Unions & Labor Law Reform Blog : Unions Lawyer & Attorney : Jackson Lewis Law Firm : Employee Free Choice Act, Collective Bargaining

The NLRB has advised the public that all employers covered by the National Labor Relations Act (generally all private sector employers) will be required to post a notification of employees’ rights by November 14, 2011. The Board’s August 25th press release, which contains links to the Final Rule and additional information, is reprinted below. The issuance of the Final Rule follows a notice and comment period in which employers generally called such a posting unnecessary and misleading.

The National Labor Relations Board has issued a Final Rule that will require employers to notify employees of their rights under the National Labor Relations Act as of November 14, 2011.

Private-sector employers (including labor organizations) whose workplaces fall under the National Labor Relations Act will be required to post the employee rights notice where other workplace notices are typically posted. Also, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the Board’s notice on those sites. Copies of the notice will be available from the Agency’s regional offices, and it may also be downloaded from the NLRB website. 

The notice, which is similar to one required by the U.S. Department of Labor for federal contractors, states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.

The Board received approximately 6,500 comments during the 60-day comment period following publication of the Proposed Rule in the Federal Register, and accepted an additional 500 that arrived after the deadline. In response to the comments, some parts of the rule were modified. For example, employers will not be required to distribute the notice via email, voice mail, text messaging or related electronic communications even if they customarily communicate with their employees in that manner, and they may post notices in black and white as well as in color. The final rule also clarifies requirements for posting in foreign languages. Similar postings of workplace rights are required under other federal workplace laws.

Board Chairman Wilma B. Liebman and Members Mark Gaston Pearce and Craig Becker approved the final rule, with Member Brian Hayes dissenting.

The rule will be published in the Federal Register tomorrow, and will take effect 75 days later. A fact sheet with further information about the rule is available here.
 

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Additional contributors:  Philip Rosen and Richard Greenberg, partners in our New York City office.

Wrestling with some dismal data on the waning strength of America’s organized labor, Secretary of Labor Hilda L. Solis tried to make the best of it.  She said in her January 21st press release that the data showed the need for workers to unionize. 

The Bureau of Labor Statistics reported on January 21 that the unionization rate of employed wage and salary workers dropped noticeably last year.  For 2010, the agency announced, the rate nationwide fell to 11.9 percent overall, from 12.3 percent in 2009.  In the private sector, the news was no better.  The rate there dropped to 6.9 percent, from 7.2 the year before.  There are 16.9 million workers in jobs covered by collective bargaining agreements, BLS reported, but 1.6 million of them indicated no union membership.  Half of the 14.7 million union members lived in just six states: California, New York, Illinois, Pennsylvania, Ohio and New Jersey.  The highest unionization rates were in education, training and library occupations.  It is hard to imagine that half a century ago unions represented a third or more of America’s workforce.

But citing weekly wage differentials between union workers and non-union workers, the Administration’s chief (organized) labor advocate said that union jobs, with better benefits and pay, were central to restoring the middle class.  Thus, the Secretary said, protecting the right to organize and bargain collectively was especially important to our economic recovery.

We wouldn’t count on a resurgence of union representation to fuel the engine of America’s recovery and job growth.   If unions were so attractive, why are the BLS numbers so bleak?  The recession took its toll on union jobs, as well as others.  Unions could not prevent sizable layoffs in their members’ ranks and have not led the way back from high unemployment.  They stand little chance of doing so, we think. 

Despite the Secretary’s opinion, and the tinkering of a pro-union National Labor Relations Board trying to tilt the legal playing field in organized labor’s favor, America’s workers generally have shown little interest in casting their lot with the “fraternally yours” crowd.  Perhaps a better educated, mobile, electronically oriented, and diverse workforce no longer sees as much value in traditional union representation — at least not enough to offset the cost in dollars and individual opportunity.  And perhaps the Secretary’s generalizations on union workers’ compensation are too much influenced by the large contingent of public-sector union workers in the total mix and the shrinking clusters of union-dominated private-sector jobs.  Employee free choice on union representation must be defended.  Saddling America’s workers with unions they do not want to fulfill the Administration’s vision for economic reengineering, however, is ill-conceived.

Jobs with good wages and benefits are worth achieving.  No one denies it.  But unless these jobs are competitive, productive, and efficiently performed, and unless they reward individual achievement, they cannot last in today’s global economy.  The President may have come to that realization as he seeks to reassure small business and corporate executives that he intends to rein in government regulation in order to create a climate conducive to growth and job creation.  Unions have yet to show America’s workers they understand that need, too.

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As if proliferating collective actions, class actions and Department of Labor investigations and enforcement actions for wage-hour and Family and Medical Leave Act violations weren’t enough, American businesses may now face even more legal challenges from employees.  The 400,000-member American Bar Association has agreed to partner with the U.S. Department of Labor to establish an attorney-referral service to facilitate workers’ complaints under the Fair Labor Standards Act and FMLA.
 
Vice President Joe Biden, Attorney General Eric Holder, and Secretary of Labor Hilda Solis were among the dignitaries at the White House ceremony on November 19 announcing the new alliance.  They were joined by ABA President-elect Wm. T. (Bill) Robinson III and current ABA President Stephen Zack, who said, “A significant number of Americans lack meaningful access to our justice system.  Even for moderate-income working people, this barrier to access is primarily financial in nature.  Too many simply cannot afford the cost of counsel to help them resolve their legal problems.”  According to the partners, the new arrangement will give more employees access to the justice system.
 
And what of employers – the prospective defendants in all this?  The prospect of more claims and lawsuits means an even greater emphasis must be placed on self-analysis and corrective action.  Employers must audit their wage and hour practices, looking at such issues as purported independent contractor status, the proper classification of employees (exempt or non-exempt), overtime calculations, breaks, payroll procedures, donning and doffing, and recordkeeping, among others.  In the FMLA context, proper notifications to employees, determinations of eligibility for and duration of leaves, handling of intermittent leave issues, coordination of worker’s compensation leave, leave relating to military service, and refining policies and procedures to address abuse of leave, are among the concerns to be considered.  State law issues also must be considered, even if technically ancillary to the federal-ABA initiative.  (A number of states are cracking down on supposed misclassification of employees; several boast their own leave statutes.) 

Once a self-analysis is completed, management must decide what deficiencies, if any, are present.  It must then undertake steps to bring the business into compliance with these laws and related DOL regulations.  Correction is essential, but may give rise to new difficulties as employees gain increased awareness of their rights.  Expect questions.  Be prepared with answers.  Where significant numbers are involved, budgeting may have to be adjusted to reflect additional, unanticipated wage costs.  Staffing may have to be modified.  These dislocations, in turn, may prompt employers to look at ways in which cost savings may be effected, such as by outsourcing, subcontracting, or introducing labor-saving equipment.  There could be a downside for employees from a surfeit of wage-hour and FMLA lawsuits.

The ABA leadership may have been motivated by the most exalted of reasons.  But we wonder if it consulted its member-corporate counsel, and their clients who face legal attacks all too often, before signing on as the employers’ adversary at the government’s behest.

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This article was written by Roger P. Gilson, a partner in our Stamford, Connecticut office.

Secretary of Labor Hilda Solis’s comment at the AFL-CIO annual meeting on March 3^rd confirms speculations that, with or without the resolution of health care legislation, President Obama will announce the appointment of Craig Becker to the National Labor Relations Board when Congress breaks for its two-week Easter recess, beginning March 29. 

While this “recess appointment” effectively could preclude Becker from serving the normal five-year term were he confirmed by Congress, he would serve about 18 months, enough time to have a profound impact on our nation’s labor law. 

Some say the President also will take the opportunity to appoint Mark Pearce, a union-side labor lawyer previously nominated (and had been expected to win confirmation) and another as yet unnamed person in place of the previous nominee to fill the currently vacant “Republican seat” on the Board.  

In addition to fulfilling the President’s need to respond to the interests of his supporters in organized labor, these appointments will allow the Board to initiate and achieve substantive rulemaking before Becker leaves. 

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Seeming to hint at a possible recess appointment of Craig Becker to the Labor Board, Secretary of Labor Hilda Solis stated at today’s AFL-CIO annual meeting that organized labor would be "very pleased" with how the Craig Becker nomination is resolved.  Union officials are predicting that President Barack Obama may appoint Mr. Becker when Congress breaks for the Easter holiday.

Stay tuned.

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This article was written by Tom Walsh, a partner in our White Plains, NY office.

The specter of EFCA may seem to be fading as support dwindles for the more controversial aspects of the Administration’s agenda. But don’t count out the pro-union reform forces yet. Not by a long shot.  Much has been said of the Craig Becker nomination – still a possibility either by formal confirmation or recess appointment – and the probability that a Becker-Liebman dominated NLRB could implement pieces of EFCA-style reform through Board decisions. But that’s not the only iron labor has in the fire.

The federal government’s ability to set rules for federal contractors gives it tremendous power to affect the employment and labor relations policies of such employers – without the pesky scrutiny that legislation attracts. Unions have long been aware of this, and have sought to tap into that power for years.

The news is that the Administration (encouraged by SEIU’s Andrew Stern, a frequent White House guest) is readying a new contracting initiative that would give a preference to unionized companies.  Conversely, non-union would-be government contractors would be at a real disadvantage.

For generations, public contracts have been awarded to the lowest-bidding contractor capable of performing the work. To protect contractors’ employees from being squeezed by the competitive bidding rule, Congress enacted the Service Contract Act and the Davis Bacon Act (among others). Under these laws, the Department of Labor analyzes regional wages and benefits, and sets the prevailing wage contractors must pay.

While this system has worked pretty well, it has not completely pleased unions. The prevailing wage rate often is lower than inflated union contracts. That means unionized employers can’t compete as readily against non-union companies (and unionized employees lose work opportunities).

Labor and the White House are reportedly contemplating new rules – which have not yet been made public – to give unionized employers an advantage. Called the “High Road Contracting Policy,” it would require the DOL (and all federal agencies) to create new bureaucracies to assess the labor-friendliness of bidding contractors. “Prevailing wage” would be supplemented with standards of a “living” wage, health insurance, employer-paid retirement benefits, paid sick days, and possibly more. Agency officials would give a subjective preference to contractors, providing these higher levels of compensation.  Applying these standards to those of area union contracts would instantly benefit union contractors.

But the potential new rules go further.  Employers who have been found to have violated labor laws would be restricted (or possibly barred) from being awarded federal contracts. 

Ironically, these contemplated rules seem likely to encourage federal agencies to award contracts to the highest bidder, not the lowest, contrary to the object of competitive bidding.

The good news is that some Senators have taken note and have raised concerns. They say, correctly, that the “High Road” rules would dramatically increase the cost of public work to taxpayers. They note that smaller companies (and, although unstated, non-union contractors) would be pushed out of competition.  They’ve asked the Office of Management and Budget to address their concerns. No reply has been received yet.

We will keep you posted on developments.

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In response to the United States Department of Labor’s request for public comments on its proposed rulemaking implementing President Barack Obama’s Executive Order No. 13496, Jackson Lewis LLP, on behalf of its clients and other employers, has provided the Department with detailed comments and suggestions for improvements to the proposed rule. The Executive Order, signed January 30, 2009, requires covered federal contractors and subcontractors post a notice apprising employees of the right to unionize and to engage in certain protected activities under federal labor laws. It and the proposed rule could have a profound effect on federal contractors since a failure to comply with the posting requirement or with the terms of the notice could result in the loss of Federal contracts or debarment. (For more information on the Executive Order, see President Signs Three Pro-Union Executive Orders and DOL Proposes Regulations Clarifying Contractors' Obligation to Notify Employees of Right to Organize.) 

Jackson Lewis, one of the nation’s largest labor and employment law firms counseling federal contractors and others, submitted its comments on September 2, 2009. The full text of the comments may be accessed here (pdf). A summary of our comments follows:   

     NLRA Preemption - The Firm maintained the Executive Order is preempted by the National Labor Relations Act (“NLRA”), the nation’s principal labor relations law, to the extent it seeks to impose obligations and penalties on contractors and subcontractors beyond those already established by the NLRA.  

     Scope of Rule – The Firm objected to the Department’s attempt to make primary contractors responsible for compliance by their subcontractors. The Department should clarify that primary contractors have no obligation to police subcontractors, other than to adhere to specific enforcement directives of the Secretary. With respect to the obligation of primary contractors to place in subcontracts language requiring subcontractors to post the required notice, the Firm suggested the Department impose this requirement only on subcontracts valued in excess of $100,000. This amount is consistent with the minimum threshold applicable to primary contracts under the Executive Order. It would exclude subcontractors who perform minimal work from being subject to the Order’s obligations. 

     Limitations on Posting Obligation – The Firm recommended that the Department limit the posting obligation to cover only employees who perform work directly related to the performance of the contract. Further, the Firm suggested the Department expressly permit employers who post notices electronically and physically to post the required notice only physically. Electronic posting would cause the notice to be sent to the vast majority of employees who do not perform work related to the contract. Additionally, the Firm suggested the Department permit the required notice to be consolidated into commercially available “all-in-one” posters employers already use to comply with other federal and state law posting requirements.  

     Exemption for Employees Working on Contracts Outside the United States - The Firm suggested that the Department add an exemption to the proposed rule for employees working on contracts and subcontracts in foreign countries who are not subject to the NLRA. This exemption is modeled on a similar exclusion made by the Office of Federal Contract Compliance Programs (“OFCCP”) in the affirmative action context. 

     A More Reasonable Notice - The Firm urged the Department to adopt a shorter, more balanced notice. The Executive Order’s purpose is to enable employees to make informed choices regarding their right to unionize (or not unionize) and the proposed longer, more detailed notice may frustrate this objective by confusing and intimidating the reader. The Firm also pointed out specific concerns with the contents of the proposed notice. 

     Adjudication of Unfair Labor Practices - The Firm recommended the Department make clear in the final rule that the National Labor Relations Board will have exclusive jurisdiction to adjudicate disputes arising from alleged violations of the substantive notice. Such disputes would involve rights conferred by the NLRA, which the Board administers.  The Firm pointed out the possibility of conflicting decisions and wasted government resources. 

     Reinstatement After Debarment - Finally, the Firm recommended improvement of the debarred-contractor reinstatement process.  To promote transparency, we suggested the Department incorporate the reinstatement guidelines contained in other laws regulating federal contracts that call for written decisions explaining why a reinstatement request was granted or denied.

No date has been set for the issuance of the final rule.

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The U.S. Department of Labor on August 3^rdproposed regulationsto help implement President Obama’s Executive Order 13496.  

Issued January 30, 2009, the Executive Order requires government contractors to post a lengthy official notice advising employees of their rights under the National Labor Relations Act to join or form labor unions, as well as to engage in other protected activity. 

The notice requirement applies to all government contractors except for contracts covering work performed under collective bargaining agreements and contracts that cover purchases below $100,000 (at least for now). Failure to comply with the notice requirement subjects employers to potential cancellation of their contract, ineligibility for further government contracts and other possible sanctions or remedies.

The DOL opened a 30-day window for public comment which closes on September 2, 2009. Jackson Lewis is reviewing the regulations and plans on submitting comments to the DOL. For a more detailed summary of the DOL’s proposed regulations and a look at the proposed official notice click here.

President Obama’s Executive Order and the corresponding regulations proposed by the DOL are clear evidence this Administration is intent on federal labor law reform, with or without Congressional legislation, such as EFCA.

What are your thoughts about these regulations? What, if anything, would you change about them? Is providing this type of notice really necessary? If you are a government contractor, what effect do you see these regulations having on your business? Are you going to comment? Is your trade association? And how would you respond to this question? — The proposed notice by the Department of Labor is pro labor – pro employer – neutral or just right? 

We’ll let you know how the responses come out!

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