Wednesday, June 22, 2011

NLRB Proposes Rules For “Quickie Elections”

On June 22, 2011, the National Labor Relations Board proposed new rules to “streamline” pre- and post- union election procedures that will have the effect of shortening the time between the filing of an election petition and the election, among other things. If adopted, the Board’s proposed rules would likely:

  • reduce the amount of time employers have to respond to a union organizing campaign and

  • restrict employers’ opportunities to communicate with employees about what it really means to have a union.

Since organized labor has not been able to pass the Employee Free Choice Act, “by administrative fiat in lieu of Congressional action, the Board will impose organized labor’s much sought- after ‘quickie election’ option, a procedure under which elections will be held in 10 to 21 days from the filing of the petition.” (Member Hayes, dissenting, available here)

The practical effect, and the desired result, of the changes is to :

  • implement “quickie elections,” held within a matter of days of filing of a petition,

  • severely restrict an employer’s ability to communicate with its employees about the collective bargaining process and what it really means to be unionized,

  • require regional directors to schedule an election for the “’earliest date practicable consistent’ with the rules.”

The Board has scheduled a hearing on the proposed rules for July 18, 2011, and will accept written comments for a 60-day period with a 14-day period for reply comments. We will continue to monitor the developments, and tune back in for additional posts on the proposed rules.

Tuesday, June 21, 2011

Rule Proposed By DOL Would Require Employers to Disclose Agreements With Their Attorneys

The DOL has proposed a rule that will broaden the requirements for reporting persuader activity by employers. (You can access the DOL’s Notice of Proposed Rulemaking here). While this might appear to be an obscure and mundane area of labor law, the DOL’s proposed rule change would have a profound effect on how employers respond to union organizing campaigns.

The Labor Management Reporting and Disclosure Act (“LMRDA”) requires employers to disclose agreements or arrangements between employers and labor relations consultants (including attorneys) when a consultant engages in activities to “persuade” employees in the exercise of their rights under the National Labor Relations Act. Of course, this typically involves activities during a union organizing campaign to persuade employees to vote against a union. The LMRDA includes an exemption to the reporting requirements for “advice” an employer receives. The DOL has traditionally interpreted the “advice” exception to apply when the consultant or attorney advises the employer and provides planning and materials, but does not directly address or interact with the employees. In those cases, the arrangement or agreement did not have to be reported. The DOL’s new rule will change that interpretation.

The DOL’s proposed rule would redefine and significantly narrow the scope of the “advice exemption,” and consequently broaden the scope of activity defined as direct persuader activity that employers must report. The proposal would define the term "advice" as "an oral or written recommendation regarding a decision or course of conduct." Under the DOL’s proposed rule, an agreement would be reportable in any case where the consultant engages in activities to persuade employees that go beyond the more narrow definition of “advice.” Persuader activities would be reportable when a consultant engages in any activity on behalf of an employer that would directly or indirectly persuade workers concerning their rights under the NLRA, even if the consultant does not have any direct contact with employees. According to the DOL’s press release, the rule would also require reporting even where an attorney provides “advice,” where the attorney also “plans or orchestrates a campaign or program to avoid or counter a union organizing or collective bargaining effort.” It appears that an agreement would be reportable under the revised rule if a consultant or attorney prepared speeches or materials for a union campaign.

The DOL’s press release regarding the proposed rule (available here) suggests that “[b]etter disclosure is critical to helping workers make informed decisions about their right to organize and bargain collectively.” The practical effect of the rule, however, will be to force employers to choose between (1) forgoing assistance during a union organizing campaign (which benefits the union’s chances of winning) or (2) disclosing the employer’s arrangements with the consultant/attorney (which provides a source of material for the union’s campaign).

The DOL’s proposed rule will be published in the Federal Register on June 21, 2011, and the deadline for submitting comments is August 22, 2011. We will continue to monitor the developments on this rule.

Attorneys are more influential than they thought. . . or maybe the DOL is giving us too much credit

The U.S. Department of Labor issued a press release yesterday announcing a proposed rule aimed at requiring employers to disclose the use of consultants and redefining the scope of "persuader" activity (such as in a counter campaign to a union organization push).

Specifically, the notice states that activities such as trainings, speeches and other communications that are the result of attorney work-product would be subject to reporting requirements. This includes communications that do not specifically address employees.

In the release, the Department of Labor states that “Better disclosure is critical to helping workers make informed decisions about their right to organize and bargain collectively.”

The comment period on the proposed rule will be open until August 22. We'll be working on our submission--wonder if it will be reportable as persuader activity?

(Thanks to Joe Harvey for finding this information.)

Tuesday, June 14, 2011

New and Improved: The NLRB’s Latest Moves

With a controversial complaint against Boeing, a lawsuit against Arizona and lawsuits threatened against three other states over their constitutional amendments, and rulemaking underway for a new mandatory notice posting, you might have thought that the NLRB had its hands full. But, taking a line from any good infomercial pitchman, the Board has essentially said “But, wait there’s more!” In a memo issued by the Board’s General Counsel, the Board revealed that it has more to offer.

According to a recent General Counsel Memo, the Board is considering a rule that would require employers to provide information to unions about all transfers of work, even if the employer is not legally obligated to bargain with the union about the transfer. (You can access the memo here.) Currently, employers are not required to bargain with a union about a transfer of work where the transfer involves a change in the scope or direction of the business, or where labor costs were not a factor, or where, even if labor costs were a factor, the union could not have offered labor-cost concessions sufficient to alter the employer’s decision. In a decision from earlier this year, the Board dismissed an allegation that an employer violated the Act by refusing to provide information related to its decision to relocate operations. (You can read the decision here.) The Board found that since the relocation decision in that case was not a mandatory subject of bargaining, there was no obligation to provide information about it. In a concurring opinion, however, Chairman of the Board, Wilma Liebman (former attorney for the Teamsters and the Bricklayers unions) “suggested that she would consider modifying the [existing] framework with regard to information requests if a party were to ask the Board to revisit existing law in this area.” In other words, she would consider changing the law to require employers to provide information to unions about a relocation decision even if the employer is under no obligation to bargain about that decision. The purpose of the General Counsel’s memo is to instruct Regional Directors to identify cases that would be suitable for the Board to use to change the law in this respect.

As much as the Board has already done, employers should expect that the Board will continue to adopt changes to the law that benefit labor organizations. And there is a “money-back guarantee” on that prediction!

Monday, June 13, 2011

E-Verify is Coming! E-Verify is Coming! (to Tennessee, that is)

If you do business and have employees in Tennessee, a law signed by Governor Haslam last week could impact the method by which you verify your applicants’ authorization to work in the United States.

Under the new law (known as the Tennessee Lawful Employment Act), all employers are required:

  1. Before October 1, 2011, to enroll and maintain active participation in the E-Verify program;
  2. On or after October 1, 2011, to verify the work authorization status of each employee hired on or after October 1, 2011, by using the E-Verify program; and
  3. On or after October 1, 2011, to maintain records of all results generated by the E-Verify program pursuant to the work authorization status check required by this bill.

If you use independent contractors, the contractor must present a valid Tennessee driver’s license, and you must maintain a copy of it. If the contractor has a license from another state, that is acceptable provided it is a state whose issuance requirements are at least as strict as Tennessee’s.

We will have a blog post discussing this legislation in more detail in the coming week.

Wednesday, June 8, 2011

Hello, Old Friend: Tennessee Legislature Reinstates McDonnell Douglas Burden Shifting

A new law recently passed by the Tennessee legislature and sent to the Governor for his signature will reinstate the framework for analyzing discrimination and retaliation claims that had been in place for thirty-seven years, but was tossed out by the Tennessee Supreme Court last September.

In 1973, the United States Supreme Court adopted a “burden-shifting” analysis for evaluating claims of racial discrimination claims under Title VII. The burden-shifting analysis was labeled “McDonnell Douglas burden shifting” after the name of the Supreme Court decision that established it. In the years following the Supreme Court’s decision, all federal courts and state courts in nearly every state adopted the McDonnell Douglas burden shifting analysis for all types of discrimination claims under Title VII, other federal laws such as the ADA, ADEA, and state anti-discrimination laws. This analysis was widely accepted and used in nearly every discrimination case for over 35 years – so much so that it rolls off the tongue of every employment lawyer like the pledge of allegiance.

Last September, the Tennessee Supreme Court discarded the McDonnell Douglas burden shifting analysis for common law retaliation claims -- and in all probability, also for all discrimination and statutory retaliation claims in state court. The Court held that the burden shifting analysis adopted by the United States Supreme Court was inconsistent with Tennessee’s standard for summary judgment. (You can read the Supreme Court's opinion here and our post about the case here). In one fell swoop, the Supreme Court fundamentally altered the analysis for claims of discrimination and retaliation in Tennessee state courts. The decision had the practical effect of making it more difficult for employers to obtain summary judgment dismissing meritless claims of discrimination and retaliation.

In its latest session, the legislature reacted by passing a bill that adds new sections to the Tennessee Human Rights Act and the provisions related to retaliation claims. The new sections explicitly reject and legislatively overrule the Supreme Court’s decision, and “establish the McDonnell Douglas framework as the appropriate and legally required framework for the consideration of evidence offered during all stages of the proceedings in employment discrimination and retaliation cases.”

The new statutes bring Tennessee law back in line with federal law and the law of a vast majority of the states. Importantly, the new statutes will eliminate uncertainty that would have resulted from a sea change in the law and will provide a more predictable standard for employers to obtain summary judgment dismissing frivolous discrimination and retaliation claims.

A copy of the bill can be found at

Tuesday, June 7, 2011

Legislature Resuscitates Summary Judgment in Tennessee

Thanks to a new Tennessee law, it will be a little easier for parties, including employers, to obtain summary judgment in cases filed on or after July 1, 2011. A bill recently passed by the legislature and awaiting the Governor’s signature reverses the effects of a Tennessee Supreme Court decision that nearly made summary judgment obsolete and pushed more cases to trial (or settlement).

Summary judgment is a procedural device that allows the judge to dispose of cases prior to trial where there trial is unnecessary because the facts are not disputed and the plaintiff’s claims are legally insufficient. Summary judgment is a tool that employers commonly used to have meritless discrimination, harassment, and retaliation claims dismissed without having to undergo the expense and uncertainty of that accompanies a trial.

(You can read about the cases which led to this legislation here  and here.)

With the passage of House Bill No. 1358/Senate Bill No. 1114, the Tennessee legislature has not only reversed the effects of the Hannan decision, but it has required Tennessee courts to apply the same summary judgment procedure as is applied in federal courts. The operative language of the statute states that the moving party shall be entitled to summary judgment if it “[d]emonstrates to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim.” The legislature clearly intended to revive summary judgment as a useful procedural device to weed out the cases that do not deserve to go to trial.

It remains to be seen how courts will interpret this law and whether courts will still feel reluctant to grant summary judgment. From the employer’s standpoint, however, this is a welcome change in the law. It will reduce the risk that meritless lawsuits go further in the process than they should, or that employers feel extorted to settle on unfavorable terms simply to avoid the costs of litigating the case.