personal or cultural) reasons, and assume there would be a conflict between Elauf’s religious practice and Abercrombie’s dress code. Put another way, the EEOC wants Abercrombie to adopt stereotypes and put those stereotypes into practice.
  • The stereotypes: (1) Women who wear hijabs are Muslim. (2) Women who wear hijabs do so for religious reasons, not for cultural or personal reasons.
  • We live in an era in which we are trying to stamp out stereotypes based on religion, sex, and race. Let’s not have the courts enforce stereotypical thinking.