On the eve of Chairman Phillip Miscimarra’s departure from the NLRB, he gave one final gift to employers: the overturning of Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), an Obama-Era Board decision that allowed unions to organize “micro-units” of employees—drastically limiting any challenges employers could have to a petitioned-for unit before being forced to negotiate with fractured units of employees throughout its workforce. In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), the Board reinstated the traditional community of interest standard to be used when determining whether unions have included all necessary employees on a petition for union representation. The Board’s reversal is a welcomed relief to employers who have been forced to bargain with several small units of employees in one workplace, thereby preventing all employees at a worksite from exercising their rights to vote on union representation. Continue Reading
In a decision issued earlier this month, the Second Circuit Court of Appeals ruled that participants in unpaid internship programs offered by the Hearst Corporation could not be classified as “employees” of Hearst and therefore were not entitled to compensation for their internships under the Fair Labor Standards Act (FLSA).
The Second Circuit’s decision in Wang v. Hearst Corp., No. 16-3302 (2d Cir. 2017) (available here) affirmed a 2016 decision by U.S. District Judge J. Paul Oetken granting summary judgment for Hearst and dismissing the claims of lead plaintiff Xuedan Wang and four other college-age individuals working as unpaid interns for Hearst’s various print magazines. The Second Circuit made clear reference to the case’s underlying significance, framing the question raised on appeal as “whether Hearst furnishes bona fide for‐credit internships or whether it exploits student‐interns to avoid hiring and compensating entry-level employees.” Continue Reading
In 2004, the National Labor Relations Board (NLRB) issued Lutheran Heritage Village-Livonia, 343 NLRB 646 (“Lutheran Heritage”), and held that the mere maintenance of a neutral work rule violated Section 8(a)(1) of the National Labor Relations Act (NLRA) if employees would reasonably construe the rule to prohibit union and other protected concerted activity (Section 7 conduct). For the purposes of this analysis, a neutral work rule is one that does not explicitly reference or restrict Section 7 conduct. In the ensuing years, primarily during the Obama administration, the Board relied on Lutheran Heritage’s “reasonably construe” standard to invalidate countless neutral work rules to the point that practically every employer in America was placed at risk of being found to be in violation of the NLRA by virtue of the wording found in their employment agreements, employee handbooks and work rules. Continue Reading
Yesterday, the National Labor Relations Board (“Board”) overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015) (“BFI”) and returned to the pre-BFI standard that governed joint employer liability. Hy-Brand Industrial Contractors Ltd., 365 No. 156 (December 14, 2017) (“Hy-Brand”).
The BFI decision set forth a broad definition of “joint employer,” imposing liability and requiring bargaining in situations where a business possesses only potential and indirect control over the employees in question. BFI received widespread criticism from both unionized and union-free businesses, as the BFI test was unpredictable and fundamentally altered the law applicable to a number of business relationships including: user-supplier, contractor-subcontractor, franchisor-franchisee, parent-subsidiary, predecessor-successor, lessor-lessee, and creditor-debtor. Efforts to overturn BFI have been ongoing since 2015, including the Save Local Business Act which was advanced to the Senate in November 2017. Continue Reading
The NLRB announced yesterday, a Request for Information (“RFI”) on the Board’s 2014 “Quickie Election” representation regulations (at 29 CFR parts 101 and 102). The RFI seeks input on the amendments to representation case procedures, which drastically changed the process for NLRB conducted elections in which employees vote on whether they want to be represented by a union. The RFI was approved by Board Chairman Philip A. Miscimarra and Board Members Marvin E. Kaplan and William J. Emanuel. Board Members Mark Gaston Pearce and Lauren McFerran dissented. Continue Reading
On November 8, 2017, Peter B. Robb was sworn in as the General Counsel (GC) of the NLRB for a four year term. Robb succeeds Richard Griffin, who has been the GC since November 2013. Robb wasted no time in taking initial steps to undo many of the NLRB’s more controversial recent decisions. On December 1, 2017, Robb issued Memorandum 18-02 directing the NLRB’s regional offices on which types of charges should be submitted to his Division of Advice and rescinding policy memoranda issued by the prior GCs. Continue Reading
The Senate voted yesterday to begin formal negotiations with the House of Representatives to reconcile their two versions of the Tax Cuts and Jobs Act, a bill that seeks to make sweeping changes to federal tax law. Republicans are racing to enact a final bill before Christmas. Under both versions of the bill, tax-exempt organizations would face new burdens and taxes in order to pay for tax cuts elsewhere. In particular, the proposed changes would:
- make it harder for larger tax-exempt organizations to attract and retain top talent, by imposing a new 20% tax on annual compensation of over $1 million per year paid to any of their top 5 highest paid employees (including certain severance payments);
- reduce revenues, by eliminating certain tax incentives to make charitable donations;
- eliminate critical low-cost financing for hospitals and universities from tax-exempt bonds;
- make certain employee benefits more expensive, by taxing organizations that pay certain fringe benefits and taxing employees on certain employer-provided education and tuition assistance; and
- add new pressures on Section 501(c)(3) organizations to support or oppose political candidates, by loosening the current absolute prohibition against political activity.
Last month, the New Jersey State Senate introduced Senate Bill 3518 (the “Bill”), which, if passed, will severely restrict the use and enforceability of employee non-compete agreements in the state of New Jersey. Most significantly, the Bill would: (1) prohibit entering or enforcing non-compete agreements with certain groups of employees; (2) require employers to pay full wages, salary, and benefits to employees during their non-compete period: (3) prohibit applying an arbitration provision or other such restriction to non-compete provisions; and (4) allow employees a private right of action for any statutory violation. The passage of the Bill would be a significant departure from current New Jersey law which generally enforces non-compete agreements and other restrictive covenants provided that they are reasonable in scope, protect legitimate business interests, and are not unduly burdensome on the employee or against public policy. Continue Reading
California Assembly Bill (AB 450) is a bold move by the State Legislature to enter the I-9 arena – an area that has long been recognized as within the domain of the federal government. The Bill was signed by Governor Jerry Brown in October 2017 and becomes law on January 1, 2018.
The Bill amends the state Labor and Government codes and requires California employers to perform various notifications to their employees if U.S. Immigration and Customs Enforcement (ICE) audits the company’s I-9’s. Continue Reading
The California Court of Appeal recently held that employees’ workers’ compensation decisions barred them from pursuing similar claims under the Fair Employment and Housing Act (“FEHA”) based on the doctrine of res judicata. Continue Reading