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Employee pushes back against employer requirement that workers sign noncompetition agreements

May 1st, 2014  |  Ron Miller  |  Add a Comment

It is not an uncommon practice in today’s workplace for an employer to require employees to sign some sort of non-compete, non-disclosure, non-solicitation, or confidentiality agreement to protect its competitive position should a former employee secure employment with a competitor. However, in a recent case, Darr v Roberts Marketing Group, LLC, an employee challenged an employer’s requirement that he sign a noncompetition agreement as a condition of continued employment. More importantly, although the employee ultimately voluntarily left his employment, a Missouri Court of Appeals determined that he was still entitled to unemployment benefits because his resignation was with good cause attributable to the employer.

Noncompete agreement as condition of employment. The employee sold life insurance for his employer. Several months after he was hired, the employer announced that it would be implementing a new noncompete agreement for its employees. In addition to containing confidentiality and noncompetition provision, the new agreement required employees to pay all of the employer’s costs, expenses, and reasonable attorney’s fees required to enforce the agreement. There was also a waiver of any right to a jury trial; a severability clause; and a waiver of the application of the rule of strict construction against the drafter of the agreement. All employees were required to sign the noncompete agreement, and it was a condition of employment.

In a meeting with his direct manager and the company’s VP of sales, the employee stated that he was not inclined to sign the agreement and that he needed to speak with his attorney. In view of the employee’s hesitancy to sign the agreement, he was told that he could transfer to a marketing position as an accommodation. However, he declined because it would involve a less lucrative compensation structure. Moreover, eventually every position in the company would be required to sign the noncompete agreement. Ultimately, the employee was given a deadline in which to turn in the agreement. After the employee met with an attorney, he was advised that the agreement was unconscionable and told not to sign it.

When the employee next reported to work, he was escorted to the HR office. Fearing that he might be arrested for trespass, the employee voluntarily left the premises. He was later told that the employer regarded his leaving as job abandonment. The employee did not contact the employer or return to work.

Unemployment claim. But the employee did file a claim for unemployment benefits. Initially, a deputy determined that the employee was not disqualified from receiving benefits because he was not discharged for misconduct. Specifically, the deputy found that the employee had been discharged because he declined to sign the noncompete agreement and that his employer had changed his conditions of work. However, an appeals tribunal reversed the deputy’s determination, finding that the employee voluntarily left his employment without good cause attributable to the employer. The Labor and Industrial Relations Commission adopted the decision of the appeals tribunal. This appeal followed.

On appeal, the employee challenged the Commission’s determination that he left his employment voluntarily and subsequently disqualifying him from receiving unemployment benefits. The Missouri appellate court agreed with the employee that substantial record evidence compelled a finding that he left his employment to avoid having to sign the employer’s noncompete agreement, which, under the facts of this case, constituted good cause attributable to the employer.

Under Sec. 288.050.1(1) RSMo, a claimant is disqualified from receiving unemployment benefits upon a showing that the claimant left work voluntarily without good cause attributable to the work or the claimant’s employer. A claimant leaves work voluntarily if he leaves of his own accord rather than being discharged, dismissed, or subjected to a layoff. The determinative question is whether the employer or employee committed the final act that severed the relationship.

Good cause attributable to employer. Although the appeals court found that the employee left his employment voluntarily, the question was whether he had good cause, attributable to the work or the employer, remained open. Good cause has been interpreted to mean those circumstances that would cause a reasonable person in a similar situation to leave the employment rather than to continue working. Moreover, the employee must prove that he made an effort to resolve the troublesome situation before terminating his job.
In this instance, the appeals court determined that the message communicated to the employee was that February 1, 2013, was his last day to execute the agreement if he wished to keep his job. The objective reasonableness of the employee’s decision to leave his employment must be evaluated in terms of what he knew and what he reasonably believed on the morning of February 4, 2013, when left the employer’s premises for the last time.

Moreover, the court found that the Commission’s finding dramatically understated the scope and coverage of the agreement. Here, the proposed noncompete agreement was presented to the employee with an ultimatum that it be signed within a very short period of time, affording the employee a limited opportunity to review the agreement and seek legal advice. Further, the agreement would have placed numerous additional restrictions and burdens upon the employee’s ability to find and maintain new employment after leaving the employer.
The agreement would have required the employee to abide by its terms for at least three years, with the potential for up to three additional years from the date of any violation. Moreover, by its terms the agreement would have applied throughout the country and would have applied broadly to the employee’s future endeavors. Additionally, the employee would have been potentially liable for damages in contract far exceeding the ordinary measures of damages, as well as attorney’s fees and costs.

While the court did not expressly determine that the employment was unconscionable, it made clear that it had serious reservations about its enforceability. Nevertheless, the court concluded that applying the objective standard of a reasonable person confronting the same situation, here employee was faced with “external pressures so compelling that a reasonably prudent person would be justified in terminating his employment.” Whether the agreement itself was unenforceable remains for another day in a direct challenge to its provisions. Here, the employee met his burden of establishing both the reasonableness and the good faith of his actions.

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Applying conduct rules to an employee with a disability: The case of the potato chip “thief”

April 29th, 2014  |  Kathy Kapusta  |  1 Comment

Almost every organization has rules that govern workplace behavior. Typically, consistency in the application and enforcement of work rules is an employer’s best protection against allegations of discrimination. But what happens when an employee with a disability violates a conduct standard? Can you hold that individual to the same standard that you apply to all other employees?

In an April 2014 decision, a federal district court in California found that a diabetic employee who was fired for violating Walgreens’ neutral, uniformly applied “anti-grazing” policy when she took a $1.37 bag of potato chips without paying for it — while allegedly in the midst of a hypoglycemic attack — can take her disability discrimination and failure to accommodate claims to a jury. In that case, the court observed that under Ninth Circuit law, misconduct resulting from a disability has to be considered as part of the disability.

The “theft.” Although Walgreens allowed the employee to carry candy with her in case of low blood sugar, on one occasion, she allegedly suffered a hypoglycemic attack while returning items in a shopping cart to the shelves. Because she did not have any candy with her, she opened a bag of chips from the cart and ate some of them. When she started feeling better, she purportedly attempted to pay for the chips at the cosmetic counter, where employees paid for their items, but no one was there. She then put the chips under the counter by her register, where they were later discovered by an assistant manager. She was subsequently terminated for violating the company’s policy against employee theft.

Reasonable accommodation. Walgreens, which estimated that it lost more than $350 million per year as a result of employee theft, argued that it strictly enforced its policy prohibiting employees from eating food merchandise without first paying for it. It also asserted that it was unreasonable to require an employer to accommodate employee theft. In support of its position, the company relied on Raytheon Co. v Hernandez, in which the Supreme Court addressed whether the ADA conferred preferential rehire rights on disabled employees lawfully terminated for violating workplace conduct rules. Though the Supreme Court, in that case, held that an employer’s application of its neutral no-rehire policy was, by definition, “a legitimate, nondiscriminatory” reason under the ADA, the court here observed that the decision did not directly address whether an employer under the ADA is required to make a reasonable accommodation with respect to an employee whose disability caused her to violate her employer’s workplace rule.

Consistent with business necessity. Walgreens also cited to the EEOC’s own guidance, specifically Question 35 in “EEOC Enforcement Guidance on Reasonable Accommodation and Undue Hardship 915.002,” in which the agency stated that “an employer never has to excuse a violation of a uniformly applied conduct rule that is job-related and consistent with business necessity. However, in the court’s opinion, Walgreens failed to address what was “consistent with business necessity” in the context of an employee suffering a hypoglycemic attack. Nor did it establish that she was “stealing” where she testified that she attempted to pay for the product but was unable to do so because no one was at the register.

The company’s attempt to rely on additional EEOC guidance — “Applying Performance And Conduct Standards To Employees With Disabilities,” in which the agency advised that if an employee’s disability caused a violation of a conduct rule, the employer could discipline the individual if the rule was job-related and consistent with business necessity — was similarly unsuccessful. Here, the court noted that what “Walgreens fails to point out is that in that same guidance, the EEOC explains that ‘[t]he only requirement imposed by the ADA is that a conduct rule be job-related and consistent with business necessity when it is applied to an employee whose disability caused her to violate the rule.”

Critically, the court pointed out, the EEOC explained that whether an employer’s application of a conduct rule to an employee with a disability is job-related and consistent with business necessity may rest on several factors, including the manifestation or symptom of a disability affecting an employee’s conduct, the frequency of occurrences, the nature of the job, the specific conduct at issue, and the working environment. Thus, the agency qualified the concept of “business necessity” as it is applied to a particular employee. Accordingly, the court found that the guidance did not establish that accommodating the employee’s conduct here was unreasonable as a matter of law. Whether it was a business necessity to treat the employee the same as other employees who had been fired under the anti-grazing policy when she claimed that taking the chips was necessitated by her medical condition was a question of fact for the jury, the court concluded.

Disability discrimination. As to the EEOC’s disability discrimination claim, Walgreens contended that there was no connection between the employee’s disability and her termination for theft. Rejecting this argument, the court pointed out that it was “simply a reiteration of Walgreen’s position” that the employee should be considered without respect to her disability, which was contrary to Ninth Circuit precedent.

Also rejected by the court was the company’s argument that it proffered a legitimate, nondiscriminatory reason for the employee’s termination — violation of its neutral, uniformly applied anti-grazing policy. Here, the court pointed out that in the Ninth Circuit, reliance on disability-caused misconduct is by its very nature not a legitimate nondiscriminatory reason under the ADA. In this case, the alleged misconduct that formed the basis of her termination was the taking of the chips without first paying for them, an act the employee claimed was caused by her disability. Walgreens thus failed to allege any misconduct that was unrelated to her disability, the court stated.

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USSCt: Michigan’s voter-approved affirmative action ban not unconstitutional as to university admissions policies

April 23rd, 2014  |  Cynthia L. Hackerott  |  Add a Comment

In a 6-2 decision, the U.S. Supreme Court has ruled that Michigan’s voter-approved affirmative action ban is not unconstitutional as to university admissions policies, rejecting arguments that the ban violates equal protection by impermissibly burdening racial minorities. Although the case focused on the ban as it pertains to university admissions, the constitutional analysis could also be applicable to race-conscious decisions in state employment and the awarding of government contracts. Justice Kennedy wrote the plurality opinion, which was joined by Chief Justice Roberts and Justice Alito. The Chief Justice also filed a concurring opinion. Justice Scalia’s concurring opinion was joined by Justice Thomas. Justice Breyer also filed a separate concurrence. Justice Sotomayor filed a dissenting opinion, which was joined by Justice Ginsburg. Justice Kagan took no part in the consideration or decision of the case. (Schuette v Coalition to Defend Affirmative Action, April 22, 2014, to be reported at 97 EPD ¶45,054)

Initiative prompted by 2003 Supreme Court ruling. In November 2006, Michigan voters approved a ballot initiative, Proposal 2, to amend the state’s constitution to prohibit state universities, the state, and all other state entities from discriminating against or granting preferential treatment based on race, sex, color, ethnicity or national origin. The initiative impacts the state’s use of affirmative action in a number of areas, including employment, education and government contracting. The Michigan measure was largely prompted by a June 2003 decision in which the U.S. Supreme Court, in a 5-4 vote, upheld the University of Michigan’s consideration of race in its law school admissions policy (Grutter v Bollinger, 84 EPD ¶41,415). However, on that same day in a 6-3 decision, the Court held that the university’s use of race as a factor in its undergraduate admissions policy violated the U.S. Constitution (Gratz v Bollinger, 84 EPD ¶41,416). In the Grutter and Gratz cases, white students who claimed they were qualified but denied admission challenged the university’s law school and undergraduate admissions systems on equal protection grounds. The Court found that the law school’s policy was narrowly tailored to achieve the compelling state interest of a diverse student body, but that the undergraduate policy was not.

Sixth Circuit decision. The High Court’s ruling reverses an en banc Sixth Circuit decision that the voter-approved ban on government affirmative action in the state of Michigan, as it applies to race-conscious admissions policies in public colleges and universities, violated the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution (96 EPD ¶44,674). The deeply divided Sixth Circuit ruled 8-7 that the measure violated equal protection under the political process doctrine because equal protection does not permit the kind of political restructuring that the measure affected.

Applying the U.S. Supreme Court’s decisions in Washington v Seattle Sch Dist No 1 (458 U.S. 457, 1982) and Hunter v Erickson (393 U.S. 385, 1969), the appeals court found that Proposal 2 unconstitutionally altered Michigan’s political structure by impermissibly burdening racial minorities. In the Sixth Circuit’s view, the Seattle and Hunter decisions clarified that equal protection of the laws is more than a guarantee of equal treatment under the law substantively. “It is also an assurance that the majority may not manipulate the channels of change in a manner that places unique burdens on issues of importance to racial minorities,” according to the Sixth Circuit. These decisions provide the benchmark for “when the majority has not only won in the political process, but also rigged the game to reproduce its success indefinitely.” They require courts to apply strict scrutiny to enactments that change the governmental decision-making process for determinations with a racial focus, the appeals court asserted.

Using a two-part analysis derived from Seattle and Hunter, the Sixth Circuit found that the Proposal 2 deprived minority groups of equal protection because it: (1) it has a racial focus, targeting a program that “inures primarily to the benefit of the minority,” and (2) it reorders the political process in Michigan in such a way as to place “special burdens” on racial minorities.

Voters may decide. However, Justice Kennedy concluded that there is no authority in the U.S. Constitution or in Supreme Court precedent for the judiciary to set aside state laws that commit to the voters the determination of whether racial prefer­ences may be considered in governmental decisions, in particular with respect to school admissions.

Prior to addressing the issue presented, Justice Kennedy noted that the principle that the consideration of race in admissions is permissible when certain conditions are met is not being challenged in this case. Rather, the issue before the court was whether, and in what manner, voters in states may choose to prohibit the consideration of such racial preferences. The decision by Michigan voters reflects the on-going national dialogue about such practices, he wrote.

Sixth Circuit misconstrued Seattle. As to that issue, the Sixth Circuit’s determination that Seattle controlled here erroneously extended Seattle’s holding to a case presenting quite different issues to reach a mistaken conclusion, Kennedy said.

Reviewing the relevant cases that preceded Seattle, specifically Hunter and Reitman v Mulkey (387 U.S. 369, 1967), the plurality opinion explained that those cases involved demonstrated injuries on the basis of race that, by reasons of state encouragement or participation, became more aggravated. In Mulkey, a voter-enacted amendment to the California Constitution prohibiting state legislative interference with an owner’s prerogative to decline to sell or rent residential property on any basis barred the challenging parties, on account of race, from invoking the protection of California’s statutes, thus preventing them from leasing residen­tial property. In Hunter, voters overturned an Akron ordinance that was enacted to address widespread racial discrimination in housing sales and rentals had forced many to live in segregated housing that was substandard and dangerous.

In Seattle, after the school board adopted a mandatory busing pro­gram to alleviate racial isolation of minority students in local schools, voters passed a state initiative that barred busing to desegregate. The High Court found that the state initiative had the practical effect of removing the authority to address a racial problem from the ex­isting decisionmaking body, in such a way as to burden minority in­terests of busing advocates then had to seek relief from the state legislature, or from the statewide electorate. According to Justice Kennedy, Seattle, like Mulkey and Hunter, is best understood as a case in which the state action had the serious risk, if not purpose, of causing specific injuries on ac­count of race.

Difficulties with Seattle rationale. Criticizing Seattle, Kennedy asserted that it went well beyond the analysis needed to resolve the case, establishing a new and far reaching rationale that where a government policy inures primarily to the benefit of the minority and minorities consider the policy to be in their interest, then any state action that places effective decisionmaking authority over that policy at a different level of government is subject to strict scrutiny.

That rationale, however, has no support in precedent, and it raises serious equal protection concerns, according to Kennedy. Citing Shaw v Reno (509 U.S. 630, 1993), he asserted that, in cautioning against impermissible racial stereotypes, the Supreme Court has rejected the assumption that all individuals of the same race think alike, but that proposition would be a necessary beginning point were the Seattle formulation to control. Other risks of adopting this formulation would include: (1) defining individuals according to race, which would impose a high risk of, inquiries and categories dependent upon demeaning stereotypes, classifications of questionable constitutionality on their own terms, and (2) determining the policy realms in which groups defined by race had a political interest, which would risk the creation of incentives for those who support or oppose certain policies to cast the debate in terms of racial advantage or disadvantage. Such analysis would have to be undertaken with no clear legal standards or accepted sources to guide the judicial decision. Moreover, adoption of the Seattle formulation could affect any number of laws or decisions, such as tax policy or housing subsidies, resulting in the validation, rather than discouragement of, racial division would be validated.

Specific injury lacking. In any event, the principal flaw in the Sixth Circuit’s decision was that in this case, there was no infliction of a specific injury of the kind at issue in Mulkey and Hunter and in the history of the Seattle schools, and there is no precedent for extending these cases to restrict the right of Michigan voters to determine that race-based preferences granted by state entities should be ended, the plurality stated. The Sixth Circuit’s ruling also calls into question other states’ “long-settled rulings” on policies similar to Michigan’s, Kennedy noted.

By approving Proposal 2 and thereby amending their state constitution, Michigan voters exercised their privilege to enact laws as a basic exercise of their democratic power, bypassing public officials they deemed not responsive to their concerns about a policy of granting race-based preferences. While individual liberty has constitutional protection, our constitutional system also embraces the right of citizens to speak and debate and learn and then, as a matter of political will, to act through a lawful electoral process, as Michigan voters have done here, Kennedy wrote. When hurt or injury is inflicted on racial minorities by the encouragement or command of laws or other state action, the Constitution requires redress by the courts, but such circumstances — which were present in Mulkey, Hunter, and Seattle — were not present here. Instead, the issue here was whether voters may determine whether a policy of race-based preferences should be continued.

Concurring opinions. The Chief Justice’s concurring opinion took issue with certain contentions of the dissent. “People can disagree in good faith on this issue, but it similarly does more harm than good to question the openness and candor of those on either side of the debate,” he wrote.

Justice Breyer agreed that the ban is consistent with the Equal Protection Clause, but for different reasons. Among other things, he noted that the constitution permits, but does not require, the use of the kind of race-conscious programs now barred by the Michigan Constitution. He also wrote that extending the holding of Hunter and Seattle to situations where decisionmaking authority is moved from an administrative body to a political one would create significant difficulties due to the nature of the administrative process. In addition, he noted that the principle underlying Hunter and Seattle runs up against a competing principle favoring decisionmaking through the democratic process.

Justice Scalia wrote that ban likely does not pass muster under the political process doctrine, but that the cases establishing the political process doctrine should be overturned because they are “patently atextual, unadministrable,” and contrary to the High Court’s traditional equal protection jurisprudence. The question here, asserted Scalia, is the same as in every case in which neutral state action is said to deny equal protection on account of race: whether the challenged action reflects a racially discriminatory purpose. In Scalia’s view, there was no such purpose here.

Dissent. In her dissent, Justice Sotomayor wrote that the plurality’s decision fundamentally misunderstands the nature of the injustice worked by the voter-approved ban, and “eviscerates an important strand of [the Court’s] equal protection jurisprudence.”

“The Constitution does not protect racial minorities from political defeat. But neither does it give the majority free rein to erect selective barriers against racial minorities,” she wrote.

“The political-process doctrine polices the channels of change to ensure that the majority, when it wins, does so without rigging the rules of the game to ensure its success,” she stated. But the plurality decision “discards that doctrine without good reason” and permits “the majority [of the voters in Michigan] to use its numerical advantage to change the rules mid-contest and forever stack the deck against racial minorities in Michigan.”

According to Sotomayor, “experts agree and as research shows” that race-sensitive admissions policies have made a difference in achieving educational diversity, and she asserted that the elimination of such policies has been harmful to minority students in Michigan and other states that have adopted similar bans.

“Without checks, democratically approved legislation can oppress minority groups,” she maintained, adding that judges “ought not sit back and wish away, rather than confront, the racial inequality that exists in our society.”

Similar ballot measures in other states. The Michigan initiative is similar to measures passed by voters in California (1996), Washington state (1998), Nebraska (2008), Arizona (2010), and Oklahoma (2012). Colorado, in contrast, became the first state to reject an anti-affirmative action ballot measure in the November 2008 election.

Other state bans. Affirmative action by the state has been banned to varying degrees in other states by means other than ballot initiatives. A New Hampshire law, which took effect in 2012, bans affirmative action in college admissions and employment, but does not address government contracting. In Florida, Executive Order 99-281 (1999) prohibits the use of affirmative action in state schools’ admissions policies, as well as in government employment and state contracting. Nevertheless, Florida has implemented a program designed to increase diversity in higher education without taking race into account. The “Talented Twenty” program guarantees all high school students who finish in the top 20 percent of their class acceptance to one of Florida’s public colleges and universities.

Recent Fisher decision. In 1996, the Fifth Circuit held, in Hopwood v Texas, that the University of Texas School of Law violated the Fourteenth Amendment by using race as a factor in deciding which applicants to admit. The Supreme Court declined to review that case. In 1997, Texas enacted the Top Ten Percent Law which mandates that Texas high school seniors in the top ten percent of their class be automatically admitted to any Texas state university.

In 2003 after the Supreme Court issued its Grutter ruling which abrogated Hopwood, Texas added the consideration of race among many factors to fill remaining slots at public universities. This practice was challenged in Fisher v University of Texas at Austin, a case addressed by the Supreme Court in June 2013 (97 EPD ¶44,850). There, the High Court ruled that the Fifth Circuit, in applying the narrow tailoring aspect of strict scrutiny as articulated in Grutter and Regents of Univ of Cal v Bakke (17 EPD ¶8402, 1978), erred in giving deference to the University of Texas at Austin’s assertion that the university’s way of considering race in its admissions process is constitutionally permissible. In the 7-1 decision, the majority held that strict scrutiny does not permit a court to accept a school’s assertion that its admissions process uses race in a permissible way without closely examining how the process works in practice. Thus, the Court remanded the case back to the Fifth Circuit with instructions to assess whether the university has offered sufficient evidence to prove that its admissions program is narrowly tailored to obtain the educational benefits of diversity. In November 2013, the Fifth Circuit court heard oral arguments addressing the issues on remand.

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Mississippi puts three more nails in the union coffin

April 22nd, 2014  |  Pamela Wolf  |  Add a Comment

By Pamela Wolf, J.D.

On Wednesday, April 16, Mississippi Governor Phil Bryant gave his stamp of approval to three new bills that will presumably shore up Mississippi’s status as a right-to-work state. “Mississippi has some of the lowest union participation in the country, and these bills send a message that we will not tolerate efforts like intimidation,” Bryant said in conjunction with the signing of the triad of anti-union bills. “I believe that Mississippi’s right-to-work status is a competitive benefit for the state, and I intend to keep it that way.”

Mississippi legislators apparently could not pass up the chance to drive a few more nails in the coffins of unions as they continue to decline in the state. According to the U.S. Bureau of Labor Statistics, only 4.2 percent of the 1,040,000 wage and salary workers employed in Mississippi in 2013 were represented by unions — a decline from 2012, when 5.7 percent of the 1,113,000 employed workers were represented by unions. Even fewer employed wage and salary workers were actually union members: 3.7 percent in 2013 and 4.3 percent in 2012.

The national union membership rate was 11.3 percent in 2013 — the same as in 2013. So, comparatively, Mississippi is doing a fine job of keeping employees out of unions or unions out of the state, or both. Mississippi has no minimum wage requirement, so for wage protection, workers in the state are stuck with Congress’ generosity, or lack of generosity, depending on your point of view.

Nonetheless, State Legislators gave unions (or workers, if you see that way) a kick in the pants by passing three new laws targeting already declining unions.

Coercion, intimidation, damage. As of July 1, 2014, SB 2473, the “Prohibition Against Employer Intimidation Act,” bars a person, organization, corporation, union, agency or other entity from damaging, harming, injuring, or threatening to injure or coerce a business, or any employee or representative of the business, with the aim of unlawfully intimidating the business or its employees from exercising rights protected by state and federal law, in an effort to obtain “something of value” for a public or private organization, corporation, union, agency or other entity. “Something of value” includes a neutrality agreement, card check agreement, collective bargaining recognition, or other objective of an organized initiative.

SB 2473 also attempts to restrict a business, a union, or the owners or employees of a business from exercising their rights protected under state and federal law in an effort to obtain something of value for a public or private organization, corporation, union, agency or other entity. Similarly banned is conspiracy with another for the purpose of disrupting lawful commerce in places of business when the activity amounts to assault or causes physical injury to any individual located in or around the place of business. Likewise prohibited is intentional or reckless damaging of the business property of another when the property is used by its owner or possessor in his or her profession, business, trade or occupation, or damaging or otherwise marking the property owner’s merchandise.

An amendment added prior to passage expressly states that nothing in SB 2473 is to be construed to infringe or impede upon any individual’s First Amendment rights.

Picketing and demonstrations. Under SB 2653, unions, labor unions, and their agencies as of July 1 are barred from engaging in mass picketing or mass demonstrations that obstruct or “unreasonably interfere” with free ingress or egress to and from any place of business. Nor may they act or conduct themselves in a way that would have the effect of obstructing or unreasonably interfering with the free use of business entryways, streets, sidewalks or rights-of-ways adjacent or contiguous to a business, or taking action that has or intends the effect of violence or intimidation near or contiguous to the business’s customers.

“Mass picketing” and “mass demonstration” means that a picket actually prevents an individual from reasonable free ingress to and egress from an entrance to a place of employment or residence, through obstruction by a person’s body or placement of a vehicle or other physical obstruction for such purpose; the picketing “prevents the pursuit of any entrance to a private residence, lawful work or employment.”

Unions, labor unions, and their agencies are also prohibited from singly or in concert with others, engaging in mass picketing or mass demonstrations so as to obstruct or unreasonably interfere with free ingress or egress of any person to and from a private residence. They also may not act or conduct themselves in a way that would effectively obstruct or unreasonably interfere with free use of residential driveways, streets, sidewalks or rights-of-ways adjacent to a residence or unreasonably interfere with the resident’s right to quiet enjoyment.

It is also unlawful for unions, labor unions and their agencies singly or in concert with others to use equipment or other objects to obstruct or unreasonably interfere with the free ingress or egress of any person to and from any private residence or place of business, or to act or conduct themselves in a way that would have the effect obstructing or unreasonably interfering with the free use of residential driveways, streets, sidewalks or rights-of-ways adjacent or contiguous to a residence. Nor may they obstruct or unreasonably interfere with free use of business entryways, streets, sidewalks or rights-of-ways adjacent to or contiguous to a business.

Violators may be convicted of a misdemeanor and sentenced up to 6 months imprisonment or fined $500 or both. It is expressly not a defense under state law that an organization or individual has engaged in mass picketing or mass demonstrations to further an objective during a labor dispute.

Notably, under SB 2653, where an organization or individual is engaged in mass picketing at a business or private residence in the context of a labor dispute, the business or property owner can seek injunctive relief without the showing of irreparable harm.

The new law is not to be interpreted to alter or change the protections granted under the NLRA and the LMRA. The final version of SB 2653 also includes an amendment expressly stating that the new law is not to be construed to restrict an individual’s First Amendment rights.

Labor agreements. The third bill signed by Governor Bryant, SB 2797, the “Mississippi Employment Fairness Act,” retains to the state exclusive authority to make employers or multiemployer associations accept or otherwise agree to provisions of a labor peace agreement or mandatory or non-mandatory subjects of collective bargaining under federal labor laws, including limitations on an employer or multiemployer association’s rights to engage in collective bargaining with a labor organization, lock out employees, or operate during a work stoppage. The new law, which is effective July 1, does not, however, invalidate or otherwise restrict the state from requiring that project labor agreements be used to the extent permissible under federal labor laws.

Any agreement, contract, understanding or practice between an employer and a labor organization that includes requirements that violate SB 2797 are unlawful, null and void, and have no legal effect.

This section of the new law is required to be interpreted and enforced consistent with the NLRA.

The new law also gives the state exclusive authority to require that an employer or multiemployer association enter into a project labor agreement. However, employers and other persons covered by the NLRA are not prevented from entering into agreements or engaging in other activities protected by law.

This provision is not to be interpreted in a manner that interferes with the labor relations of NLRA-covered persons. Nor can relief that would interfere with the labor relations of NLRA-covered persons be granted.

Stay tuned! It will be interesting to see, given these new anti-union laws, how unions and workers in Mississippi fare in 2014.

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Who will and who won’t attend NLRB hearing on VW-UAW election results

April 17th, 2014  |  David Stephanides  |  Add a Comment

Update: The UAW announced in the morning hours of April 21 that it is withdrawing objections filed with the NLRB, effectively ending the case before the Board. In a statement, UAW President Bob King said the “UAW based its decision on the belief that the NLRB’s historically dysfunctional and complex process potentially could drag on for months or even years. Additionally, the UAW cited refusals by Tennessee Gov. Bill Haslam and U.S. Sen. Bob Corker to participate in a transparent legal discovery process, which undermines public trust and confidence.”

“Looking ahead,” the statement contnued, “the UAW believes the congressional inquiry into the Haslam administration’s incentives threat to Volkswagen provides the best opportunity for additional scrutiny. The UAW will ask Congress to examine the use of federal funds in the state’s incentives threat, in order to protect Tennessee jobs and workers in the future.”


On Monday, April 21, the NLRB will hold a hearing on UAW’s challenge to the mid-February no-union vote rendered by workers at Volkswagen’s Chattanooga, Tennessee plant. Just after the election, the UAW filed objections with the NLRB over what the union saw as interference by politicians and outside special interest groups in the election that resulted in a 712-626 vote. The UAW is asking the NLRB to set aside the election results due to third-party misconduct and to hold a new election.

At issue is alleged improper conduct by very vocal outside forces, with the union claiming foul as to comments seen as threats that were made by elected officials. Comments of Sen. Bob Corker (R-Tenn.), widely covered in the local media and repeated frequently by anti-union organizations, was cited as the most damaging to the election process.

Corker is reported to have commented that he had been “assured” that VW would manufacture its new mid-size SUV in Chattanooga if workers voted against unionization. Volkswagen’s U.S. chief executive immediately refuted his remarks, but in response, Corker suggested that his information came from executives in Germany. Corker’s comments, it is maintained, could have caused widespread fear and confusion among the workers and pressured them to vote “no.”

However, Corker says that in spite of a subpoena, he will not attend the hearing on Monday. In an e-mailed statement to WTVC News of Chattanooga, the Senator’s Chief of Staff  stated, “Everyone understands that after a clear defeat, the UAW is trying to create a sideshow, so we have filed a motion to revoke these baseless subpoenas. Neither Senator Corker nor his staff will attend the hearing on Monday.”

Tennessee Gov. Bill Haslam and Economic and Community Development Commissioner Bill Hagerty have also not scheduled an appearance at the hearing, but they did not explicitly rule it out.

On the other hand,  five employees represented by the National Right to Work Foundation will be attending the hearing. The UAW had sought to bar the workers from participating in the case. They have argued that VW and the union entered into a neutrality agreement that prevented the workers from getting other points of view that might otherwise have been offered by managers and supervisors.

In a decision released April 16, the NLRB said that “due to the unique circumstances of the case” the plant workers had a right to participate and offer evidence that they really intended to vote against the UAW. As they explained in a March reply motion: “The UAW’s request [to bar the workers from the hearing] must be denied because, if it were granted, there would be no party left in the case who would cross-examine the UAW’s witnesses, rebut its evidence and arguments, and otherwise defend the election results.”

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