The National Labor Relations Board issued a decision that serves as a reminder to employers of their bargaining obligations upon implementing changes to their business. Rigid Pak Corp., 366 NLRB No. 137 (2018) involves a unionized company (“Rigid”) that manufactured and sold plastic products. Rigid maintained an injection-molding division and a blow-molding division housed on different sides of its facility. The injection-molding division manufactured open-head containers, lids, and crates while the blow-molding division manufactured plastic bottles. In 2014, Rigid encountered various financial difficulties, and to address them, the company entered into a supply agreement to outsource its work to a third-party manufacturer.
As we reported last December, the NLRB, in The Boeing Company, 365 NLRB No. 154 (2017), reversed its workplace rule standard under Lutheran Heritage. Specifically, instead of assessing whether an employee could “reasonably construe” a workplace rule as barring the exercise of rights under the NLRA, the new test will evaluate the nature and extent of the potential impact on NLRA rights and the legitimate justifications associated with the rule. The results of the new balancing test will place the rule in one of three categories: Category 1 (lawful work rules), Category 2 (work rules that warrant individualized scrutiny in each case), or Category 3 (unlawful work rules).
The saga continues with regards to the status of a December 2017 NLRB decision that loosened restrictions on employer workplace rules. As we reported, on December 14, 2017, the NLRB overruled the “reasonably construe” standard for evaluating the validity of employer work rules and replaced it with an evaluation that balances 1) the nature and extent of a rule’s impact on NLRA rights and 2) an employer’s legitimate justifications for the rule. The new standard is widely-perceived as a victory for employers and indicated the newly-composed NLRB’s intent to revise the law in situations where the previous administration had stretched key legal principles too far, turning the “reasonably construe” standard into a “possibly construe” standard.
Recently, the NLRB created significant uncertainty as to the joint employer test under the NLRA when it vacated a December 2017 decision that resurrected the standard that existed prior to 2015. Such a standard determines the existence of a joint employer relationship by assessing whether one entity has “actually exercised joint control over essential employment terms (rather than merely having ‘reserved’ the right to exercise control)” and the control is “’direct and immediate’ (rather than indirect)” and exercised in a manner that is not “limited and routine.”
Under a new DOL pilot program, employers can self-report wage violations and potentially avoid costly litigation.
Last week, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) launched a six-month pilot program to resolve FLSA violations. Under the Payroll Audit Independent Determination (PAID) program, employers may self-report potential overtime or minimum wage violations to the WHD, which will then resolve the matter by supervising payments to employees if the employees accept the settlement. Importantly, the WHD will not impose penalties or liquidated damages on employers that participate in the program and proactively work with the WHD to resolve the compensation errors. Further, if an employee accepts a supervised settlement through PAID, s/he waives his or her right to file an action to recover damages and fees for the violations and time period identified by the employer. To participate in the PAID program, an employer must identify: (1) the wage violation(s); (2) the impacted employee(s); (3) the time period(s) in which the violation(s) occurred; and (4) the amount of back wages owed to the impacted employee(s). However, employers may not participate if they are in litigation or under investigation by the WHD for the practices at issue, or to repeatedly resolve the same potential violations.
We have reported on several Board decisions issued by a new Republican majority in the final days of 2017, but questions remain as to what issues the Board will address next to scale back on Obama-era precedent. In recent weeks, Republican Board Members have provided some hints in a pair of footnotes in two unpublished decisions.
Earlier this month, the U.S. Department of Labor’s Wage and Hour Division issued a Notice of Proposed Rulemaking (“NPRM”) seeking to repeal a 2011 rule that significantly impacted the compensation of hospitality workers. Specifically, the NPRM proposes to allow hospitality employers to control the distribution of the tips they pool assuming their employees are paid the full minimum wage. By way of background, the FLSA requires employers to pay employees a minimum wage (currently $7.25 per hour) plus overtime for all hours worked over 40 in a single workweek. Employees who “customarily and regularly receive tips” must still receive the minimum wage, but employers may elect to take a “tip credit” by counting up to $5.12 per hour of those employees’ tips toward the minimum wage, meaning employers may pay a reduced wage of $2.13 to tipped employees. Historically, employers that take the tip credit have been prohibited from sharing money from a tip-pooling system to employees who do not traditionally receive direct tips (cooks, dish washers, etc.). In 2011, the DOL extended the tip-pooling prohibition to apply to employers even if they do not take the tip credit and pay their employees the full federal minimum wage.
Hunton & Williams recently published an entry on its Retail Law Resource Blog regarding what employers can expect from Victoria Lipnic, the new acting chair of the Equal Employment Opportunity Commission (“EEOC”) and an EEOC Commissioner since 2010. Since that publication, Lipnic has made public comments as to what she envisions from the EEOC under her leadership. Several key topics from those comments are summarized below:
Employers should be aware of a recent ruling by the U.S. Court of Appeals for the District of Columbia Circuit that overly broad confidentiality and nondisparagement policies violate the National Labor Relations Act (“NLRA”). The case, Quicken Loans v. NLRB, 2016 U.S. App. LEXIS 13778 (D.C. Cir.), involved an employment policy which prohibited employees from using or disclosing a broad range of personnel information without Quicken’s prior written consent or to criticize publicly the company and its management. The National Labor Relations Board (“NLRB” or “Board”) determined that those rules ran afoul of Section 7 of the NLRA because they “unreasonably burden the employees’ ability to discuss legitimate employment matters, to protest employer practices, and to organize.” Quicken then appealed the NLRB’s decision to the D.C. Circuit Court of Appeals.
The issue of religious background has generated substantial discussion during the current election cycle. Recently, the federal government highlighted the issue of religious discrimination and accommodation in the workplace.
On July 22, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced the release of a one-page fact sheet specifically designed to educate young workers of their rights and responsibilities under the federal employment anti-discrimination laws prohibiting religious discrimination. The fact sheet stresses that employers may not discriminate against an employee on the basis of religion, and notes that employees have a right to ask that certain workplace accommodations be made to respect their religious preferences. Also outlined by the sheet are various examples of proper and improper employment practices under federal law. The fact sheet encourages employees to report suspected religious-based discrimination.