DOL issues proposed rule re tip-pooling

In a November 2019 opinion letter the DOL reversed position on tip-pooling. As explained there, the DOL lifted the Obama-era DOL’s 80-20 rule, making it easier for employers (like restaurants) to pool tips among tipped employees, including even those who perform some non-tipped work during their day (like waiters who vacuum, set up and clean up the restaurant as well as work tables). In this proposed rule the DOL is proposing to codify its new approach into a formal regulation. Codification of this approach into a regulation — rather than simply setting it forth in an opinion letter — will have at least two effects: It will generally require courts to defer to this interpretation and make it more difficult for future administrations to deviate.

/0 Comments/by

President Trump limits informal agency guidances

Federal law requires administrative agencies to go through a rulemaking process before implementing regulations. To avoid that process, agencies have increasingly begun using informal “guidances,” often issued in the form of memorandums, letters and bulletins. By two Executive Orders, the President has ordered administrative agencies, among other things, to include in any such document a disclaimer that it does not carry the force of law and further to make all such documents available to the public via a searchable database on the Internet. It is not yet clear whether the Executive Orders reach opinion letters, such as the Department of Labor’s well known opinion letters.

/1 Comment/by

Third Circuit rejects Uber’s ability to enforce arbitration agreement with its drivers

Applying the Supreme Court’s recent Oliveira decision, the Third Circuit held that Uber cannot enforce its arbitration agreement with drivers engaged in interstate commerce. In doing so, the Court held that the exception in federal law that prohibits arbitration agreements for drivers engaged in interstate commerce applies not only to drivers who transport goods but also drivers who transport services.

Source:  Singh v. Uber Technologies, Inc., — F.3d — (3rd Cir. 9/11/19).

/0 Comments/by

California attempts to ban mandatory (even opt-out voluntary) pre-dispute arbitration agreements

On October 10, 2019, the Governor of California signed into effect California’s AB 51, which bans mandatory pre-dispute arbitration agreements. This new law continues California’s struggle to find a way to limit pre-dispute arbitration, in direct conflict with the Supreme Court’s recent cases upholding such arbitration.

AB 51 prohibits even otherwise-voluntary pre-dispute arbitration agreements are banned if they would require an “opt out” or “any (other) affirmative action” by the employee to preserve the right to litigate not arbitrate, quoting sec. 432.6(c). AB 51 contains a 1-sided attorney fees clause, which allows a worker but not an employer to recover attorney fees if successful in litigation over the enforceability of an arbitration agreement. Additionally retaliation against a worker who refuses to agree to a pre-dispute arbitration agreement is prohibited, as is conditioning new or continued employment on such an agreement. According to sec. 432.6(h), AB 51 only applies to “contracts for employment entered into, modified, or extended on or after January 1, 2020,” at which time AB 51 will take effect.

It is anticipated that AB 51 will spark immediate litigation as it appears to stand in flat conflict with (and is therefore preempted by) the federal Fair Arbitration Act (FAA), as the Supreme Court has already ruled in a number of recent cases, including its recent decision in Lamps Plus and Epic Resources. 

Indeed it is so easy to anticipate such legislation that the California legislature itself preemptive responded to such challenges when it passed AB 51 by arguing it was somehow only addressing how pre-dispute arbitration agreements could be entered into in the state of Colorado, which seems to be the very thing that the Supreme Court has been saying states may not do as Congress preempted the field with its FAA. California’s argument frankly seems to make little sense and is expected to find no support within the Supreme Court’s recent line of arbitration cases.

Employers should carefully re-consider any arbitration agreement in California and anticipate that, unless AB 51 is blocked by the courts, they risk becoming a test case for litigation if they require pre-dispute arbitration agreements there after 1/1/2020, even if their agreement is otherwise-voluntary on the basis of an opt-out provision

/0 Comments/by

NLRB loosens restrictions on an employer’s ability to modify wages, hours and working conditions during the term of a CBA

Historically the Board has permitted an employer to change wages, hours and working conditions during the term of a CBA if it can prove a “clear and unmistakable waiver” by the union permitting the change. An example of a “clear and unmistakable waiver” would be contract language expressly authorizing a company to modify the cost of health insurance up to a certain maximum during the term of the CBA so long as the same modification was imposed on non-union workers. That would be just one kind of clear and unmistakable waiver.

Now, the Board will apply a “contract coverage” standard. This is the same standard that has been applied by the D.C. Circuit. Under the “contract coverage” standard, the Board won’t look for language as “clear and unmistakable” as previously required, rather it will ask whether the plain language of the contract seems to “cover” an employer’s right to act unilaterally. The Board believes this approach is not only more consistent with the National Labor Relations Act but reinforces the role of an arbitrator — not the Board — as interpreter of the CBA; in other words, if an employer believes it has contract language authorizing it to make a change, it should be for an arbitrator, not the Board, to be the primary decider whether or not the CBA was breached by the change.

Source: M.V. Transportation, Inc., 368 NLRB No. 66 (2019).

/0 Comments/by

A union that isn’t a union? The New York Times on the growing presence of “solidarity unions”

Interesting lunchtime read today for HR and labor-employment law professionals, in the New York Times. The article discusses the growing presence of non-union unions called “solidarity unions,” especially in the tech industry. These groups are simply informal associations of two or more workers in a workplace.

The article is a good reminder for employers that, if workers don’t feel they have a voice in the workplace, they will find a way to express and protect themselves, whether it means through a formal union or simply acting together to secure their goals.

As the article notes, such workers enjoy legal protections, indeed the National Labor Relations Act protects workers who act to further their wages, hours or working conditions, whether or not they do so through a union. Also protected are worker actions, with no union involved, involving two or more workers actin in concert with each other, or sometimes even, as a previous blog post noted, when a single worker acts on behalf of his colleagues.

The New York Times reports that “solidarity unions” are already present at Google, Kickstarter, Uber and other companies. Their proponents believe they hold several advantages over traditional organized unions: They do not need to be recognized through NLRB-sanctioned elections. They do not need the support of a majority of the workers. They do not need to, and generally do not, enter into collective bargaining type agreements. Rather they prefer not to have such agreements, instead hoping to keep the company “on its toes” by engaging in labor actions if and when the workers choose, for the reasons chosen by the workers.

The article discusses these “solidarity unions” as outgrowths of a single book, Labor Law for the Rank and Filer.

Source: “The Radical Guidebook Embraced by Google Workers and Uber Drivers,” New York Times (10/10/19).

/0 Comments/by

NLRB reverses micro-unit rule

The NLRB has reversed its 2011 Specialty Healthcare decision, which in turn reversed its 2017 PCC Structurals decision, meaning the NLRB will no longer permit a union to try to organize only a sliver of a workforce (a so-called “micro-unit”). Now an employer (or workers) may defeat a union’s effort to organize a micro-unit by proving the petitioned-for unit does not share an internal community of interest or does not have sufficiently distinct interests from those employees excluded from the petitioned-for unit.

Source:  The Boeing Co., 368 NLRB No. 67 (2019)

/0 Comments/by

NLRB permits employers to eject non-employee union agents from their property

Reversing a 1999 decision, Sandusky Mall Co., the Board upheld an employer’s right to eject non-employee union agents from its premises, even though it had routinely granted other non-employees’ permission to solicit on the same premises for “civic, charitable and promotional activities.” In doing so the Board held that a union’s presence to solicit customers to join a boycott is entirely dissimilar from Girl Scout cookie sales, firefighter boot drives, Salvation Army drives, Lion’s Club activities, Red Cross blood drives and church activities. Employers may now comfortably permit such other activities without worry that they could be used by union activists to justify the union’s presence.

The Board’s ruling not only reinstated the exception permitting employers to treat civic, charitable and promotional activities” differently from unions but suggests the Board will now require an even higher showing for unions. The Board held that the new burden of proof will require the union (and NLRB General Counsel) to prove that the employer allowed “comparable organizational activities.” The Board did not give examples of what might be considered “comparable organizational activities.”

Source: Kroger Limited Partnership I Mid-Atlantic, 368 NLRB No. 64 (2019).

/0 Comments/by