Employment Law Daily Wrap Up, March 29, 2011
Below is sample content from the March 29th issue of CCH’s Employment Law Daily. Click here if you would like to receive additional information, or request a trial offer.
HEADLINES
•TOP STORY—Court hears arguments in high-profile class action case
•NLRB WEEKLY SUMMARY—For the week ending March 25, 2011
CASES
TOP STORY—Court hears arguments in high-profile class action case
In what turned out to be a lively session, the Supreme Court heard oral arguments in Wal-Mart Stores, Inc v Dukes, Dkt No 10-277, this morning. The high-profile class action sex discrimination case has grabbed the attention of attorneys even outside the employment bar, as shown by the large number of amicus curiae briefs filed with the Court. The named plaintiffs allege that Wal-Mart paid women less than men in comparable positions and were promoted to management positions less often.
The High Court granted cert in December 2010 to address class certification issues in this largest-ever class action discrimination suit. Various estimates set the potential class at anywhere from 500,000 to more than 1.5 million women. Last year, a sharply divided en banc Ninth Circuit opinion upheld an earlier panel decision affirming a district court’s certification of the case as a class action in regard to certain claims.
Wal-Mart’s arguments. At the beginning of his argument, the petitioners’ attorney, Theodore J. Boutrous, Jr, stated the class was improperly certified because the plaintiffs failed to satisfy Rule 23(a)’s cohesion requirements and because the plaintiffs’ “highly individualized” claims for monetary relief didn’t satisfy Rule 23(b)(2)’s requirements for certification of a mandatory non-opt-out class. Noting that a company has an obligation to ensure that there aren’t wage gaps and discrimination, Boutrous argued that the “fundamental flaw” of the plaintiffs’ case was the aggregated statistics that the plaintiffs relied on—saying the statistics did not show that there were gender gaps at the stores among comparable people.
Justice Ginsberg asked whether a company that “gets reports month after month showing that women are disproportionately passed over for promotion, and there is a pay gap between men and women doing the same job” has a responsibility to ask whether sex discrimination existed and, if so, to stop it. Boutrous replied that a company has an obligation to ensure there aren’t wage gaps and discrimination, but that the “fundamental flaw” of the plaintiffs’ case was the aggregated statistics they relied on. He argued that the statistics did not show there were gender gaps at the stores among comparable people.
“Their argument is that individual decisionmakers throughout the country were making stereotyped decisions, and that this had a common effect, but they just added everything together. They haven’t shown a pattern across the map. They’ve added all the data together and pointed to disparities,” said Boutrous.
He went on to argue that the question was whether it could be assumed that every decisionmaker acted in the same manner in a way that caused the same injury to each plaintiff. “That assumption is not supported by the record. That’s why there’s not the kind of cohesion that’s necessary to protect the rights of the absent class members and the defendant.”
Plaintiffs’ arguments. Arguing on behalf of the petitioners, Joseph M. Sellers stated it didn’t matter that Wal-Mart’s official policy was one of nondiscrimination because managers were able to act within a corporate culture that allowed women to be paid less and promoted more men to managerial positions. When Justice Kennedy expressed skepticism with the plaintiffs’ underlying theory, Sellers replied that their theory was that Wal-Mart gave its managers “unchecked discretion.”
“It’s hard for me to see that your complaint faces in two directions. Number one, you said this is a culture where Arkansas knows, the headquarters knows, everything that’s going on. Then in the next breath you say, well, now these supervisors have too much discretion. It seems to me there’s an inconsistency there, and I’m just not sure what the unlawful policy is,” said Kennedy.
“Well, Justice Kennedy, there is no inconsistency any more than it’s inconsistent within Wal-Mart’s own personnel procedures. The company provides to its managers this discretion, which, by the way, is very discrete… We’re not attacking every facet of the pay and promotion decisions. The District Court found specific features of the pay and promotion process that are totally discretionary. There’s no guidance whatsoever about how to make those decisions,” replied Sellers.
“But with respect to the discretion, every store, the District Court found… managers are provided with the same level of discretion,” he continued. “But the company also has a very strong corporate culture that ensures that managers, not just with respect to the practices we’re challenging, but in all respects, what they call `the Wal-Mart way,’ and the purpose of that is to ensure that in these various stores, contrary to what Wal-Mart argues, that these are wholly independent facilities, that the decisions of the managers will be informed by the values the company provides to these managers in training.”
“I’m getting whipsawed here,” Justice Scalia broke in, after Sellers responded to Kennedy’s question whether such behavior constituted disparate treatment. “On the one hand, you say the problem is that they were utterly subjective, and on the other hand you say there is a—a strong corporate culture that guides all of this. Well, which is it? It’s either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.”
Theodore J. Boutrous, Jr. (Gibson Dunn & Crutcher) argued for Wal-Mart. Joseph M. Sellers (Cohen Milstein Sellers & Toll) argued on behalf of the Plaintiff class.
Reaction. “This case has the potential of having a wide-reaching impact not only on employment law cases, but across the board,” noted Gerald L. Maatman, Jr., a partner in the Chicago office of Seyfarth Shaw and a Member of the Wolters Kluwer Labor and Employment Law Advisory Board. Maatman noted the Wal-Mart case gives the High Court the opportunity to fashion some broad rules that would apply to all class actions.
The Wal-Mart case is particularly critical because “it has everything to do with leverage,” according to Maatman. He noted how critical the standards for class certification are to corporate America. “Just what does it take to create commonality? How do you structure a large case? How large can a group be and how tight must the common injury be? In layman’s terms, how strong must the glue be to hold everyone together?”
What was interesting about this morning’s arguments, Maatman observed, was that more questions were asked than is typical. He noted that it was a very, very lively session, with eight of the nine justices asking questions. For Maatman, there were two big surprises: First, he noted the lack of questions regarding expert input into crafting a class. This issue was expected to be important during arguments because of the emphasis on expert input in lower opinions. Yet there was no focus on it, he noted, wondering if it will be part of the decision, since it was not part of the questioning. The second surprise was the obvious skepticism expressed by the justices about the plaintiffs’ theory on the merits. Maatman observed that Justice Scalia, in particular, found the plaintiffs’ theory was at war with itself.
Wal-Mart’s essential argument was that the way the plaintiffs structured their case was too large and that it would be unfair for Wal-Mart to defend itself as the class now stands. “The underlying theme is the issue of fairness,” Maatman continued. “How can a large class action case be structured so that it’s fair for all concerned? That seemed to be an important issued for the Justices. What degree of commonality is needed to hold a case together?”
DISCRIMINATION—RELIGIOUS—EDTenn: Study abroad coordinator’s unavailability to monitor for, or respond to, emergencies on her Sabbath could not be accommodated; discharge lawful
A coordinator for a university’s study abroad program who was a Seventh Day Adventist and could not work on Friday evenings or Saturdays was lawfully discharged, ruled a federal district court in Tennessee, because there was no possible accommodation that would not impose an undue hardship on the university (Crider v Univ of Tennessee, Knoxville, March 28, 2011, Phillips, T).
The coordinator was one of three whose job responsibilities included weekly monitoring of a cell phone in order to respond to emergencies reported by students and faculty traveling abroad. The emergency cell phone was monitored on a 24/7 basis; coordinators had to have it with them and be available to answer it at all times, thus limiting their activities and requiring that they remain in town so that they could access a student’s file, if necessary. Prior to the plaintiff’s hiring, the cell phone monitoring responsibilities were divided between the other two coordinators.
Three days after she was hired, the plaintiff informed the program’s director that she could not perform any work on her Sabbath, including participation in the emergency phone rotation, and requested a religious accommodation. The director met with the coordinator to explore possible accommodations, but concluded that the coordinator would not be able to help with any situation that occurred on Friday evening or Saturday. The coordinator had indicated that she could not carry the emergency phone on her Sabbath, even if the other coordinators were out of town or if one were out of town and the other had a family emergency. The coordinator did indicate a willingness to take on additional responsibilities to offset her inability to work on the Sabbath and proposed a schedule under which she would be responsible for the phone for the majority of days each month. However, that schedule would still have required the other coordinators to carry the phone on alternating Saturdays.
The director asked the other two coordinators if they would voluntarily monitor the phone on alternating weekends on a permanent basis, but they refused to do so. The director concluded that she could not devise a permanent accommodation that would not have compromised the risk-management program, particularly if emergencies arose in the coordinator’s region (Latin America and Spain) because she was the only one who spoke Spanish, and approximately 30 percent of the study abroad students traveled in those areas.
The court determined that the university could not accommodate the coordinator’s religious requirements without incurring undue hardship. An employer’s accommodation of one employee’s religious beliefs should not be at the expense of other employees. The court found it would have constituted an undue hardship on the university to require the other two coordinators permanently monitor the emergency phone on alternating weekends in addition to their regular rotations.
Nor could the university substitute hourly support staff to monitor the phone during the coordinator’s Sabbath because they did not have sufficient expertise, training, and authority to respond to emergency calls. Moreover, it would have required the university to pay overtime compensation. The court also determined that the university was not required to hire a fourth coordinator because that would involve more than a de minimis cost.
There were other job responsibilities as well that also involved working on Friday evenings or Saturdays: attendance on site visits that include weekend functions and assistance with campus outreach functions that occur on Friday nights and Saturdays. Again, the court said it was unfair to expect the other coordinators to shoulder the plaintiff’s weekend responsibilities on a permanent basis. This would have resulted in more favorable treatment of the plaintiff based solely on her religious beliefs, something that Title VII does not contemplate.
Maha M. Ayesh (Law Office of Jennifer B. Morton) for Plaintiff. Todd R. McFarland (General Conference of Seventh-Day Adventists), for Plaintiff. Michael D. Fitzgerald (University of Tennessee General Counsel) for Defendant.
DISCRIMINATION—SEX—DCCir: Failure to promote sex bias claim revived; relevant evidence improperly excluded, evidence of spoliation erroneously disregarded
A female security specialist’s failure to promote sex discrimination claim was sufficiently supported, the DC Circuit has ruled, finding the district court erroneously excluded relevant statements and evidence of spoliation giving rise to a negative inference that the lower court improperly characterized as “weak” (Talavera v Shah, March 29, 2011, Rogers, J). However, the employee’s reprisal claim failed because, based on the evidence she adduced, a reasonable jury could only speculate that the decisionmaker knew of her prior EEO activity.
Out-of-court statements. With respect to the employee’s only viable nonpromotion claim, the district court excluded statements made by the director of the USAID Office of Security that demonstrated that the head of the division in which the employee sought a promotion was biased against women. For example, the director, who was the decisionmaker’s boss, purportedly told the employee that the decisionmaker was “not ‘culturally sensitive,’ had ‘many issues’ with women, and ‘couldn’t deal with being an equal colleague to a woman.’” Finding Third and Seventh Circuit precedent instructive, the DC Circuit concluded that the statements were admissible as those of a party-opponent, under FRCP 801(d)(2)(D).
“[T]he director was empowered to speak on the subject of promotions within the Office and was involved generally in the promotion process,” wrote the court. The statements he made to the employee during his tenure were ‘“direct warnings” about the ‘attitude’ of a management official he supervised.” Regardless of whether his personal involvement in the promotions at issue was shown, or when exactly the statements were made, they were directly relevant to the question of whether impermissible sex bias may have played a part in the decisionmaker’s decision not to promote. Further, it is a reasonable inference that the director was speaking about the decisionmaker’s biased attitudes toward women, and that this bias had implications for the promotion decision challenged by the employee, the court wrote.
However, the district court correctly found inadmissible a statement from the employee’s colleague that men were asked different questions than she was asked during the interviews for the job she sought, because there was no evidence that the statements were within the scope of his employment or that he had authority to speak on the subject of promotions, held the court. Moreover, the district court was correct in finding admissible the decisionmaker’s alleged comment, at least a year prior to the employee’s nonpromotion, that men in the office had bonded because they had served in the military, despite the fact that the employee had also served in the military. The decisionmaker’s statement was relevant to the employee’s claim of sex discrimination because it illustrated the director’s statements concerning the decisionmaker’s animus toward women, and it was properly considered in evaluating whether the totality of the evidence showed that the federal employer’s explanation for not promoting her was pretextual, held the appeals court.
Spoliation of evidence. The appeals court also took issue with the lower court’s holding as to spoliation of evidence. The lower court said the spoliation entitled the employee to only a “weak adverse inference,” characterizing the destruction as ‘“at worst negligent’ and not intentional.” Noting the DC Circuit’s recognition of “the negative evidentiary inference arising from spoliation of records,” the appeals court held that a reasonable jury could find the decisionmaker’s “nonaccidental destruction” two months later of his notes concerning the candidates’ interviews supported an inference that the notes would have contained information favorable to the employee’s claim. In so concluding, the court observed that OPM regulations required the decisionmaker to retain his notes for two years and EEOC regulations required their retention for one year. These regulations contained no exception for the decisionmaker’s “typical” practice of destroying notes after interviews were concluded.
Further, the destroyed records were relevant to the employee’s claim because her former employer defended on the ground that her nonselection was due to her poor performance during her interview with the decisionmaker. The notes might have undermined the decisionmaker’s claim that the man he selected for promotion showed more knowledge of the job than she did, and might have confirmed her assertion that the decisionmaker asked her different questions than he asked the men who were interviewed. The notes were the employee’s “best chance to present direct evidence” that the decisionmaker’s proffered reason for the selection was pretextual, wrote the court.
Viewing the totality of the evidence, according the employee all reasonable favorable inferences from the evidence and considering the statements improperly excluded by the lower court and the improper destruction of the interview notes, a reasonable jury could conclude that the reason proffered for the employee’s lack of promotion was pretextual, held the DC Circuit. Thus, the court reversed summary judgment as to this claim, and remanded for further proceedings.
Reprisal claim. However, the appeals court affirmed summary judgment as to the employee’s claim that her lack of promotion was in retaliation for her EEO complaint about an unwarranted referral for mental health screening. The plaintiff failed to offer evidence showing that the decisionmaker knew of her EEO activity, the court found. She adduced only evidence from which the jury would have to speculate that he knew of her EEO activity, and that was insufficient to survive summary judgment.
Jonathan L. Gould (Law Office of Jonathan L. Gould) for Plaintiff-Appellant. Marina Utgoff Braswell (U.S. Attorney’s Office) for Defendant-Appellee.
DISCRIMINATION—SEX—EDTenn: Cleaning tasks performed by women only, not adverse employment action, disparate treatment claim fails
The cleaning tasks performed by female staff, but not men, were not adverse employment actions, a federal district court concluded in dismissing a disparate treatment claim (Tolliver v Children’s Home-Chambliss Shelter, March 28, 2011, Collier, C). The court found no genuine issues of material fact with respect to the plaintiff’s claims for disparate treatment, failure to promote, improper calculation and payment of overtime wages, failure to keep proper records; and retaliatory discharge against her employer, so they were dismissed. However, a disparate pay claim was allowed to proceed.
From January 18, 2008, until March 3, 2010, the plaintiff was employed as a “direct care staff employee” responsible for the physical, emotional, social, and educational well being of the children assigned to her care at a children’s center. Her initial rate of pay of $9.25 was determined by a matrix, which assigned values to such things as prior experience, education, and training. There was some dispute as to when she could expect a raise and promotion. After some time, the plaintiff became troubled by what she felt was the defendant’s improper treatment of female staff. For example, although apparently not instructed to do so, female workers did the more “traditional” tasks of cleaning, cooking, and dusting, while the men played video games.
Another employee, who was male, was hired in the same position as the plaintiff in the same shift, but he was paid $10.50 per hour, $1.25 more than the plaintiff because the employer felt that he had more relevant experience, although it was not clear to the court how this determination was made. The plaintiff wanted and believed that she was entitled to the responsibilities of the new employee, who was more involved with activity planning for the children.
In March 2009, the plaintiff filed an EEOC charge, alleging age and sex discrimination with respect to the raise and promotion to which she believed she was entitled. Subsequent to this, the plaintiff became worried about the improper calculation of overtime pay. The defendant acknowledged several payment errors, which were corrected when brought to its attention. The plaintiff was eventually terminated for failure to attend mandatory training.
Disparate treatment. The plaintiff alleged that the “female direct care staff workers, including the plaintiff, were required to perform cleaning tasks while the younger, better paid, male workers were not required to do so.” The plaintiff claimed that this constituted discriminatory disparate treatment on account of sex, in violation of Title VII and state law. Because there was no evidence of direct discrimination, the court analyzed the circumstantial evidence under the burden-shifting framework set forth in McDonnell Douglas. Here, the plaintiff did not make out a prima facie case of disparate treatment on account of sex because she did not show that she was subjected to a materially adverse employment action. The extra cleaning duties are not a significant change in job responsibilities, according to the court. Nor did the plaintiff allege that these duties affected her wages, benefits, or title, nor that they amounted to “reassignment with significantly different job responsibilities.” The court concluded the cleaning tasks performed by the plaintiff and other women did not rise to the level of material adverse employment actions, and, thus, are insufficient to support a prima facie case of discriminatory disparate treatment. Moreover, these tasks were not specifically assigned to female staff, so the plaintiff was not “subjected” to them.
Disparate pay. The plaintiff’s complaint alleged that her “rate of pay was less than that of the other male direct care staff workers” even though she performed more job duties than the male workers, and that the pay disparity violated federal and state equal pay Acts. The court found that the plaintiff established a prima facie case of disparate pay because of evidence tending to show that the defendant paid men more than women for similar work The plaintiff only had to show that the defendant’s salary distribution showed that an employer “pays different wages to employees of opposite sexes for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions,” and she met this burden.
Other claims. The failure to promote claims that the plaintiff brought under state law were dismissed as untimely. The claims under Title VII and the ADEA were also dismissed because the plaintiff provided no evidence, not even circumstantial evidence, that she was not promoted because of her age or sex. The retaliatory discharge claim was dismissed because the plaintiff did not establish a causal connection between her termination and the filing of her EEOC complaint. The 12-month period was too long, and the plaintiff did not provide any evidence that other employees missed training and were not terminated. The failure to pay overtime claims did not survive because the plaintiff put forth no evidence that she was not properly paid for hours worked, and the failure to keep proper records claim is not a cause of action that employees can bring.
Valerie W. Epstein (Berke, Berke & Berke) , for Plaintiff. Rosemarie L. Bryan (Chambliss, Bahner & Stophel), for Defendant.
DISCRIMINATION—SEX—DColo: Hospital’s failure to require that females respond to calls for emergency patient restraint no basis for males’ sex bias claim
After first determining that the Colorado workers’ compensation law did not bar sex discrimination claims brought by male employees of a state psychiatric hospital who were injured while restraining violent or disruptive patients, a federal district court in Colorado held that they did not make their case because they failed to show that they suffered an adverse employment action (Elson v Colo Mental Health Inst at Pueblo, March 24, 2011, Krieger, M).
The psychiatric hospital serves adult males who have been referred by the criminal justice system. When patients become violent or disruptive, a “duress alarm” is sounded. According to hospital policy, a sufficient number of staff members are expected to respond to such an alarm to restrain the patient in the safest manner possible. However, the men contended that the policy anticipates that all staff must respond, and that some female employees refused to respond, leaving the men to deal with the situation unassisted. Additionally, the men contended that they had lodged several complaints about the lack of female response, but no disciplinary action was taken against the females, no new policies were implemented, no retraining occurred, and no clarification of existing policies was provided.
The men each suffered serious injuries while answering a “duress alarm” and received workers’ compensation for their physical injuries. Their employer claimed that workers’ compensation is their exclusive remedy for these work-related injuries. The court disagreed, citing the differing protections offered by the workers’ compensation and antidiscrimination laws. Here, the men’s claim turned on whether male and female employees were treated differently. “The fact that such differential treatment may have led to the Plaintiffs sustaining physical injuries is, in many ways, irrelevant to claims of discrimination,” the court said. Regardless of their physical injuries, if their discrimination claims succeed, the men would be entitled to recover damages they sustained as a result of being subjected to differential treatment.
Additionally, their waiver of claims executed in connection with the settlement of their workers’ compensation claims related only to workers’ compensation matters. While the waivers prevent them from recovering additional damages for physical injuries, the waivers did not limit their right to assert claims for illegal discrimination based on the hospital’s failure to enforce its policies in a nondiscriminatory manner.
With regard to the sex discrimination claim, the court held that the men did not make their case. “Title VII does not require employers to enforce their policies as they are written, so long as whatever enforcement of the policy that actually does occur occurs without discrimination,” the court said. The men contended that no women were disciplined for violating the policy, but they did not contend that any men were disciplined, either. Thus, the hospital appears to apply the policy equally to male and female employees, insofar as no one was disciplined for failing to adhere to the policy. “Many criticisms can be leveled at such a practice, but the Court cannot say that an employer who fails to correct the shirking employee has effectively imposed an adverse employment action upon the diligent employee; at best, the employer is guilty of inaction, rather than adverse action.”
The court suggested that the men would have suffered an adverse employment action if they had stopped responding to the duress alarm and were disciplined, but the failure to discipline a co-worker who did not respond does not constitute an adverse employment action against them. The men countered with the argument that failure to correct the recalcitrant female employees’ behavior is an adverse employment action because it allegedly exposed the responding employees to an increased risk of being injured by a violent patient. But the court held that the men offered no evidence of increased risk due to the hospital’s failure to enforce its policy. Admittedly, most women participated in the restraint process, and the men offered no evidence that the participation of the remaining women staff members would reduce the risk of injury. Thus, the court held that the men had failed to come forward with evidence establishing that the employer’s inaction increased the risk of harm to them.
Stephen M. Johnston (Hassler Law Firm, LLC), for Plaintiff. Douglas J. Cox (Colorado Attorney General’s Office-Department of Law), for Defendant.
LABOR—DCCir: Rail unions lose challenge to Surface Transportation Board decision allowing Massachusetts DOT to purchase CSXT rail track
Rejecting a challenge brought by several rail unions, the DC Circuit held it was a reasonable interpretation of the Interstate Commerce Commission Termination Act for the Surface Transportation Board (STB) to find that the purchase by the Massachusetts Department of Transportation (MassDOT) of railroad track and other rail assets from CSX Transportation (which reserved a permanent, exclusive freight easement over the track) was not the acquisition of a “railroad line” requiring the STB’s authorization or exemption (B’hood of RR Signalmen v Surface Transp Bd and United States, March 29, 2011, Henderson, K). The unions failed to meet their burden of showing that a departure by STB from long-held precedent was warranted “as a matter of law or policy.”
In 2009, MassDOT agreed to purchase from CSXT property interests in 70-plus miles of track and real estate, including rights-of-way and related assets, in order to expand the commuter rail system that it operates through its Massachusetts Bay Transportation Authority (MBTA). Under the purchase agreement, CSXT retains a permanent and exclusive freight easement over the track and MassDOT assumed all of the dispatch and maintenance responsibilities.
The Brotherhood of Railroad Signalmen, the Brotherhood of Maintenance of Way Employees Division/IBT, and the American Train Dispatchers Association challenged an STB decision holding that the MassDOT’s purchase of the railroad track and other rail assets did not require STB authorization or exemption. The unions claimed standing to challenge the agency’s decision because they and their members would be injured as a result of the purchase. Their bargaining agreements with CSXT would be essentially nullified, they argued, and union members would lose seniority under the CSXT contract.
Moreover, the union asserted, if MassDOT is not deemed a carrier subject to the Railway Labor Act, the state agency will not be required to bargain with the union and it will be entitled to have the rail work performed by nonunion entities. While much of the union’s stated concern was merely speculative, the appeals court concluded, the STB did acknowledge that some union members had already been displaced as a result of the acquisition, and this constituted a concrete injury sufficient to confer representational standing on the unions, the court held.
Nonetheless, the unions failed in their challenge to the STB decision, as they could not meet their burden of showing that a departure from State of Maine — a precedent that the ICC and STB have followed in more than 60 cases, and on which the instant ruling was based — was warranted in this case. Abruptly abandoning the State of Maine policy “could have widespread impacts on transportation planning throughout the country,” the STB reasonably concluded. The appeals court rejected the union’s argument, in challenging that conclusion, that the long line of agency precedent applying State of Maine was wrongly decided.
Richard S. Edelman for Petitioners. Jeffrey D. Komarow (Surface Transportation Board) for Respondents.
LABOR—ARBITRATION—WDMich: Race and sex bias claims head to arbitration pursuant to policy published online; signature not required
A grocery store deli manager’s race and sex discrimination claims must be arbitrated pursuant to a Dispute Resolution Policy (DRP) published in the grocer’s online policy manual, a federal court ruled. The court rejected the manager’s contention that because he never signed a written agreement giving up his right to sue in court, his claim was not subject to arbitration (McGill v Meijer, Inc, March 28, 2011, Quist, G).
The plaintiff was hired to work as a specialty clerk in the bakery/deli at the defendant’s Gaines Township, Michigan, store in 2005. The position was covered by a CBA. Subsequently, the plaintiff was promoted into management positions and continued to work in management until his employment was terminated, in March 2009, for failing to disclose prior felony convictions on his job application and for lying about them during his interview. In January 2010, the plaintiff filed an EEOC charge alleging that he was actually terminated as a result of discrimination based on his race and sex, in violation of Title VII, and was granted a right to sue letter.
At the time he was hired, the plaintiff signed a form acknowledging receipt of a handbook and agreeing to abide by the employer’s policies and procedures, including those that, like the DRP, were available online. However, because the DRP does not apply to employees subject to collective bargaining agreements, the plaintiff was not subject to the policy until he was promoted to his first management position, in April 2006.
The court found that the plaintiff’s claim that he did not agree to arbitration, because he never signed a written agreement giving up his right to sue in court, was unfounded. In this case, in addition to his signature on the form acknowledging that he promised to abide by the defendant’s policies and procedures, including those available for viewing online, the DRP’s provision that continued employment would constitute acceptance was sufficient under state law. Further, the DRP specifically includes Title VII claims under its arbitration provision and because it is “well settled within the Sixth Circuit that Congress did not intend to exclude Title VII claims from arbitration,” arbitration was compelled as to all claims.
Todd R. McGill (pro se) for Plaintiff. Jeffrey S. Rueble (Meijer, Inc) for Defendant.
LABOR—BARGAINING—7thCir: Laid-off teachers entitled to recall procedures, but school board need not bargain with union over those procedures
The Chicago Board of Education must establish recall procedures, pursuant to the Illinois School Code, to provide laid-off teachers a right to demonstrate that they are qualified to fill new teacher vacancies as they arise, the Seventh Circuit ruled; however, the school board is not required to consult and negotiate with the teachers’ union in promulgating those procedures (Chicago Teachers Union, Local No 1, Am Fed’n of Teachers v Bd of Educ of the City of Chicago, March 29, 2011, Williams, A). The appeals court, therefore, affirmed in part a district court’s grant of injunctive relief to the union, but narrowed its scope by eliminating the requirement that the board create these procedures in tandem with the union.
Background. In the face of steep budget deficits, the school board laid off nearly 1,300 teachers over the summer of 2010. With an infusion of federal funding late in the summer, the board recalled some 715 tenured teachers. The teachers were not recalled pursuant to an official recall policy, however. Since the layoff ended, more vacancies opened up within the school system; typically the board hires hundreds of new teachers each year. However, many of those positions were filled with new hires instead of with laid-off tenured teachers. As a result, the teachers’ union filed suit. The district court found that the teachers had a property interest under Illinois law that entitled them to some kind of retention procedure. The court issued a permanent injunction directing the school board to rescind the discharges and to promulgate a set of recall rules, in consultation with the union and after good-faith negotiations, within 30 days; it also enjoined the Board from conducting future layoffs in a similar manner until recall rules had been promulgated. However, the district court stayed the permanent injunction pending an appeal by the school board.
Protected property interest. Under Illinois law, tenured teachers cannot be discharged except for cause. Thus, tenured teachers in Illinois have a property interest in their continued employment, the appeals court noted. However, Illinois courts have found that pre-termination hearings are unnecessary before good-faith economic layoffs or as long as teachers are provided adequate post-termination procedures. Under this legal backdrop, the Seventh Circuit addressed for the first time whether tenured teachers are entitled to consideration for reassignment.
Looking to Illinois law, 1995 amendments to the law, and relevant state case law, the court concluded that the Board must formulate procedures governing layoff and recall. According to Illinois Supreme Court precedent, in its holding that the school board and not the state legislature had authority to formulate teacher layoff and recall procedures, it did not permit the school board to have no procedure in place whatsoever. This statutory limit on the school board’s discretion, coupled with teacher tenure, endowed the teachers with a property interest in continued employment and gave rise to a legitimate expectation that tenured teachers who are laid off will be given the opportunity to show that they are qualified for new vacancies for a reasonable period of time, the appeals court held.
Due process. Having concluded that the teachers have a cognizable property interest, the appeals court turned to the question of what process is due to them. It rejected the school board’s insistence that, having held two job fairs and resume workshops and pointed the laid-off teachers to a website listing the teacher vacancies, the board provided all the process that was due them. This contention could not be squared with the school board’s numerous admissions on the record that it had no recall procedure in place. “The Board simply has not established a procedure whereby laid-off teachers can demonstrate their qualifications for new teaching positions, nor has the Board announced the criteria to be used in evaluating teachers who apply for teaching jobs,” the court wrote. “Without any procedures for recall, the risk of deprivation to the teachers is significant.”
Injunction. Nonetheless, the appeals court concluded, the scope of injunctive relief afforded the teacher’s union should have been narrower. The district court ordered the school board to consult with the union when promulgating its recall procedures pursuant to state law. However, although consultation with the union may expedite the process of promulgating the rules, nothing in the relevant state statute compels the school board to do so; thus, the appeals court refused to impose such a requirement. Also, the lower court ordered that the teachers’ discharges be rescinded; while the appeals court did not reverse this order, it clarified that the teachers were still considered to be laid-off teachers.
Dissent. Judge Manion dissented in part, arguing that neither the Illinois School Code nor the other factors alluded to by the majority gave the teachers the right to recall procedures; moreover, even if state law provided such a right, it is not itself a property right that the due process clause protects.
Further, Manion noted, the union had simply failed to bargain over and secure recall procedures for its members when faced with an economic layoff, and it now sought to create a property right out of the school code. However, “the substance and form of recall procedures during an economic layoff should be resolved at the bargaining table,” Manion argued. “It is not for us, fifteen years after the [relevant] statute was passed, to remedy that by calling the expectation of `recall procedures’ property rights and placing them under the protection of the Due Process clause.”
Thomas H. Geoghegan (Despres, Schwartz & Geoghegan), for Plaintiff–Appellee. Sally J. Scott (Franczek Radelet) for Defendant–Appellant.
LABOR—BARGAINING—WDPa: New electrical company not alter ego of union employer even though created by relatives
A newly created electrical company was not an alter ego of a union employer and therefore, was not obligated to abide by the decision of a grievance board even though the electrical company was formed by relatives of the union employer, ruled a federal district court in Pennsylvania (Int’l Bhd of Elec Wkrs, Local No 5 v Krater Serv, LLC, March 25, 2011, Gibson, K). The union failed to present any evidence demonstrating that the two entities were either owned or controlled by the same individual or group of individuals, so that Krater Services could not be saddled with the obligations of Krater Electric.
Background. Krater Electric executed a letter of assent authorizing a contractor association to bargain on its behalf over collective bargaining agreements. In 2006, the union notified the employer that it was in violation of contract provisions relating to the hiring of employees from its exclusive hiring hall, improper changes to employee’s classifications, and direct negotiations over wages and benefits. A labor-management committee concluded that the employer had violated the CBA and, as a result, ordered it to pay certain wages, benefits, and union dues. Krater Electric thereafter voted to dissolve its business operations. The union commenced an enforcement action against the company.
In August 2007, the grandson of Krater Electric’s owners and his wife resigned from the company and formed Krater Services. They cashed out the grandson’s individual retirement account and obtained loans to finance their new business. They hired nonunion employees previously employed by Krater Electric and paid them the same salaries they previously received. Krater Services never purchased any of the assets, equipment, or property owned by Krater Electric and never had any ownership interest in nor served as officers or directors of Krater Electric. Further, they operated their business from a separate address. The union commenced this action against Krater Services alleging that it was an alter ego of Krater Electric and therefore, responsible for its obligations under the grievance award.
As an initial matter, the court determined that the union’s complaint was not barred by the LMRA’s six-month limitations period since, by its terms, that provision applied to complaints issued by the NLRB. Rather, the Third Circuit has held that Pennsylvania’s six-year statute of limitations for breach-of-contract actions were applicable to a “pure” LMRA action to enforce an arbitration award under a collective bargaining agreement, noted the district court. That limitations period was subsequently reduced to four years. Here, the union commenced this action within the applicable four-year limitations period, so its alter ego claim was timely filed.
Alter ego claim. Krater Services was not responsible for Krater Electric’s admitted violations of the CBA, ruled the district court. In order to determine whether an alter ego relationship existed between the two entities, the court must consider whether there was a substantial identity of management, business purpose, operation equipment, customers, supervision and ownership between the two corporations. It was also necessary to determine whether Krater Services was created to permit Krater Electric to evade its responsibilities to the union under the CBA and the grievance award.
The ownership of the two companies could not be fairly characterized as “substantially identical,” concluded the court. Although there was a “close familial relationship” between the individual owners, no single family member exercised substantial control over both entities. Further, since it was undisputed that Krater Services never utilized or purchased any property owned by Krater Electric, did not share the same location, and received no financial support from it, the record failed to support the union’s contention that Krater Services was a “disguised continuance” of Krater Electric. Although some factors weighed in favor of the union’s position, such as same business purpose, customers, and use of former employees with the same compensation, those factors were not dispositive, concluded the court.
Joshua M. Bloom and Tiffany R. Waskowicz (Joshua M. Bloom, P.C.) for Plaintiff. Michael J. Wagner (Wagner & Finn) for Defendant.
LABOR—ORGANIZING, ELECTIONS—NLRB: Employer’s conduct mitigated effects of pro-union supervisors’ petition drive
Strong anti-union conduct by an employer mitigated the effects of a representation petition drive by pro-union supervisors, a divided panel of the NLRB has ruled in overruling the employer’s election objections (Terry Machine Co, 356 NLRB No 120, March 28, 2011).
Union drive. When the union first attempted to organize the bargaining unit, seven area coordinators who oversaw the work of 74 employees, or half the eligible voting electorate, were strongly pro-union. Those coordinators solicited signatures for a showing of interest petition and a second petition that sought commitments to vote for the union. At a hearing, the coordinators testified that they spent, at most, two days soliciting signatures. When the employer learned of the organizing campaign, it began an “extensive” anti-union drive. It held mandatory company meetings in which it urged a “no” vote, promised to correct problems, and showed anti-union videos. The employer also distributed anti-union buttons, postings, and home mailings, had outside representatives come to the facility to advocate against the union, and sent letters to employees informing them that their supervisors’ pro-union activities were prohibited by law. One week before the election, the employer threatened to fire the coordinators, a threat that was widely disseminated to the voting electorate.
Procedural history. The Regional Director ordered an election, which the union won. The employer filed objections over the coordinators’ alleged supervisory status. An ALJ overruled those objections and the General Counsel issued a complaint against the employer for its failure to bargain with the union. While that case was pending, the Supreme Court issued its decision in NLRB v Kentucky River Community Care, rejecting the Board’s then-current interpretation of the exercise of “independent judgment” in determining whether employees were statutory supervisors within the meaning of the Act. At the same time, the Board issued its decision in Harborside Healthcare, setting forth its definition of when supervisors’ pro-union conduct is objectionable. Thus, the Board reopened this case and remanded it.
After the ALJ issued a second decision and while exceptions to it were pending, the Board issued Oakwood Healthcare, ruling on several factors that go into determining supervisory status. The Board remanded the instant case yet again. The ALJ’s third decision found that the coordinators were supervisors and that their conduct had materially affected the outcome of the election; the ALJ recommended that the election be set aside.
Harborside applied. In determining that the employer’s conduct mitigated the pro-union conduct of the supervisors, the Board applied the two-step Harborside inquiry. The first step requires an analysis of whether the supervisors’ conduct could have reasonably tended to coerce or interfere with the employees’ exercise of free will. The second step considers whether that coercion materially affected the outcome of the election.
However, even if such conduct may have materially affected the outcome of an election, the Board will not set aside the election if the employer engaged in conduct that mitigated the effect of the supervisors’ conduct.
The Board did not, in the instant inquiry, address whether the coordinators were supervisors. The Board further assumed, for purposes of the inquiry, that the coordinators’ conduct was coercive. However, despite the possible coercive nature of the conduct, the Board refused to set aside the election, because it found that the employer’s conduct mitigated the conduct of its coordinators. In informing the employees that the supervisors’ conduct violated the law, the employer had disavowed that conduct. That disavowal, combined with the termination threats, “relieved any potential continuing pressure employees might have felt” to vote for the union, the Board ruled. Thanks to the employer’s conduct, the employees knew that regardless of their vote, the supervisors could soon be capable of either rewarding or punishing them based on their vote.
Further, although the coordinators disseminated the threat, the Board found that the employees reasonably believed the threat to be serious. Thus, the Board overruled the employer’s objections and refused to set aside the election. Although the Board acknowledged that a great amount of time had passed since the election, it refused to “frustrate the previously expressed representation choice.”
Dissent. Member Hayes dissented. He found that the employer’s termination threat did not constitute mitigation because the coordinators, not the employer, disseminated the threat. Further, even if he did find that the employer’s conduct mitigated the coordinators’ conduct, Hayes still would not have certified the union due to the great amount of time that had passed.
NLRB WEEKLY SUMMARY—For the week ending March 25, 2011
In this issue of the NLRB’s weekly summary, Board staff summarized five cases. Decisions of administrative law judges and unpublished Board decisions in representation and unfair labor practice cases are also listed.
PUBLIC EMPLOYEES—3rdCir: Police officer entitled to informal pretermination or presuspension hearing, but right not clearly established at time of suspension
Although union grievance procedures permitted a police officer to challenge his suspension after the fact, a brief and informal pretermination or presuspension hearing was also necessary, ruled the Third Circuit (Schmidt v Creedon, March 29, 2011, Roth, J). However, because this rule was not clearly established at the time of the officer’s suspension, Capitol Police officials were entitled to qualified immunity.
Background. Before the start of his shift, the officer was approached by a fellow officer who wanted to file a complaint against superior officers because he believed he was about to be charged with misconduct for refusing to refile charges against a suspect. The coworker wanted a union representative available when he was served with paperwork relating to the misconduct. Thereafter, the officer entered the coworker’s complaint into a database at a dispatch center. According to Capitol Police officials, the dispatch center was outside the officer’s duty area and he required permission to enter the center and access the database. Moreover, the police officials asserted that the officer needed to report the complaint up the chain of command before entering it into the database.
After the police superintendent learned of the complaint, he directed a sergeant to remove it from the database. When the officer learned of the sergeant’s actions, he confronted him and questioned him about removing the complaint. Following the incident, the superintendent initiated an investigation, which resulted in a suspension recommendation. Three days after the officer entered the complaint in the database, he was suspended without pay and without being provided a predisciplinary hearing. Thereafter, the officer filed a grievance with his union. After the grievance was submitted to arbitration, the officer was awarded back pay and seniority.
However, a separate inspector general investigation found that the officer deliberately entered the complaint in the database in an effort to embarrass and discredit the Capitol Police. This time, the officer was provided a predisciplinary conference, after which he was terminated. Again, the officer filed a grievance challenging his discipline, and an arbitrator ultimately ordered his reinstatement, but without back pay, seniority, or benefits.
Subsequently, the officer filed a complaint against Capitol Police officials, but a district court granted summary judgment for the employer on all but the officer’s due process claim arising from his suspension. The district court later determined that, because the officer had access to union grievance procedures to challenge his suspension, this post-deprivation process cured any defects in predeprivation due process. In a later action related to the officer’s termination, the district court ruled that due process did not require that he be informed of the specific rules he was alleged to have violated. Both claims were consolidated for appeal.
Suspension claim. Under 53 Pa Stat Sec. 46190, the officer had a constitutionally protected property interest in not being terminated or suspended from his position without good cause. The Third Circuit concluded that the procedures followed, in suspending the officer, did not comport with due process. Under Pennsylvania law, a police officer’s property interest in his job is protected from either termination or suspension under Sec. 46190, and due process entitled him to a brief and informal presuspension or pretermination hearing. Consequently, absent extraordinary circumstances, a police officer cannot be suspended without pay, unless there has been a presuspension hearing, even where post-discipline union grievance procedures fully compensate erroneously suspended employees.
Although the officer had a right to a hearing, prior to his suspension, police officials were nevertheless entitled to qualified immunity because his right was not clearly established at the time of his suspension, concluded the Third Circuit. It was clearly established in 2006, at the time of the officer’s suspension, that certain state employees were entitled to a hearing prior to termination, and that this rule applied to police officers. However, it was not clearly established in 2006 whether this rule applied when appropriate post-suspension union grievance procedures were available. Thus, the district court correctly granted summary judgment on the officer’s suspension claim.
Termination claim. With respect to the officer’s termination claim, the appeals court also agreed with the district court’s ruling that the officer was provided with adequate process before he was discharged. Here, there was no dispute that the officer was given prior notice of the hearing, which described in detail the conduct that was the basis of his suspension. Although the employee complained that officials failed to identify the specific rules that they claimed his conduct violated, the Third Circuit concluded that the notice provided to the officer of the termination hearing did not violate due process.
Nathan C. Pringle, Jr., for Plaintiff-Appellant. Howard G Hopkirk, Senior Deputy Attorney General, and Thomas W Corbett, Jr., Attorney General, for Defendants-Appellees.
WAGE-HOUR—OVERTIME—DMinn: Cable installation technicians granted conditional certification of FLSA collective action
A motion by a cable installation technician to certify an FLSA overtime case as a collective action has been granted by a federal district court in Minnesota (Meseck v TAK Communications, Inc, March 28, 2011, Tunheim, J). The court also granted the technician permission to disseminate a notice, as he had established that he was similarly situated to other installation technicians who have worked for TAK Communications on or after March 25, 2007.
The plaintiff, who was paid on a piece-rate basis for work performed, alleged that TAK’s compensation policies resulted in a failure to pay him and other technicians overtime compensation and the minimum wage in violation of the FLSA and the Minnesota Fair Labor Standards Act. In conjunction with the instant motion, the plaintiff proffered declarations from 19 installation technicians that indicated that they had similar job duties and were subject to the same procedures that allegedly resulted in wage and hour violations. Specifically, the technicians challenged TAK’s policies of requiring them to lease or purchase its vehicles; deducting employer-related costs from their paychecks; compelling them to work 12-hour days, often six days a week; and not compensating them for “off the clock” non-installation work activities, including vehicle maintenance, attending mandatory meetings, travelling between jobs, returning and unloading unused equipment, assisting other technicians, and returning to prior jobs to address customer complaints.
In response, the company alleged that there were various distinctions among individuals performing installation work for TAK, and claimed that the company did not regularly employ installation technicians until November 2008 (prior to that time, the individuals who provided installation services on TAK’s behalf were predominantly classified by TAK as independent contractors and were required to execute independent contractor agreements). The court, however, noted that, at this stage, the plaintiffs need only establish a colorable basis for their claim that the putative class members were the victims of a single decision, policy, or plan. As such, the plaintiff amply achieved that modest factual threshold with regard to the installation technicians that he alleges were misclassified as independent contractors.
Given the low threshold of proof necessary at the notice stage, the court conditionally certified a class including hourly and piece-rate installation technicians and will reconsider this argument, as well as others regarding distinctions among TAK’s installation technicians, on a decertification motion.
Daniel P. Doda (Doda & McGeeney, PA), for Plaintiffs. Jacqueline E. Kalk, and Jeffrey A. Timmerman (Littler Mendelson, P.C.), for Defendants.
WAGE-HOUR—OVERTIME—WDPa: Motor carrier exemption didn’t eliminate Frito Lay’s obligation to pay overtime to route salesmen
Frito Lay benefited from the safe harbor provisions of the Technical Corrections Act (TCA), which excused its failure to pay overtime compensation to route salesmen between August 10, 2005, and April 26, 2006, the date it became aware of a change in the definition of commercial vehicle, ruled a federal district court in Pennsylvania, which granted the employer summary judgment with respect to that timeframe (Cerutti v Frito Lay, Inc, March 28, 2011, Conti, J). However, the court denied summary judgment with respect to overtime compensation for nine route salesmen of the snack food giant for the period between April 26, 2008, and June 6, 2008, when the Motor Carrier Act’s definition of a commercial vehicle was restored. Because it was unclear whether the salesmen ever drove trucks with a gross weight under 10,001 pounds, a question of fact remained as to whether or not the motor carrier exemption was applicable to them.
Frito Lay compensated its route salesmen through a base salary and commissions pursuant to a collective bargaining agreement. Under the CBA, the salesmen were entitled to overtime compensation for all time worked over 40 hours per workweek. Frito Lay paid the salesmen at one-half their regular rate of pay using the fluctuating workweek method. The company also contended that salesmen were exempt from overtime under the Pennsylvania Motor Carrier Act (PMCA). While conceding that they were exempt from overtime prior to April 26, 2006 (the date Frito Lay became aware of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU)), the salesmen alleged that they were entitled to overtime compensation of not less than one and one-half times their regular rate.
Safe harbor. The Pennsylvania Minimum Wage Act (PMWA) mirrors the FLSA, including the motor carrier exemption. With the enactment of the SAFETEA-LU on August 10, 2005, the Secretary of Transportation no longer had jurisdiction over drivers of vehicles of 10,000 pounds or less. However, Congress passed the Technical Corrections Act (TCA) on June 6, 2008, restoring the previous definition of commercial vehicles. The TCA provided a safe harbor of one year from August 10, 2005, to August 9, 2006, for any failure of an employer to pay overtime, if the employer did not have actual knowledge that the scope of the exemption had changed when the SAFETEA-LU was enacted. It was undisputed that Frito Lay had actual knowledge that the exemption changed no later than April 26, 2006, so that the safe harbor provisions were applicable here and the drivers were exempt from overtime for the time period between August 10, 2005, and April 26, 2006.
The court rejected Frito Lay’s argument that the SAFETEA-LU only altered which employers would be considered motor carriers and made no changes to the definition of employees. According to Frito Lay’s position, because it operated hybrid fleets that contained vehicles both under and over 10,000 pounds, it was not excluded from application of the motor carrier exemption. However, the court ruled that under the SAFETEA-LU, an employee’s activities must be considered in determining whether or not he or she is subject to the Secretary of Transportation, and therefore exempt under the motor carrier exemption. Here, the court determined that the record was not sufficiently developed to reach any conclusion about whether the salesmen never had to drive a truck that weighed over 10,000 pounds, so that Frito Lay was not entitled to summary judgment on the issue of the motor carrier exemption for the period from April 26, 2006, until the TCA was enacted on June 6, 2008.
The court additionally ruled that upon enactment of the TCA, the salesmen were once again exempt under the state motor carrier exemption, even though they may not have been exempt under the federal exemption. After June 6, 2008, the state exemption applied to the salesmen because the TCA restored their status as employees subject to the authority of the Secretary of Transportation.
Fluctuating workweek. With respect to the calculation of any overtime compensation, the court concluded that a plain reading of 34 Pa Code Sec. 231.43(d)(3) clearly requires that overtime pay be computed at one and one-half times the rate established by an agreement or understanding. Thus, the court rejected Frito Lay’s contention that the fluctuating workweek method was permissible under the PMWA to calculate overtime pay for its route salesmen.
Joseph E. Fieschko (Fieschko & Associates, Inc) and John R. Linkosky, for Plaintiff. Rachel A. Miller (Sheppard, Mullin, Richter & Hampton LLP), for Defendant.
WHISTLEBLOWERS—6thCir: Lack of qualifications, not retaliation for whistleblowing, reason for pilot’s non-promotion
Substantial clear and convincing evidence supported a finding that an employee, a pilot who alleged that he was denied a promotion in retaliation for reporting aviation safety and Federal Aviation Authority (FAA) compliance issues to his employer and to the FAA, would have been denied the promotion even in the absence of his reporting activities, ruled the Sixth Circuit, in denying the employee’s petition for review (Hoffman v Solis, March 29, 2011, Rogers, J). Although the appeals court found it troubling that the employee may not have been promoted because of his reports of safety violations, the court observed that Congress gave primary authority to the Secretary of Labor, not the courts, to carry out the provisions of 49 US Sec. 42121 (AIR21).
The employee, who was hired as a pilot for an operator of a fleet of chartered business jets for the private transportation of its investors, alleged that he was retaliated against through denial of a promotion in contravention of whistleblower protections outlined in AIR 21. AIR21 protects employee whistleblowers in the aviation industry from retaliation for reporting potential aviation safety violations to their employers or to the federal government. In this instance, the employee was denied appointment as an initial operating experience instructor. He also challenged an administrative law judge’s denial of his motion to supplement his complaint and the Administrative Review Board’s grant of the employer’s motion to strike evidence in his brief.
The court found that substantial evidence supported the finding that the employer had proved, by clear and convincing evidence, that the employee would have been denied the promotion because his rating on the scale used to determine who would be promoted was one on a scale of zero to nine. The point system used to rank applicants was based on three categories: international experience; program-manager feedback; and peer feedback. A maximum of three points could be awarded in each category for a maximum total of nine points per candidate. The employer was able to show that twenty-six of the thirty pilot applicants scored higher than the employee, that seven of those applicants were hired, that five of those hired had international flying experience (which the employee did not have), and that the employee had not been promoted to initial operating experience instructor despite more than 25 previous attempts at promotion.
The court also found that no abuse of discretion had occurred in regard to the employees’ challenge to two procedural rulings — the ALJ’s denial of his motion to supplement his complaint, and the ARB’s grant of the employer’s motion to strike evidence in the employee’s brief that purportedly was not in the administrative record. The ARB was justified in affirming the ALJ’s denial of the motion, held the court, because the employee’s original complaint concerned a retaliatory denial of promotion whereas the supplemental complaint alleged punishment of the employee for possible violations of the employer’s policy regarding tape-recording of discussions with other employees. The court stated that, although related, the two issues were separate matters that the ALJ need not have considered in the same proceeding. Furthermore, the court found the ARB had not abused its discretion in granting the employer’s motion to strike the evidence that purportedly was not in the record, as any error would have been harmless because the evidence was either irrelevant or had been considered by the ARB in reaching its decision.
Richard R. Renner (Kohn, Kohn & Colapinto, LLP) for Petitioner. Mary J. Rieser (USDOL) for Respondent.
NEWS
CONFERENCES—OFCCP expert: Director Shiu eliminating, “brick-by-brick,” limitations on pay discrimination enforcement
The White House has identified the OFCCP as the lead point agency of government on pay discrimination, and OFCCP Director Patricia Shiu has been removing limitations on pay discrimination enforcement “brick-by-brick” over the past six months, OFCCP expert John C. Fox stated during an OFCCP mid-year update webinar presented by the National Employment Law Institute (NELI). Among these efforts, the OFCCP has replaced the Bush Administration’s guidelines on compensation with new compensation investigation instructions and has revised its audit procedures to allow for more on-site investigations.
Rescission of compensation enforcement notices. Many in the contractor community, particularly some of the big law firms, are needlessly “hyper-ventilating” about the OFCCP’s January 2011 proposal to withdraw two Bush-era compensation policy notices, according to Fox. A notice published in the Federal Register (76 FR 62-64) details the OFCCP’s reasoning behind its proposal to rescind its two policy notices on systemic compensation discrimination, put into place by the Bush Administration in June 2006. The 2006 notices were not regulations or changes to any regulations; rather, they were statements regarding how the agency intended to enforce existing regulations. The first notice, “Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance With Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination” (71 FR 35114-35122), contained guidelines for federal contractors’ self-evaluation of compensation practices. The second 2006 notice, “Interpreting Nondiscrimination Requirements of Executive Order 11246 With Respect to Systemic Compensation Discrimination” (71 FR 35124-35141), contained standards regarding systemic compensation discrimination that the OFCCP would use in enforcing Executive Order 11246.
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STATE LEGISLATION—MICHIGAN—Governor signs bill extending unemployment benefits for 2011, but cutting them for 2012
Under a law signed Monday, March 28 by Michigan’s Republican governor Rick Snyder, the state will extend unemployment benefits this year, but will cut them by six weeks in 2012. The new law ensures that Michigan employers will pay lower unemployment taxes next year, but laid-off workers will face a much tougher road.
Currently, every state pays for 26 weeks of unemployment benefits before federal unemployment benefits begin. In signing the bill, Snyder made Michigan the first state in the nation to slash that period, and Michigan will now end payments after 20 weeks, leaving a six-week gap in payments.
The bill also made a technical change to the existing law, thereby ensuring that the state’s long-term unemployed could continue receiving extended federal unemployment benefits for up to 99 weeks; without the change those benefits would have been phased out next week because the U.S. Bureau of Labor Statistics found that the state no longer met the criteria to remain in the extended benefits program. Snyder was pleased to trumpet the extension for this year, but in a statement released on Monday, Snyder made no mention of the cuts for 2012.
Although Synder claims that he had little choice but to act as he did, the National Employment Law Project (NELP) noted that 11 other states this year made the same extension to their unemployment benefit laws, without cutting future benefits. NELP says that Synder should have issued a veto forcing the state legislature “to pass clean legislation fixing the Extended Benefits program.”
Snyder also found himself under attack by Democrats from the state’s Congressional delegation. Representative Sander Levin (D-MI) called the law “reckless” and blistered the governor for his failure to even mention the cuts. Levin accused Snyder of trying to “distract Michiganders from the full story, seeking to portray legislation that includes a drastic and permanent cut as a ‘protection’ for the unemployed.” Before Synder signed the bill, Levin and other Democrats sent Snyder a letter, imploring him to veto the measure.
STATE LEGISLATION—OHIO—Bill that would strip public employees of bargaining rights, right to strike passes Committee; full House vote expected soon
The Ohio House Commerce and Labor Committee passed a bill March 29 limiting the collective bargaining rights for the state’s 350,000 workers, setting the stage for passage of the bill by the full House. Although the Committee amended the bill in an effort to win more support, it is still likely to be the subject of a referendum within the next two years.
According to published reports, as amended Senate Bill 5, which the state senate passed earlier this month by one vote, would allow Ohio voters to reject public-union contracts if leaders pick a contract that would be paid for with a tax increase, would allow workers to refuse to pay dues to unions, would eliminate binding arbitration for police and fire-fighters and would prohibit public employees from striking. However, according to reports, the amended bill struck provisions requiring jail-time for striking workers.
In addition, the bill would require public employees to pay at least 15 percent of their healthcare benefits and would bar unions from negotiating over those benefits, working conditions, including building assignments and staffing sizes.
HOUSE NEWS—Sub-Committee on Health, Education, Labor and Pensions to hold hearing investigating transparency in organized labor
On Tuesday, March 31, the Sub-Committee on Health, Education, Labor and Pensions of the Committee on Education and the Workforce will hold a hearing exploring transparency in organized labor. The hearing, “The Future of Union Transparency and Accountability” is scheduled to begin at 10:00 a.m. (EST) in room 2175 Rayburn House Office Building and will feature testimony from four witnesses. Diana Furchtgott-Roth, a Senior Fellow at the conservative Hudson Institute will testify, as will Nathan Paul Mehrens, Counsel for the Americans for Limited Government Research Foundation. In addition, Arthur L. Fox II, of counsel at the Washington D.C. law firm of Lobel, Novins & Lamont, LLP will testify; Fox was the outside general counsel of the National Postal Mail Handlers Union, the National Association of Air Traffic Specialists and a Fraternal Order of Police corrections unit. Lastly, John Logan, the Director of Labor Studies at San Francisco State University, is scheduled to testify.
Under the current Republican majority, the Committee on Education and the Workforce has made little secret of its anti-union sentiment. The Republicans removed the word “Labor” from the Committee’s name and have investigated what they perceive to be an aggressive pro-labor agenda on the part of the National Labor Relations Board.
DOL NEWS—Department reaches agreement with Levi Strauss & Co netting over $1 million in back wages for 596 employees
Following an investigation by the DOL that revealed that the clothing manufacturer Levi Strauss & Co. violated overtime and recordkeeping provisions of the FLSA, the company has agreed to pay $1,011,413 in overtime back wages to 596 employees.
The investigation found that the company misclassified several groups of worker in order to exempt those workers from overtime. Those workers included assistant store managers at newly acquired stores who, unlike their peers at previously existing stores, were not exempt from overtime compensation. The investigation also revealed that the company failed to record all hours worked by its employees in the payroll system. Rather than properly recording the hours, the company forced its assistant store managers to work off-the-clock during late night closings, early morning openings, and staffing shortages.
The DOL investigation, which covered back-pay over a two-year span, also found that the company misclassified various administrative employees working at its headquarters as exempt from FLSA overtime coverage.
In addition to the back-pay, the company has also agreed to maintain future FLSA compliance, to treat the affected employees as non-exempt and to upgrade its time and attendance system.
LABOR BEAT—Veterans Affairs and AFGE enter into CBA covering 200,000; OPEIU and AFGE to consult on issues affecting airline pilots
The Veterans Affairs Department and the American Federation of Government Employees (AFGE) have signed a national CBA covering over 200,000 employees, the union announced. The new agreement will increase telecommuting options for VA employees, thereby improving employee morale and will add security protocols to protect healthcare workers who are exposed to “on-the-job” hazards in their treatment of wounded soldiers. The agreement will also clarify employee rights and protections under Title 38 and will create a new training program to assist employees in obtaining new skills and certifications, thereby helping them to advance in their careers.
“This is a morale booster for our employees. A good contract behind our workers gives them the incentive to do their best work,” AFGE National President John Gage said.
Airline pilot union collaboration. The Air Line Pilots Association International (ALPA) has entered into a service agreement with the Office and Professional Employees International Union (OPEIU). The agreement will allow the two unions to better consult on matters of relevance to their members. The OPEIU and ALPA will share information on aviation safety issues, such as cockpit recorders and accident avoidance systems, and will work together to present their shared views to Congress and the National Transportation Safety Board. Under the agreement, local union officers of the OPEIU will now have access to ALPA’s training programs, including programs on CBA training and accident investigation. ALPA will also share information on legislative and regulatory issues.
Fair Labor Association. The Fair Labor Association (FLA) has announced that Kathryn “Kitty” Higgins will be the next Chair of its Board of Directors. Higgins, who joined the DOL in 1969, was Chief of Staff to Secretary of Labor Robert Reich in 1993, and was later named Deputy Secretary of Labor. In that capacity, she helped direct an initiative to expand pension benefits for workers, helped to create an OSHA ergonomics standard, helped to revise OSHA’s cooperative compliance program and also helped to craft initiatives to assist workers impacted by trade and other economic dislocations.
“Kitty’s long and distinguished career has been characterized by a commitment to public service and workers’ rights,” said FLA Board member and Acting Chair Bob Durkee. “Her experience working with stakeholders from many sectors and her proven leadership skills make her an excellent choice to chair the FLA Board at a time when the FLA is enhancing its programs and expanding its impact.
Higgins’ three-year term begins Friday, April 1.
