Labor and Employment Law Blog

NLRB: Everyone’s a Joint Employer

By Patrick Scully

In a widely dreaded reversal of more than 30 years of precedent, a majority of the NLRB found that an alleged joint employer does not have to actively “codetermine” or control terms and conditions of employment in order to be considered the “employer” of its contractor’s employees. Under the standard announced yesterday, the NLRB will require only that a joint employer “possess the authority to control” a term or condition of employment. It simply will not be necessary for a union to present any evidence of the exercise of that authority. Accordingly, the NLRB acknowledged that even commercial agreements could be utilized to prove that, for example, a franchisor is the “joint employer” of a franchisee’s employees (watch out McDonalds!)

Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015)

FCRA Tip: Keep Hands On

By Bill Wright

A federal trial court will conduct a trial on a Fair Credit Reporting Act claim because the employer streamlined its background check system. In this case, a bank used a third party service provider to conduct background checks in compliance with the FCRA. The provider would get consent from the applicant, conduct the check, and send the information to the bank. If the report included an unacceptable conviction, the bank would mark the applicant’s record “ineligible” and send it back to the provider for further processing. The provider then would send the applicant a Pre-Adverse Action Notice. On receipt of this notice, the applicant could, but didn’t have to, challenge the report. If the applicant challenged the report, further information would be collected and given to the bank, but, if the applicant chose not to challenge the report, the provider would go ahead and send the Adverse Action Notice with no further action by the bank. On these stipulated facts, the court ruled that, where the applicant does not challenge the report, the bank might be found to have taken final action before sending the Pre-Adverse Action, by marking the applicant’s record “ineligible.” The court needs a jury to determine whether the bank violated the FCRA. Manuel v. Wells Fargo Bank, National Assoc., No. 3:14cv238 (E.D. Va. August 19, 2015).

The moral here: have the provider report back, even when the applicant does not challenge the information.

Board Penalizes Legal Argument

By Bill Wright

Previously, we described a court’s reaction when some plaintiff-employees tried to reinstate their collective wage claim in court using a belated NLRB order against class action arbitration waivers. (See: Court Order Trumps Board) The NLRB is trying again to limit employers’ use of individual arbitration agreements with employees. In Countrywide Financial Corp. et al., 362 NLRB No. 165 (August 14, 2015), the NLRB ruled that employers may not argue in court that their arbitration agreement with individual employees both requires arbitration and precludes class arbitrations. The setting, again, is a collective action for unpaid wages. The court compelled arbitration and left the issue of arbitration of class claims for the arbitrator to decide.

The NLRB ruled that this employer violated the NLRA by enforcing an arbitration agreement which, according to the employer’s legal analysis, barred employees from bringing a class action in any forum. This arbitration agreement is actually silent with regard to arbitrating class claims, but the employer had the audacity to argue that, according to the Supreme Court, parties can only arbitrate class claims if they agree to arbitrate such claims.

The NLRB ordered the employer to go back to court and to withdraw its objection to the plaintiffs’ pursuit of the collective claim in court. Will the employer comply? Would you? I expect an appeal. http://apps.nlrb.gov/link/document.aspx/09031d4581d6054b

The NLRB Chooses Not to Play

By Bill Wright

The NLRB has ruled on the representation petition for Northwestern University student football players. You’ll remember, last year, the NLRB’s Regional Director decided that student athletes who received grant-in-aid athletic scholarships at Northwestern University were actually employees of the university and that they could petition for union representation. The issue went up to the NLRB and now the NLRB has . . . decided not to play. The Board avoided the question of whether student athletes might or might not be employees. Instead, the Board announced that it would not further the goal of labor stability to exercise its jurisdiction in this case, at this time. It doesn’t have jurisdiction over teams in state-run schools and the NCAA itself exercises a lot of control over participating teams. So, the Board declines to exercise its jurisdiction. There will be no official bargaining between the University and its footballers, and, moreover, the Board avoids years of litigation, followed by, most likely, a stinging rebuke by the courts. Northwestern University and College Athletes Players Association, 362 NLRB No. 167 (August 17, 2015).

What’s the Alternative?

By Bill Wright

FEMA Employees sued when FEMA closed its Puerto Rico-based call center. The call center was originally a “temporary” center set up to address calls from Spanish-speaking victims of a hurricane. The leased facility was inadequate for a permanent call center; working there posed employee health and safety risks. FEMA let the lease expire and discharged the employees. Abril-Rivera et al. v. Johnson, No. 14-1316 (1st Cir. July 30, 2015).

The employees alleged that targeting the Puerto Rico-based center for closure had an adverse impact on employees living in Puerto Rico. Yes, the court noted that “living in Puerto Rico” is not a protected status, but the court relied more on the Supreme Court’s recent ruling in a Fair Housing Act case. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., No. 13-1371. (U.S. June 25, 2015). The Supreme Court instructed the courts to pay special attention to legitimate business needs in disparate impact cases. The court here noted that FEMA had legitimate business reasons to close the call center –the health and safety of the workers – and the plaintiffs offered no evidence of an alternative that would have had less disparate impact and would have served the legitimate needs. FEMA could have done a nation-wide layoff of poor performers instead of closing the Puerto Rico call center, but how would that have solved the safety problems at the call center?

It pains us to admit it, but John Doran was right. He told us the Supreme Court’s recent FHA decision would have Title VII implications. The case supports the circuit court’s decision; plaintiffs must show how employers could accomplish their legitimate business needs with less disparate impact.

Websites Must Be Accessible

By Ted Olsen

So you’ve been waiting for those website accessibility regulations promised by the Department of Justice almost FIVE YEARS ago? Wait no longer. The Department of Justice recently filed briefs indicating its position: If you are a “public accommodation” under the ADA or the Rehabilitation Act, and you have a website, all the information on the website must be accessible to all disabled Internet users. Read on.

DOL Says Employers Are Morons

By John Alan Doran

Okay, that’s not what the DOL said exactly. But the DOL did say today that companies far and wide are just wrong on which workers are employees and which are independent contractors for purposes of the FLSA. In an “Administrator’s Interpretation,” the DOL today re-asserted that it believes almost all individuals providing services to a company are employees and most companies who claim to be using independent contractors are simply misclassifying actual employees.

In what we only wish were a tongue-in-cheek commentary, the DOL’s own blog describes the Mis-“Interpretation” as an attempt to give employers “clarity” on employee status under the FLSA.  Unfortunately, the DOL Mis-“Interpretation” repeatedly chants the mantra that the FLSA defines “employee” in the broadest sense imaginable and then states a plethora of factors (all of which appear to suit the DOL and not job-creators) to be balanced in light of the FLSA’s definition. What clarity has the DOL provided when its stated position conflicts with the I.R.S. definition of “employee,” conflicts with laws in the majority of the states with respect to employee status, and repeatedly states that every classification requires an individualized balancing of multiple factors against an incompatible statutory definition?

WEBINAR – DOL Proposed Overtime Regulations

Sherman & Howard’s Labor & Employment Practice Group invites you to attend a complimentary webinar presented by Andy Volin and Doug Towns on Wednesday, July 29, 2015

On June 30, the U.S. Department of Labor released long awaited, new, proposed regulations for the overtime exemptions under the Fair Labor Standards Act for “white collar” employees. Under the proposed standards, employers may have to start paying overtime to many administrative employees who make less than $47,892 annually, even if they are “salaried.”

Click here for more information and to register!

Common Sense Trumps NLRB, For Once

By Patrick Scully

If the NLRB has a consistent adversary, it is common sense. And so, it was a bad sign for the NLRB when the District of Columbia Circuit Court of Appeals began its review of a recent NLRB Order with the following line: “Common sense sometimes matters in resolving legal disputes.” The NLRB had tried to strike down AT&T’s common sense prohibition against customer-facing employees wearing T-shirts with the word “Inmate” on the front and “Prisoner of AT$T” on the back. The NLRB found that the message on the shirts was protected and that AT&T’s prohibition was not saved by “special circumstances”. The NLRB contended that AT&T could show no actual customer fear or harm to customer relations, and that because AT&T had permitted employees to wear other “unprofessional” attire, it could not object to the “Inmate/Prisoner” shirts.

On review, the Court quickly dispatched the NLRB’s analysis, noting that the “special circumstances” exception includes “protecting the employer’s product” and “maintaining a certain employee image.” The Court explained that the Board itself recognized in the past that, if an employer reasonably believes that union apparel may harm the relationship with customers or an employer’s public image, the apparel may be lawfully prohibited. The Court found that one common sense question trumped the NLRB’s arguments: “What would you think about a company that permitted its technicians to wear such shirts when making home service calls?” Southern New England Telephone Company v. NLRB., No. 11-1099 (D.C. Cir. July 10, 2015).