U.S. Soccer Union Claims Ability to Reject Promotional Material Involving Players

The collective bargaining agreement between the U.S. men’s national soccer team and its players’ union is silent on the issue of advertisement approvals. The players union recently asked the Seventh Circuit Court of Appeals to affirm an arbitral finding that the union has the power to reject promotional materials sought by U.S. Soccer Federation sponsors. The union said the federation and union have operated under such an understanding for years, and that the arbitral award rightly filled a gap in the collective bargaining agreement between the two sides. The federation, on the other hand, asserts that it is not obligated to seek the union’s approval for ads. At most, said the federation, approval is needed only for video spots, and that arbitrator overstepped his bounds in obligating a preapproval process for print ads. Of course, the easiest solution would have been to fill the gap in the union contract through collective bargaining instead of having to go through an arbitration process and an appeal.

The National Basketball Association is likely paying close attention to the outcome of this case as it tests the waters for placing advertisements on players’ uniforms. The NBA first put a logo on players’ jerseys during the All-Star game with expectation to rolling out similar advertising opportunities in the future. My guess is that the NBA will address this issue during labor negotiations before basketball players become walking billboards.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Union Pension Fund Sues Yahoo, Claims Internet Company is Really an Unregistered Investment Company

Lead plaintiff in a shareholders’ federal class action, UFCW Local 1500 Pension Fund, claims Yahoo’s board of directors and top executives are violating the Investment Company Act of 1940. According to the suit, Yahoo’s investment securities make up 90% of the company’s value, so it must register as an investment company. The pension fund wants Yahoo to fire its executive officers, including CEO Marissa Mayer, and its entire board.

According to the pension fund, income from yahoo’s operations for 2013 was only 32.7% of its total net income, while income from investments accounted for 67.3%. The numbers were supposedly even more “shocking” in 2014, with 1.2% coming from operations income, compared to a “staggering” 98.8% for investment income, according to the complaint. Of course, the devil is in the details. Yahoo owns 2 billion shares of Yahoo Japan common stock, valued at $7.4 billion, representing about 25% of Yahoo’s market capitalization and almost 20% of Yahoo’s assets. Yahoo Japan is a joint venture with Softbank Corp., which was established in 1994. In 2005, Yahoo bought about 46% of Alibaba.com Corp., China’s biggest online marketplace and payment system. This amounts to about $27 billion, representing 89% of Yahoo’s market capitalization and 70% of its assets. Thus according to the complaint, Yahoo’s assets are primarily invested in publicly traded securities, and Yahoo is an investment company.

The union pension fund seeks class certification, disgorgement, permission to pursue two of the four counts derivatively, and damages for ICA violations, breach of fiduciary duty, and unjust enrichment.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

NYC Successor Grocers Required to Retain Former Workforce or Join a Union

I serve as the labor counsel to the Ohio Grocer’s Association, so this NYC law is of great interest to Ohio grocers and me.

The New York City Council passed a law that prohibits successor grocery employers from discharging certain grocery store employees without cause during a 90-day transition period following a “change in control.” A “change in control” is defined as “any sale, assignment, transfer, contribution, or other disposition of all or substantially all of the assets of, or a controlling interest in, including by consolidation, merger or reorganization any grocery establishment.”

Only grocery stores where “the sale of food for off-site consumption comprises fifty percent or more of store sales and that exceed 10,000 square feet in size, exclusive of any storage space, loading dock, food preparation space, or eating area designated for the consumption of prepared food,” are covered by this law.  Also excluded from coverage are managerial, supervisory, and confidential employees, as well as any worker who regularly works fewer than eight hours per week. Essentially, the Act protects unionized employees or those eligible for form a union.

Following the 90-day transition period, the successor employer must complete written performance evaluations for each of the retained employees, and maintain a record of such evaluations for at least three years. At the end of the transitional period, successors may, but are not required, to offer such employees continued employment.

Of course, this law does not apply to successor employers who, before a change in control occurs, enters into a collective bargaining agreement covering the eligible employees or, instead, agrees to assume the predecessor’s collective bargaining agreement covering the same employees.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Court Overrules NLRB, Says Workers are Independent Contractors Not Employees of Referral Service

A referral service that referred stagehands to event producers for concerts, plays, trade shows, and other events offered jobs to employees on a first-come, first-served basis. The referral service, which required employees to sign independent contractor agreements, did not withhold taxes or other benefits, prohibit the stagehands from accepting jobs from other referral services or from doing other work, or provide stagehands with any tools (other than a company vest for safety and identification reasons). The stagehands were required to check in and out with the company in order to keep track of their hours. Nonetheless, when a union petitioned the NLRB to represent the stagehands, the Board concluded they were employees, directed an election, and certified the union.

On appeal, the Eleventh Circuit said the Board made several errors “when it applied the law to the facts.” The errors include:

  1. The Board erred by not giving adequate weight to the facts that the employer did not withhold stagehands’ taxes and that the stagehands signed independent contractor agreements.
  2. The Board’s consideration of the stagehands’ inability to negotiate their pay was irrelevant.
  3. The Board’s conclusion that the stagehands performed the “essential functions” of the company’s operations was erroneous.
  4. Contrary to the Board’s conclusion that the company controlled the workers, “[o]nly the event producers and touring crews control the means of the work performed by the stagehands, and [the employer] lacks the expertise to direct the stagehands in their work for any particular client.”

The Court’s analysis is instructive to other companies faced with the potential union organizing of independent contractors. As the NLRB continues to aggressively expand the reach of the National Labor Relations Act and help unions organize any worker possible, this case provides a decent roadmap to ensure independent contractors remain independent.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Company Required to Bargain over Break Rule Change

Parsons Electric was part of a multiemployer collective bargaining agreement that was silent on the subject of employee breaks. Independent of the union contract, Parsons, for years, maintained a written policy that provided hourly employees with a 15-minute break in the morning and a 15-minute break in the afternoon each workday. Parsons then replaced the break policy with a statement that it would abide by applicable bargaining agreements, but reserved the right “in the absence of specific provisions for breaks in the collective bargaining agreement” to establish break policies. Parsons then stopped its practice of 15-minute breaks in the morning and afternoon.

Since employee breaks are terms and conditions of employment, bargaining over changing breaks is probable. But, a unilateral change to a collective bargaining agreement only violates the National Labor Relations Act if it is “material, substantial, and significant.” Parsons argued unsuccessfully that its change did not meet this test. According to the Eighth Circuit, the prior policy gave employees a “specific, concrete standard” for breaks and any managerial deviation from that policy was “an exception to the default rule.” The new policy eliminated the default rule and gave Parsons “unfettered discretion to determine whether employee breaks would be permitted at all….” This, according to the Court, was significant enough of a unilateral change to violate the Act.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Union Pension Payouts are Getting Cut and Retirees Threaten Militant Action

The Teamsters pension plan (Central States Pension Plan), widely criticized as being extremely underfunded and unable to pay a fraction of its obligations to retirees, is set to be cut in the coming weeks. The Central States Pension Plan last year became the first financially troubled pension fund to seek relief with the federal government under the Multiemployer Pension Reform Act that was passed in late 2014. The law was designed to keep multiemployer plans solvent and continue to pay retirees, but at a reduced rate. Without substantial changes, Central States will be insolvent within 10 years.

This reduced benefits amount has employees angry and threatening to “go old-school on their ass,” referring to Congress. Other suggestions from Akron-area retirees included a nationwide strike, blocking or occupying the U.S. Treasury Department building, and, as one member suggested, to “shoot them.”

Most companies I represent get out of the union defined benefit contribution plans because most of them are headed for the same fate as Central States. Workers are then free to invest in company sponsored 401k plans or some other option on their own. I feel bad for the workers who believed the union organizers that promised them a lucrative retirement if they voted for the union and paid into the union’s pension plan. Decades later, after the workers lived up to their end of the bargain, the union broke its promise.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Locking Out Workers: A Landmine of Legalities

A swimming pool cleaning supply manufacturer was negotiating a successor collective bargaining agreement with the United Food and Commercial Workers Union. After the Union rejected several healthcare plan proposals made by the Company, the Company said it wanted to freeze the current contract for one year, but also said it expected to have information on more plan options to propose. The Company said it wanted everything to stay the same for a year and requested that the Union have the employees vote on the Company’s offer. Union officials were unclear as to what the employees were voting on. Two days later the Company locked out the employees.

The Company violated the National Labor Relations Act by locking out its employees without providing the employees with a timely, clear, and complete offer setting forth the conditions necessary to avoid the lockout. The Company made a clear, complete proposal one week later, but that did not cure the unlawful lockout. The lockout remained unlawful until it ended and the employees were made whole.

The decision to lock out employees is one no company should make hastily. Locking out workers is a legitimate bargaining tactic used by many companies during negotiations – just as strikes are strategically used by unions. However, detailed planning, with experienced labor counsel, must be taken before implementing a lock out or risk losing any positional strength that might be gained by utilizing it as a bargaining tactic.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.