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Washington Labor & Employment Wire

NLRB to Sue Arizona, South Dakota Over Secret Ballot Amendments

On April 22, 2011, the NLRB announced that it would bring suit against Arizona and South Dakota to overturn state constitutional amendments banning the use of the card-check process in union elections. In November 2010, voters in Arizona, South Dakota, South Carolina, and Utah passed constitutional amendments requiring secret ballot elections in all union elections. Stating that the amendments are preempted by federal labor law, Acting General Counsel Lafe Solomon announced the upcoming lawsuits against Arizona and South Dakota, declining to bring suit against the latter two states at this time to conserve taxpayer dollars. Currently, federal labor law permits voluntary card check or majority sign-up arrangements as an alternative method to select a union where the union and the employer reach an agreement. 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.  

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, 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 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.


Eighth Circuit Upholds Post-New Process Steel NLRB Delegation

On April 22, the Eighth Circuit upheld the decision of a three-member NLRB panel in NLRB v. Whitesell Corp., No. 10-2934 (8th Cir.). Following the Supreme Court’s June 2010 decision in New Process Steel, L.P. v. NLRB, __U.S. __, 130 S.Ct. 2635 (2010), which invalidated hundreds of NLRB decisions presided over by a panel of the two then-remaining members of the NLRB, this Eighth Circuit decision paves the way for the NLRB to seek enforcement of hundreds of invalidated decisions after reconsideration by three-member panels.

Following impasses between the executive branch and the Senate in the final year of the Bush administration and the first year of the Obama administration concerning Board appointments, three NLRB vacancies went unfilled between December 2007 and March 2010, leaving only two Board members, Democrat Wilma Liebman and Republican Peter Schaumber. In December 2007, the existing four-member NLRB had delegated its powers to a three-member panel.  That three-member panel was eventually reduced to Liebman and Schaumber upon the expiration of the third member’s term. These remaining two NLRB members continued to issue decisions. In New Process Steel, the Supreme Court invalidated those decisions as violating the NLRB’s three-member statutory quorum requirement.

In Whitesell Corp., the Eighth Circuit upheld a three-member panel’s post-New Process Steel reconsideration of a 2008 decision by the two-member panel. In light of New Process Steel, the court had previously declined to enforce that two-member panel decision. The court ruled that the previous denial of enforcement would not affect its decision to enforce a proper decision taken by a three-member NLRB panel reconsidering the initial decision. The Eighth Circuit opinion in Whitesell Corp. signals that federal appellate courts will enforce decisions of three-member panels rehearing the invalidated two-member decisions, making it likely that the NLRB will address the invalidated two-member panel cases in this manner.


USCIS Announces Final Rule on I-9 Proof of Identity and Employment Authorization


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On April 14, 2011, in an effort to improve the integrity of the verification process, the United States Citizenship and Immigration Services (”USCIS”) announced a final rule that changes the types of documents an employer can accept as proof of identity and employment authorization during the Employment Eligibility Verification process. The rule takes effect May 16, 2011.

Employers are required to verify the identity and employment authorization of their employees by completing a Form I-9, or an Employment Eligibility Verification form. The government provides lists of approved documents that an employer can accept from the employee to prove their identity and eligibility to work. 

By this final rule, USCIS added some documents and removed others.  For example, the new rule now prohibits employers from accepting “Temporary Resident Cards” or “Employment Authorization Cards” because USCIS no longer issues them.  It also adds the new U.S. passport card to the list of documents acceptable to prove both identity and employment authorization.  The rule also prohibits employers from accepting expired documents even if they are on the approved documents lists.


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.


Employment Non-Discrimination Act (H.R. 1397)

Core Provisions:  On April 6, 2011, Rep. Barney Frank (D-MA) reintroduced the Employment Non-Discrimination Act (ENDA), which would prohibit discrimination on the basis of an individual’s actual or perceived sexual orientation or gender identity in decisions regarding hiring, firing, compensation, and other terms, conditions, or privileges of employment.  Employers also could not adversely limit, segregate, or classify employees or applicants because of actual or perceived sexual orientation or gender identity.  In addition, the Act would make it an unlawful employment practice for an employer to discriminate based on actual or perceived sexual orientation or gender identity of a person with whom the employee associates, and prohibits retaliation against employees for exercising their rights under the Act.  The Act would apply to employers with 15 or more employees, but there is an exemption for religious employers and armed forces.

Rep. Frank introduced similar legislation in the 110th Congress, which failed to pass in the Senate, and in the 111th Congress, which failed to make it out of committee. 

Status: Rep. Frank reintroduced the bill with 117 co-sponsors on April 6, 2011.  It was referred to the House committees on Education and Workforce, Administration, Oversight and Government Reform, and the Judiciary on the same day. 


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.


Supreme Court Holds that FLSA’s Anti-Retaliation Provision Covers Oral Complaints


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On March 22, 2011, by a 6-2 vote, the Supreme Court ruled in Kasten v. Saint-Gobain Performance Plastics Corp. that the anti-retaliation provision for employees who file an Fair Labor Standards Act (FLSA) complaint extends to the “filing” of oral complaints. The Court did not address whether such an oral complaint must be “filed” with the government or may simply be made to the private employer because the employer failed to raise the issue until after the Court had selected the case for review.  The Court left resolution of that issue for the lower courts.

Section § 15(a)(3) of the FLSA, 29 U.S.C. § 215(a)(3), forbids employers “to discharge . . . any employee because such employee has filed any complaint.” In Kasten, the employee alleged that he was terminated for oral complaints made to his employer regarding a wage and hour issue. The lower courts granted summary judgment to the employer on the basis that § 15(a)(3) did not protect oral complaints. 

Justice Breyer, writing for the majority, stated that the text alone did not conclusively indicate whether a complaint must be filed in writing. The Court then looked to the act’s “basic objectives” and found that the FLSA relied both on employee reporting and the anti-retaliation provision protecting such reporting to ensure that its objective were met. The Court acknowledged that the statute requires fair notice to employers, and that the phrase “filed any complaint” contemplated some degree of formality. However, the Court found only that “a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both the content and context, as an assertion of rights protected by the statute and a call for their protection.”

Justice Scalia, in a dissent joined by Justice Thomas, stated that the Court had the discretion to consider the question of whether FLSA covers complaints made to private employers. Justice Scalia concluded that such complaints were not sufficient to trigger the statutory protection and, thus, the Court need not consider the distinction between oral and written complaints.


EEOC Holds Hearing on Employment of Persons with Mental Disabilities and Announces New Initiative

On March 15, 2011 the EEOC convened a public hearing on “The Employment of People with Mental Disabilities.” Organized primarily by Commissioner Chai Feldblum, who had significant involvement in the creation and passage of the Americans with Disabilities Act (”ADA”), the hearing featured three witness panels. Commissioner Stuart Ishimaru commented that the hearing was particularly timely as the Commission is on the brink of issuing its final regulations regarding the ADA Amendments Act. 

One of the hearing’s themes was the dignity and pride that working allows individuals with mental disabilities to have. In addition, a host of social and economic benefits to the individual and society, socially and economically were presented. The Commissioners of both parties in their opening and closing statements noted the bipartisan nature of this concern and indicated a sentiment that they speak with one voice in support of addressing the issues surrounding those with disabilities seeking and attempting to maintain employment. 

Employment Rates of People with Mental Disabilities

The first panel presented research, anecdotal data, and suggested strategies to improve the employment rates of people with mental disabilities. Dr. William Kiernan, director of the Institute for Community Inclusion, noted that 42% of people with intellectual disabilities live beneath the poverty line and that only 23% of such persons are in the workforce (as compared to 71.9% of the general population). Dartmouth professor Gary Bond reported that 70% of individuals with serious mental illness wish to work. Panelists also talked about challenges for individuals with mental disabilities, including transportation and the need for flexible hours, and the  technology which is redefining the traditional work day and location that can provide solutions. Ruby Moore, executive director of the Georgia Advocacy Office, cited various examples of corporations that have worked to create successful accommodations, including flexible working hours policies.

Requirements of the ADA, Strategies to Comply and Outcomes for People with Mental Disabilities

The second panel included Samuel Bagenstos, the principal deputy assistant attorney general for civil rights, a local Giant Foods supermarket manager and one of his employees with a mental disability, and a current EEOC legal intern who has struggled with psychiatric issues. Bagenstos testified on litigation efforts by the Department of Justice to enforce the ADA after Olmstead v. L.C., 527 U.S. 581 (1999), which requires public agencies to provide services “in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” The supermarket manager testified about his success in working with individuals with mental disabilities and emphasized in questioning that his employment of such persons was based on business interest, not charity. One of his employees spoke about the connections she had made with people and the pride she takes in working. The EEOC legal intern described the dehumanizing effects of her multipl institutionalizations and described the pride and self-worth she has regained through sheer effort after removing herself from institutionalization.

Litigation to Enforce the Rights of People with Mental Disabilities

In the final panel, EEOC senior trial attorney Markus Penzel and charging party Donna Malone discussed their experience in EEOC v. Land Air Express, and how the ADA Amendments Act would have changed the litigation. Malone, who suffers from post-traumatic stress disorder (PTSD) as a result of repeated abuse by family members, was discharged after seven years based on a stereotype of individuals with PTSD. Penzel noted that the issue of whether Malone was legally disabled was a substantial issue in the litigation, but would not be an issue under the expanded scope of disability under the ADA Amendments Act.  In addition, Malone’s case would have been simplified due to the change in the burden of proof for individuals claiming to have been discriminated against because they are “regarded as” disabled. Penzel believes the changes to the ADA will help the EEOC and plaintiffs get to the substantive issues instead of being caught up in threshold issues.

 In her concluding remarks, Commissioner Feldblum stated her hope that the hearing demonstrated that it is possible to change the dire employment statistics for individuals with mental disabilities. She further posited that one critical step is to establish a forum through which efforts can be built upon the experience of employers who have been leading that way, using what they have learned to create more systematic change. Commissioner Feldblum then announced, “Towards that end, I am very pleased that I have had some initial conversations with the Chamber of Commerce and Society for Human Resource Management and I am pleased that they are willing to explore the possibility of working with me, the various disability groups and various agencies within the government to develop a coherent and coordinated effort to increase the number of people with disabilities in employment.” Commissioner Feldblum explained that she and her staff will facilitate such cooperative efforts with an initial focus on individuals with mental disabilities and that she will be forming a disability group with her government colleagues and a business group to get the efforts under way.


Occupational Safety and Health Review Commission Issues Decision on Time Limits for Recordkeeping Violations


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On March 11, 2011, the Occupational Safety and Health Review Commission issued a decision which addressed the question of when an “occurrence” of a regulatory violation happens for the purpose of determining whether it issued a citation within the statute of limitations.

At issue were five OSHA citations finding that Volks Constructors violated certain recordkeeping requirements at its facility located in Prairieville, Louisiana. OSHA cited the employer for numerous incidents of failing to maintain injury-and-illness records on OSHA Form 300 logs and Form 301 incident reports. The inspections took place between May and November 2006, leading OSHA to conclude that the employer failed to record 67 work-related injuries or illnesses at the site between August 2002 and April 2006. The employer did not contest that it failed to keep adequate records, but argued that the OSHA citations were too late.

Section 9(c) of the OSH Act states that “[n]o citation may be issued under this section after the expiration of six months following the occurrence of any violation.” None of the injuries or illnesses that the employer failed to log had occurred within six months of OSHA’s inspection and some had occurred almost five years earlier.

It was undisputed that the Secretary of Labor  issued the citations than six months after the recordkeeping duties at issue initially arose. The Secretary argued that the citations were timely because the violations continued during the five-year retention period prescribed by the recordkeeping regulations. Volks argued that these violations were one-time events that were not continuing, and that the citation could not be considered timely on the basis of the “discovery rule.”

The Commission affirmed four of the citations as timely and vacated a fifth citation as time-barred.  The Commission cited as controlling its decision in Johnson Controls, Inc., 15 BNA OSHC 2132, 1991-93 CCH OSHD ¶ 29,953 (No. 89-2614, 1993), where OSHA issued a citation for a recordkeeping violation more than six months after the employer erroneously deleted the entry of an employee’s elevated blood lead level from its illness and injury log. In Johnson Controls, the Commission held that “it is of no moment that a violation first occurred more than six months before the issuance of a citation, so long as the instances of noncompliance and employee access providing the basis for the contested citation[] occurred within six months of the citation’s issuance.” The Commission emphasized that it has explicitly held that, unlike other federal statutes in which an overt act is needed to show any violation, the OSH Act penalizes both overt acts and failures to act in the face of an ongoing, affirmative duty to perform prescribed obligations.

Next, the Commission rejected Volks’ argument that Johnson Controls has been undermined by intervening precedent from the Supreme Court and various courts of appeals. Specifically, Volks argued that the citation items were time-barred because they were not issued within six months of any “discrete, violative act.” The Commission found each line of cases cited by Volks to be distinguishable. With regard to Volks’ argument that, under the discovery rule, OSHA could not issue a citation for a recordkeeping violation more than six months after the close of the seven-day period, the Commission found that the discovery rule was irrelevant, since the Secretary did not claim that the discovery rule enabled her to cite Volks more than six months after the violations first occurred. “Rather, the timeliness of the citation at issue here is predicated solely on the continued existence of the violations throughout the five-year retention period, which means that OSHA did, in fact, issue the citation within six months of the occurrence of the recordkeeping violations.”

The fifth citation, which the court did vacate as time-barred, was for the employer’s failure to post an annual summary for the full time period required by 29 C.F.R. § 1904.32(b)(6). This regulation sets out a “date certain (April 30th) by which the posting of the annual summary may come to an end.” The Commission found that regulation’s plain language imposed a duty to post the summary for only a specified time period, and the Secretary failed to issue a citation within six months of the last day of that specified period. Thus, the citation was untimely.