Federal court freezes California’s new anti-arbitration law AB 51

A federal court in California has frozen California’s 2019 anti-arbitration law, numbered AB 51 (“Assembly Bill”). AB 51, which would have taken effect January 1, 2020, would have barred arbitration agreements entered into — even through an “opt out” clause — as a condition of employment, at least as to California state law claims. The court’s ruling is a welcome clarification since AB 51 stood in obvious contradition to and in apparent violation of the United States Supreme Court’s many rulings under the Federal Arbitration Act. AB 51’s effective date is now frozen pending further litigation.

Source: Order Granting Temporary Restraining Order And Setting Expedited Hearing on Preliminary Injunction, Case No.  2:19-cv-02456-KJM-DB  (12/30/19).

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NLRB returns to permitting employers to cease dues check-off collections during negotiations

Reversing its Obama-era decision, the Board has returned to its longstanding precedent of permitting employers to stop withholding dues, even as may have been required by a dues check-off clause in a collective bargaining agreement, once that agreement expires and the parties enter renewal negotiations.

In sum, we find that a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by the contract and are enforceable through Section 8(a)(5) of the Act only for the duration of the contractual obligation created by the parties. There is no independent statutory obligation to check off and remit dues after expiration of a collective-bargaining agreement containing a checkoff provision, just as no such statutory obligation exists before parties enter into such an agreement. This holding and rationale apply even in the absence of a union-security provision in the same contract. Because we find that it would not be unjust to follow our normal approach when overruling precedent, we will apply our holding retroactively in this case and in other pending cases. We therefore find that the Respondent had no obligation under the Act to continue dues checkoff after the contract expired.

Source: Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (2019).

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NLRB reverses course on its expedited election rules

Effective April 16, 2020, the Board will jettison its 2014 expedited election rules. The expedited election rules were highly controversial and nicknamed, depending on the speaker’s perspective, either “quickie” or “ambush” election rules. The highly accelerated election period was intended to limit (or, depending on the speaker’s perspective, curtail) the ability of employer’s to speak and otherwise lawfully campaign prior to the election.

In its fact sheet on the new election rules, the Board summarized “the most significant changes in the new rule(, as follows):  

  • Pre-Election Hearings:  Pre-election hearings will generally be scheduled 14 business days from notice of the hearing, and regional directors will have greater discretion to postpone hearings. In most cases, pre-election hearings currently must be scheduled 8 calendar days from the notice of hearing.  

  • Notice of Petition for Election:  Employers must post and distribute the Notice of Petition for Election within 5 business days after service of the notice of hearing. Existing rules require posting and distribution within 2 business days. Non-Petitioning Party’s Statement of Position:  Non-petitioning parties (most commonly employers) must file a Statement of Position within 8 business days after service of the notice of hearing, and regional directors will have greater discretion to grant extensions. Under the existing rules, non-petitioning parties’ Statement of Position usually must be filed 1 day before the opening of the pre-election hearing (typically 7 calendar days after service of the notice of hearing).  

  • Petitioning Party’s Statement of Position:  Petitioners (typically unions) must file a Statement of Position responding to the issues raised in any non-petitioning party’s Statement of Position. This responsive Statement of Position is due at noon 3 business days before the hearing. In most cases, the current rules do not provide for pre-hearing statements of position from petitioning parties.  

  • Unit Scope and Voter Eligibility Determinations:  All disputes concerning unit scope and voter eligibility – including issues of supervisory status – will generally be litigated at the pre-election hearing and resolved by the regional director before an election is directed. The parties may, however, agree to permit disputed employees to vote subject to challenge. Under the current rules, disputes concerning individuals’ eligibility to vote or inclusion in an appropriate unit ordinarily need not be litigated or resolved before an election is conducted.

  • Post-Hearing Briefs:  Parties are permitted once again to file post-hearing briefs with the regional director following pre-election hearings. Post-hearing briefs will be permitted for postelection hearings as well. Such briefs are due within 5 business days, and hearing officers may grant an extension of up to 10 business days for good cause. Under existing rules, post-hearing briefs are permitted only upon special permission of the regional director.  

  • Notice of Election:  The regional director’s discretion to issue a Notice of Election subsequent to issuing a direction of election is emphasized. The current rules provide that regional directors “ordinarily will” specify election details in the direction of election.  

  • Scheduling of Election:  Regional directors must continue to schedule the election for the earliest date practicable, but—absent agreement by the parties—normally will not schedule an election before the 20th business day after the date of the direction of election.  

  • Voter Lists:  Employers must furnish the required voter list within 5 business days following the issuance of a direction of election. Under the current rules, employers have 2 business days to provide voter lists. 

  • Election Observers:  Parties are required to select election observers who are current members of the voting unit whenever possible. When no such individual is available, a current nonsupervisory employee should be selected. The current rules provide for election observers but place no restrictions on who may be selected to serve as an observer. 

  • Requests for Review: 

    • Filed within 10 Business Days after Direction of Election:  If the Board either does not rule on a request for review or grants the request before the election, ballots will be impounded and remain unopened pending a decision by the Board. 
    • Filed more than 10 Business Days after Direction of Election:  Parties may still file a request for review of a direction of election more than 10 business days after the direction, but the pendency of such a request for review will not require impoundment of the ballots or postponement of the vote results.
    • Post-Election:  Consistent with the current rules, parties may wait to file a request for review of a direction of election until after the election has been conducted and the ballots counted. 

  • Oppositions to Requests for Review:  Oppositions are explicitly permitted in response to all types of requests for review, and the practice of permitting replies to oppositions and briefs on review only upon special leave of the Board has been codified.

  • Certification of Election:  The regional director will no longer issue certifications following elections if a request for review is pending or before the time has passed during which a request for review could be filed. Under the current rules, regional directors are required to issue certifications following elections despite the pendency or possibility of a request for review.    

  • Business Day Calculation:  All time periods applicable to the election rule are calculated based on business days as opposed to calendar days. Under the existing rules, there is a lack of consistency on the calculation of days. The new rules also define how business days are calculated, including clarification that only federal holidays are implicated in time period calculations.”

Source: “NLRB Fact Sheet: Revisions to the Board’s Representation Case Procedures.“ See also the final rule, 84 Fed.Reg. 69524 (12/18/19).

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DOL issues regulations clarifying excludable items from the regular rate of pay

Workers who are not exempt from overtime, in other word, workers who must be paid overtime, under federal law (the Fair Labor Standards Act) must be paid time and one-half of their “regular rate of pay.” The phrase “regular rate of pay” is not what it intuitively sounds like; it is not simply what the worker regularly gets paid. Instead, there are strict rules for what must be included in a regular rate of pay and for what may be excluded. The DOL issued final regulations, to be effective January 15, 2020, “to confirm that employers may exclude the following from an employee’s regular rate of pay:

  • the cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance;

  • payments for unused paid leave, including paid sick leave or paid time off;

  • payments of certain penalties required under state and local scheduling laws;

  • reimbursed expenses including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit; and clarifies that reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”;

  • certain sign-on bonuses and certain longevity bonuses;

  • the cost of office coffee and snacks to employees as gifts;

  • discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples and;

  • contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.”

(Quoting the DOL’s web page for these final rules, available here, https://www.dol.gov/agencies/whd/overtime/2019-regular-rate.)

The final regulations also “eliminate() the restriction in (FLSA’s) §§ 778.221 and 778.222 that ‘call-back’ pay and other payments similar to call-back pay must be ‘infrequent and sporadic’ to be excludable from an employee’s regular rate, while maintaining that such payments must not be prearranged.” (Quoting that same web page.)

As the DOL notes in its summary above, some sign-on bonuses are excludable, but not all are. The DOL explains in its final rule and the prefatory comments for that rule that it depends on whether the sign-on bonus requires the recipient to do work. Thus a sign-on bonus that is paid before and irrespective of whether work is actually done is excludable, but if that bonus has a clawback provision (if the worker doesn’t end up working, or doesn’t end up working enough hours/days), then it is payment for work provided and becomes not excludable.

In brief, sign-on bonuses with no clawback provision are excludable from the regular rate; sign-on bonuses with a clawback provision pursuant to collective bargaining agreement (CBA), or city ordinance or policy are included in the regular rate; and sign-on bonuses with a clawback provision not pursuant to a CBA, city ordinance or policy, or other similar document that complies with § 778.212, are excludable from the regular rate.

Likewise, the DOL explains “bonuses contingent upon the employee’s continuing in employment until the time the payment is to be made and the like are” not excludable.

The DOL also spent quite a bit of time in the final rule discussing what is a “discretionary bonus” that may be excluded from the regular rate of pay.

Examples of bonuses that may be discretionary include bonuses to employees who made unique or extraordinary efforts which are not awarded according to pre-established criteria, severance bonuses, referral bonuses for employees not primarily engaged in recruiting activities, bonuses for overcoming challenging or stressful situations, employee-of-the-month bonuses, and other similar compensation. Such bonuses are usually not promised in advance and the fact and amount of payment is in the sole discretion of the employer until at or near the end of the period to which the bonus corresponds.

Employers should consider pulling a list of the payroll codes they use for non-exempt workers, marking which they currently considered excluded versus included in the regular rate of pay calculations, then mapping that against the new regulations. In conducting that mapping, and in order to preserve attorney-client privilege and attorney work product protections, they may wish to involve experienced employment law counsel in their internal audit.

Source: “Regular Rate Under the Fair Labor Standards Act,” 84 Fed.Reg. 68736 (12/16/19).

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In another reversal, NLRB holds employers can issue so-called “gag orders” to protect the confidentiality of workplace investigations

The NLRB has ruled that employers can issue so-called “gag orders” to protect the confidentiality of workplace investigations. A typical “gag order” would be an instruction by the company to employees (and other witnesses) not to discuss matters relevant to an on-going investigation.

The decision triggered a heated dissent from one Board member who argued it will allow employers, in #MeToo type matters, to further keep secret wrongful matters, such as the details of sexual harassment.

In issuing its decision the Board held that such “gag orders” will, still, draw individualized case-by-case scrutiny from the Board when they are “not
limited on their face to open investigations.”

In reaching its decision, the Board applied its new more permissive approach to analyzing handbooks and policies.

Source: Apogee Retail, 368 NLRB No. 144 (12/17/19).

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NLRB reverses course and holds employers can control emails

In a reversal of its Purple Communications decision, the NLRB held that employers can maintain sole control over their email and computer systems. Employers need not allow workers much less third parties like unions access to their email systems to, for example, further union organizing, collective bargaining, grievance administration or other non-work purposes.

(E)mployees have no statutory right to use employer equipment, including IT resources,

Employers are reminded this decision leaves in tact the Board’s longstanding exception for “those rare cases where an employer’s email system furnishes the only reasonable means for employees to communicate with one another.” For example, where employees are geographically dispersed and have no means, other than corporate email, to communicate. With regard to that exception, the Board elaborated only to say the following:

Because, in the typical workplace, employees do have adequate avenues of communication that do not infringe on employer property rights in employer-provided equipment, we expect such cases to be rare. We shall not here attempt to define the scope of this exception but shall leave it to be fleshed out on a case-by-case basis.

Source:  Caesar’s Entertainment, Inc., 368 NLRB No. 143 (12/17/19).

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New Colorado wage order will overhaul many overtime and minimum wage requirements

The Colorado Department of Labor and Employment has proposed its new wage order. This order, #36, will replace the current wage order, #35. The new wage order will overhaul Colorado law regarding overtime and minimum wage. Its many changes from current wage order #35 include:

  • A title change: Reflecting the fact that this new order addresses far more than simple wages, its title will change from the “Colorado Wage Order” (WO) to the “Colorado Overtime and Minimum Pay Standards Order” (COMPS).
  • COMPS 36 will now reach almost all private employers in Colorado. Previous WOs had applied only to the following four industries: retail and service, commercial support service, food and beverage, and health and medical. COMPS will apply to all employers as a general rule, unless the employer falls within one of the newly defined exemptions set forth in prosed Rule 2 of COMPS. Therefore employers who previously considered themselves exempt from the WOs should now review COMPS to determine if it will become covered.
  • Minimum guaranteed salary: If covered COMPS will increase the minimum guaranteed salary to $42,500, effective 7/1/20, well above that in federal law. COMPS minimum will rise steeply thereafter, each year, to $57,500 effective 1/1/26 and be adjusted thereafter per the CPI.
  • Changes to particular job-specific exemptions have been proposed.
  • Changes to the timing of required rest periods and a requirement that employees who are not allowed their 10-minute rest period receive pay not only for the 10-minute rest period but an extra 10 minutes pay.
  • Changes to the ability to take credits and the ability to charge for uniforms.
  • Changes to the fluctuating workweek method of calculating overtime.
  • Expansion of anti-retaliation protections.
  • Expansion of employer obligations as to “transparency,” “language inclusiveness” and posters.

The CDLE has invited comments by 12/31/19 and stated its hope to release a final COMPS by 3/1/20 to become effective 7/1/20.

Source: See the CDLE’s webpage re its proposed COMPS 36.

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Expert testimony not required to prove a “disability,” some of the times

The Tenth Circuit held that a plaintiff doesn’t always need to have a medical expert to confirm the plaintiff’s medical condition rises to the level of a “disability” protected by the Americans with Disabilities Act.

When is a medical expert required? “(W)]here injuries complained of are of such character as to require skilled and professional persons to determine the cause and extent thereof,” and that question needs to be asked by each court in each individual case. This seemingly circular standard — expert medical testimony is required when it is necessary to understand the medical condition — was somewhat clarified by the Tenth Circuit when the Court contrasted such cases, at least, against those where the disability is “obvious.”

In short, the Tenth Circuit’s decision makes clear that expert medical testimony is likely always helpful to a plaintiff, might sometimes be required but isn’t always, and no plaintiff, or defendant, will know until the trial court, after undertaking a case-by-case analysis decides in any given case.

Source: Tesone v. Empire Marketing Strategies, case no. 19-1026 (10th Cir. 11/8/19).

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