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

Requiring individual employees as a condition of employment to sign arbitration agreements waiving their right to bring joint, class or collective actions, both in arbitration and in the courts, violates federal labor law, the National Labor Relations Board has held.  The National Labor Relations Act, the Board said, confers on employees the right to pursue discrimination, wage and hour and other workplace-related claims in a joint, class or collective fashion as “protected concerted activity.”  In D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012), the Board held that “employers may not compel employees to waive their NLRA right collectively to pursue litigation of employment claims in all forums, arbitral and judicial.”  As the agreement in the case before it did just that, the agency found the agreement violated the statute, and ordered it rescinded or revised.  The Board also concluded that the agreement violated the NLRA for the added reason that its language, which barred employees from starting “lawsuits or other civil proceedings” relating to their employment, would lead employees reasonably to believe that they were prohibited from filing unfair labor practice charges with the Board.

By no means, the Board asserted, does the decision ban all arbitration agreements with new and existing employees.  “Employers remain free to insist that arbitral proceedings be conducted on an individual basis,” the NLRB affirmed.  “So long as the employer leaves open a judicial forum for class and collective claims,” it continued, “employees’ NLRA rights are preserved without requiring the availability of classwide arbitration.”
 
The Board also recognized that a union representing employees in collective bargaining could waive individual unit employees’ rights to pursue statutory claims in court, as the Supreme Court held in 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009), maintaining that collective bargaining itself is a form of statutorily protected activity. But these waivers, it said, were different from the unilaterally imposed employment policies before it in D.R. Horton. 

The panel deciding D.R. Horton included Member Craig Becker on his last day on the Board, but not Member Brian Hayes, who was recused.

A court challenge to the Board’s decision is anticipated.  The case may even reach the Supreme Court.  For more details on the decision, please see our article, Mandatory “No-Class Action” Arbitration Waivers Interfere with Employee Rights, NLRB Rules.

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The National Labor Relations Board has just announced it has postponed the effective date of its new rule mandating the workplace posting of an official Notice of Employee Rights under the National Labor Relations Act. The rule had been scheduled to go into effect on November 14th. Now, the rule will be effective on January 31, 2012.

The NLRB’s stated reason for the postponement is to “allow for enhanced education and outreach to employers, particularly those who operate small and medium sized businesses.” The Board cited confusion over which business fall within the jurisdiction of the statute. Unlike many other employment laws, coverage does not depend on a minimum number of employees, but the extent to which a company engages in interstate commerce. The thresholds, generally expressed in terms of gross volume of business for different industries, are very low. Almost all private sector employers are subject to the Act.

The Board states that “[n]o other changes in the rule, or in the form or content of the notice, will be made."

Keep reading this blog for updates, or feel free to contact us for more details.

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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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Adding to the troubles employers are beginning to face with the new National Labor Relations Board is a report that the agency’s General Counsel (GC) has some new ideas to ratchet up employers’ costs of litigation, and even settlement.  The GC, the Board’s chief prosecutor, professes fears that victims of alleged discrimination on account of union activity may think the Board lacks teeth in remedying claimed violations. He is weighing a requirement that employers pay alleged discriminatees at least three months’ back pay where the employer settles a discrimination case before litigation, and at least one year’s worth of back pay after litigation – whether or not the victim has suffered any actual loss of pay!

The General Counsel, we are told, thinks the National Labor Relations Act does not forbid this remedy.  We strongly disagree.  This is a punitive measure by any standard.  It is unrelated to actual losses suffered by the employees involved; indeed, it would constitute a windfall for them.  No employee reasonably should expect “a big payday” merely for complaining of discrimination to the Board, even persuasively, yet that’s precisely what is promised.  In fact, it seems the aggrieved employee has only to convince some regional Board officials to move forward with an agency complaint and the employer will have to pay a minimum of three months’ wages just to settle.  If the employer exercises its right to contest the accusation before a judge, it risks getting tagged with even more onerous damages.

The current Act contains no provision for punitive damages.  It speaks of “reinstatement of employees, with or without back pay.”  The Board, to our knowledge, has never construed the Act to allow the kind of remedy considered here.  The General Counsel’s proposal seems to be just the latest assault on employers by an agency unconstrained even by its own statute.

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Workplace discrimination on the basis of an employee’s support for, or opposition to, a labor organization has been unlawful since 1935, when the National Labor Relations Act (NLRA) was passed.  One exception to this principle of non-discrimination:  In non-right-to-work states, such as Massachusetts and California, an employee can be required to pay union dues under a union security clause in a collective bargaining agreement.

A second exception, however, apparently has been agreed to by labor union leaders and the White House in the guise of “health care reform.”  A deal involving the taxation of “Cadillac” benefit plans will exempt from coverage until 2018 those plans found in collective bargaining agreements (“excise tax deal”).  If enacted, union-free employees will be discriminated against – legally – in favor of unionized employees. 

What motivated this disturbing development?  Political expediency?

Some now believe “health care reform” must be enacted at any cost.  Labor union support is necessary to achieve this. Unions therefore need to be rewarded for their past political support and to ensure their continued loyalty.  Would the SEIU have given $685,000 to the unsuccessful Massachusetts Democratic candidate for Senator if the excise tax deal was not reached?  Will organized labor campaign as passionately in 2010 as in 2008 for political allies if taxation of health plans was to be imposed on a non-discriminatory basis?  Ask labor leaders Richard Trumka and Andy Stern.

There is also a practical reason why unions insisted on the excise tax deal.  Labor has had a difficult time organizing new members because, today at least, unions cannot guarantee their promises of benefit improvements will be realized after good faith negotiations.  The NLRA affords the parties the freedom to bargain and make contracts without pre-determined mandates.  This applies to health insurance.

If the excise tax deal becomes law, this freedom will likely go by the boards, and with it, employee options for health insurance.  Workers desiring good health insurance, but burdened by the excise tax for plans in union-free settings, may have difficulty resisting union organizing and bargaining demands for union-sponsored plans.  Look for unions to argue that union-free employees can remove the cause of their costly workplace discrimination by…well…joining the union which created the discrimination in the first place!

Careful observers of the “labor reform” movement are not surprised by this crass political blackmail.  EFCA, pending in Congress, also would restrict freedom of contract through government-mandated arbitration of initial collective bargaining agreements.  Further, EFCA eliminates secret ballot elections in favor of union card recognition.  From Big Labor’s perspective, the excise tax “compromise” is a welcome sign of those statutory changes.  From an employee, employer and American citizen’s perspective, however, it is an ominous precursor.

A vote in favor of a health care bill with its excise tax compromise is a vote for workplace discrimination.  Do not expect to hear that from Washington.  

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