On Monday, December 11, 2017, the Board issued a decision holding that Administrative Law Judges can approve an employer’s offer to settle unfair labor practice charges so long as the settlement offer is “reasonable,” even if the general counsel and charging party object to the settlement. The case reverses Obama-era precedent that held that an ALJ can approve a settlement only if the settlement provides “complete relief” for every alleged unfair labor practice. That standard made it impractical for employers to settle unfair labor practice charges because employers received no compromise in exchange for foregoing full-blown litigation.
In a series of recent decisions, courts have weighed in on a spate of ERISA lawsuits challenging retirement plans private universities offer to their employees. These rulings, most of which allowed claims to proceed past the motion to dismiss stage, highlight the variation in standards courts apply when weighing ERISA fiduciary suits. Moreover, they underline the need for plan fiduciaries to review the performance and fees of their plans’ service and investment providers on a regular basis to determine whether the providers’ fees are reasonable and their continued retention is appropriate.
The newly-appointed NLRB General Counsel Peter Robb issued his list of priorities in Advice Memo 18-02 released December 4, 2017. The Memo sets forth the “Mandatory Submissions to Advice” – the kinds of cases Regional Directors must submit to the Division of Advice to obtain guidance before issuing a complaint. The Advice Memo signals the GC’s intent to assist the Board in undoing much of the Obama-era Board’s sweeping changes to federal labor law. As predicted, many of the priorities focus on the Board’s handbook-related changes, granting employee access to employer email systems, and confidentiality rules in investigations.
The Sixth Circuit yesterday outlined narrow circumstances under which an employer can show good faith reliance on a Department of Labor opinion letter in setting wage-hour policy. In Perry v. Randstad General Partner, No. 16-1010 (6th Cir. Nov. 20, 2017), the Court held the employer did not establish a good faith reliance defense despite undisputed evidence that the employer relied on a 2005 DOL opinion letter in determining that its employees met the administrative exemption of the FLSA. The opinion serves as a note of caution to employers relying on DOL opinion letters for wage-hour policies.
On Monday this week, Arizona Governor Doug Ducey signed Executive Order 2017-07 to provide “second chance opportunities” for the 1.5 million Arizonans with criminal records. The Order prohibits state agencies from initially questioning job applicants about their criminal records. Arizona cities Phoenix, Tempe, and Tucson already have similar laws for city job applications.
Importantly, Ducey’s Order still allows state agencies to check the applicant’s criminal record—just after the applicant has received an initial interview—and the Order does not apply to private Arizona employers. Ducey affirmed that he doesn’t “set policy for private employers.” Instead, he stated, “We’re trying to lead the way in terms of examples from state government.”
Arizona joins 29 other states that have prohibited questions about criminal records in initial state employment applications. Ten states, including California, have imposed the same limitation on private employers.
The “ban the box” movement continues to spread. Employers should check local laws before creating application forms or interview questions that call for the applicant’s criminal history.
On October 10, Local 100, United Labor Unions filed an unfair labor practice charge against the Dallas Cowboys claiming that it unlawfully threatened players to prevent them from engaged in protected concerted activity. Earlier this week, Cowboys’ general manager Jerry Jones threatened to bench players who refused to stand for the national anthem.
The charge highlights how simple it is for literally anyone on the street to file an unfair labor practice (“ULP”) charge. Local 100 does not represent the players—the National Football League Players Association does. But anyone can file a ULP charge—the NLRB requires no standing.
The charge also raises the interesting question of whether kneeling for the national anthem constitutes concerted activity protected by the NLRA, even under the NLRB’s currently broad standards. The NLRA protects “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” but only as it relates to terms and conditions of employment. Protesting social and racial injustice, broadly speaking, does not relate to the players’ working conditions, particularly where none of the players have claimed poor treatment by the NFL or their teams. But if players kneel to support other players (such as Colin Kaepernick) or to protest Jones’s new rule, such conduct could earn the protection of the Act.
On October 3, 2017, California Governor Jerry Brown signed into law Senate Bill 306, dramatically limiting an employer’s right to defend itself against allegations that it retaliated against an employee for making wage claims. In short, the law makes it far easier for employees and the California Labor Commissioner to obtain injunctive relief in retaliation cases, potentially requiring employers to reinstate discharged employees before an employer can fully defend itself against the allegations. The law takes effect January 1, 2018.
The law allows the Labor Commissioner or an employee to obtain injunctive relief against an employer based on a mere showing that “reasonable cause exists to believe a violation has occurred.” That’s a far lower burden of proof than a court’s typical standard for injunctive relief, which requires a showing that (1) the employee will suffer irreparable harm, (2) the employee will likely succeed on the merits, and (3) the employee’s interests outweigh the employer’s. The law also requires a court considering a request for an injunction to evaluate “the chilling effect on other employees.”
Other features of the new law that restrict employers’ rights include:
- Authorizing the Labor Commissioner to seek injunctive relief before concluding its own investigation;
- Permitting the Labor Commissioner to initiate investigations on its own, “without a complaint,” if the suspected retaliation occurred during the adjudication of a wage claim or a field inspection, or in instances of immigration-related threats;
- Allowing the Labor Commissioner to issue its own citations ordering reinstatement or back pay, without going to court;
- Placing a heavy burden on the employer to challenge Labor Commissioner citations, including requiring the employer to post a bond equal to the total amount of back pay allegedly owed.
Key Takeaways: The new law increases the need for California employers to make careful, well-reasoned, and thoroughly-documented disciplinary and discharge decisions. Notably, when employees make wage claims, they often also simultaneously engage in protected concerted activity under Section 7 of the NLRA. Given the potential overlap between the Labor Commissioner’s jurisdiction and the NLRB’s jurisdiction, employers facing legal action under the new law should consider whether an NLRA preemption defense applies.
On September 21, 2017, a federal district judge rejected a $19.1 Million proposed deal to end a nationwide wage-hour class action against the TGI Friday’s restaurant chain. In Zorrilla v. Carlson Restaurants Inc., 14-cv-2740 (SDNY), a class of nearly 29,000 tipped workers in nine states alleged violations of the FLSA and state wage-hour laws, including that the restaurant improperly took a tip credit, required an unlawful tip pool, and failed to pay spread-of-hours and uniform-related expenses. After more than four years of litigation, the parties reached perhaps the largest wage-hour settlement for the restaurant industry and sought court approval as required under the FLSA.
On September 28, 2017, the Supreme Court agreed to review whether service advisors at auto dealerships qualify as exempt from overtime under the Fair Labor Standards Act, in Encino Motorcars, LLC v. Navarro. The employer’s petition asks the Court to overturn the Ninth Circuit’s decision that the employees who advise customers about repair work could continue their wage-hour lawsuit against a California Mercedes Benz dealership. A Supreme Court decision could have wide-ranging impact on how lower courts interpret exemptions under the FLSA. (We’ve previously written about misclassification issues here.)
The Court also agreed to rehear the issue of whether requiring non-union employees in the public sector to pay fees to unions violates their First Amendment rights, in Janus v. AFSCME, Council 31. The petitioners seek to overturn the Court’s 1997 decision in Abood v. Detroit Board of Education, which affirmed that unions can require fees from non-members to cover costs of collective bargaining, contract administration, and grievance handling. The Court reheard the issue in March 2016 shortly after Justice Scalia’s death, but the case ended in a 4-4 tie. Newly-appointed Justice Gorsuch is expected to provide the clinch vote to ban to fees.
In related news, the Court will hear oral argument on Monday, October 2, 2017, in the consolidated cases asking whether arbitration agreements that bar employees from pursuing class or collective action claims violate Section 8(a)(1) of the NLRA.
On September 25, the Senate confirmed William Emanuel to the National Labor Relations Board by a vote of 49-47. With Emanuel’s confirmation, and the Senate’s recent confirmation of Republican Marvin Kaplan, the Board now has its full five-members and a Republican majority, which it has not had since before the Obama administration. Along with Kaplan, Emanuel joins Republican Chairman Philip Miscimarra and Democratic members Mark Gaston Pearce and Lauren McFerran.
A veteran management-side attorney with Littler Mendelson, Emanuel has significant experience representing employers before the Board. His previous clients include companies in the transportation, banking, automotive, and healthcare industries. Just before the vote, Senate Majority Leader Mitch McConnell (R-KY) tweeted: “The @NLRB is supposed to be a neutral umpire in labor disputes. It’s time it got back to that. Confirming Mr. Emanuel today will help do so.” Senator Dean Heller (R-NV) stated that he was encouraged that the Board has a new majority for the first time in nearly a decade and that “it will be instrumental in making balanced decisions that will help boost our economy and create jobs . . . around the country.” Senate Democrats, including Elizabeth Warren (D-MA), were less enthusiastic. Warren expressed concerns that Emanuel should not serve on the Board after spending his lengthy career trying to prevent workers from unionizing.
Various business groups supported President Trump’s nomination of Emanuel and praised his ultimate confirmation. National Retail Federation Senior Vice President for Government Relations David French previously urged the Senate to promptly confirm Emanuel, noting that retailers were confident that he would be a “fair arbiter of the law.” Competitive Enterprise Institute labor policy expert Trey Kovacs stated that Emanuel would be an outstanding addition to the Board. Kovacs added, “It’s essential that the NLRB start to undo the harm caused during the Obama administration, when the board put out numerous job-killing decisions and rules that weaken worker choice.”
While the Republicans have a 3-2 majority, and with Chairman Miscimarra’s term coming to an end in December 2017, look for the Board to soon revisit previous high profile Board decisions that placed significant burdens on employers, including such issues as the joint employer standard, micro-bargaining units, and employer handbooks and policies, as well as possibly rescinding speedy election rules.