Wednesday, August 31, 2011

More NLRB Facilitation of Union Membership Efforts

In a decision written just prior to the departure of NLRB Chair Liebman, the NLRB made it dramatically easier for unions to insert themselves into virtually any workplace. In a decision that went well passed the issues raised on review by the parties, the Board not only overruled two decades of labor jurisprudence with respect to appropriate bargaining units in healthcare facilities, it rewrote the law with respect to the size and nature of bargaining units in almost any industry.

The case, Specialty Healthcare and Rehabilitation Center of Mobile, started as a relatively straightforward bargaining unit determination case in a so-called nonacute healthcare facility, in this case a nursing home. The United Steelworkers ("USW") petitioned to organize some 53 certified nursing assistants (CNA's) at the nursing home. The employer argued that the 53 person bargaining unit was inappropriate, and that the smallest bargaining unit that should be allowed is one that included other employees such as maintenance workers, supply clerks, cooks, and various activities directors. The employer's request was based on long-standing guidance from the NLRB in a case called Park Manor, which set certain factors and minimal standards with respect to bargaining unit composition.

Neither the USW nor the employer asked the board to overturn Park Manor, but only to apply its standard in determining appropriate bargaining units at a healthcare facility to the facts of the case. Instead, the Board expressly overruled the Park Manor standard, and inserted in its place a new standard that applies to all non acute-healthcare workplaces subject to the Board's jurisdiction. The new standard opens the door to significant union penetration into numerous workforces, in some cases with bargaining units as small as two employees.

What the Board did was dramatically shift the balance of power in a union organizing campaign by making a petitioned-for bargaining unit virtually unassailable in terms of size or scope. The Board determined that where a petitioned-for unit shares a "community of interest" (typically in the form of similar job descriptions or duties), then the bargaining unit membership cannot be challenged without demonstrating that there is an "overwhelming" community of interest between the included employees and the employees excluded from the proposed bargaining unit. As the dissent in this case quickly recognized, a presumption that a union-proposed unit is proper unless there is an overwhelming community of interest with excluded employees effectively gives controlling weight to the union's choice of bargaining units. This is because the union will propose a unit comprised of the employees it has organized, and no more. The Board had previously rejected this type of "same job, same place," standard, but stare decisis is not a concept with much relevance to this particular group of Board Members.

In fact, the new test encourages unions to organize the smallest bargaining units possible, so that they can absorb an employer's workforce piecemeal. The possibility of a local grocery store, for example, having to deal with separate bargaining units (each with its own collective-bargaining agreement) made up of cashiers, stocking clerks, general laborers, and bagging clerks is fraught with inefficiency and concerns about unmanageable labor demands, affecting store operations two to five employees at a time. But such a standard does make it much easier for unions to recruit members, especially in workforces with no union presence at all. This is especially true if the Board's recently proposed rule--designed to speed up elections, limit the ability of employers to counter long-running union organizing campaigns, and limit an employer's rights to appellate review--is approved, as it almost certainly will be.

One possible employer response is to spread job duties as thinly as possible throughout a workforce, i.e., to make each position responsible for as many different jobs as possible.  This would prevent a skills-oriented, piecemeal organizing effort.  Of course, this will reduce economic efficiency, and limit the number of people qualified to work in a position that requires wildly different skill sets.  But that might be a small loss compared to having to deal with an organized labor element.I've previously noted this administration's marked efforts to aid unions (some of its chief campaign donors) in increasing their membership and financial power. This latest decision is another step along that path.

Monday, August 29, 2011

A Tale of Two Class Actions

The recent decision by Judge Loretta Preska in New York that blew up the EEOC’s discrimination case against Bloomberg Financial News Service is worth reading, despite its length, for what it says about large scale employment discrimination cases. It's particularly worth reading along with the Supreme Court’s decision in Dukes v. Walmart, another large scale case that fell apart after a rational judicial assessment of the basis for the class claims.  

Both cases involved large numbers of female class members alleging that gender discrimination was the norm at their employers. The Walmart group was gigantic – more than a million members – and was brought as a true class action. Bloomberg, on the other hand, involved only some 600 employees who took maternity leave during a 7-year time period (the EEOC claimed Bloomberg discriminated against pregnant women and mothers). Both cases, however, alleged that individual employment decisions made by Walmart and Bloomberg management were permeated with bias--against women generally, or against pregnant women in particular. Both cases ultimately fell apart because of the inability of the plaintiffs to provide valid statistical evidence to support their claims and because the plaintiffs relied on  individual anecdotal statements that ultimately could not support the wide scale relief that they sought.

The plaintiffs  used different approaches in each case. As noted above, the Walmart plaintiffs filed their case under traditional class action principles; the EEOC went after Bloomberg using a quasi- class action process by alleging a “pattern or practice” charge, and claiming that it was the normal process at Bloomberg to discriminate against pregnant employees.

Both plaintiffs groups were betting that they could overcome the normal problems associated with  filing discrimination claims on behalf of large numbers of employees by using a mix of unreliable statistical comparators, coupled with what were supposed to be fairly graphic claims of employment discrimination against individual class members. Although the Walmart plaintiffs were successful in getting passed the 9th Circuit with their statistical nonanalysis, the Supreme Court  made short work of it on review. The Court noted that for the statistics to have any meaning, the individual plaintiffs must have been subjected to a  common decision-making system. In this case, what was alleged was actually a non-systematic approach to employment decisions, namely that the company delegated wide latitude to individual store managers with respect to promotions, hiring, and compensation. The Walmart plaintiffs then made the ironic logical jump (for a discrimination claim, at least) that because the decision makers were for the most part male, they would necessarily be biased against women. The Supreme Court vitiated this analysis on several levels, noting in particular that a policy of not having a policy was not, in fact, a policy. It also blew up the statistical analysis, which could not do anything more than state that it was a possibility that discrimination would result in a system with wide latitude at the individual store manager level.

In Bloomberg, the judge precluded the EEOC from even getting its statistical analysis into evidence. Amazingly, the court called the EEOC on a fundamental error in its statistical work; namely that the EEOC’s statistical expert compared women who took maternity leave not against other employees who took similar long term leaves of absence for reasons other than maternity, but rather against the work force that did not take leave at all. This is a fundamental and surprising error for a federal employment agency to make. In fact, the judge noted that it was not illegal for a company to discriminate against people who took absences for extended periods of time in terms of compensation and promotion as long as the company was not singling out people who missed work for protected reasons such as pregnancy. As the court noted, the law does not require that pregnant women be treated better than their co-workers, or given more advantages, it only requires that they not be treated worse than other employees who are not pregnant but similarly situated in their ability or inability to work. Indeed, the Civil Rights Act says as much in its section on pregnancy discrimination.

Finally, Judge Preska’s opinion should be read for what it says about the legal requirements of the modern workplace and so-called “work life balance.”  The judge cites former GE CEO Jack Welch: “There is no such thing as work life balance. There are work life choices, and you make them, and they have consequences.” The judge then went on to say that the law does not mandate that employees offer a work life balance and does not require companies to ignore an employee’s family-work  tradeoffs when deciding about employee pay and promotion. Employees who make decisions that preference family over work must understand that those decisions come with consequences, and as long as those consequences occur for anyone who takes significant time away from the company, then the company’s policies are legal.

It's unusual to get such solid and thoughtful guidance in opinions written by often harried federal judges. Judge Preska has done everyone a favor by taking the time to do so here.

Thursday, August 25, 2011

New Union Posting Requirement for Employers

As part of the administration's efforts to promote union membership, the NLRB today announced that any employer subject to its jurisdiction will have to post a lengthy statement of employee rights under the NLRA.  The posting is patently pro-union, although the required language is not as bad as it was when the regulation was originally proposed, and there is limited language in the statement that acknowledges an employee's right not to join a union.  Interestingly enough, the posting does not contain language telling employees they have the right to de-certify a union when they become dissatisfied with union representation.
The posting requirement affects all "retail" businesses (including home construction) with an annual business volume of more than $500,000, and other businesses (referred to as "non-retail") with an annual business volume of more than $50,000.  Posting requirements are relatively onerous (for example, the posters must be in any language spoken by 20% or more of the workforce not proficient in English) and are comparable to the requirements for federal contractors. 
I'm not sure what purpose this new regulatory requirement serves, other than clearly showing an important constituency that the current executive leadership is willing to become ever more intrusive into the workplace on its behalf.

Wednesday, August 24, 2011

No Damages Windfalls

Here's a brief note on a case with a limited but important holding.
The Fifth Circuit recently joined the Sixth, Seventh, Tenth and the DC Circuit Courts of Appeals in holding that the damages caps under Title VII apply to all the claims brought by an individual, rather than to each separate claim of discrimination or retaliation.
The case involved a plaintiff who filed three Title VII claims against her employer, two for gender discrimination and one for retaliation. The plaintiff prevailed on all three of her claims and the jury awarded her $200,000 in compensatory damages for each, or a total of $600,000. The Fifth Circuit affirmed the trial court's decision to reduce the total compensatory and punitive damage award to $200,000 based on the size of the employer (Title VII damages caps are tied to the size of the employer--$50,000 in compensatory and punitive damages for employers with less than 101 employees, $100,000 for employers with less than 201 employees, $200,000 for employers with less than 501 employees, and $300,000 for employers with more than 500 employees). The employee argued that she was entitled to the full $600,000 because the caps should apply to each claim, rather than to all of her claims under. The Fifth Circuit disagreed, noting that the language of the Civil Rights Act of 1991, in amending Title VII of the 1964 Act, plainly said that the damages were limited for "each complaining party".
This is a relatively straightforward issue, but one that further limits what seems to be an increasing exposure under Title VII.


It's an axiom of employment discrimination cases that plaintiffs who win get their attorneys' fees as part of a damage award.  In fact, frequently the attorneys' fees are as much or more than the back pay and other compensatory damages recovered by the plaintiff. Most employment statutes do not provide for recovery of attorneys' fees if the company prevails, an inequity that frequently grates on my clients when we are discussing litigation strategy. During these discussions, I often hear general counsel bemoan the fact that American courts do not operate under the rules applicable in English jurisprudence, where the loser usually pays the other sides attorneys' fees, as well as the traditional costs associated with depositions, photocopying, filing fees, etc.
Title VII of the 1964 Civil Rights Act, however, allows for the prevailing party to seek attorneys' fees. Given the financial inequities between the parties, courts are normally loath to award attorneys fees to a prevailing company unless the employee plaintiff either brought her case in bad faith, or had virtually no evidence to support her claims. Some courts consider it "bad form" for a prevailing company to go after a former employee for attorneys' fees in this situation, in fact. But more and more, especially given the extremely high cost of litigation, companies are looking to ways to recover anything they can from an unsuccessful employment plaintiff. This is especially true when the plaintiff's demands are so significant (or extravagant) that settlement is virtually impossible, or when the case has been extensively litigated in the media, where the company has virtually no chance to fight back without looking even worse than it does already.
So it shouldn't be a surprise that defense contractor KBR, which had been publicly raked over the coals for the last 5 years in a highly publicized case involving claims by a former employee of rape, hostile work environment and gender discrimination, is going after fees from the individual plaintiff after the company prevailed in a jury trial. The plaintiff sought $145 million in damages, and took her case to the media and Congress in an effort to force the company to pay.
KBR is now asking for more than $2 million in legal fees and court costs of $145,000. Plaintiff's counsel, of course, is crying "foul", and while I'm sure he didn't expect to lose completely, at some point he must have advised his client that she was facing a significant financial risk if things didn't go as planned. He's also claiming that this is an effort by KBR to chill people from bringing legitimate claims. But from my perspective, if KBR successfully recovers just its costs, the knowledge that plaintiffs have some financial exposure themselves will go some way to making settlement of these types of cases a little more likely.

UPDATE:  And, BAM!  This will be an expensive lesson in US jurisprudence, although not nearly as bad as it could have been.

Monday, August 22, 2011

Social Media and the NLRB

Many employers who do not deal with unions on a daily basis are blissfully unaware that they can nonetheless find themselves in the crosshairs of the National Labor Relations Board for disciplining their employees. The most common way a nonunion employer violates the National Labor Relations Act is by disciplining employees for engaging in "protected concerted activity".
The NLRB's Office of General Counsel recently issued a lengthy memorandum summarizing its activities with respect to employees engaging in protected concerted activity using social media over the last year. The report is worth reading because it gives some insight into the Board's application of well-established precedent to a new and rapidly expanding medium--Internet-based social networking platforms such as Facebook, MySpace, and YouTube.
Most of the reported cases involve employees posting derogatory or negative comments about their working conditions on Facebook or other public access social media sites and then being disciplined for the posting by their employers. A couple of lessons from the NLRB case files:
1. The NLRB's reach into nonunion companies is expanding dramatically as a result of its focus on employer discipline for social media use. In fact, the Board is applying its standard rules -- that prohibit disciplining employees for discussing their terms and conditions of work with other employees -- to a new and vastly more expansive arena. What most of us would consider to be typical employee carping, which used to take place with a small group around the water cooler or coffee pot and simply did not last long enough to come to the attention of management, now makes its way out onto the permanent record of the Internet. Just as importantly, the involvement of other coworkers also becomes a matter of permanent record. When an employer responds to employee complaints about working conditions, business processes, or other conditions of work by disciplining those involved in the discussion, it's almost always going to run afoul of the NLRA.
2. Employers who try to protect themselves from Internet defamation by adopting broad policies prohibiting their employees from saying anything derogatory in their Internet postings are going to draw the wrath of the Board as well for creating overly broad, illegal work rules. Many of the cases cited in the outline are the result of the Board targeting a specific company policy containing broad or poorly defined prohibitions on social media comments.
3. Employers may, without fear of federal sanctions, discipline employees who post inappropriate or offensive matter unrelated to terms and conditions of employment or that do not involve or seek to involve other employees.
This NLRB is proving itself to be far more employee than business friendly. Smart management will review these cases and modify its policies and behavior so that it does not open the door to federal inquiry into its employment practices.

Thursday, August 18, 2011

A View of The U

The situation involving the University of Miami's athletic department continues to look bleaker and bleaker.  But no one should be surprised that a booster with lots of money could insert himself into an athletic program the way Nevin Shapiro did, with apparently the full knowledge and acquiescence of the school administration.
But never mind the potential game forfeitures and calls for the revision of college sports. From the perspective of an employment lawyer there are two fascinating lines of potential work that immediately jump out of this miserable situation.  The first involves current Missouri basketball coach Frank Haith, who was named by Shapiro as someone who knew about some shenanigans involving a basketball recruit while he was the coach at Miami. Coach Haith's contract with Missouri has a clause that allows the Tigers to terminate him for cause if, "in the sole judgment of the University" he is found to have engaged in any conduct during prior employment that violated NCAA regulations.  It seems this situation falls squarely within the scope of this particular clause. The question in my mind is why the coach agreed to this term, since the impending investigation at Miami has been known for at least a year.
The second employment issue involves the current Miami football coach, Al Golden. Golden, along with the Miami athletic director, is a brand-new hire who has absolutely no links to the burgeoning payola scandal. He must feel like he stumbled into a hurricane of uncertainty, especially since Miami failed to advise Golden about the investigation, even though school was well aware of it when it was recruiting him. He could certainly be forgiven for doing an about-face on his coaching contract, especially since he might not have a football team to coach for a few years. 
Breach of employment agreement / fraud in the inducement claims, anyone?

Wednesday, August 17, 2011

Making an Impression

Having worked at large firms most of my professional life, I'm always interested when a large firm gets sued by one of its former counsel, since the claims typically reveal much about how lawyers manage their own.
But sometimes a lawsuit reveals as much about the departed attorney as about the firm itself.
Such is the case with a recent filing in New York against Kasowitz Benson, Torres & Friedman. According to this report, a formerly employed associate, Gregory Berry, a software engineer and entrepreneur in a previous life who worked at the firm for only eight months, is suing for wrongful termination, and claiming the firm misrepresented its corporate culture and working conditions when it hired him.
I can't say anything for the firm's culture, but part of the complaint filed by the former associate definitely gave some insight into his culture. Specifically, Berry indicates that he had a run-in with a senior partner after sending an e-mail around the office seeking work and stating that his past experience as an engineer made him far more valuable than a normal first-year associate. Compounding his self-assessment, Berry then stated that it was clear to him that he had as much experience and ability as an associate many years his senior, as much skill writing, and a "superior legal mind" to most of the associates he encountered.
Well. If that doesn't have partners beating a path to your door for the opportunity to work with you, I don't know what will. Yikes.
We will keep our thumb on the pulse of this particular case, if for no other reason than the summary judgment motions ought to contain some further entertaining revelations about the plaintiff's talents.

When Does This Become an Employment Relationship?

I've seen several articles relating to the phenomena of "sugar daddies"; older and well-off gentlemen who agree to provide the necessities of life (in the upscale version, these amenities are typically college tuition and living expenses) to young women in exchange for, uh, "companionship". The initial lawyer reaction to these types of arrangements (after envy, that is) runs along the lines of, "Isn't this a form of prostitution?"
According to the CEO of an online site that caters to arranging these types of relationships, the answer is a firm "no", because there's "chemistry" involved and the quid pro quo takes place over an extended period. But if it's not a criminal exchange of sex for financial support, is it some other type of commercial exchange? Perhaps one more closely akin to hiring a full-time escort? Are these payments income to the young lady? Should there be some type of withholding? Certainly there is a tax implication in there somewhere.  It's clear that this particular Brave New World is just itching for attorney intervention. Whether it's in the form of an IRS opinion/audit, or some type of quasi-civil union claim, I suspect it won't be too long before these relationships start getting formalized and legalized.  I can hear some of my family law practitioner friends limbering up their word processors already.

Tuesday, August 16, 2011

This sounds fishy--a case of retaliation?

It sure looks like it, even with the relatively lousy batting performance of the union rep.  A company contemplating action against a poorly performing employee should always consider whether that employee has engaged in recent "protected activity", such as reporting sexual harassment, or exercising rights under a collective bargaining agreement.  Here, the Florida Marlins took action against not one, but two players-- Logan Morrison and Wes Helms, who is a union representative--after Helms told Morrision it was okay to skip a pre-game team function with some season ticket holders after an earlier autograph signing session ran long.
The club promptly (as in less than 12 hours later) demoted Morrison (second on the club in home runs, third in RBIs) to AAA, and released Helms. 
While the timing of an adverse employment action is seldom enough to demonstrate conclusively that the employer was retaliating illegally, when the timing is close enough to the protected activity (like here), courts will usually allow the issue to reach a jury.  Or an arbitrator. 
I suspect that the club was trying to send a message, and is willing to deal with the negative consequences in any arbitration down the road.  This is simply too heavy handed to be anything but a deliberate bean ball by the Marlins management.

Monday, August 15, 2011

The Gender Gap in Compensation

The link below is to a terrific article from City Journal that provides some detailed factual information about a commonly held belief in the employment discrimination industry, namely that women make less than men because of widespread gender discrimination in pay and promotions. In fact, this gender gap prejudice permeated the recent Walmart class-(now non-class) action that made it to the Supreme Court last term.
Most of us in the working world are well aware that, as a group, women tend to track into different career fields and career paths than men do. This article not only describes the recent studies that document these trends, it shows that even in societies considered almost totally egalitarian-Iceland and Sweden-women and men end up working different jobs, for different hours, and looking for different things from a career.
I'm seeing more of this type of discussion in the legal literature lately. That's good, because unsupported  beliefs, especially those that are "common knowledge", are a lousy thing on which to base legal standards or economic policy.
Here's the link:

Mandatory union education for all HR managers

This article describing how an actual, high-end, union organizing campaign works should be mandatory reading for all HR managers. It provides a chilling account of how effective union organizers can be in subverting a company's workforce, even with (or perhaps especially with) highly skilled and educated employees.
It also demonstrates convincingly how much of an advantage union organizers have even without the new "fast-track" regulatory modifications currently proposed by the NLRB.  Those modifications are specifically designed to curtail company's ability to counter the union campaign, and tilt what is already an uneven playing field further in the direction of the union.
Pay particular attention to how this particular organizer used peer efforts to tar the neutral or pro-management employees with the label "traitor", and how readily the union was able to access company information through the efforts of pro-union employees.

Wednesday, August 10, 2011

Stand and Deliver

The NLRB gets a subpoena from Congress re its Boeing charge.
This is significant because the action against Boeing by the Board appears to be more political than legal--it's directly supporting big labor, perhaps the largest contributor to the Democrats over the last few election cycles.
I love the comment from the Board general counsel that the committee will see this stuff in due course during the unfair labor practice trial.  I'm not sure why the Board feels it can be as unfair with Congressional requests for information as it typically is with employers, but this should be a major election issue next year. 

Thursday, August 4, 2011

Things Old People Shouldn't Say in Job Interviews

This should be common sense, but as a 50+ guy myself, I find that it's easy to lapse into trite phraseology or standard responses that indicate a certain lack of, shall we say, "hipness"?  I can safely say that recollections of your past that seem quite recent might seem a long time ago to someone in their 30s. For example, the Challenger shuttle explosion occurred 25 years ago.  Many of your co-workers won't even remember the event. 
I would add to this list in the article:  Pulling out a Jitterbug phone in the presence of the interviewer; detailing your personal reminiscences of the Eisenhower administration, saying things like "hip" or "groovy" (without trying to be funny), and any reference to a typewriter.