NLRB looks at 2018

The NLRB now is back to its full five Members, with a Republican majority and a new Chairman – John Ring. The General Counsel has shared his vision of the NLRB's future. See NLRB's GC's Roll-Back Agenda.

Changes that are in the wind involve both unionized and non-union workplaces:

Joint employers Flip Flop. Hy-Brand Industrial Contractors (NLRB 12/14/2017) [Decision] overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015) and returned to the pre-Browning Ferris standard that governed joint-employer liability. But wait! The Board vacated Hy-Brand. Hy-Brand Industrial Contractors (NLRB 02/26/2018) [PDF] because Member William Emanuel had a conflict of interest. So Browning-Ferris is still with us – until the Republicans' new majority sorts things out.

Election Rule. In 2014 the Board adopted a new election rule [NLRB fact sheet] intended to decrease the time preceding union elections, thus sometimes called the "quickie election rule." The new Board has issued a "Request for Information" [Full text] – the first step in the inevitable roll-back of the Board's controversial 2014 Election Rule. The time for submitting comments has expired. View comments [HERE]. For more, see NLRB signals Election Rule roll-back; NLRB election rule comment period extended.

Class-action waivers. In D.R. Horton (2012) [Board decision] [not enforced by 5th Cir], the NLRB said that it's an unfair labor practice for an employer to require employees to agree that they will not bring a class-action or collective-action case, either in litigation or in arbitration. Federal circuit courts are split on this, and the issue is now before the US Supreme Court (Epic Systems v. Lewis, consolidated with two other cases). A decision is expected at any moment. See NLRA v. FAA – US Supreme Court will decide class-action waiver cases; Delayed arguments in class-action waiver case; Dissecting SCOTUS' class-action argument.

Deferral to arbitration. Babcock & Wilcox (2014) [Board decision] modified Olin Corp (1984) to make it more difficult to obtain deferral to arbitration awards, grievance/arbitration proceedings, and pre-arbitration grievance settlements.

Joint representation. Miller & Anderson (2016) [Board decision] overruled Oakwood Care Center (2004) and held that a union seeking to represent employees in bargaining units that combine both solely and jointly employed employees of a single user employer are no longer required to obtain employer consent.

College students. Columbia University (2016) [Board decision] overruled Brown University  (2004) and held that college student assistants are statutory employees, and the fact they are also students does not change their status as employees.

Employer's email system. Purple Communications (2014) [Board decision] (reaffirmed in 2017) overruled Register Guard (2007) and held that employees may use their employer's email system for protected communications on nonworking time.

Union dues check-off. WKYC-TV (2012) [Board decision] overruled Bethlehem Steel (1962) and held that a dues check-off provision in a collective bargaining agreement remains in force after the collective agreement has expired.

Pastor-pressured volunteers are not FLSA employees at for-profit restaurant

What was DOL thinking? That the FLSA applied to volunteers whom a pastor spiritually "coerced" to work at a church-owned restaurant, even though they didn't expect payment? Not so, says the 6th Circuit. Acosta v. Cathedral Buffet (6th Cir 04/16/2018) [PDF].

The Department of Labor sued Cathedral Buffet claiming violations of the minimum wage requirement of the Fair Labor Standards Act (FLSA). The trial court held a bench trial and found in favor of DOL; the 6th Circuit reversed.

No expectation of being paid: Cathedral Buffet is a for-profit restaurant whose sole shareholder is a non-profit religious organization. DOL's position was that the restaurant's "volunteers" were actually employees. Volunteers performed many of the same restaurant-related tasks as employees: cleaning, washing dishes, serving cake, chopping vegetables, and manning the cash register. However, employees received an hourly wage; volunteers did not. The 6th Circuit held that the volunteers could not be classified as employees because they did not expect to receive any compensation. The trial court improperly applied the economic realities test, which can come into play only after first determining that workers expected remuneration.

Spiritual coercion: DOL also argued that the volunteers were coerced into working, and that coercion can satisfy the expectation-of-remuneration requirement. But the coercion in this case was spiritual (pressure from a church pastor) rather than economic, so the workers were not employees.

A concurring opinion argued that DOL's "premise—namely, that the Labor Act authorizes the Department to regulate the spiritual dialogue between pastor and congregation—assumes a power whose use would violate the Free Exercise Clause of the First Amendment."

Republicans regain majority at NLRB


The Senate on April 11 confirmed (by 50-48 vote) Republican John Ring as a Member of the National Labor Relations Board. Thus, Republicans now have a 3-2 majority, and can resume the roll-back of Obama era Board decisions. For some examples, see NLRB Watch.

What's John Ring's history?

+ John Ring was a lawyer with Morgan, Lewis & Bockius LLP, practicing out of the Washington, DC office.
+ Co-leader of the Morgan Lewis labor/management relations practice.
+ Office practice leader for the labor and employment practice.
+ Hiring partner for the Morgan Lewis Washington, DC office.
+ Counsel to a number of national negotiating teams, including for the National Master Freight Agreement.
+ Co-counsel to a number of multiemployer benefits funds.
+ Negotiates and administers labor contracts.
+ Advisor on large-scale workforce restructuring and consolidations and reduction-in-force (RIF) issues.
+ Counsels on ADA, FMLA, & WARN issues.
+ B.A. degree, Catholic University of America, 1985.
+ Law degree, Catholic University of America, Columbus School of Law, 1989.
+ Fellow, College of Labor and Employment Lawyers.
+ President, Friends of the National Zoo Board of Directors.

More details about John Ring are on the Morgan Lewis website [HERE].

Arbitration in the gig economy

Professor Charlotte Garden [Bio] at Seattle University School of Law is no fan of pre-dispute arbitration agreements. She has published an article in 2017 University of Chicago Legal Forum 205 (2018) entitled Disrupting Work Law: Arbitration in the Gig Economy. You can download the article [HERE].

This is the abstract:

It is presently in style to speculate about the disruptive potential of the “gig economy.” Will enterprises like Uber and Lyft change the way we get around, undoing taxi monopolies in the process? And what happens when tens of thousands of workers find work by logging onto a platform? Do the enterprises become the employers of some or all of these workers, or — as the enterprises themselves generally assert — should we regard these workers as newly minted micro-entrepreneurs?

That last question has emerged as a major unresolved issue with enormous importance to gig economy workers. Yet, there exists a major impediment to resolving it: the ubiquity with which gig economy companies require or encourage their workforces to resolve their disputes in individual arbitration proceedings. As this article will discuss, the effects of individual arbitration clauses (IACs) in the gig economy are significant. First, they make it unlikely that large swaths of gig economy workers will, as a practical matter, be able to resolve their employment status in any forum. Second, they make it more likely that — to the extent those questions are resolved at all — they will be resolved in arbitral proceedings that result in decisions that are non-precedential, secret, and applicable to only one worker at a time. Third, they reduce the costs of misclassifying workers — or at least they lead enterprises to believe they have reduced the costs of misclassification — by reducing the deterrent effect that the prospect of aggregate litigation can serve.

This article makes three contributions: first, it systematically reviews a group of IACs in gig economy worker agreements, discussing their similarities and differences; second, it offers a detailed look at how litigants and courts have responded to IACs in the gig economy so far, and discusses some consequences of IACs when they become ubiquitous in a segment of the economy; and third, it discusses possible ways to limit the effects of IACs in the work law context despite the Federal Arbitration Act (FAA), including responses at the agency, state, and private individual or organization levels.

Salary history no good as an EPA defense

The 9th Circuit – en banc – has swept away prior rulings and held that an employer cannot use an applicant's salary history (whether considered alone or with other factors) as a defense in an Equal Pay Act case. A "factor other than sex" must be "job-related." Therefore, an applicant's pre-employment salary history cannot be used as a reason for paying a woman less than a man for doing the same work. Rizo v. Yovino (9th Cir 04/09/2018) (en banc) [PDF], overruling Kouba v. Allstate, 691 F3d 873 (9th Cir 1982).

The Equal Pay Act requires employers to pay men and women the same amounts for work that "requires equal skill, effort, and responsibility, and which are performed under similar working conditions." One exception is for "a differential based on any other factor other than sex."

The en banc court concluded that "any other factor other than sex" is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.

"Prior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages."

The majority (six judges) clearly view the use of prior salary as a perpetuation of prior discrimination, which the EPA was designed to eliminate.

"Congress simply could not have intended to allow employers to rely on these discriminatory wages as a justification for continuing to perpetuate wage differentials."

This all sounds like a clear, bright line, yet the majority is leaving some wiggle room for individualized salary negotiation.

"Today we express a general rule and do not attempt to resolve its applications under all circumstances. We do not decide, for example, whether or under what circumstances, past salary may play a role in the course of an individualized salary negotiation."

Two concurring judges wrote that they agree with most of the majority opinion, particularly its observation that past salary can reflect historical sex discrimination. However, they said the majority went too far in holding that any consideration of prior pay is impermissible under the Equal Pay Act, even when it is assessed with other job-related factors.

Two other concurring judges wrote that in holding that prior salary can never be considered, the majority failed to follow Supreme Court precedent, unnecessarily ignored the realities of business, and, in doing so, might hinder rather than promote equal pay for equal work.

One judge concurred in the judgment, saying that the better view is that past pay can constitute a "factor other than sex," but only if an employee’s past pay is not itself a reflection of sex discrimination.

A number of other Circuits pretty much agree, but the 9th Circuit looks like the toughest of the bunch.

NLRB's Hy-Brand soap opera accelerates

The NLRB's General Counsel is ripping the Board for denying litigants' due process rights and deviating from long-held practice by ex post facto disqualifying Member Emanuel from voting on the second round of the Hy-Brand case. The GC dropped its little bomb on April 5 - a brief in opposition to reconsideration of the Board's order which vacated the original Hy-Brand decision [PDF].

In December 2017 the Board, with Emanuel's participation, decided Hy-Brand Industrial Contractors, Ltd. (Hy-Brand I), 365 NLRB No. 156 (2017) [PDF], which overruled Browning-Ferris Industries, 362 NLRB No. 186 (Aug. 27, 2015). This changed the rules for determining when a company is considered a "joint employer." Hy-Brand I adopted a "direct control" test rather than Browning-Ferris' "indirect control" test.

Then in February three Members (not including Emanuel) vacated Hy-Brand I, having decided that Emanuel ought not to have participated. Hy-Brand Industrial Contractors, Ltd. (Hy-Brand II), 366 NLRB No. 26 (2018) [PDF]. It's pretty clear that Emanuel was blind-sided by this action.

The GC now wants the Board to set aside Hy-Brand II, basically for the following reasons:

1. Emanuel should have been allowed to rule on the motion for his recusal. That's been the long-standing practice at the NLRB and at other agencies.

2. It was not proper for three Board Members to vacate a decision that was made by five Members, especially when the Board had four Members.

3.  Arguably, Emanuel had a right to sit on the Hy-Brand II case.

4. The Board violated the parties' due process rights, essentially because they were not given notice and an opportunity to respond to the Board's plan to vacate Hy-Brand I.

How will all this end? There's no way to tell. For right now we're seeing some pretty hot words being thrown by a Republican General Counsel toward Republican Board Members.