By Pamela Wolf, J.D.
Those who have been watching developments on the labor front know that it’s been quite an interesting year for some of the federal agencies that impact the world of labor law. Indeed, some of the challenges faced by these agencies in 2013 have landed in the lap of the U.S. Supreme Court. For these and other reasons, 2014 may turn out to be a similarly notable year in the labor law arena.
To understand the most significant developments at the federal labor agencies in 2013, among other things, and learn what may be in store for 2014, Employment Law Daily reached out to a team of experts on its Editorial Advisory Board, including Chris Bourgeacq, General Attorney with AT&T, and Will Anthony, Jackson Lewis Partner and Chair of the Class Action and Complex Litigation Practice Group.
Our experts outlined the most important agency activities on the labor front in 2013. According to Will Anthony, they centered around three key developments:
(1) The President’s recess appointments to the National Labor Relations Board (which are now before the U.S. Supreme Court in NLRB v Noel Canning);
(2) The NLRB’s “increased expansion” of the concept of “protected concerted activity”; and
(3) The Department of Labor’s consideration of changes to the Labor-Management Reporting and Disclosure Act (LMRDA) “advice” exemption.
Recess appointments. “If, as may be the case based on the recent oral argument in Noel Canning, Dkt No 12-1281, the Supreme Court holds that the President’s recess appointments were invalid, then the NLRB was acting without a quorum for several years,” Anthony explained. “In that case, the Board decisions and rulemaking during the relevant time period are likely to be found invalid.” That means the Board will need to reconsider all of the decisions it made during the relevant period. The issue of NLRB’s legitimacy “has resulted in the finality and import of numerous NLRB decisions being called into question,” he said.
The D.C. Circuit’s Noel Canning decision invalidating President Obama’s NLRB recess appointments was likewise at the top of Chris Bourgeacq’s list as the most notable agency development of 2013. He observed that two other appellate courts (the Third and Fourth Circuits) have reached the same conclusion as the D.C. Circuit reached in Noel Canning. “The decision places in limbo virtually all decisions issued by the Board since January 2012 until it attained its full quorum last August,” Bourgeacq said.
What was the impetus for the Noel Canning decision? It may have been many instances of overreaching by the Board in its rulemaking activities, which were also struck down by the courts, as well as the NLRB’s administrative decisions that have overturned decades of precedent, according to Bourgeacq. He said the D.C. Circuit issued more than one decision against the NLRB last year in addition to Noel Canning, suggesting the circuit’s frustration with the manner in which the Board has conducted its regulatory activities.
On the political front, Noel Canning probably also contributed in large part to the Senate’s finally consenting to President Obama’s subsequent Board nominees, Bourgeacq suggested — a move that resulted in the first fully-constituted Board since George W. Bush was President.
Expansion of protected activity. With regard to the NLRB’s increased expansion of “protected concerted activity,” Anthony points out that there has been “a significant increase in Board unfair labor practice charges relating to policies on social media, confidentiality, at-will disclaimers, class action waivers, and many areas where employers and employees did not realize that the National Labor Relations Act might apply.”
The impetus for the expansion of “protected concerted activity,” according to Anthony, is “the NLRB’s efforts to make the NLRA more relevant to both unionized and union-free workplaces.” He said that the LMRDA changes appear to help unions since, among other things, employers may decide they want to forego their right to obtain competent confidential legal advice in dealing with union issues.
The NLRB’s “protected concerted activity” initiative, Anthony said, has provided additional opportunities for employees and unions to file charges against employers based on a perception that the Board is more receptive. “All employers — whether unionized, union-free, or somewhere in between — are impacted by the Board’s decisions and related advice memoranda applying the provisions of the NLRA in terms of protected concerted activity in a new and broader fashion,” he said. “In fact, from a broader perspective, all employers are at risk of running afoul of the NLRA under new NLRB interpretations on issues ranging from individual social media postings to newly organized bargaining units to dues collection after union contract expiration.”
DOL’s persuader rules. The DOL’s proposed changes to the “advice” exemption — the so-called persuader rules — are a significant development because they would change the interpretation of the LMRDA exemption such that employers seeking confidential legal advice on labor relations matters would be subject to a reporting requirement, according to Anthony, who noted that employers’ legal counsel would also have a reporting requirement for providing legal advice.
Currently, employers and labor consultants are required under LMRDA Sec. 203 to report agreements or arrangements that they enter into with the intention of persuading employees concerning their rights to organize and bargain collectively, or for purposes of supplying the employer with information about the activities of employees or a union in connection with a labor dispute involving the employer.
Those who oppose the rule change note that almost continuously since 1963, in the absence of some deceptive arrangement between the employer and the consultant, employer and labor consultant reporting has been exempted through the “advice” exception where the consultant has no direct contact with employees and the employer is free to accept or reject the consultant’s advice or materials.
Under the DOL proposal, there would be a significant change to the definition of “advice” that would limit the exception to oral or written recommendations. Opponents are concerned that as a result of the change, if an employer were to distribute to employees a document created by a consultant that describes employee rights, both the employer and the consultant would be required to file a report with DOL’s Office of Labor-Management Standards.
Anthony suggested that the proposed LMRDA changes would have “a tremendous impact” on employers, employees, and their attorneys. “Application of the proposed DOL rule to employers and attorneys will undermine both the confidential attorney-client relationship and employers’ fundamental right to counsel.”
Best practices in light of these developments? Anthony shared these best practice suggestions related to the three important developments he identified:
• Work with clients to ensure that they have reserved their legal rights in any proceedings involving the NLRB in light of the recess appointment issue.
• In 2014, now that the Board is at full strength, given anticipated additional decisions expanding and/or explaining the bounds of “protected concerted activity,” employers should, among other things,
o review their policies and procedures with legal counsel to ensure compliance, and
o conduct executive/management/supervisory training so their management team applies the policies correctly under current law.
• Legal counsel should be aware that the attorney-client privilege would be impacted by the new DOL regulations, if finalized in their proposed form, thereby raising a potential conflict between state bar and federal LMRDA requirements, among other things.
Bourgeacq offered this tip: “With a full Board still decidedly pro-union, practitioners representing employers should seriously consider appealing egregious decisions to the D.C. Circuit, where at least for now, its welcome mat for the Board resembles a post-it note.”
WHAT’S AHEAD IN 2014?
What’s on the horizon for 2014 at federal labor agencies? Bourgeacq pointed to the long-awaited final release of the DOL’s persuader rules. The DOL expects to finalize its persuader rules in March 2014. Bourgeacq characterized the proposed rule change as a “not-so-subtle effort to support union organization.” He said that the proposed rule’s “assault on attorney-client privilege” will draw challenges from various groups, and predicts that the rule will almost certainly be stayed and likely struck down by the courts.
The NLRB will also revisit its so-called “quickie election” rules in 2014 with a full quorum, according to Bourgeacq, and will probably adopt a more onerous rule, making it easier for unions to organize and win elections. The Board “has thrown in the towel” on the union rights poster — the notice posting rule that required employers to inform employees of their rights under the NLRA — and probably will not waste its regulatory capital on that pursuit again, he predicted.
Anthony also pointed to the likelihood that the NLRB will renew its rulemaking efforts on accelerated elections, which he, too, thought would go beyond the rules that stalled in the courts because of a quorum-related issue. He likewise noted that the DOL is likely to finalize its proposed LMRDA rules.
In addition, Anthony anticipates that the NLRB will be more active in seeking court-ordered 10(j) relief, which reinstates terminated employees pending an NLRB trial and final determination by an NLRB Administrative Law Judge as to whether the employees were terminated in violation of the NLRA.
Bourgeacq said that we can expect court challenges to any rulemaking, and employers will likely challenge adverse decisions — going to the D.C. Circuit, unless its bench gets “packed” by Obama nominees — in response, for example, to the Board’s likely reversal of its decision in Register Guard (holding no employer duty to provide union access to email network) and expansion of its Specialty Healthcare ruling (interpreted to result in micro bargaining units).
NELI webinar provides transactional approach to compliance with OFCCP’s revised disability and veterans rules
Federal contractors are still in the process of absorbing all of the basic information regarding the new requirements of the OFCCP’s revised regulations on protected veterans and workers with disabilities, noted OFCCP expert John C. Fox during the first part of a two-part webinar presented by the National Employment Law Institute (NELI). Therefore, many contractors have not yet focused on the nuts and bolts of the all the new transactions that will be required. To that end, the webinar was designed to provide a transactional approach.
The revised regulations were published in the Federal Register on September 24, 2013 (78 FR 58614–58679 and 78 FR 58682-58752). The VEVRAA rule revises the OFCCP’s regulations at 41 CFR Part 60-300 (and rescinds the outdated regulations at 41 CFR Part 60-250); the Section 503 rule revises the agency’s regulations in 41 CFR Part 60-741. The revised regulations will require federal contractors to establish a 7 percent utilization goal for workers with disabilities and a variable hiring benchmark for protected veterans as well as impose new data collection and recordkeeping requirements.
Understanding the architecture. Fox, a former OFCCP official and current president of Fox, Wang & Morgan P.C. in San Jose, California, offered some practice tips for understanding the architecture of the revised regulations. First, he advised that contractors should work only from the Federal Register version of each of the regulations (cited above) because there have been some subtle changes between what was posted on the OFCCP website when the final rules were first announced on August 27, 2013 and the version of these rules published in the Federal Register on the following month. Second, he suggested that contractors should read the regulations themselves first, the preamble second, and the economic analyses last.
The revised regulations are divided into the following five subparts:
Subpart A: “Preliminary Matters, Equal Opportunity Clause”
Subpart B: “Discrimination Prohibition”
Subpart C: “Affirmative Action Program”
Subpart D: “General Enforcement and Complaint Procedures”
Subpart E: “Recordkeeping”
Subpart C contains “the guts” of the new rules, Fox said. Under the current regulations, there are ten “ingredients” required for AAPs (at 41 CFR 60-300.44(a)-(j) and 41 CFR 60-741.44(a)-(j)). The revised regulations add some new obligations to the majority of the existing AAP ingredients, and add a new ingredient (at .44(k)), “data collection analysis,” Fox noted.
Effective date and compliance deadlines. Although federal contractors and subcontractors will be required to comply with Subparts A, B, D, and E of both new rules by March 24, 2014, the obligations in Subpart C of the new rules will be phased in. The timing of when certain Subpart C provisions will be phased in has been “on a roller coaster” since the regulations were published, Fox observed. Nevertheless, the most recent information from the OFCCP is that contractors with existing affirmative action programs (AAPs) on the effective date may wait to comply with the new requirements of Subpart C of both rules as part of their standard AAP review and updating cycle. In other words, contractors with AAPs in operation (mid-cycle) on March 24 do not have to create a new AAP on that date to comply with the new requirements, but rather can continue under the current rules until the conclusion of the annual AAP cycle. However, contractors must still comply with all existing obligations under the current regulations while they are waiting for their new annual AAP cycle (and thus, the new requirements) to begin.
While contractors may choose to take advantage of the OFCCP’s phased-in implementation allowances, they do not have to do so, Fox said. Thus, contractors who chose to do so may began to implement all the requirements of the new rules on March 24, 2014, Fox said.
Transitional AAPs. The OFCCP refers to the first AAP that a contractor will develop after March 24, 2014 as a “transitional AAP.” Fox noted that the OFCCP has announced it will not find contractors out of compliance as to their “transitional AAP” if the contractor documents in the AAP:
(1) what compliance obligation(s) it has not accomplished, and
(2) what efforts the contractor is undertaking to bring itself into compliance.
Invitations to self-identify (41 CFR §60-300.42 and 41 CFR §60-741.42). The final VEVRAA rule requires that contractors invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process. At the pre-offer stage, contractors must extend an invitation to self-identify generally as a “protected veteran.” At the post-offer stage, contractors must extend an invitation to self-identify as to the specific veteran category(ies) that contractors are required to report on in the VETS-100A form.
Appendix B of the VEVRAA final rule includes sample invitations to self-identify (for both the pre-offer and post-offer stages) that contractors may use. Unlike the requirements of the Section 503 final rule, contractors are not required to use any specific form for the VEVRAA invitations. Nevertheless, contractors that do not use the sample forms provided in Appendix B must still ensure that the format they use meets the criteria provided in the VEVRAA rule.
The final Section 503 rule requires contractors to invite applicants to self-identify as individuals with disabilities (IWDs) at both the pre-offer and post-offer phases of the application process. The final Section 503 rule — unlike the VEVRAA rule — also requires “post-employment” invitations, Fox said, noting that there are three post-employment invitations:
(1) in the first year that a contractor is subject to the new rule;
(2) every five-year interval thereafter; and
(3) at least once during the intervening years between these invitations, contractors must remind employees that they may voluntarily update their disability status.
All invitations under the Section 503 rule must use the standardized form prescribed by the OFCCP, which is now posted on the OFCCP website.
The obligation to solicit pre-offer self-identification information will not arise until the occurrence of the contractor’s first opening after March 24, 2014, Fox pointed out.
Confidentiality requirements (41 CFR §60-300.42(d-e); 41 CFR §60-741.42(e)). Under both rules, contractors will be required to keep all self-identification forms confidential. At the same time, the section of the regulations dealing with medical examinations and inquiries (41 CFR §300.23 (d) and §741.23(d)) requires that any information regarding the medical condition or history of any applicant or employee must be maintained in a separate medical file and treated as a confidential medical record (subject to specified exceptions). The Section 503 rule, unlike the VEVRAA rule, will require contractors to keep all Section 503 self-identification forms in a “data analysis file” and not in the employee’s medical file.
Therefore, a “multiple-file” or confidential access system will be necessary for employee files, Fox advised. For Section 503 compliance, contractors will need the following three files/access systems: (1) personnel file; (2) ADA/Section 503 medical file; and (3) data analysis file. Under the VEVRAA rule, contractors will need: (1) personnel file; (2) ADA/Section 503 medical file (if medical information is included in the post-offer self-id form); and (3) confidential pre-offer self-id forms file. What this means is that different groups of people will have access to each file depending on function.
Assessment of outreach and positive recruitment (41 CFR §60-300.44(f)(3) and 41 CFR §60-741.44(f)(3)). The current regulations require contractors to engage in outreach and recruitment of IWDs and protected veterans. Under the revised outreach and recruitment provisions, contractors will have the additional obligation to document their outreach and recruitment efforts and undergo an annual written assessment of their effectiveness.
If the contractor concludes that the totality of its efforts was not effective, it must “implement alternative efforts” listed at .44 (f)(1) or (f)(2) of both rules. Notably, (f)(1) incorporates all the efforts listed in (f)(2), so contractors would, in reality, have to do (f)(2) even if they chose the (f)(1) option, Fox observed. Realistically, what contractor would “point the gun at themselves” by deeming themselves, their recruiters, or their hiring managers as “not effective?” Fox queried.
EEO clauses (41 CFR §60-300.5(d) and 41 CFR §60-741.5(d)). Under the revised regulations, contractors may incorporate the required Section 503/VEVRAA equal opportunity clause into covered subcontracts by reference to the regulations, only if they use the language specified in both regulations at part .5 (d). However, a covered contractor does not have to automatically go back and universally embed new EEO clauses into its existing (i.e. “original”) subcontracts on or before March 24, 2014, Fox clarified. Rather, if a contractor “modifies”, “renews” or “extends” an existing covered federal subcontract on or after March 24, 2014, then and only then is the contractor required to put the mandated language of the EEO clauses in its covered federal subcontracts.
Is starting early advisable? He advised that contractors may choose to exercise their management discretion to implement early (i.e. before March 24, 2014) all of the VEVRAA compliance obligations and most of the Section 503 obligations with the exception of the following:
(1) The pre-offer invitation to self-identify disability; and
(2) The post-employment invitation to self-identify disability.
Under the Section 503 regulations currently in force, pre-offer inquiries about disability are prohibited and post-employment inquiries about disability are illegal unless they are “job related and consistent with business necessity.” Thus, the pre-offer and post-employment invitations to self-identify disability will only be permissible once the revised regulations become effective on March 24, 2014, Fox explained. In contrast, there is no law or regulation currently in force that prohibits any of the actions the VEVRAA final rule will require. Still, contractors must be careful to avoid inquiries about disability when extending pre-offer invitations to self-identify as to veterans status prior to March 24, he cautioned.
Although contractors will need to make preparations (such as getting systems and draft language ready) to implement the new requirements prior to the effective date, contractors should think about whether it is practical to roll out any portions of their plans to comply with the new rules prior to March 24, he advised.
Budget and staffing. Implementing all these new requirements “is not something you will fold in causally on a Friday afternoon,” Fox told the listeners, noting that there will be two types of costs over time. The first type is the initial, one-time conversion costs, including: (a) outside consultant costs (if any); and (b) the time it will take managers and other employees responsible for implementation to study the rules’ changes and to design and draft new notices, clauses, forms, AAPs, analyses (“effectiveness” and “internal audits”), surveys, training materials, and HRIS requirements. The second type is the annual “maintenance” or “recurring” costs, such as: (a) data collection; (b) outreach; (c) analyses (“effectiveness” & “internal audits”); (d) surveys; and (e) training.
In terms of staffing, a “tremendous” amount of the workload will be going to document clerks as opposed to HR managers and generalists, he said. Clerks will be needed to count heads and take care of recordkeeping, while managers will be handling tasks such as outreach/recruiting, analyses, surveys, self-evaluations, and training.
For the first year of compliance, the OFCCP estimates the costs will be about $3,000 – $4,400 per establishment. In contrast, some industry analysts say a more realistic estimate is $20,000 – $24,000 per establishment, Fox reported. Following the first year, the OFCCP estimates $440 of recurring (maintenance) costs per AAP establishment/per year. Industry analysts appear to suggest that recurring costs of at least $2,200 per establishment/per year is a more realistic estimate.
Likelihood of court injunction. On November 19, 2013, the Associated Builders and Contractors (ABC) filed a federal court complaint seeking declaratory and injunctive relief to stop the Section 503 final rule (Associated Builders & Contractors v Shiu, DDC, No 1:13-cv-01806-EGS). However, Fox said that he does not foresee the court granting ABC’s injunction request to stop the Section 503 rule from taking effect as scheduled.
Fox represents companies and tries cases in state and federal courts that involve primarily individual trade secret claims, employment contract disputes, wage-hour and employment discrimination class actions, wrongful termination, corporate investigations, and the use of statistics in employment matters. He previously served as Executive Assistant to the Director of the OFCCP, where he was responsible for all enforcement and policy matters.
The webinar, presented on January 23, 2014, was the first segment of a two part program, entitled, “What You Need to do to Implement OFCCP’s Final Section 503/VEVRAA regulations: A Transactional Approach.” The second segment of the webinar was presented on January 30, 2014. Re-broadcasts of both segments may be ordered by going to NELI’s website at www.neli.org.
Cleared of ULP charges, Volkswagen, UAW gear up for union election featuring first-ever “works council” model
By Lisa Milam-Perez, J.D.
Some 3,200 workers at Volkswagen’s Chattanooga, Tennessee, plant will vote in an NLRB-conducted election next week to decide whether to be represented by the United Auto Workers (UAW). The NLRB scheduled the election for February 12-14 after a stipulated election agreement was reached between Volkswagen Group of America (VWGA) and the union.
The organizing drive at Volkswagen has attracted considerable attention because the auto workers, who manufacture the company’s Volkswagen Passat, will decide whether to move ahead with a European-style “works council” representational model—the first of its kind in the United States. But the union’s collaboration with the German automaker has not been without controversy.
Works council model. Local works councils, comprised of employee-elected members, negotiate with an employer on issues such as plant rules, discharge, work hours, and vacation scheduling. They also have authority to request information and address employee grievances. German law mandates the existence of such works councils as a means of promoting employee co-determination of the business, and it also mandates representation of works council members on corporate boards. Accordingly, Volkswagen’s parent company, Volkswagen Aktiengesellschaft Group (VWAG), has a works council in its German operation. It also has a global works council comprised of representatives from each of its production facilities’ local works councils. Members of the global works council serve on VWAG’s supervisory board. (In contrast to the works councils, German unions negotiate CBAs with multi-employer associations or on an industry-wide basis. These negotiations generally establish only minimum wages and other terms and conditions. Union reps may attend all works council and department meetings in an advisory capacity.)
Last August, the UAW confirmed that officials of Volkswagen Group, the Volkswagen Global Works Council, and the UAW met in Wolfsburg, Germany, to continue a series of meetings focused on “the appropriate paths, consistent with American law, for arriving at both Volkswagen recognition of UAW representation at its Chattanooga facility and establishment of a German-style works council.” In September 2013, the union obtained authorization cards from a majority of workers at the plant. The authorization card included language stating that the workers “commend and embrace the Volkswagen philosophy of co-determination,” and went on to state: “We believe that the best way to actively participate in our company and to contribute to VW’s continued success is to achieve representation as our colleagues have at the other 61 Volkswagen facilities across the globe.”
Currently, the Chattanooga plant is the only major Volkswagen assembly facility without labor representation, according to the UAW. With a works council, the plant would have a seat at the parent company’s global works council, the union said in a recent press release. “Ultimately, such a labor relations model would give workers an integral role in co-managing the company and providing input on workplace improvements that would contribute to the success of the company and the workers.”
The collaborative approach with VWGA (VWAG’s U.S. subsidiary) would be “based on the principles of co-determination,” according to the union. “Volkswagen is known globally for its system of cooperation with unions and works councils,” said UAW President Bob King, noting the union wanted to partner with the company and a works council “to set a new standard in the U.S. for innovative labor-management relations that benefits the company, the entire workforce, shareholders and the community.” The union has launched a website describing the works council model in detail.
ULP allegations. The problem, as the National Right to Work Foundation (NRTW) saw it, is that Volkswagen was improperly touting its works council model and strong-arming the Chattanooga workers into accepting it. Moreover, NRTW alleged, the company was providing unlawful assistance to the UAW in order to secure its vision of European-style labor-management collaboration in Tennessee. The organization filed unfair labor practice charges against the employer and the union on behalf of employees who opposed such representation.
Several Volkswagen workers at the Chattanooga plant alleged that statements by German company officials were unlawfully coercive. According to media reports, VWAG officials said that for any expanded production to be considered in Chattanooga, the plant must adopt a works council that would force workers to accept representation by the UAW. By threatening to condition future work on whether employees select the union and by providing unlawful assistance to the UAW, the company violated the NLRA, the charges contended. Other workers charged that the UAW misled and coerced them into forfeiting their rights during the earlier card-check drive. They alleged the union unlawfully demanded recognition from Volkswagen without a valid showing of majority support. The cases were submitted to the NLRB’s Division of Advice for consideration and, in two advice memoranda released in January, the Division recommended the charges be dismissed.
Charges against Volkswagen. Last November, Volkswagen hosted a meeting with several German labor officials sitting on VWAG’s works council. Those officials endorsed the UAW. Moreover, according to a trade magazine, a member of VWAG management, in a meeting of VWAG executives, said he was confident a works council plan would work in the U.S., that VWAG executives intended to release a works council plan and, if their proposal won the support of the managing board, formal negotiations with a labor organization would be imminent. He also was quoted saying that Volkswagen wanted a works council and that the “UAW would be a natural partner.”
Volkswagen also hosted three management representatives on the work council who came to encourage the Chattanooga employees to participate in the global works council, according to the charges, but U.S. law required them to elect a union before that could happen. Finally, Volkswagen allegedly cooperated with the union’s distribution of a booklet entitled “Co-determining the Future.”
Citing Sec. 8(c) of the Act, which grants employers the right to express their opinions on unionization so long as they are not accompanied by threats of reprisal or promises of a benefit, the Division of Advice noted that Volkswagen was free to state its preference for the union—or for a works council. “There is nothing unlawful about such statements of preference for unionization in general, or the Union in particular. All of these statements—urging union representation and/or a works council system, and those saying that the Union would be a ‘natural partner,’ that direct communication between workers’ representatives globally is ‘essential to guarantee good working conditions,’ or that the law requires a labor organization before employees could form a works council,” were lawful.
Moreover, the Division pointed out, “It is well settled that a certain amount of employer ‘cooperation’ with the efforts of a union to organize is lawful,” adding, “these actions were well within the range of lawful cooperation with the Union and its organizing efforts.” Taking a “totality of circumstances” approach to its analysis, the Division concluded Volkswagen’s conduct as a whole would not tend to inhibit workers in their free choice of a bargaining representative. That was particularly true given that VWGA also stated repeatedly that the decision on unionization, and on forming a works council, was “entirely up to its employees,” a message the company “emphatically reiterated” at the November meeting itself and in two subsequent employee newsletters. Further, as the charging parties’ witnesses conceded, Volkswagen’s supervisors and managers have been neutral with regard to the unionization effort. Thus, there was no evidence that the company inhibited employees’ free choice regarding a bargaining representative.
German officials’ statements. There were two possible violations, the Division observed, based on allusions to expanding the Chattanooga facility to manufacture another vehicle there if the works council were established. One was an alleged statement by a German company official that VWAG would only agree to an extension of the site once “it is clear how to proceed with the employees’ representatives in the United States.” The other: a reported statement by the head of the global works council that “we know how important that (second) vehicle is for Chattanooga” and that “in the interests of our U.S. colleagues, we’re open to such an allocation of an order.” These statements could be understood “to condition future expansion of the Chattanooga facility on the employees’ representational status,” and arguably would violate the Act—had they been made by an employer that was subject to its coverage. But VWGA could not be held responsible for the statements of German union representatives who are members of VWAG’s supervisory board. Although a wholly owned subsidiary, VWGA is a separate corporation from VWAG, operates independently, and sets its own employment policies. While there has been consultation and cooperation between the entities, there are no other indicia of single employer status, the Division concluded.
Moreover, the NLRA does not apply beyond the geographic boundaries of the United States, and its reach is limited to locations in which the U.S. has sovereignty or some measure of legislative control. Also, the speakers were not acting as agents of VWGA when they made the statements at issue. They had no apparent authority, and after the statements were made, VWGA “clearly and effectively disavowed any message indicating that future expansion of the Chattanooga facility might be conditioned on the employees’ representational status.”
Charges against UAW. The union faced accusations that it made misrepresentations while soliciting authorization cards from Volkswagen workers; specifically, that a signature on the authorization card meant the employee was approving a secret-ballot election to be held. The UAW also allegedly relied on ambiguous or outdated authorization cards signed more than a year before the union claimed majority status. Finally, the union was accused of telling workers who had revoked authorization cards, and sought their return, that they’d have to contact the UAW office and meet with a union representative, who would destroy the cards in their presence. But the union did not violate the Act in its solicitation or handling of authorization cards, as there was no evidence indicating any unlawful restraint or coercion, the Division advised.
“None of these claims include any factual assertions that would indicate that any of the Union’s conduct in the solicitation of cards would itself constitute unlawful restraint or coercion,” according to the Advice Memorandum. “Nonetheless, the charges allege that the Union’s alleged misrepresentations and solicitation of authorization cards was itself unlawful.” The Division disagreed, concluding that the UAW did not violate the Act merely by claiming majority status and demanding recognition, regardless of whether it had made a valid showing of majority support. Nor did the union violate the Act in its solicitation or handling of authorization cards, given the lack of evidence indicating any unlawful restraint or coercion.
Acting on the recommendation of the Division of Advice, the Board, in turn, recently dismissed the charges against both Volkswagen and the UAW.
NRTW seeks inquiry. Last week, NRTW staff attorneys (led by former NLRB Member John Raudabaugh) requested an official inquiry into the NLRB’s conduct in adjudicating the Volkswagen workers’ charges. It has asked the Board’s inspector general to investigate the agency’s conduct in processing the unfair labor practice allegations and the instructions by the Division of Advice to dismiss the charges. Foundation attorneys have filed a Freedom of Information Act request with the NLRB seeking full disclosure regarding the agency’s handling of the case and its contacts with UAW agents.
Chief among the NRTW’s complaints is that NLRB staff released the advice memoranda to members of the press in Tennessee but not to NRTW attorneys—who only received the memos from a reporter. “Such memos are rarely, if ever, released to anyone in open cases,” according to NRTW. An email from the NLRB Atlanta region, accidentally forwarded to NRTW attorneys, reflects that the Board regional director questioned the propriety of releasing the memos to the media, contrary to longstanding NLRB practice, NRTW said. “Foundation attorneys are concerned that the NLRB’s hurried public release of memos favorable to VW and the UAW calls into question the agency’s impartiality in the workers’ cases.” They also say the NLRB’s actions undermined the organization’s ability to advise its clients before it became publicly known that the Board would dismiss their cases.
Election scheduled. News of the “rapid-fire” UAW election was met with a prompt response from NRTW President Marx Mix. He issued a statement Monday, February 3, noting the organization was “pleased that despite constant calls by UAW officials to be recognized as the workers’ monopoly bargaining representative via card check recognition, Volkswagen workers will instead be given a chance to vote on the matter in a secret-ballot election. A secret-ballot election is what Foundation-assisted workers were asking for all along,” Mix said.
Still, he cited concerns over “the existence of backroom deals cut between Volkswagen and UAW officials giving union organizers preferential access to the workers leading up to the election.” NRTW asked the company to give equal time to those workers opposing the union, and “to release any agreements it has signed regarding what would happen if the UAW union takes monopoly bargaining power over the workplace, including agreements to impose a so-called works council on the employees.” Said Mix: “VW workers should be given all the facts before the election so that they can make an informed choice, and we will oppose efforts to stampede them or tilt the playing field.”
At any rate, with charges of campaign misconduct cleared, the election is slated to proceed on February 12. The UAW’s King said the works council model is in line with the union’s existing partnerships with domestic auto companies and is in keeping with “its vision of the 21st century union.” Come next week, the union will find out whether the Chattanooga workers share that vision.
By Joy P. Waltemath, J.D.
Late last month, the Seventh Circuit created a circuit split when it determined that an employee who accompanied her terminally ill mother on an end-of-life vacation to Las Vegas to care for her physical needs, as she did at home, was entitled to FMLA-qualifying leave “to care for a family member with a serious health condition” (Ballard v Chicago Park District). The court parted ways with the First and Ninth Circuits on whether leave “to care for” needed to be connected to “ongoing medical treatment” in order to be protected under the statute. A careful reading of the Act itself and its regulations, which never use the term “treatment” in their definition of care but speak in terms of basic medical, hygienic, and nutritional needs, did not convince the Seventh Circuit that it should read a “connected to treatment” requirement into the statute.
What does it mean “to care?” It was undisputed that the employee’s mother suffered from a serious health condition. Rather, the employer argued its employee did not “care for” her mother in Las Vegas, believing the FMLA limited the meaning of “care,” at least in the context of an away‐from‐home trip, only to those services provided in connection with ongoing medical treatment.
The statute. An eligible employee is entitled to leave “[i]n order to care for” a family member with a “serious health condition” 29 U.S.C. § 2612(a)(1)(C), and this statutory section addresses only care, not treatment (although other sections, which both parties agreed were not relevant here, do use the term treatment). The court questioned why the employer suggested that participation in ongoing treatment would be required when an employee provided away-from-home care but not when care was provided at home, especially because the FMLA’s text does not restrict care to a particular place or geographic location.
The regs. No regulations specifically interpret Sec. 2612(a)(1)(C). But the court turned to regulations interpreting what is required for a medical provider to certify that “the eligible employee is needed to care for” a family member “for purposes of leave under section 2612(a)(1)(C).” Those regs state that “needed to care for” encompasses both physical and psychological care, where, for example, “a family member is unable to care for his or her own basic medical, hygienic, or nutritional needs or safety, or is unable to transport himself or herself to the doctor, etc.” Care, as described by the regs, also includes providing psychological comfort and reassurance that would be “beneficial to a child, spouse or parent with a serious health condition who is receiving inpatient or home care.”
Where do we care? To the Seventh Circuit, the only suggestion that location could make a difference was a statement in the regulations that psychological care “includes providing psychological comfort and reassurance to [a family member] … who is receiving inpatient or home care.” But that example, first, only concerned psychological care and second, was not intended to be exclusive. “The examples of what constitutes physical care use no location‐specific language whatsoever,” concluded the court. Nor did the regulations use the term “treatment” in their definition of care; they talked instead about basic medical, hygienic, and nutritional needs, which do not change merely because a person is not undergoing active medical treatment. Plus the court was unwilling to read an ongoing active treatment requirement into the definition of “care” when the regulatory definition of “serious health condition” explicitly states that active treatment is not a prerequisite.
Why do we care? From the employer’s perspective, caregiving (wherever it takes place) has a substantial impact on business. According to the Family Caregiver’s Alliance website, issues like absenteeism, replacing employees who quit in order to provide care, and other caregiving-related concerns (partial absences, interruptions, and the like) can have serious financial consequences to employers, costing billions of dollars in replacing workers and lost productivity from caregiving-related workplace interruptions, and hundreds of millions in absenteeism, including leaving work early or arriving late.
Yet, although lots of eligible employees do take FMLA leave (13 percent in the year this survey was taken), the Department of Labor’s 2012 FMLA survey reports that less than 10 percent of workplaces perceive negative effects from complying with the FMLA on “employee productivity, absenteeism, turnover, career advancement, and morale, as well as the business’s profitability.” Regardless of which way these statistics sway you, profitability pressures, low staffing, and fear of family leave abuse are real issues for employers.
Why do we care? From the family’s perspective, however, caregiving is essential. Most older people with long-term care needs — 65 percent — rely exclusively on family and friends to provide assistance, the Family Caregivers’ Alliance notes. Women in particular provide the majority of informal caregiving, the value of which reportedly ranges from $148 billion to $188 billion annually. And caregiving costs working women: lost wages from reduced work hours; passing up a promotion, training or assignment; time out of the workforce; unpaid family leave; switching from full-time to part-time; or taking early retirement.
Why do we care? In the Seventh Circuit case, the court had to consider a caregiving employee’s “family vacation to Las Vegas,” where she and her mother “participated in typical tourist activities.” Perhaps a trip to Las Vegas doesn’t immediately strike you as FMLA-qualifying. On the other hand, this employee was her mother’s primary caregiver, cooking her mother’s meals, administering insulin and other medications, draining fluids from her heart, bathing her, dressing her, and preparing her for bed. She performed these same caregiving activities on the trip, which was arranged by a hospice social worker who had discussed end-of-life goals for the mother and arranged funding for the trip from a nonprofit that facilitated trips for terminally ill adults. Had the FMLA leave request come from a father who wished to accompany his terminally ill son on a trip to Disney World arranged by a similar nonprofit, would we find it so difficult to see this as entitled to FMLA protection?
Our friend Eric B. Meyer wrote a pithy blog post on the case, which gets right to the point: If your employee needs time off to care for a significant other with a serious health condition, get an FMLA medical certification to satisfy yourself that the leave is covered.
Otherwise, what does it matter where the employee cares for a loved one?
By Lorene D. Park, J.D.
When people hear the word “whistleblower” they likely think of the few individuals who made recent headlines or were immortalized in a movie (the names Serpico, Brockovich, and Silkwood likely ring a bell even years later). But there are many outside the media spotlight who impact our lives for the better, often putting their jobs on the line to do so. For example, a hospital employee who repeatedly protested that changes in requirements for training operating staff endangered patients (including having surgeries interrupted because staff could not identify surgical instruments) was fired. The CEO then told surgeons that she had committed a “heinous crime,” which he later admitted was not true. Rejecting the defendants’ legal challenges, a federal court ruled that she had sufficient evidence to proceed to trial on her wrongful discharge and defamation claims (Grivois v Wentworth-Douglass Hospital).
Here are some other recent examples of employees who faced a moral dilemma between keeping their jobs and reporting or opposing unlawful, unsafe, or other wrongful activities. While these everyday heroes may not ultimately succeed on their claims at trial, a federal court in each case determined that they sufficiently stated their claims or had enough evidence to go to trial against an employer for wrongful retaliation:
- A truck driver who had previously been in a deadly accident walked off the job when he learned his truck was unsafe and the employer demanded that he drive it anyway. He later discovered the employer put a negative note on his driving record, making it hard for him to get a job with other companies (Maverick Transportation, LLC v U.S. Department of Labor).
- A manager of a federal wildlife refuge who insisted that the Fish and Wildlife Service address a problem with staff alcohol abuse, which she believed led on employee to commit suicide, was forced to choose between reassignment to Anchorage or termination (Kerr v Jewell).
- A bank employee was fired after reporting fraud and securities violations by her supervisor and the vice president of human resources (McEuen v Riverview Bancorp, Inc).
- Two daycare workers who reported a coworker’s child abuse to the state were reprimanded and fired for purportedly violating the employer’s confidentiality policy and behaving unprofessionally (Norman v Bright Horizons Family Solutions, LLC).
- A teacher and coach who opposed sexist behavior towards female staff and students was suspended, transferred, and ultimately fired for being unprofessional and insubordinate (Kirley v Board of Education of Maine Township High School District 207).
- A turkey farm manager was fired after voicing concerns to her supervisor, to human resources, and to the chemical department about chemicals used on the farm (Pecore v Jennie-O Turkey Store, Inc).
- An engineer for a government contractor was demoted and fired after complaining that the company was overcharging the government by having him charge his time to an account when the work he did on the account did not justify full-time hours (Hanson v Raytheon Co).
- An HR director was fired after reporting to the CFO that the company misclassified IT technicians as exempt from overtime compensation, in violation of the FLSA (Kavanagh v CDS Office Systems Inc dba CDS Office Technologies, Inc).
- A court administrator lost her job after complaining to a judicial conduct commission and the media about a state court judge’s sexual harassment. The county closed the court location where she worked and refused to rehire her in other positions (Eisenhour v Weber County).
- A police officer who reported misuse of crisis intervention funds had an internal affairs complaint filed against him for insubordination (Hollenbach v Burbank).
- A manager at a company that sells steel was fired after sending an email opposing a plan to switch to a cheaper (and allegedly inferior) grade of steel without telling customers (Beers v ER Wagner Manufacturing Co).
As these examples would suggest, average employees put their jobs at risk to protect the public’s interest more often than reported by mainstream media. If it weren’t for whistleblower laws, and other laws prohibiting an employer from firing or otherwise retaliating against an employee who reports, opposes, or refuses to participate in an activity that is unlawful or against public policy, such individuals would have no recourse for the retaliation they suffered. As it stands, each of these employees will at least get their day in court.