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Washington Labor & Employment Wire

ALJ Rejects Boeing’s Bid to Dismiss NLRB Unfair Labor Practice Complaint

On June 30, 2011, ALJ Clifford H. Anderson rejected Boeing Co.’s challenge to the controversial unfair labor practice complaint filed against it by the NLRB in April. The NLRB’s complaint, which has ignited a partisan firestorm, alleges that Boeing unlawfully transferred an aircraft assembly line from Washington State to South Carolina as retaliation for prior strikes by the unionized workforce in Washington State. The case will proceed to trial before the ALJ.

The case has drawn fierce condemnation by Congressional and Senate Republicans, Republican governors and state attorneys general, and right-to-work groups, who allege the case represents a frontal attack on right-to-work states. NLRB Acting General Counsel Lafe E. Solomon has defended the complaint, pointing to a number of specific statements made in the press by Boeing officials concerning the desire to set up the production line in a non-union setting. For example, one high-level Boeing official told the Seattle Times that “The 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.”

In seeking dismissal of the unfair labor practice complaint, Boeing argued that the building a new production line for 787 Dreamliners in South Carolina did not represent a removal or transfer of work from Washington State, since the second production line had never been located in Washington State. Boeing further argued that the NLRB would have to - and could not - prove that any unionized Washington workers were adversely affected by the decision to build the production line in South Carolina. Additionally, Boeing argued that the comments made by its officials were taken out of context and that it only considered permissible factors in locating the production line in South Carolina.

In rejecting Boeing’s motion to dismiss the complaint prior to the NLRB General Counsel putting on evidence, the ALJ ruled that the NLRB General Counsel would have the opportunity to present evidence and make a showing of unlawful discrimination. The ALJ explained that it is unusual to dismiss an unfair labor practice complaint at such an early stage and ordered the trial to go forward. In addition, the ALJ also refused Boeing’s request to dismiss a costly potential remedy sought by the NLRB General Counsel - the transfer of the production line back to Washington State - and noted that Boeing had not yet set forth facts showing that the allegedly anti-union statements by its officials were taken out of context.

OSHA Proposal Would Revise List of Industries Required to Record and Report Worker Injuries and Illnesses

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On June 22, OSHA published a proposed rule in the Federal Register that would significantly revise the list of industries required to record workplace injuries and illnesses. OSHA regulations partially exempt certain industries from the obligation to maintain such records because those industries have relatively low rates of occupational injuries and illnesses. The industries are only partially exempt, because employers in these industries still must respond to OSHA or Bureau of Labor Statistics annual occupational injury and illness surveys on request. See 29 C.F.R. §§ 1904.41 & 1904.42

The list of partially exempt industries in the current regulations is based on the Standard Industrial Classification (SIC) system, which dates to the 1930s and is no longer used in government statistics.  The proposed rule would replace this list with one based on the newer North American Industry Classification System (NAICS).

Under the proposed rule, employers in 59 different industries would be required for the first time routinely to record illness and injury information. These industries include:  retail bakeries; car dealerships; hardware stores; liquor stores; property managers; theater and dance companies; museums; photography studios and labs; and video rental stores. In contrast, 72 industries that currently have to record this data would become partially exempt. The new exemption extends to:  boat dealers; book, newspaper, and periodical publishers; radio stations; television broadcasters; and wireless telecommunication carriers.

In addition, the proposed rule would make reportable all amputations and in-patient hospitalizations resulting from work-related incidents. Employers would be required to report all work-related fatalities and all work-related in-patient hospitalizations within eight hours, and all work-related amputations within 24 hours. Currently, employers are required to report within eight hours work-related incidents resulting in a fatality or that result in the in-patient hospitalizations of three or more employees. Employers need not report amputations resulting from work-related incidents at all if they do not require in-patient hospitalization.

OSHA estimates that the proposed rule would impose new recordkeeping requirements on 199,000 establishments, with a total of 5.3 million employees. The agency anticipates that those establishments, in turn, would record 173,000 injuries and illnesses per year. This impact would be offset, in part, by an estimated 119,000 establishments, with a total 4.0 million employees and an estimated 76,000 injuries and illnesses per year, that would no longer need to keep records.

Overall, OSHA estimates that the proposed rule would cost about $8.5 million, with costs of $50 to $100 for each affected establishment.

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.

The Legal Workforce Act (H.R. 2164)

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Core Provisions: On June 14, 2011, Rep. Lamar Smith (R-Texas) introduced the Legal Workforce Act (H.R. 2164), a bill amending the Immigration and Nationality Act to implement a fully electronic (”E-Verify”) worker verification system. The bill would make E-Verify mandatory for all employers, repealing the current paper-based I-9 system. Mandatory E-Verify participation would be phased in by the Act in six-month increments based on a business’s number of employees-e.g., within six months of enactment, businesses with more than 10,000 employees would be required to use E-Verify.  Businesses with 500-9,999 employees, 20 to 499 employees, and 1 to 19 employees would have 12, 18, or 24 months to comply, respectively. 

The bill also contains special provisions for agricultural employees, providing that employees performing “agricultural labor or services” are not subject to the bill’s E-Verify provisions until 36 months after the Act’s enactment. Furthermore, a seasonal agricultural employee will not be considered a “new hire” subject to verification if the individual returns to work for their previous employer. Finally, the bill contains a safe harbor provision for employers that act in good faith and also explicitly preempts any state laws mandating E-Verify use for employment eligibility purposes, although states and localities may condition business licenses on the requirement that employers comply with the federal E-Verify law in good faith.  

Status: Rep. Smith introduced H.R. 2164 with 13 co-sponsors on June 14, 2011. The Bill was referred to the House Committee on the Judiciary, the Committee on Education and the Workforce, and the Committee on Ways and Means on the same day.

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.

The Arbitration Fairness Act of 2011 (S. 987; H.R. 1873)

Core Provisions:  On May 12, 2011, Sen. Franken (D-MN) re-introduced legislation which would amend the Federal Arbitration Act (FAA) by prohibiting mandatory predispute arbitration agreements. Rep. Johnson (D-GA) introduced identical legislation in the House. The proposed legislation would invalidate and make unenforceable predispute arbitration clauses in civil rights, consumer, and employment disputes. The legislation would not apply to any arbitration provision in a collective bargaining agreement between an employer and a labor organization or between labor organizations.

The proposed legislation follows the Supreme Court’s April 27, 2011 decision in AT&T Mobility LLC v. Concepcion, which held that the FAA preempted a California law that made waivers of classwide arbitration in consumer contracts unconscionable and unenforceable. 

Similar legislation was introduced in the 111th Congress in both the Senate (S. 931) and the House (H.R. 1020), but did not make it out of committee.

Status:  Sen. Franken introduced the bill (S. 987) with 12 co-sponsors on May 12, 2011.  It was referred to the Senate Committee on the Judiciary on the same day.  Rep. Johnson introduced the same bill (H.R. 1873) with 62 co-sponsors on the same day.  The bill was referred to the House Committee on the Judiciary on the same day.

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.