Sunday, August 31, 2014

Loyalty: Extinct under the NLRA?

§8.01 of the Restatement Third of Employment Law states that employees owe a duty of loyalty to their employers in matters related to the employment relationship.  Employers realize that under the Obama Board, the inclusion of that statement would violate the act because it is overly broad and would chill employees in the exercise of § 7 rights.  The Board has recently decided a case where it has reviewed terminations because of employee activity that could be considered disloyal.

In MikLin Enterprises, Inc. , the Board upheld a finding of a violation of the Act in the employer's termination and disciplining of employees who took part in a union sponsored sick days campaign.  The employer was a Jimmy John's franchisee.  The employer did not provided sick days and required employees to find their own replacements if calling in sick.  The union assisted the employees in a campaign utilizing press releases and posters placed in local businesses and at the employer's stores.

The posters contained side by side pictures of sandwiches with the notation that one was made by a healthy employee and one was made by a sick employee.  The poster asked if the viewer could tell the difference and stated that the Jimmy John employees do not get sick days.  The poster stated, "We hope your immune system is ready because you are about to take the sandwich test..."  The union's contact information was on the posters.

In a 2-1 decision, the majority stated that the test in deciding whether employee communications to third parties was protected is set forth in NLRB v. Electrical Workers Local 1229(Jefferson Standard), 346 U.S. 464 (1953).  The Jefferson Standard test focuses on whether the communications indicate that they are related to an ongoing labor dispute and whether they are so disloyal, reckless or maliciously untrue to lose protection.  The majority stated that the Board also considers whether the communication is made at a critical time in the initiation of the company's business and whether they are reasonably calculated to harm the company's reputation and reduce its income.  Concerted activity that is otherwise proper does not lose its protected status simply because it is prejudicial to the employer.

The majority rejected the argument that the standard should be different in the food industry than other businesses.  The majority  noted that although the public may be alarmed by a potential health threat in the food industry, they could not say the public would be any less sensitive to inferences of safety problems in school buses. 

In addressing the issue of disparagement, the majority stated that the press releases and posters did not allege that any sandwiches were actually contaminated or that customers had become ill.  Rather, there was only the suggestion of the realistic potential for illness resulting from the handling of food by workers who are sick.  Indeed, there is no lack of data establishing that the preparation and handling of food by sick workers poses a danger to public health.

The naiveté of the majority is breathtaking.  As they acknowledged, there is a very real public concern for the public health risk in consuming contaminated food.  The posters pointed out that there is no way of telling the difference between contaminated and uncontaminated food.  So what would be the reasonable reaction of the consumer?  Avoid the stores.  Go to a competitor.  That is precisely what the reasonable impact would be.  As the dissent recognized, the posters were clearly designed to attack the reputation of the employer in the eye's of the public and the employer's income.  At the very least, the dissent noted the posters demonstrated a reckless disregard for the inevitable, detrimental  consequences.

It will be interesting to see what the Board's position will be if the employees are laid off due to the loss of business and allege retaliation that they were laid because of their concerted activity which caused the loss.  Urging the public to avoid the employer's sure looks like disloyalty, whatever that means today.

Thursday, August 21, 2014

EEOC and wellness programs: A preview of things to come?

Employers have been waiting for the EEOC to provide direction with respect to its position on wellness programs and the impact of the ADA on them.  Last May, the EEOC held a hearing where it heard from a broad spectrum of interested groups on the topic.  In the press release issued after the meeting, the EEOC noted that the speakers indicated guidance was needed to avoid violations of federal law.  Acting Associate legal counsel Christopher Kuczynski stated that the ADA allows for employers to ask for medical information in connection with voluntary wellness programs and that the meaning of "voluntary" merited further clarification by the Commission.  To date, no official position has come out of the meeting.

A recent case filed on August 20 against a Wisconsin employer shows, at least in one case, what the EEOC is thinking.  The EEOC filed suit on behalf of an employee who refused to participate in the company's wellness program.  The suit seeks to enjoin the continued operation of the program to the extent it requires employees to undergo unlawful medical exams and medical inquiries and to reinstate the terminated employee and make her whole.

According to the Complaint, the company began a wellness program in March of 2009.  The program included a fitness component where employees were required to use a range of motion machine.  The program included a health risk assessment requiring the self disclosure of medical history and to have blood work performed.  The employee questioned whether the program was voluntary and whether the medical information obtained would be kept confidential.  The employee was told not to express opinions to co workers and that the meeting was to address her "attitude" concerning the program.  In April of 2009, she declined to participate and thereafter was required to pay the full amount of insurance coverage--$413.43 per month. The company also assessed a $50 penalty per month for her refusal to participate.  She was fired in May of 2009 because she objected to and refused to participate in the program according to the Complaint.

At this stage of the proceeding, there is nothing that explains what transpired between May of 2009 and the filing of the lawsuit other than the allegation in the Complaint than mediation was attempted in April of 2012 and in August of 2012, the EEOC determined it was unable to resolve the matter by informal means and so advised the company. 

In the press release announcing the filing of the suit, the regional attorney for the Chicago office is quoted as stating that wellness programs have to be voluntary.  Imposing penalties such as shifting 100% of the premium cost to the employee or firing an employee who chooses not to participate makes the program involuntary.  According to the regional attorney, having to choose between responding to medical exams and inquiries which are not job related in a wellness program on the one hand or being fired on the other hand is no choice at all.

So, this is the EEOC's first suit challenging a wellness program.  It appears that the position of the EEOC will be developed through litigation and potential settlements.  Employers should start reviewing their wellness programs to see how it compares to the program subject to litigation.  The shifting of the entire cost of coverage for non participation to the non participating employee negates the voluntary aspect of the least that is the current legal position.

Sunday, August 17, 2014

Still causing problems: Employee handbooks and at will employment

For many employers, employee handbooks are used to detail what is expected of employees without binding employers to follow any particular policy.  It is the "have your cake and eat it" approach which is part of a larger strategy to maintain at will employment.  Problems arise however when employers include policies that may be interpreted as creating a legitimate expectation of just cause employment.

In Walsh v. Kraft Foods Global, Inc.,  the Michigan court of appeals rescued the employer from a jury verdict of over $1.2 million dollars.  When the plaintiff was hired, he signed an employment application which contained the typical at will disclaimer.  He was promoted to district sales manager and hired numerous sales representatives who signed similar disclaimers.  As a district sales manager, he was given a resource guide that contained a progressive system of discipline for sales representatives.

After being terminated, the plaintiff filed a lawsuit asserting he had a just cause contract or at least a legitimated expectation for just cause employment based upon the provisions in the employee handbook dealing with issue resolution and arbitration as well as the district sales manger's guide.  The employer was unsuccessful in its motion for summary disposition before trial and motions for a directed verdict  or Judgment NOV.  The jury based its verdict on the issue resolution policy and the resource guide.

The court of appeals reversed the denial of the motions for a directed verdict and JNOV and vacated the judgment.  The court found that there was not contract for a definite period of time nor for just cause.  With respect to the issue resolution policy in the employee handbook, the court stated that no promise existed because the handbook contained a specific disclaimer stating it did not constitute a contractual obligation of any kind with any employee.  The court also noted that the employer retained the discretion not to apply its policies to any individual employee.  With respect to guide, the court noted it did not apply to sales managers and only guided district managers regarding how to discipline their employees.

The case highlights the danger of including policies that employers do want to be binding such as confidentiality, non compete, and arbitration in a document which the employer has proclaimed not to be a contract and the confusion which the inclusion can create with respect to the issue of at will employment.  While the employer prevailed, it did so only after the expense of a trial and an appeal.
The courts will take employers at their word when they say an employee handbook is not a contract.  Efforts to enforce an arbitration procedure set forth in an employee handbook with the disclaimer of not being a contract may not be enforced.  Employers should make sure that those policies they want to be binding are presented in a format to be binding and not in the employee handbook.

Wednesday, August 13, 2014

Expanding its horizon: the NLRB and safety and wage/hour claims

The Office of the General Counsel has issued a one page memorandum--OM-14-77--advising the Regions that in the course of conducting investigations of unfair labor practice charges, the charging party or witnesses should be apprised of their right to contact OSHA or the Wage Hour Division of the Department of Labor to discuss the filing of a complaint with those agencies.  Such action may occur at any stage of the investigation or case intake process when a witness divulges facts that may suggest the employer has violated OSHA or the FLSA. 

The specific directions in the memo state  If the Region believes that an employer may have violated a substantive or anti-retaliation provision of the OSH act or the FLSA, the Board agent should notify the charging party that he or she(or their representative) has the right to file a complaint with OSHA or WHD, respectively.  If the Region learns that there is a parallel investigation into the violation of their statutes, the Region should coordinate the case processing with the DOL. 

So, it looks like the Board agents will be busy interpreting OSHA and the FLSA in addition to the NLRA. The memo states the Regional personnel are not expected to be experts in the construction of the two statutes and suggests that it may be appropriate for Regional management to partner with OSHA or WHD to develop training vehicles for their employees. 

Ok, the Regional personnel are not expected to be experts but can feel free to make a determination of a probable violation.  There may be some interesting issues that arise if the agencies share information  provided by employers during the investigations.  Is an affidavit given to the NLRB to be shared with the WHD or OSHA?  How long before the NLRB ventures into the realm of Title VII, the ADA, and the ADEA?

Friday, August 1, 2014

Work place violence...again

Once again there is news of another shooting; this time in Chicago.  Once again there is discussion over what could be or should be done. Unfortunately there is no simple answer; it is complicated.

One of the first questions is whether there were signs that this might happen given the actions of the shooter.  In the Chicago case, it is still early, and those questions have not yet been answered.  Employers should once again review their workplace violence policy to see if it needs to be changed, expanded, or updated.  At the very least, when an employee is terminated, those persons who control access to the office need to be alerted that the individual no longer works and is not allowed on the premises.  A protocol should be established as to steps to be taken if the individual appears in the workplace.  Safety is dependent upon whether there is ready access or a system to let people in.  It is also dependent on the determination of whether there is any likelihood that a terminated employee has the propensity for violence. If there is a belief that violence is possible, the employer should consider using the services of specialists who can intervene after the termination and offer counseling to help diminish the likelihood of violence.  Hindsight in cases like this is unforgiving. 

Tuesday, July 29, 2014

More time for Michigan whistleblowers?

Under Michigan's Whistleblowers' Protection Act, a claim must be brought within 90 days of the occurrence.  This is a comparatively short limitations period.  Recently, however, the NLRB and OSHA entered into a memorandum of understanding(OM 14-60, 5/21/14) that provides that persons with a claim of retaliation which is untimely under the 30 day limitations period in OSHA will be referred to the NLRB where the limitations period is 6 months.  The memo noted some individual safety and health activities involve concerted activity which is also protected under the NLRA.

The Michigan Supreme Court recently held in Henry v. Laborers' Local 1191 that the NLRA did not preempt state whistleblower claims premised on retaliation for reporting suspected criminal misconduct.  The court noted that the employees also acted with the purpose of furthering group goals when they disputed the working conditions, specifically unfair wages and an unsafe work environment which the court referred to as "prototypical issues of dispute" under the NLRA.  The court held that these claims were preempted.  The allegations of criminal misconduct which were communicated to the Department of Labor did not relate to the employer's practices and were not preempted.  A state court adjudicate the claim without having to consider whether employees engaged in protected, concerted activity in reporting those allegations.

Employers need to be aware that employees can craft a claim of protected, concerted activity under the NLRA which encompasses a whistleblowing claims working within the parameters of the Henry decision.  The Board is now more receptive than it had been under the Bush administration.  Concerns about action that might be taken may not be over after 90 days after all. 

Friday, July 25, 2014

The NLRB decison in Macy's: Resistance is futile.

In Star Trek--the Next Generation TV series, an alien race of cyborgs known as the Borg existed and conquered civilizations.  Its message was direct and chilling:  We are the Borg.  You will be assimilated.  Resistance is futile.  In its recent decision concerning the determination of appropriate bargaining units in Macy's , the NLRB's Democratic majority sent a similar message to employers confronted with what could be considered as a "micro" bargaining unit in a representation matter.  The burden of successful employer resistance is virtually impossible.

In Macy's, the Board in a 3-1 decision upheld the decision of the Regional Director that a unit consisting of cosmetic and fragrance workers was appropriate. The position of the Macy's that the smallest appropriate unit was a wall to wall unit of all employees in the store.  The majority held that the decision was consistent with its decision in Specialty Healthcare, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC., 727 F.3d 552 (6th Cir. 2013).  Specifically, the majority said that unit sought was readily identifiable as a group and that the employees shared a community of interest.  The burden then shifts to an employer seeking a larger unit to demonstrate that the employees sought to be added share an "overwhelming" community of interest with the petitioned for employees.  The majority noted that all employees in the petitioned for unit work in the same selling department and perform their functions in connected, defined work areas. The work function is integrated, and there is minimal contact with other employees.  They are not expected to work in other departments.

With the current Obama Board, employers will be hard pressed to demonstrate the "overwhelming" community of interest, especially where there are numerous departments, job classifications, and separate supervision.  It would appear an employer would have to have a "flat" organization with few separate departments and job classifications and a supervisory structure that oversees all employees to have a chance at prevailing.  Unions will now have the opportunity to go after smaller units in an attempt to establish a "beach head" at an employer.  This Board has given its message...resistance will be futile.