Sup. Ct. allows Class Action Arbitration under FAA

In Oxford Health Plans LLC v. Sutter, No. 12-125 (2013), the Supreme Court ruled that an arbitrator can require a class action arbitration.

The gist of the case is that Sutter, a pediatrician, had a fee-for-services contract, which required arbitration for all contractual disputes.  When Oxford failed to promptly pay him and other physicians, Sutter filed a class action in New Jersey.  After filing, the court compelled arbitration.  The arbitrator concluded that the contract called for class action arbitration.  Sutter appealed to higher courts, but these appeals were denied.

The Supreme Court explained its decision as follows.  First, the parties agreed to go to arbitration in their contract.  Second, an arbitrator looks at the contract, makes a decision based on the contractual language, and this decision is binding.  Thirdly, and most importantly, the Supreme Court explained that judicial review is limited to whether the arbitrator interpreted the contract, not whether the court agreed with the decision.  Consequently, because the arbitrator considered the contract, the arbitrator’s decision stands.  They only way to vacate an arbitral decision is when an arbitrator strayed from his task of interpreting the contract.  In other words, not when he performed his task poorly.

As a note: In prior decisions (Steelworkers Trilogy/Misco) in the labor context under the Labor Management Relations Act (LMRA), the Supreme Court had ruled that a contractual language had to explicitly allow class actions in the arbitration clause.  Here, the arbitration clause did not do so.

This raises the question of how the Federal Arbitration Act (FAA) reconciles with LMRA arbitrations when they are both present.  In this case, only the FAA was involved.

via Workplace Prof Blog: SCOTUS OKs Class Arbitration.

D.C. Circuit Strikes Down NLRB Notice Rule

In NAM v. NLRB, No. 12-5068 (D.C Cir. May 17, 2013), the D.C. Circuit Court of Appeals struck against the NRLB notice rule.

The background is as follows.  On August 30, 2011, the National Labor Relations Board (NLRB) published a final rule regarding notice posting.  76 Fed. Reg. 54,006.  That final rule provides:

All employees subject to the NLRA must post notices to employees, in conspicuous places, informing them of their NLRA rights, together with Board contact information and information concerning basic enforcement procedures…”

39 C.F.R. 104.202(a).  The final rule also declares that failure to post this notice is an unfair labor practice (ULP).   In other words, if an employer fails to put up a NLRB notice, the employer violates the National Labor Relations Act (NLRA).  This is essentially the focus for the Court of Appeals.

The court explained that under Section 8(e), the Board cannot find non-coercive employer speech to be an ULP or evidence of an ULP.  The Court of Appeals found that the NLRB’s final rule did both.  The court states,

Under the rule an employer’s failure to post the required notice constitutes an unfair labor practice.  See 29 C.F.R. 104.210, 104.201.  And the Board may consider an employer’s ‘knowing and willful’ noncompliance to be ‘evidence of antiunion animus in cases in which unlawful motive [i]s an element of an unfair labor practice.’ 76 Fed. Reg. at 54,035-36; see also 29 C.F.R. 104.214(b).

(as in original).

Successor Liability does not cover federal claims

Teed v. Thomas & Betts Power Solutions, LLC (7th Cir. 2013) held that  a buyer of a company’s assets can’t rely on state law to keep  a seller’s violations of the Fair Labor Standards Act (FLSA) from transferring to the buyer of the Seller company’s assets.  This standard has been previously applied to the LMRA, NLRA, Title VII, ADEA, and FMLA.

The Seventh Circuit explained that federal labor law claims are governed by federal common law, not state law.  Further, the court explained that employees do not have the power to stop an owner from selling the company.  Therefore, the buyer (successor) is stuck with the seller’s (prior owner) liability regardless of what the contract states.

To determine whether successor liability will apply, the Seventh Circuit considered the following multi-part balancing test:

1. Whether the successor had notice of the pending law suit;
2. Whether the predecessor would have been able to provide the relief sought in the lawsuit before the sale;
3. Whether the predecessor could have provided relief after the sale;
4. Whether the successor can provide the relief sought in the suit (if not successor liability is a phantom); and
5. Whether there is continuity between the operations and work force of the predecessor and the successor – which favors successor liability because nothing really has changed.

via Buyer Beware of Successor Liability For FLSA Claims | Sands Anderson PC – JDSupra.

Indiana Bill 373: whistleblower concerns

Indiana Senate Bill 373, which has not been adopted, has raised concerns.  The amended bill’s language is not currently available.

The bill provided that it is a Class A misdemeanor for defamation, to directly or indirectly harm the business relationship between the agricultural or industrial operation and its customers, and for trespass.  However, it is a defense if the person has a good faith belied that there is evidence of illegal activity and provides the recording to law enforcement or a regulatory agency within 48 hours after the person left the property or premises.

The original bill provided that persons could not take pictures or videos of the real property, structures located on the real property, or the agricultural operations or industrial operations being conducted on the real property without the consent of the owner or the representative of the owner.

The amended bill shifted its focus from unauthorized pictures and videos of the structure and operations to (1) trespassing and (2) those who gain employment by providing false information in order to gain access to inside information.  The amended bill states a person is guilty of trespass if he/she intentionally crosses a fence, a wall, or other constructed barrier that reasonably implies entry is prohibited.

The concerns from animal rights groups, unions, and representatives for news media are concerned that the revisions could become a way for employers to intimidate whistleblowers.

The bill will be presented to the full House for consideration.

via Indiana bill changes raise whistleblower worries – 14 News, WFIE, Evansville, Henderson, Owensboro.

Economic state – a close up examination

So what is the employment state of the US right now?  You would be surprised at what the numbers really mean.

On Friday March 8th the Bureau of Labor Statistics released the most anticipated report of the employment situation.  The report found:

• Unemployment decreased to 7.7% in February.  The number of unemployed persons also edged lower in February to 12 million.
• Total nonfarm payroll employment increased by 236,000 in February.

So does this mean that the economy state keeps booming every month?  Not really.

It is important to look at a very important report, which is usually clouded: The Job Openings and Labor Turnover.

Why is this report so important?  For one, it shows the population’s confidence on whether they would find other employment if they quit their current job.  Second, it really shows a clear picture of how many people lost their job.  So hypothetically, if the US lost 1 million jobs, but only gained 500,000 – this doesn’t bode very well for the economy.

On Tuesday March 12th, the Bureau of Labor Statistics released the Job  Openings and Labor Turnover.  This report found:

Jon Openings

• The number of job openings (3.7 million) did not change much from December.
• The number of openings rose in professional and business services.
• However, it decreased in health care and social assistance.
• All remaining industries did not change much from January.

Hires Rate

• The hires rate (3.1%) changed little from January.  The hires rate was not seasonally adjusted.
• The hires rate decreased in mining and logging and in the arts, entertainment, and recreation.
• The hires rate was unchanged for total nonfarm, private, and government.

Separation Rate

• The separation rate includes: (1) quits; (2) layoffs; and (3) discharges.  The overall separations rate (3%) changed little from January.
• The overall quits rate was unchanged at 1.6%.  The quits rate was not seasonally adjusted.
• The quits rate edged up for total private in January.
• The quits rate for government was unchanged.
• The layoffs and discharges rate was seasonally adjusted.  The layoffs and discharges rate changed little from January at 1.1%.

So what does these statistics show?  For one, that the overall rate of job openings has not really changed.  Similarly, the overall rate of separation rate has not really changed.

Most interesting is the fact that upon close examination – the where of these job openings has changed.

In the health care and social assistance industries, the rate of job openings have decreased.  The question posed is – will this affect the services accessibility to the public?

The education and health services rate was 3.1% (January 2012), 3.2% (December 2012), and 2.8% (January 2013).  Since December 2012 to January 2013, we are seeing a 0.4% decrease.

The health care and assistance rate was 3.4% (January 2012), 3.4% (December 2012), and 3.0% (January 2013).  From December 2012 to January 2013, we also saw a 0.4% decrease.

On the more positive side, the job openings rate increased in the professional and business services, as well as in construction.

The construction industry rate has been slowly increasing. The rate is 1.4% (January 2012), 1.6% (December 2012), and 1.7% (January 2013).

The professional and business services also show a very promising increase.  In other words, we are almost back to January 2012 rates.  The rate is 3.7% (January 2012), 3.1% (December 2012), and 3.6% (January 2013).  This means that we have seen a jump of 0.5%, which puts at near the rate of January 2012.

 

via Job Openings and Labor Turnover Summary.

NLRB Overrules Anheuser-Busch, Favors Balancing Test on Witness Statements

The National Labor Relations Board (NLRB) on Piedmont Gardens, 359 NLRB No. 46, overruled a 36-year-old “bright-line rule” that denied labor organization representatives access to witness statements obtained by unionized employers, finding NLRB should balance the interests of unions and employers in assessing union requests for the names or statements of witnesses interviewed during a company investigation.

By overruling Anheuser-Busch, 237 NLRB 982 (1978), and applying instead the Detroit Edison balancing test, the NLRB found that respondents violated the NLRA by failing to provide the witness statements.  In the Detroit Edison balancing test, the board will balance the union’s need for relevant information against the legitimate and substantial employer’s interest in keeping information confidential.

via Adjunct Law Prof Blog: NLRB Overrules Anheuser-Busch Precedent, Favors Balancing Test on Witness Statements.

Donning and Doffing: paying for changing “work clothes”?

The U.S. Supreme Court agreed Tuesday to decide the Donning and Doffing issue as, how does Section 203(o) of the Fair Labor Standards Act (“FLSA”) define “changing clothes.”

In Sandifer v. U.S. Steel, a class of 800 members filed a collective action against U.S. Steel Corp.  The issue on the 7th Circuit Court was whether workers deserved overtime pay for the time spent changing into work clothes and walking from locker rooms to their work site.

The FLSA ordinarily requires that workers be paid at least the federal minimum wage for all hours worked, and time and a half for hours worked over 40 hours in a week.  However, Section 203(o) provides that any time spent changing “clothes” at the beginning or end of each workday may be excluded from working time by the express terms of, or custom or practice under, a bona fide collective bargaining agreement.  In Sandifer, the collective bargaining agreement did not require compensation for changing time.

In this collective action, the class argued that Section 203(o) exclusion was inapplicable because their work attire did not constitute “clothes,” but rather “safety equipment.”  The alleged work clothes in this case included: flame-retardant pants and jacket, work gloves, metatarsal boots, hard hats, safety glasses, ear plugs, and a “snood” (a hood that covers the top of the head, the chin, and the neck).

The district court held that the FLSA did not require compensation for clothes-changing time.  The 7th Circuit Court of Appeals affirmed.  The 7th Circuit explained that the articles seems to be clothing.  The 7th Circuit stated that the articles of clothing were both, clothing and personal protective equipment,

Protection – against sun, cold, wind, blisters, stains, insect bites, and being spotted by animals that one is hunting – is a common function of clothing, and an especially common function of work clothes worn by factory workers.  It would be absurd to exclude all work clothes that have a protective function… and thus limit the exclusion largely to actors’ costumes and waiters’ and doormen’s uniforms.  Remember that the section covers not only clothes-changing time but also washing-up time, and workers who wear work clothes for self-protection in a dangerous or noxious work environment are far more likely to require significant time for washing up after work than a waiter.”

(emphasis added).

In addition, the 7th Circuit relied heavily on the fact that the collective bargaining agreement did not imply that workers were to be compensated for the time spent changing into work clothes, and washing up and changing back.

via Courthouse News Service.

NBA Union Executive Director Dismissed

The last couple of days, I have been reading about the possible ousting of NBA Union Executive Director.  Yesterday (Saturday), the union representatives voted unanimously to dismiss him.

After a 469-page audit report conducted a law firm, the report charged former executive director Billy Hunter with nepotism, poor management, and abuse of union resources.  The audit did not find any criminal wrongdoing.  Nevertheless, the report concluded that Hunter had put his own interests ahead of the union’s and recommended that the players reconsider his employment.

The move to dismiss the former NBA union Executive Director Billy Hunter was announced by the union president Derek Fisher.  Hunter’s business practices had drawn the scrutiny of three government agencies.

In his blog, Hunter announced, “During the days and weeks ahead, my legal team and I will begin carefully reviewing the actions taken and statements made against me in the meeting room in my absence.”

via N.B.A. Players Dismiss Union Leader – NYTimes.com.

NLRB charge alleging illegal picketing at Wal-Mart held in abeyance

The NLRB Office of General Counsel today announced that, based on specific commitments made by the United Food and Commercial Workers union, it is not necessary to decide the merits of an unfair labor practice charge filed by Wal-Mart against the UFCW.

In that charge, filed November 20, Wal-Mart alleged that the union violated the National Labor Relations Act by picketing at its stores for more than 30 days with the intent of seeking recognition for the union, without filing a petition for an election. The union, however, contended that the actions at the stores were not intended to gain union recognition, but to help employees in their efforts to have the employer commit to certain labor rights and standards.

The charge will be held in abeyance and dismissed in six months as long as the union complies with the commitments it has made. Under those commitments, described in an Advice Memorandum, the union disavowed any recognitional or organizational object and promised to maintain a disclaimer to that effect on Making Change for Wal-Mart and OUR Walmart websites. The union also promised, among other things, not to engage in any picketing or confrontational conduct which is the functional equivalent of picketing for 60 days.

via NLRB charge alleging illegal picketing at Wal-Mart held in abeyance | NLRB.

More on NLRB Recess Appointments

There is much talk on the D.C. Circuit Court of Appeals’ ruling that the President’s NLRB recess appointments was unconstitutional.

Shortly thereafter, the NLRB released a press release stating:

The Board respectfully disagrees with today’s decision and believes that the President’s position in the matter will ultimately be upheld.  It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other court of appeals.

Below is a compilation of pending cases, as put together by SCOTUS Blog by Lyle Denniston:

• D.C. Circuit — fifteen other challenges pending, most if not all of which will be decided on the basis of last Friday’s ruling.  The cases are either in the briefing stage, or awaiting a briefing schedule.
• Second Circuit — one case, in briefing.
• Third Circuit — three cases, one set for argument March 19 NLRB v. New Vista Nursing, docket 11-3440; one case being held for that case, another in briefing.
• Fourth Circuit — four cases, one set for argument March 22 NLRB v. Enterprise Leasing Co. SE, docket 12-1514; others in briefing.
• Fifth Circuit — one case, in briefing.Sixth Circuit — one case, in briefing.
• Seventh Circuit — two cases: one decided, but not on the merits of the appointments power; one in briefing.Ninth Circuit — one case, in briefing.
• Eleventh Circuit — one case, in briefing.
• The only federal appeals courts in which no such cases are pending are the First, Eighth, and Tenth.

via Spreading challenge to appointment power UPDATED : SCOTUSblog.