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Washington Labor & Employment Wire » The Obama Administration

NLRB Issues Proposed Regulations to Expedite Election Process

In a proposed rule to be published in the Federal Register today, June 22, 2011, the National Labor Relations Board would streamline and expedite its election procedures. Stating a desire to “remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation,” the rule would move resolution of eligibility disputes to the post-election period, reduce the ability of parties to seek Board review in representation cases, shorten various existing filing deadlines, require employer disclosure of employee contact information, and allow the parties to make increased use of electronic filing. In setting forth these amendments, the Board’s Democratic-majority maintained that the regulations merely seek to reduce unnecessary litigation and undue delay - they would not require that representation elections be held within a specific number of days.

Brian E. Hayes, the NLRB’s lone Republican, expressed doubts that the majority was concerned about expediting the representation elections process. He disputed the claim that the process is too slow, and argued that the majority’s true aim was to aid unions in representation elections.

With the NLRB embroiled in a series of contentious partisan disputes, including the recent filing of union discrimination charges against Boeing, Inc. and legal challenges to state constitutional amendments outlawing the majority sign-up process, the reaction to the proposed rule was predictable. Union leaders praised it, noting that the reforms would bring faster, more transparent elections, while business interests and Republicans have characterized the proposed rule as a giveaway to labor.

Labor has long criticized the current representation election procedures, believing they allow employers to defeat union drives through delay and labor consultant-directed anti-union messaging. The shorter election periods would thus provide employers with a smaller target and would likely allow more representation drives to come to a vote. While unions win nearly two-thirds of representation elections coming to a vote, they fail in the majority of the representation drives they initiate. Employer opposition - primarily through coordinated messaging and education campaigns - leads roughly three in every 10 election drives to fizzle out prior to voting, either through union withdrawal or NLRB rejection of an election petition.

The NLRB will allow 60 days for written comments and will hold a public hearing on the proposed rule on July 18-19 in Washington, D.C.

DOL to Publish Proposed Rule Expanding Reporting Requirements for Labor Consultants and Persuaders

Section 203 of the Labor-Management Reporting and Disclosure Act requires the disclosure of agreements with persons who work on behalf of employers to persuade employees to exercise or not exercise their rights to organize or collectively bargain, or to persuade employees as to how they should exercise such rights. See 29 U.S.C. § 433(b). However, the Act provides an exemption to this so-called “persuader” reporting requirement where the would-be persuader is merely “giving or agreeing to give advice” to an employer. See id. at § 433(c).

On June 21, 2011, the U.S. Department of Labor’s Office of Labor-Management Standards (”OLMS”) will publish a proposed rule in the Federal Register narrowing this  ”advice exemption” and thus expanding the Act’s reporting requirements. Historically, the advice exemption has been broadly interpreted, exempting persuader reporting when consultants or attorneys advising employers have no direct contact with employees. This includes situations where consultants or attorneys have prepared materials for use by the employer.

The OLMS’s proposed rule will reject the current interpretation of “advice” and expand the definition of reportable “persuader activities” to include “all actions, conduct, or communications, on behalf of an employer that . . . have a direct or indirect object to persuade employees concerning their rights to organize or bargain collectively.” The proposed rule will seek to limit the advice exemption to the “plain meaning” of “advice,” defined as “an oral or written recommendation regarding a decision or course of conduct.” Reporting will thus be required “in any case in which the agreement or arrangement, in whole or in part, calls for the consultant to engage in persuader activities, regardless of whether or not advice is given.”

The proposed regulation will also provide examples of reportable agreements or arrangements, including a labor consultant:

  • Agreeing to plan or orchestrate an anti-union campaign through specific persuader activities;
  • Engaging on behalf of the employer in any other actions, conduct, or communications designed to persuade employees;
  • Engaging in any conduct, actions, or communications that utilize employer representatives to persuade employees, such as directing or coordinating the activities of employer representatives, or providing persuader material to them for dissemination; and
  • Drafting or implementing policies for the employer that aim to directly or indirectly persuade employees.

Under the proposed rule, reporting would still not be required where a consultant or attorney enters into an arrangement exclusively to provide advice to an employer - as that term is narrowly construed by the proposed rule - such as counseling employer representatives on what they may lawfully say to employees, ensuring a client’s compliance with the law, or providing guidance on NLRB practice or precedent.

OSHA Announces Final Rule Streamlining Employer Requirements

On May 26, 2011, OSHA announced a forthcoming final rule that will streamline and simplify OSHA standards and reduce employer burdens.  The rule will impose no new requirements, and thus employers will need to take no steps to comply. 

This rule updates OSHA regulations in keeping with the goals of President Obama’s Executive Order 13563, “Improving Regulation and Regulatory Review.” The executive order was issued on January 18th with the stated goal of simplifying standards and reducing unnecessary burdens. Assistant Secretary of Labor for OSHA David Michaels stated that “OSHA estimates that the final rule, without reducing employee protection, will result in an annual cost savings to employers exceeding $43 million and significant reductions in paperwork burden hours.” The White House’s Office of Information and Regulatory Affairs noted that the new rule will remove “over 1.9 million hours of redundant reporting burdens on employers.”   

Specifically, the new rule will make several changes to OSHA’s existing respiratory protection standard, including aligning air cylinder testing requirements for self-contained breathing apparatuses with the U.S. Department of Transportation’s regulations, clarifying that aftermarket cylinders meet National Institute for Occupational Safety and Health (”NIOSH”) quality assurance requirements, and clarifying that the provisions of Appendix D, which contains information for employees using respirators when not required by the standard, are mandatory if the employee chooses to use a respirator.

The new rule will also update the definition of “potable water” to be consistent with the current EPA definition instead of the outdated Public Health Service Corps definition, remove the outdated requirement that hand dryers use warm air, and remove two medical records requirements from the commercial diving standard. The slings standard will also be updated and streamlined to require that employers use only slings marked with the manufacturers’ loading information. Finally, the new rule will delete a number of requirements that employers transmit exposure and medical records to NIOSH, since NIOSH had concluded that these records do not serve a useful research purpose. 

The final rule will be published soon in the Federal Register.

Free DOL “I-Phone App” To Allow Employees to Track Time and Calculate Wages Owed

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On May 9th, the DOL announced the launch of its first application for smartphones, a timesheet to help employees independently track the hours they work and determine the wages they are owed. DOL hailed the development of this technology as “significant because, instead of relying on their employers’ records, workers now can keep their own records.” The application is available in both English and Spanish. The DOL also provides a printable work hours calendar in English and Spanish for those workers who do not have smartphones. 

Both the smartphone application and the printable calendar will allow users to track regular work hours, break time and any overtime hours for one or more employers. The application also will allow users to add comments to the information; view a summary of their work hours in a daily, weekly, and monthly format, and e-mail the summary of work hours and gross pay as an attachment. Currently, the app is compatible with only the iPhone and iPod Touch. The DOL intends to explore expanding the program to other smartphones such as the Android and the Blackberry, as well adding pay features that would track tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials, and pay for regular days of rest.

NLRB Sues Arizona Over Secret Ballot Amendments; Suit Against South Dakota to Follow

On May 6, 2011, the NLRB filed suit against Arizona in federal court to overturn its recently-passed state constitutional amendment banning the use of the card-check process in union elections, asserting that the amendment creates an “actual conflict” with federal labor law and is therefore preempted. (NLRB v. Arizona, D. Ariz., case number not available, complaint filed 5/6/11).

In November 2010, voters in Arizona, South Dakota, South Carolina, and Utah passed constitutional amendments requiring secret ballot elections in all union elections. 

Section 7 of the NLRA permits workers to choose a union through two pathways: NLRB-conducted secret-ballot elections and voluntary recognition after a showing of majority support through the use of the card-check or majority sign-up processes. The state constitutional amendments would eliminate the latter pathway to union certification, preventing employers from entering into neutrality agreements with unions utilizing the card-check or majority sign-up processes and requiring NLRB-conducted secret-ballot elections in all circumstances.  

The NLRB initially threatened legal action against Arizona, South Carolina, South Dakota, and Utah in January 2011. In January 2011 letters to the attorneys general of those four states, NLRB Acting General Counsel Lafe Solomon warned that the state amendments would pressure employers who previously agreed to voluntary recognition agreements to withdraw recognition from labor organizations representing their work forces and could lead to unnecessary litigation by workers challenging unions with majority support. In response, the state attorneys general asserted the legality of those amendments and pledged to defend them.  The NLRB’s May 6 news release announcing the suit against Arizona stated that the complaint against South Dakota will be filed “in the coming weeks.”

The state amendments are an outgrowth of the defeat of the Democratic-sponsored Employee Free Choice Act in the 111th Congress, which would have permitted the use of the card-check or majority sign-up processes outside the voluntary recognition context.  This year, Senate Republicans have introduced the Secret Ballot Protection Act, a federal bill mirroring the state constitutional amendments that would ban the card-check/voluntary recognition pathway and require secret ballot elections in all circumstances. With Democrats controlling the Senate, the legislation is unlikely to have majority support in that body, let alone the 60 votes needed for cloture.

NLRB Acting General Counsel Solomon was nominated by President Obama earlier this year to a four-year term as General Counsel on a permanent basis. His nomination is currently pending in the Senate.

NLRB Brings Complaint Against Boeing; Critical Senate Republicans Introduce Right-to-Work Legislation in Response

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On April 20, 2011, NLRB Acting General Counsel Lafe E. Solomon issued a complaint against the Boeing Company for its transfer of aircraft production jobs from the state of Washington to South Carolina in violation of Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (”NLRA”). The complaint follows an unfair labor practice complaint brought by IAM in March 2010 and asserts that by opening a new production line in North Charleston, SC rather than the Puget Sound area of Washington State, Boeing is engaging in anti-union discrimination with regard to hiring and employment and unlawfully interfering with, restraining or coercing its employees in their exercise of their NLRA rights.

In conducting an investigation and bringing the complaint, the NLRB referenced numerous statements made in the press by Boeing officials concerning the desire to set up the production line in a non-union setting. In particular, one high-level Boeing official was reported to have told the Seattle Times that “[t]he overriding factor (in locating the work in South Carolina) was not the business climate. And it was not the wages we’re paying today. It was that we cannot afford to have a work stoppage, you know, every three years.” Boeing production lines in the Puget Sound, WA area have been plagued by periodic strikes in the past.

In a statement issued by its Executive Vice President and General Counsel J. Michael Luttig, a former federal judge, Boeing emphatically contested the complaint, arguing that establishing a new production line in South Carolina did not represent a removal or transfer of work from Puget Sound or otherwise adversely affect any union employees. Boeing also asserted that the NLRB mischaracterized the statements of its officials, and that the company considered only permissible factors in locating the production line in South Carolina.

The filing of the NLRB complaint brought condemnation from Senate Republicans, who contended that the action improperly interfered with the ability of businesses to operate in right-to-work states and would force companies to instead move jobs overseas. The NLRB complaint prompted Sen. Lamar Alexander (R-TN) and South Carolina’s two Republican Senators, Sen. Jim DeMint and Sen. Lindsey Graham, to announce that they would soon unveil the Right to Work Protection Act, which would bar the NLRB or union contracts from overriding right-to-work laws and halt NLRB actions such as the Boeing complaint. The bill, which is unlikely to pass the Democratic-controlled Senate, would prohibit federal government from engaging in enforcement actions against companies electing to relocate to right-to-work states or from disadvantaging work located in right-to-work states when awarding federal government contracts.

The complaint also brought condemnation from the Republican state attorneys general of nine right-to-work states, who called on the NLRB to drop the complaint: Alabama, Arizona, Florida, Georgia, Nebraska, Oklahoma, South Carolina, Texas, and Virginia.

Both parties will be able to present evidence and arguments concerning the NLRB complaint in a June 14, 2011 hearing in Seattle, WA before an NLRB administrative law judge.

NLRB Acting General Counsel Solomon was nominated by President Obama earlier this year to a four-year term as General Counsel on a permanent basis. His nomination is currently pending in the Senate.

Social Security Administration To Resume Sending No-Match Letters to Employers

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The Social Security Administration (”SSA”) has announced that it will resume sending “no-match letters” to employers this month.  The SSA issues no-match letters when certain information on wage statements provided by the employer does not match the information maintained by the SSA.  The new no-match letters, officially referred to as decentralized correspondence (DECOR) notices, will be sent to employers for the 2010 tax year.

An employer is required to provide the SSA with a W-2 for each of its employees annually.  The SSA uses the earnings information on the W-2 to determine the employee’s Social Security benefit amount.  The SSA compares each employee’s name and social security number on the W-2 with the same information in its records.  If the information does not match, the SSA will not post the employee’s earnings and will issue a no-match letter. 

Since no-match letters may be used as evidence of an employer’s constructive knowledge that specific employees may be unauthorized workers, employers should not simply ignore the letters.   The Department of Justice (”DOJ”) has issued general guidance for employer’s who receive a no-match letter.  For example, the DOJ warns against assuming that a no-match letter conveys information regarding the employee’s immigration status or authority to work, since no-matches can result from simple administrative errors, such as input errors by SSA staff or a reporting error by the employee or employer. 

The SSA started sending no-match letters in 1979 but stopped in 2008 when a federal court enjoined the Department of Homeland Security (”DHS”) and the SSA from implementing a proposed DHS regulation called “Safe Harbor Procedures for Employers Who Receive a No-Match Letter.”  The DHS has since rescinded the proposed regulation.  The SSA will not send no-match letters to employers for the 2007 through 2009 tax years.

DOL Clarifies FLSA Tip Credit, Declines to Amend Regulations Governing the Fluctuating Workweek

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            On Tuesday, April 5, 2011, the Department of Labor (DOL) published updated regulations to the FLSA that were intended to conform the Act to subsequent legislation. The regulations were initially proposed in 2008 under the Bush administration. While the final rule updates regulations regarding the tip credit to reflect an increase in the minimum wage and clarifies existing overtime exemptions for employees engaged in fire protection activities, the rule is more interesting for what it does not do. In response to negative comments from employee groups, DOL opted not to adopt changes that would have clarified that salaried, non-exempt employees could receive bonuses under the fluctuating work week method of compensating overtime. 

            In addition to raising the maximum federal tip credit to $5.12 per hour, the final rule eliminated the maximum contribution percentage on valid mandatory tip pools. Notably, however, the DOL did not adopt a proposed regulation clarifying that bona fide bonus or premium payments do not invalidate the fluctuating workweek method of compensation. This proposal had been supported by the Chamber of Commerce, among other pro-employer entities. Commenters opposed to the proposed rule argued that it would allow employers to reduce employees’ fixed weekly salaries and instead provide compensation primarily through bonus and premium pay. The DOL noted that “in general, commenters representing employers favored the revisions while commenters representing employees strongly opposed the revisions.”

            DOL had also proposed a change to clarify that under section 7(o) of the FLSA, states and local governments that grant employees compensatory time off instead of cash overtime compensation must allow employees to use the compensatory time off on the date requested absent undue disruption to the agency. This clarification was not adopted in the final rule, but DOL reiterated that it maintains its longstanding position that employees are entitled to use compensatory time on the date requested. The final rule also does not include several other provisions originally proposed including providing an overtime exemption for service managers, service writers, service advisers, and service salesman; a regulation that allows an employer to take a meal credit even where the employee does not accept the meal voluntarily; and, examples of when pay is not required for employees who use their employer’s vehicle in home-to-work commuting.

EEOC Publishes Final ADA Regulations

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On March 25, 2011, the Equal Employment Opportunity Commission (”EEOC”) published its final revised regulations and interpretive guidance under the Americans with Disabilities Act (”ADA”). These revisions bring the Commission’s regulations into compliance with the ADA Amendments Act of 2008 (”ADAAA”), which explicitly invalidated certain prior EEOC regulations and several Supreme Court decisions interpreting the pre-2008 ADA.The ADA Amendments Act expanded the definition of “disability,” making it easier for an individual to establish that he or she has a disability within the meaning of the ADA. Accordingly, the EEOC’s final regulations, as with its prior proposed regulations, reflect a broadened understanding of what constitutes a “disability.” The regulations expand the definition of “major life activities” to include “major bodily functions,” such as breathing, cell reproduction, and immune system function. They provide that an impairment that is episodic or in remission is still considered a disability if it would substantially limit a major life activity when active. Additionally, the regulations provide that mitigating measures, other than the use of ordinary eyeglasses or contact lenses, should not be considered when assessing whether an individual has a disability. The regulations further revise the definitions of “substantially limits” and “regarded as” to reflect this broader understanding of what constitutes a disability under the Act.

The final regulations go beyond the proposed regulations previously promulgated by the EEOC to include additional guidance on certain topics. This includes clarification that cases in which an applicant or employee does not require reasonable accommodation can be evaluated solely under the “regarded as” prong of the definition of “disability,” and that whether an individual is substantially limited in a major life activity is irrelevant under the “regarded as” prong. Further, the final regulations state that a covered entity is not required to provide a reasonable accommodation to an individual who meets the definition of disability solely under the “regarded as” prong.

General concerns were raised by employer groups about the inclusion of major life activities in the final regulations that were not listed in the statute, including specific concerns that the inclusion of “interacting with others” in the non-exhaustive list of major life activities would limit the ability to discipline employees for misconduct. The Commission declined to act on these concerns, noting that Congress provided that the lists of major life activity examples are non-exhaustive and that the Commission is authorized to recognize additional examples.

The final regulations also explain that the standard from Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002), for determining whether an activity qualifies as a major life activity (i.e., that it be of “central importance to most people’s daily lives”) no longer applies after the ADA Amendments Act.

In conjunction with the publication of the final regulations, the Commission has released two question-and-answer documents. The ADAAA regulations, the accompanying question-and-answer documents, and a fact sheet are available from the EEOC here.

Borzi Addresses Fiduciary Regulation in Hearing

In a public hearing on March 1 and 2, 2011, Assistant Secretary of Labor for the Employee Benefits Security Administration (”EBSA”) Phyllis Borzi addressed the Department of Labor’s proposed fiduciary regulation, released in October 2010. The proposed regulation would update and expand the definition of a fiduciary under Section 3(21)(A) of ERISA. Under the proposed regulation, individuals preparing employer stock evaluations and similar investment advice would be considered ERISA fiduciaries. Speaking in support of the proposed change, Borzi pointed to the “tremendous evolution in the marketplace” in the 35-plus years since the existing fiduciary regulations were adopted and stressed the necessity of improving transparency and accountability.

At the hearing, critics of the proposed regulation urged EBSA to coordinate the fiduciary rulemaking with other agencies, including the Securities and Exchange Commission (”SEC”) and the Commodities Futures Trading Commission (”CFTC”).  Explaining that EBSA was working to harmonize the regulations with SEC and CFTC fiduciary standards, Borzi declined to defer entirely to those agencies regarding establishing new fiduciary standards. Borzi noted that the aims and structure of ERISA differed from other relevant statutes, such as the Consumer Protection Act and the Dodd-Frank Act, making it unworkable to completely synchronize the regulations.

Borzi explained that EBSA had no intention to issue a final fiduciary regulation that would require a covered party to be in violation of other statutes and regulations, but was unable to provide assurances that compliance with the EBSA regulation would necessarily comply with other fiduciary provisions. In issuing these caveats, Borzi noted that the proposed regulation would not directly conflict with existing Internal Revenue Service rules.

Prior to the hearing, Borzi stated that EBSA will likely issue a final regulation by the end of 2011.