Fox Television Stations sought a wage reduction and other concessions from the Communications Workers of America during recent labor negotiations. When no agreement was reached by an agreed-upon deadline, Fox lawfully implemented an older contract offer much to chagrin of the CWA.
Fox and the Union had been negotiating a successor agreement for two years when in November 2012 the union rank and filed voted down a new collective bargaining agreement that was supported by the Union negotiators. After further negotiations, Fox told the Union it needed an affirmative ratification vote by the members in May 2013 or it would declare impasse and implement its November 2012 agreement. When the membership voted down the May 2013 contract, Fox declared negotiations were at an impasse and implemented the November 2012 proposal as its last, best, and final offer.
I caution companies against using this case as a blueprint to prematurely reach impasse. Rather, the facts here are unique. For example, the Union refused to give ground on most of the eight listed priority areas for Fox, the Union refused to recognize that it had already agreed to accept the November 2012 deal if the May 2013 one wasn’t ratified, and the Union engaged in regressive bargaining after rejecting the May 2013 offer. Only if your company’s facts start to parallel these should you consider following in Fox’s footsteps – but even then, seek the advice of competent legal counsel before declaring impasse.
I’ll be honest, I’m tired of warning companies that the NLRB is on a witch hunt to find minor violations of the National Labor Relations Act hidden inside handbooks of union and non-union companies alike. But, based on the number of clients who have proactively asked me to review their handbooks with an eye toward complying with the NLRB’s recent scrutiny, I have a lot more warning to do.
A management company for an Embassy Suites was the latest victim when the NLRB Administrative Law Judge took issue with several policies in its handbook. One policy prevented employees from accessing company property when not on duty without offering a business justification for the restriction. Another policy prohibited employees from speaking with the media. The Company’s confidentiality policy apparently could give employees the impression that they are prohibited from discussing their wages and terms and conditions of employment with one another.
This is just a sampling of the many policies under attack by the NLRB. The current Board has extended employees’ Section 7 rights under the Act to points never before contemplated. Standard employment policies incorporated into most every handbook now violate the law, according to the current activist Board. I cannot stress enough that every handbook of every company has a target on it. Take the time now to ensure that your handbook complies with the always-changing Section 7 of the NLRA.
Under a dues check off provision, employers deduct employees’ union dues from their paychecks and forward the money directly to the union. Employees never see, and thus never miss, the money that they pay for dues and unions are not tasked with collecting dues money from each employee individually after that money has hit their own bank accounts. This is a critical component of a collective bargaining agreement and unions will trade away a lot in exchange for this clause. In 1962, the NLRB held that an employer’s dues check off obligation terminates upon expiration of a contract. See, Bethlehem Steel. Since then, savvy labor negotiators have ceased automatic dues deduction as a way to place economic pressure on a union during negotiations.
But, in 2012, an unconstitutionally appointed NLRB decided to overrule this 50-year-old precedent. See, WKYC-TV. According to WKYC-TV, it became an unfair labor practice to cease dues deduction upon the expiration of the contract. However, since the U.S. Supreme Court ruled in Noel Canning that the NLRB was unconstitutionally appointed, the law reverted back to Bethlehem Steel and companies are once again permitted to stop dues deduction after the expiration of a collective bargaining agreement.
The reversion to Bethlehem Steel will likely be short-lived. In Lincoln Lutheran of Racine, an Administrative Law Judge, consistent with the law, followed Bethlehem Steel when approving the employer’s cessation of dues deduction. However, when the union appeals the ALJ’s decision, it is a foregone conclusion that the current Board will endorse the rulings of the invalid Board and once again overturn Bethlehem Steel. Lincoln Lutheran is set to be the case to accomplish the Board’s goal.
You probably remember when I discussed how OSHA was referring claimants to the NLRB who had missed their statute of limitations to file an OSHA charge (“OSHA Actively Encouraging Employees to File Charges with the NLRB” – Employment Services Alert issued May 22, 2014). Thankful to OSHA for doing it a solid, the NLRB will now refer cases back to OSHA as well as to the Division of Wage and Hour.
According to Anne Purcell, Associate General Counsel of the NLRB, information obtained in NLRB investigations could suggest the presence of OSHA or FLSA violations if witnesses disclose facts indicating that an employer required employees to work in unsafe or unhealthy conditions or failed to properly pay employees for all the hours they work.
I fully anticipate Board employees to question workers about their pay and the safety of their working conditions while investigating alleged unfair labor practice charges. Board employees are not trained in the nuances of wage and hour law or the OSH Act, yet will make a preliminary determination whether either may have been violated. To quiet my cynicism of the NLRB being a one-stop-shop (which it doesn’t), Purcell said NLRB employees are not expected to be experts in the construction of the FLSA or the OSH Act, and they “should refer cases only where they believe that a possible violation of the OSH Act or FLSA presents itself.” So basically, solicit the information from employees and err on the side of caution by referring most cases to OSHA or Wage and Hour.
This is even more reason, though none was needed, that all companies, both union and non-union, must make sure all of their employment practices abide by all labor and employment laws.
Employee Elias of grocery store Fresh & Easy Neighborhood Market was instructed to write a reminder about upcoming training on the Company’s whiteboard. After she wrote the reminder, someone drew an inappropriate picture near Elias’ name. Since Company policy prohibited her from taking a photo of the whiteboard, she drew a copy of the image and sought witness statements from co-workers to support the accuracy of the drawing. Elias then turned the drawing into the Company and complained that it amounted to sexual harassment. She never intended to file a joint complaint with the people who signed the document (and they denied any intent of participating in the complaint), but she thought other female employees would also be offended by the conduct and wanted to stop it from happening again.
According to the Board, this activity – an employee acting on her own behalf regarding a claim of sexual harassment directed solely at her – was “indeed engaged in concerted activity for the purposes of mutual aid or protection.” Really?
To be protected under Section 7 of the NLRA, employee conduct must be both “concerted” and for the purpose of “mutual aid or protection.” The fact that Elias may have had personal motivations for her actions was irrelevant to the analysis because both elements are judged from an objective perspective. The Board concluded that Elias’ conduct in seeking her coworkers’ assistance in raising a sexual harassment complaint to management was concerted activity even if she did not intend to file a joint complaint because: (1) concertedness is not dependent on a shared objective or on the agreement of one’s coworkers with what is proposed; (2) Board precedent establishes that concerted activity includes not only true group complaints, but also cases “where individual employees seek to initiate or to induce or to prepare for group action,” and thus includes “preliminary individual discussions, as long as it is not solely by and on behalf of the employee himself;” and (3) it is well established that “the activity of a single employee in enlisting the support of his fellow employees for their mutual aid and protection is as much ‘concerted activity’ as is ordinary group activity.”
The Company questioned Elias as to why she obtained witness statements from her co-workers and directed her to stop collecting statements. These requests were lawful because they were narrowly focused and came during the Company’s investigation into Elias’ sexual harassment claims. The Company did not prohibit Elias from discussing the pending investigation with her coworkers, asking them to be witnesses for her, bringing additional complaints, or obtaining statements from coworkers in future complaints.
According to the two pro-employer Board members, Elias’ conduct should be considered concerted activity but the majority’s ruling created too loose a standard for finding that concerted activity was carried out for the purpose of mutual aid or protection. They stated, “We enforce a single statute that, on its face, does not afford protection to ‘individual’ action. The majority’s expansion of Section 7 – though well-intended – will impair employee rights and hinder the ability of employers to comply with statutes that require prompt, thorough investigations and meaningful corrective actions.”
Several states and now the NLRB are trying to reap the rewards of the growing legalized marijuana trend across the United States – an industry that is currently worth about $1.5 billion and expected to grow to $6 billion by 2018.
Marijuana remains illegal under federal law despite some states legalizing the growth, cultivation, possession, and/or consumption of the drug. Yet, even after admitting that pot dispensaries are operating in violation of the federal Controlled Substances Act, the NLRB concluded that marijuana processors working for companies that grow and cultivate the herb are employees under the National Labor Relations Act instead of agricultural laborers who fall outside the Act’s protection.
The NLRB’s Division of Advice, which provides guidance to the Board’s Regional Offices, provided input regarding the Wellness Connection of Maine, which processes medical marijuana products at an indoor facility where it employs three production assistants and eight processing assistants. The company also operates four retail dispensaries in the state. Important to whether the workers are able to unionize (a goal of the UFCW union that has created a “Medical Cannabis and Hemp” Division) is whether they are statutory employees or agricultural laborers.
The Act excludes “agricultural laborer” from its definition of a statutory employee. The Board distinguishes between primary agricultural tasks such as cultivation and tilling, which are performed by agricultural laborers who are not covered by the NLRA, and secondary functions that are covered by the Act because they are not established parts of agriculture. Wellness Connection’s processing assistants work by hand to use machines to trim, vacuum, weigh, package, and label marijuana in preparation for sale. They also mix and sift plant matter to create tinctures and marijuana-based foods and beverages. According to the NLRB’s Division of Advice, “the processing operation that transforms the cannabis plants from their raw and natural state is more akin to manufacturing than agriculture.”
In 2011 there was a case called Specialty Healthcare that permitted micro bargaining units in the healthcare industry. Micro bargaining units exist when just a few people in a department, instead of all people in the company, are allowed to be in a union. In a grocery store, this means the frozen food employees can be in one union, the produce boys in another, the cashiers in a third, etc. Specialty Healthcare micro-units have recently crept into the retail industry, in the Bergdorf Goodman and Macy’s cases.
In Bergdorf Goodman, only the full-time and regular part-time women’s shoes associates in a second-floor designer shoes department and a fifth-floor contemporary shoes department sought to unionize. According to the Board, the designer shoe department made up their whole department, but the contemporary shoe employees were carved out from a department called contemporary sportswear. This carve out did not comport with Specialty Healthcare’s appropriate unit requirements. Without the carve out it is likely that just the designer shoe department clerks maintained the right community of interest to satisfy the micro-unit test. Specialty Healthcare’s “community of interest” test looks almost exclusively at how the employer has chosen to structure its workplace. The Bergdorf decision makes it clear that management can set up operations in ways that avoid unions organizing departmental units. While there is no one-size-fits-all solution, companies need to look at their operations and organizational structures and be aware of the potential consequences that come with different approaches.
For a contrary decision, and one that stinks, just the cosmetic and fragrance department of a Macy’s store sought to unionize. These workers accounted for 41 of 150 store workers. Historically, all 150 employees would have constituted an appropriate bargaining unit, but under Specialty Healthcare, these 41 are appropriate and admittedly larger than a true micro-unit. The Board determined that just the cosmetic and fragrance employees (a) had the same first level supervisor (even though the second level manager and store supervisor exercised control over everyone); (b) worked in connected defined work areas (though on different floors and adjacent to other employees); (c) had limited interaction with other employees (despite having daily all-employee meetings); and (d) they were paid on commission.
Challenging narrowly defined micro-units appears to be almost impossible. Companies that have employees in distinct fields should be diligent to eliminate the types of unique, department-specific management and sales practices that sways the NLRB to permit a small group to organize within the larger workforce. Further, companies should place a premium on how businesses are structured administratively and how employees are integrated in their work functions.