$4 million attorney’s fees brief filed at SCOTUS

The EEOC sued and lost, so will the defendant get its attorney’s fees? The stakes involved in CRST Van Expedited, Inc. v. EEOC are simple: over $4 million in attorney’s fees. The Equal Employment Opportunities Commission lost its case against CRST, and CRST wants to recover $4,004,371 in attorney’s fees. The District Court said yes, the Eighth Circuit said no, and the Supreme Court will hear oral arguments on March 28.

CRST has filed its opening brief on the merits, as have four pro-employer amici curiae in support of CRST. (I’ll be writing more later, after the EEOC files its brief.)

The EEOC sued CRST on behalf of hundreds of individuals claiming sexual harassment in violation of Title VII. The District Court dismissed 67 of the EEOC’s claims because the EEOC had failed to fulfill its statutory pre-suit duties to investigate the claims, make a reasonable cause determination, and attempt conciliation. The Eighth Circuit affirmed the dismissal, and that’s no longer an issue in this case. The District Court then granted CRST an attorney’s fees award of $4,004,371 against the EEOC. However, the Eighth Circuit reversed the attorney’s fee award on the ground that CRST’s victory was not “on the merits.” EEOC v. CRST Van Expedited, Inc. (8th Cir 12/22/2014).

Under the “American Rule,” litigants generally pay their own attorney’s fees – whether they win or lose. As the Supreme Court put it last June in Baker Botts v. ASARCO, LLC:

“Our basic point of reference when considering the award of attorney’s fees is the bedrock principle known as the American Rule: Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.”

Title VII Section 706(k) contains an exception to the American Rule, saying that

“the court, in its discretion, may allow the prevailing party … a reasonable attorney’s fee … as part of the costs ….”

This statutory language tracks the language of 42 USC §1988, which is used in many civil rights cases.

For a defendant to be entitled to attorney’s fees there is more involved than simply winning the case. The Supreme Court has said that in order for a defendant to recover attorney’s fees under Section 706(k), the plaintiff’s (here the EEOC’s) case must have been “frivolous, unreasonable, or without foundation.” Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978).

The Eighth Circuit, however, did not even reach the factors set out in Christiansburg because of its finding that CRST was not a “prevailing party.” For the Eighth Circuit, in order for a defendant to be a prevailing party – and thus eligible for an award of attorney’s fees – there must have been a ruling “on the merits” of the case. The reason for this is simple. You cannot analyze the Christiansburg “frivolous, unreasonable, or without foundation” factors unless there has been a judicial determination as to the sex discrimination claim itself.

To decide whether CRST won on the merits, the Eighth Circuit considered whether the EEOC’s pre-suit obligations fit within one of three categories: (1) a restriction on subject matter jurisdiction, (2) a non-jurisdictional precondition to filing suit, or (3) an element of the EEOC’s claim. The EEOC and CRST both agreed that jurisdictional facts were not involved here. The Eighth Circuit concluded that the EEOC’s pre-suit obligations were simply preconditions to filing suit and not an element of the EEOC’s claim or cause of action, so the judicial dismissal was not “on the merits.” On that reasoning, CRST was not even granted the status of a “prevailing party.”

CRST’s opening brief contains two core arguments:

  1. Nothing in Section 706(k) or in Christiansburg requires a defendant to prevail “on the merits” in order to be awarded attorney’s fees, and such a requirement would undermine the policy of Section 706(k).
  2. In any event, CRST did prevail on the merits.

CRST’s primary argument is that the Eighth Circuit invented a new hurdle that is not supported by the text of the statute or by anything the Supreme Court has said. The statute already requires that one be a “prevailing party,” and the Supreme Court has added the rule that defendants get attorney’s fees only if the plaintiff’s case was “frivolous, unreasonable, or without foundation,” but the Eighth Circuit has added that the defendant must have prevailed “on the merits.” Although plaintiffs must obtain relief on the merits, that can’t logically be applied to defendants because they have no claims and seek no relief. Christiansburg protects plaintiffs by allowing defendants to obtain attorney’s fees awards only when the plaintiff was unreasonable. The decision to litigate can be unreasonable for a number non-merits reasons, such as time-bars or mootness. Denying fees in such cases would frustrate Congress’ policy that plaintiffs who impose unnecessary and unreasonable litigation on defendants should bear the cost.

CRST’s next argument is that it actually did win on the merits. The EEOC’s pre-suit requirements are a part of the EEOC’s cause of action. They are similar to other Title VII conditions that the Supreme Court has already recognized as part of a plaintiff’s cause of action, such as the limitation of a private right of action to plaintiffs who are “aggrieved” and the numerosity requirement for a covered “employer.”

Both CRST and some amici are spilling a lot of ink to persuade the Court that the EEOC has been overreaching in its litigation. In the current case the EEOC brought suit on behalf of one individual and a class of similarly situated female employees. EEOC didn’t know how many women would be in the class, and used discovery to find them, and eventually named 270 women who allegedly had been sexually harassed. Many of these were dropped because they didn’t show for depositions or for other reasons, leaving 154. CRST deposed all 154. Another 87 were removed on summary judgment, leaving 67. As for the remaining 67, the District Court dismissed the EEOC’s claims after the EEOC admitted that it did not investigate, find reasonable cause, or attempt to conciliate any of those 67 individual claims. So the point being made is that the EEOC’s overall litigation strategy and tactics are out of line, and awarding attorney’s fees will deter such conduct in the future.

My view: CRST’s argument should be elegantly simple: (1)  CRST was the prevailing party because it obtained a final judgment in its favor, and that judgment is res judicata as to the 67 claims. So the inquiry immediately shifts to whether the EEOC was unreasonable when it initiated and continued litigation without first investigating the claims, making a reasonable cause determination, and attempting conciliation. The EEOC was automatically (per se, if you will) unreasonable because its duties are clearly specified in the statute. (2) This case is a good opportunity to remind all Circuit Courts that they should not be in the business of adding things to Congressional statutes – things like “prevailing party” means a party that prevails “on the merits.”

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

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SCOTUS: Unaccepted Rule 68 offer does not moot class action

classactionCampbell-Ewald Co v. Gomez (US Supreme Court 01/20/2016) is an important victory for class action plaintiffs in employment and consumer cases.

In class action suits a defendant will often attempt to “pick off” the lead plaintiff by offering to that person a judgment in full satisfaction of that individual’s claim. The defendant’s idea is that complete satisfaction of the plaintiff’s claim renders the case “moot” because there is no longer any legal dispute between the two. Under Article III of the constitution, federal courts have no jurisdiction over situations in which there’s really no dispute between the litigating parties.

Defendants rely upon Federal Rule 68:

“(a) Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.

“(b) Unaccepted Offer. An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.”

What happens if the defendant makes the Rule 68 offer, but the plaintiff simply does nothing in response?

Every first year law student should know the answer to this question. If an offer is made, and the offeree does not accept the offer, then there has been no change in the legal relationship between the two parties. An unaccepted offer simply lapses, and the unaccepted offer is a legal nullity.

Justice Kagan once wrote (Genesis HealthCare Corp v. Symczyk, 569 U. S. ___ (US Supreme Court 2012):

“When a plaintiff rejects such an offer—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer— like any unaccepted contract offer—is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer ‘leaves the matter as if no offer had ever been made.’ Minneapolis & St. Louis R. Co. v. Columbus Rolling Mill, 119 U. S. 149, 151 (1886). Nothing in Rule 68 alters that basic principle; to the contrary, that rule specifies that ‘[a]n unaccepted offer is considered withdrawn.’ Fed. Rule Civ. Proc. 68(b). So assuming the case was live before—because the plaintiff had a stake and the court could grant relief—the litigation carries on, unmooted.”

In Campbell-Ewald Co v. Gomez (US Supreme Court 01/20/2016) the Supreme Court (splitting 6-3) adopted Justice Kagan’s pithy explanation.

Gomez sued claiming that Campbell-Ewald Co had violated the Telephone Consumer Protection Act by using any automatic dialing system to send a text message to his cell phone, without his prior express consent. This was a class action claim. Before the deadline for Gomez to file a motion for class certification, Campbell-Ewald proposed to settle Gomez’s individual claim and filed an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Gomez did not accept the offer and allowed the Rule 68 submission to lapse on expiration of the time (14 days) specified in the Rule.

Campbell-Ewald argued that its offer mooted Gomez’s individual claim by providing him with complete relief. Next, Campbell-Ewald urged that Gomez’s failure to move for class certification before his individual claim became moot caused the putative class claims to become moot as well. Both the district court (805 F. Supp. 2d 923 (CD Cal. 2011)) and the 9th Circuit (768 F3d 871 (9th Cir 2014)) ruled that the case did not become moot, and the US Supreme Court agreed.

Dissenting for himself and two others, Chief Justice Roberts said:

“When a plaintiff files suit seeking redress for an alleged injury, and the defendant agrees to fully redress that injury, there is no longer a case or controversy for purposes of Article III. After all, if the defendant is willing to remedy the plaintiff ’s injury without forcing him to litigate, the plaintiff cannot demonstrate an injury in need of redress by the court, and the defendant’s interests are not adverse to the plaintiff.”

Some pundits will exclaim that this case is a left-leaning pro-consumer, pro-employee decision (and the line-up of votes supports this), yet it really is the natural result of the text of Rule 68 and well-accepted rules of the common law of contracts.

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Fair Labor Standards Act returns to the US Supreme Court

flsaOK, Folks, One more FLSA overtime case for you. This one is somewhat esoteric, applying to one specific type of employee and one specific type of employer: a “service advisor” at a car dealership. Yet it could have great importance because a decision hinges on whether or not a court must defer to a Department of Labor’s statutory interpretation. Two big questions are involved: (1) Is the FLSA ambiguous? (2) Is the DOL’s interpretation reasonable? The case is Encino Motorcars, LLC v. Navarro (certiorari granted 01/15/2015) [Read the briefs here.]

What’s a service advisor?

  • Employees’ description: “Service advisors at automobile dealerships meet and greet customers, write up their requests for automobile services, suggest additional work, and forward these work orders to other dealership employees.”
  • Dealership’s description: The “primary job responsibilities involve identifying service needs and selling service solutions to the dealership’s customers.”

Now you know.

The FLSA: The Fair Labor Standards Act provides for overtime pay, and then provides for exemptions. From 1961 to 1966, all automobile dealership employees were exempt, but in 1966 Congress narrowed the exemption to

“any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.”

The DOL’s interpretation: In 1970, DOL interpreted the statute not to exempt employees known as “service advisors.” In 2011, after notice-and-comment rulemaking, DOL issued a final legislative regulation, adhering to its original position and declining to broaden this exemption to cover service advisors.

The 9th Circuit: Navarro v. Encino Motorcars, LLC (9th Cir 03/24/2015). Some service advisors sued their employer claiming overtime payments under the FLSA. The District Court dismissed, concluding that the plaintiffs fell within the FLSA’s exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” The 9th Circuit reversed. The 9th Circuit applied the familiar analysis from Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

  • First, the court found the statute ambiguous, saying “It is not clear from the text of the statute whether Congress intended broadly to exempt any salesman who is involved in the servicing of cars or, more narrowly, only those salesmen who are selling the cars themselves.”
  • Second, the court found that the DOL’s interpretation was reasonable. After all, service advisors  do not personally sell cars and they do not personally service cars.

Other courts: The 9th Circuit’s decision is in conflict with decisions of the Fourth and Fifth Circuits, several district courts, and the Supreme Court of Montana. Walton v. Greenbrier Ford, Inc., 370 F.3d 446 (4th Cir. 2004); Brennan v. Deel Motors, Inc., 475 F.2d 1095 (5th Cir. 1973); Brennan v. N. Bros. Ford, Inc., No. 40344, 1975 WL 1074 (E.D. Mich. Apr. 17, 1975) (unpublished), aff’d sub. nom Dunlop v. N. Bros. Ford, Inc., 529 F.2d 524 (6th Cir. 1976) (table); Brennan v. Import Volkswagen, Inc., No. W-4982, 1975 WL 1248 (D. Kan. Oct. 21, 1975) (unpublished); Yenney v. Cass Cnty. Motors Co., No. 76-0- 294, 1977 WL 1678 (D. Neb. Feb. 8, 1977) (unpublished); Thompson v. J.C. Billion, Inc., 294 P.3d 397 (Mont. 2013).

We expect the US Supreme Court to schedule oral argument sometime in the Spring.

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

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At SCOTUS: Does EEOC owe $4 million in attorney fees?

CRST_Expedited_LogoEEOC brought a massive suit against CRST Van Expedited, Inc., claiming sexual harassment. The district court granted judgment for CRST as to 67 individuals because the EEOC had failed to engage in any form of pre-suit investigation, reasonable cause determination, or conciliation extending beyond the claims of just two alleged victims. The 8th Circuit affirmed. But after the district court awarded over $4 million in attorney fees against the EEOC, the 8th Circuit reversed. Now the US Supreme Court has said it will decide the issue.

[Here’s a later blog post: $4 million attorney’s fees brief filed at SCOTUS]

There’s a statute. 42 U.S.C. § 2000e-5(k):

In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney’s fee (including expert fees) as part of the costs, and the Commission and the United States shall be liable for the costs the same as a private person.

It looks like CRST prevailed, but the 8th Circuit applies a rule limiting civil rights fee awards to cases involving rulings “on the merits.” According to the 8th Circuit [Opinion], prevailing because the EEOC bungled its duty to perform pre-suit investigation and conciliation is not prevailing “on the merits.”

You can check out the certiorari stage briefs:



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Public sector unions under fire at the Supreme Court: Symposium on Friedrichs v. California Teachers Association

Is it unconstitutional to compel non-members to pay an “agency fee” to a labor union?

The US Supreme Court will hear oral arguments in Friedrichs v. California Teachers Association on January 11, 2016. The case raises two issues:

(1) Whether Abood v. Detroit Board of Education should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment; and

(2) whether it violates the First Amendment to require that public employees affirmatively object to subsidizing nonchargeable speech by public-sector unions, rather than requiring that employees affirmatively consent to subsidizing such speech.

The outcome will determine the financial health of public sector labor unions.

SCOTUSblog recently ran a symposium on the case, and the points made are summarized below.

Symposium: Overrule Abood to protect individual rights, by Deborah J. La Fetra, a Principal Attorney at Pacific Legal Foundation.

  • The Court’s grant in Friedrichs comes at an ideal time to review the public-employee unions’ ability to garnish workers’ paychecks for the inherently political act of collective bargaining for taxpayer-funded wages and benefits.
  • Unions rely heavily on peer pressure, coercion, and inertia to prevent dissenting members or nonmembers from opposing union political activities.
  • Public-sector bargaining is an inherently political activity. Therefore, the Court’s attempts to distinguish public-employee union collective bargaining from other types of political and ideological activities have proven illusory.
  • The interests of public sector unions sit on both sides of the collective-bargaining table. School board members stand for election and depend on the campaign support of their bargaining “adversaries.” Teachers’ unions pour tremendous resources into these elections and their favorites rarely lose.
  • Sweetheart pension deals cut with public-employee unions have created a financial crisis of Greek proportions.

Symposium: Public-sector unions, labor relations, and free speech, by Ann C. Hodges, Professor of Law at the University of Richmond School of Law.

  • What justifies forcing employees to pay fees to a union if they object? Labor peace and avoiding free riders.
  • If a majority of employees votes for union representation, the union represents all of the employees in the bargaining unit. The benefits of any contract negotiated apply to all, even those who oppose the union, and any grievance procedure to enforce the contract is open to all.
  • This system provides many benefits to employers – one set of negotiations, one contract, and one grievance and arbitration procedure to administer.
  • Without fair share fees, the union may lack the resources to engage in effective representation, which will eviscerate the entire system.
  • If the labor relations system that has served well for so long is in need of revision, that task should be left to Congress and the state legislatures.

Symposium: Will the Court continue to recognize a distinction between bargaining with government and lobbying the government?, by William Messenger, an attorney with the National Right to Work Legal Defense Foundation.

  • Friedrichs squarely presents the question wrongly decided in Abood: whether public school teachers can be forced to support union bargaining with a school district.
  • Harris v. Quinn (2014) suggests that the Court will be receptive to the Friedrichs petitioners’ arguments that there is no relevant difference under the First Amendment between bargaining with government and lobbying government, in that both are petitioning government over matters of political and public concern, and that Abood should be overruled on these grounds.
  • Harrisalso suggests that the Friedrichs respondents have a difficult path ahead of them, because Harris rejected most union arguments for compulsory fees.
  • For the respondents in Friedrichs to argue that union collective bargaining with government is merely an internal matter with no political component, and of no public concern, would be to ask the Court to deny the obvious.

Symposium: The Friedrichs petition should be dismissed, by Catherine Fisk, the Chancellor’s Professor of Law at the University of California, Irvine School of Law.

  • Friedrichs was rushed through the lower courts without any factual record, apparently in response to Knox v. Service Employees International Union, Local 1000 (2012).
  • In the trial court, the plaintiffs filed suit and promptly requested the court to enter judgment on the pleadings in favor of the defendants, which the court did, finding the matter controlled byAbood and other cases. In the Ninth Circuit the plaintiffs likewise requested and received summary affirmance in favor of the defendants.
  • The absence of a record will be a problem. In Friedrichs, the trial court did not allow the union to develop a factual record to make the showing Harris requires about the costs the union incurs in bargaining on behalf of teachers and in enforcing their rights under collective agreements and the likely extent of the free-rider problem.
  • The Court cannot rule against the union in Friedrichs for failing to make a showing that the union specifically tried to make.
  • Nor can the Court decide the opt-in /opt-out issue without a record because the First Amendment issue turns on factual questions.

Symposium: Correcting the “historical accident” of opt-out requirements, by David B. Rivkin, Jr., and Andrew M. Grossman in the Washington, D.C., office of Baker & Hostetler LLP.

  • Friedrichs will likely mark the end of requirements that dissenting workers take action to “opt out” of funding public-sector unions’ political and ideological activities.
  • As the Court recounted in Knox, “acceptance of the opt-out approach appears to have come about more as a historical accident than through the careful application of First Amendment principles.”
  • As a practical matter, labor unions have not made it easy for workers to opt out of funding political activities.Workers must go through the process of objecting every single year, opt-out requests are typically permitted only during an annual “objection period,” and unions do the bare minimum required by law to publicize workers’ opt-out rights.
  • One can certainly understand why labor unions would want to collude with state and local politicians to exact political funds from unwilling employees who may not know how to satisfy convoluted opt-out procedures or are reluctant to bear the burden of doing so.

Symposium: Another battle in the war over union fees, by Charlotte Garden, Associate Professor at Seattle University School of Law and Litigation Director of the Korematsu Center for Law & Equality.

  • A major reason states choose to allow public-sector bargaining is to provide a productive and stable channel for workers’ voices, which is much more easily achieved when an elected union has adequate resources.
  • Agency fees are appropriate when – as in this case – unions are required to fairly represent all workers in the bargaining unit, whether or not they become members; the alternative would permit destabilizing free ridership.
  • Overturning Abood would set off a wave of contract renegotiations as unions attempt to internalize the costs of free riding. This might involve limiting non-essential union activities that benefit both workers and employers.
  • Constitutional rights often turn on whether the government is acting as a sovereign or in another capacity, such as employer. Conversely, public-sector workers have much greater First Amendment protection when they are acting as citizens, rather than as employees.
  • Bargaining is not the same as lobbying. Public employers bargain in their managerial capacities, whereas they receive lobbyists in their sovereign capacities.


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With an artificially intelligent attorney, will you have to pay overtime?

Meet ROSS, “the world’s first artificially intelligent attorney.”

I recently wrote about a lawyer who put in for overtime, and may win if he can demonstrate that his work “did not involve the use of any legal judgment or discretion.” See Was lawyer doing robot work, so FLSA overtime is due?

The court bought in to this, saying that the lawyer was alleging that he “provided services that a machine could have provided.”

I wondered out loud whether the court had heard of smart machines that play chess or even do judicial work.

Better yet, Meet ROSS, “the world’s first artificially intelligent attorney.”


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Was lawyer doing robot work, so FLSA overtime is due?

clockMy view: Robots don’t get overtime pay, but a lawyer alleging he does the work of a robot states a claim for overtime. Just allege you provide services that a machine could have provided, and you get to go to trial. [Opinion: Lola v. Skadden, Arps (2nd Cir 07/23/2015), reversing Lola v. Skadden, Arps (SD NY 09/16/2014).]

David Lola is a lawyer who got hired by a legal staffing company to perform services for the Skadden Arps law firm. Lola did his work in North Carolina – reviewing documents relating to litigation pending in federal court in the Northern District of Ohio. Lola is a licensed lawyer in California, but is not admitted to practice law in either North Carolina or the Northern District of Ohio.

Lola sued both the staffing company and the law firm claiming entitlement to overtime pay. The defendants argued that Lola was exempt from overtime due to his status as a professional employee – “Any employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and is actually engaged in the practice thereof,” according to DOL regs.

Lola argued that his work was not the practice of law because it was “mechanical” and “did not involve the use of any legal judgment or discretion.”

The court said it needed to use state law standards in interpreting the federal “practice of law” rule.

And which state? The state where the work was performed (North Carolina). Not the state where the litigation was pending (Ohio), not the state where the law firm and staffing agency had their principal place of business (New York), and not where Lola had his law license (California).

According to a North Carolina ethics opinion, document review is the practice of law. But the 2nd Circuit pointed out thatinherent in the definition of ‘practice of law’ in North Carolina is the exercise of at least a modicum of independent legal judgment.” The court interpreted Lola’s complaint as alleging that he “exercised no legal judgment whatsoever,” and “provided services that a machine could have provided.” That’s enough to survive a motion to dismiss for failure to state a claim.

Obviously the court does not understand machines. Have they not heard of computers that can beat chess champions? Or experiments in which computers replace judges?

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Free law school tuition, with a catch

IndianaTechGet a free legal education, with no guarantee that you can take the bar exam.

Indiana Tech Law School started out in 2013. Really close to the bottom of a long-term nationwide slide in the number of folks applying to go to law school. It’s the fifth law school in Indiana. Interesting to see someone enter a market where demand is declining and supply seems to be pretty strong.

Indiana Tech has applied for ABA approval, which is needed so grads can take the bar exam. Approval has been declined. The school is re-applying.

Nobody is saying why ABA approval was denied, and the school says it is working to fix whatever deficiencies the ABA noted.

The school has now announced that every student who is enrolled in the school during 2016 will receive a 100 percent scholarship. Of course they still have to buy books and cover their own living expenses. And take the risk that ABA approval might not be forthcoming.

Free tuition was offered at U Cal Irvine during its first year of operations. As part of the huge and well-financed U Cal system, it seemed clear that ABA approval would be a cinch, and the school got approval on the fastest track available. The jury is still out on Indiana Tech.

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“Prisoner of AT$T” T-shirt can be banned

attprisoners3“Common sense sometimes matters in resolving legal disputes,” says the court.

Reversing a decision by the NLRB, the DC Circuit held that a telephone company can forbid employees to wear “Prisoner of AT$T” T-shirts when going into customer homes or were working in public. Southern New England Telephone v. NLRB  (07/10/2015).

During contract negotiations in 2009 Communications Workers in Connecticut wore T-shirts with “Inmate # ____” on the front and “Prisoner of AT$T” on the back. The boss said they could not wear them if they were going into customer homes or were working in public. Many did anyhow, and 183 got suspended.

The NLRB generally allows employees to wear union insignia while working, and keeps employers from firing workers who do so. There’s a “special circumstances” exception: A company may lawfully prohibit its employees from displaying messages on the job that the company reasonably believes may harm its relationship with its customers or its public image.

AT&T explained that it banned only employees who interact with customers or work in public from wearing the T-shirts. AT&T officials testified that the shirts could alarm or confuse customers, could cause customers to believe that AT&T employees were actually convicts, or could harm the company’s public image more generally.

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One more NLRB overruling is coming

nlrbMy view:  It’s all about “temps.” The NLRB’s announcement that it wants briefs from the parties and from amici is a tip-off that they will overrule Oakwood Care Center343 NLRB 659 (2004), and return to the rule of M.B. Sturgis331 NLRB 1298 (2000).

In Miller & Anderson, pending at the NLRB, you have three groups of employees and the Sheet Metal Workers Union wants them all to be part of the same bargaining unit. The three groups are those who are: (1) employed by Miller & Anderson, (2) employed by Tradesmen International (a temp staffing organization), and (3) jointly employed by Miller & Anderson and Tradesmen International.

Current Board policy is that for these three groups of employees to be in the same bargaining unit it requires the consent of both employers. Otherwise, they’re in separate units. That’s Oakwood Care Center.

Prior policy was that the groups could be combined even without employers’ consent. That was M.B. Sturgis.

The outcome seems inevitable, given the current makeup of the NLRB, but here are the questions the NLRB wants to be briefed:

  • How, if at all, have the Section 7 rights of employees in alternative work arrangements, including temporary employees, part-time employees, and other contingent workers been affected by the Board’s decision in Oakwood Care Center343 NLRB 659 (2004), overruling M.B. Sturgis331 NLRB 1298 (2000)?
  • Should the Board continue to adhere to the holding of Oakwood Care Center, which disallows inclusion of solely employed employees and jointly employed employees in the same unit absent the consent of the employers?
  • If the Board decides not to adhere to Oakwood Care Center, should the Board return to the holding of Sturgis, which permits bargaining units that include both solely employed employees and jointly employed employees without the consent of the employers? Alternatively, what principles, apart from those set forth in Oakwood and Sturgis, should govern this area?

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