Hunton Employment & Labor Perspectives

The U.S. Supreme Court in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College decided that the race-based admissions programs at Harvard College and the University of North Carolina (the “Schools”) violated the Equal Protection Clause of the Fourteenth Amendment. While the Court answered the question for publicly funded schools, it is an open question whether, and how, the Court’s decision will impact affirmative action and diversity programs for private employers, as discussed in more detail below.

Employers who conduct background checks on applicants or employees must comply with the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq.  Among other things, the FCRA requires employers who procure criminal background reports (“consumer reports”) to provide applicants and employees with a Summary of Rights form as prepared by the Consumer Financial Protection Bureau (CFPB) when providing them with the FCRA-required pre-adverse action notices. See 15 U.S.C. § 1681b(b)(3)(A)(ii).

On December 16, 2022, a National Labor Relations Board (Board) majority (Members Kaplan and Ring) issued a Decision and Order holding that an employer’s conduct did not warrant setting aside a union election where the employer failed to strictly adhere to regulations requiring employers to provide unions a voter list comprised of employee names and contact information (commonly known as an Excelsior list).

Disfavor toward employer/employee nondisclosure agreements (NDAs) has been an increasingly popular sentiment expressed by state legislatures over the last few years, and 2022 has seen the trend continue.  Legislation in some states may void and make unenforceable certain employer/employee nondisclosure agreements; it may prohibit employers from requiring employees to enter into such agreements; or it may outright prohibit employers from executing the agreements, for example in employment contracts and separation agreements.  Just over halfway through 2022, Hawaii, Maine, Oregon, and Washington have issued or amended state laws voiding, prohibiting, or restricting employer/employee nondisclosure agreements.

Earlier this year, the Office of the General Counsel (GC) of the  National Labor Relations Board (Board) issued an Advice Memorandum in Case 05-CA-281089 instructing Board Region 5  to issue a complaint alleging  that the employer, LT Transportation (a shuttle bus transportation provider), violated Section 8(a)(1) of the National Labor Relations Act, when it banned nonemployee union organizers from boarding its shuttles because of their identity as union organizers. The GC also directed the Region to use the case as a vehicle to argue that that two Board precedents, UPMC, 368 NLRB No. 2 (June 14, 2019) and Kroger, 368 NLRB No. 64 (2019), should be overruled because, in the view of the GC, they narrowed employee rights set forth in two U.S. Supreme Court cases, NLRB v. Stowe Spinning Co., 336 U.S. 226, 233 (1949) and NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1956).

Of the many class action-related decisions from the last year, two courts issued holdings that are particularly relevant to defending against class action lawsuits (particularly in the context of the Fair Credit Reporting Act (FCRA)).

In December of 2020, the DOL under President Trump issued a final rule dispensing with the longstanding “80/20” tip credit rule—whereby an employer was only required to pay a tipped-employee the full minimum wage rate for non-tip producing work if the employee spent in excess of 20% of their workweek performing such work. In early 2021, the DOL under President Biden delayed the effective date of the Trump-era rule (initially until April 30, 2021, then again until December 31, 2021).

On July 29, 2021, the U.S. Department of Labor filed a final rule rescinding the Trump-era “Joint Employer Status Under the Fair Labor Standards Act” rule (29 CFR part 791), which went into effect on March 16, 2020.

On June 1, 2021, the U.S. Court of Appeals for the D.C. Circuit overturned a NLRB determination that a manager’s incorrect blaming of a union for discrepancies in an employee’s paid-leave time constituted an unfair labor practice. The pivotal issue was whether the manager’s statements had a reasonable tendency to interfere with employees’ labor rights. As discussed below, the D.C. Circuit rejected the NLRB’s determination that the manager’s statements had a reasonable tendency to interfere with employees’ labor rights, reasoning that the manager’s misstatements were lawful expressions of the employer’s opinions.

It is early in 2021 and already the NLRB has before it ALJ determinations that employee handbook policies conflict with the NLRA. When analyzing employee handbook policies, the Board generally applies the Boeing test, whereby a handbook policy’s potential interference with employee rights under the NLRA is balanced against an employer’s legitimate justifications for the policy, when viewing the policy from the employee’s perspective. While the NLRA and the Boeing test apply to a number of employee handbook policies, confidentiality, social media, and solicitation/distribution policies are especially vulnerable.

On December 21, 2020 the NLRB adopted an ALJ’s determination that a union’s request for information about non-bargaining unit employees was relevant. One of the issues present in the case was whether a union’s request for information about non-bargaining unit employees sought relevant information. As discussed below, the NLRB upheld the ALJ’s determination that the information was relevant solely because the employer should have known the information was relevant based on the circumstances surrounding the request.

On September 10, 2020, the United States District Court for the District of Massachusetts issued a Memorandum and Order granting summary judgment in favor of a franchisor in response to claims by a purported class of franchisees that they were not truly independent contractors, but employees of the franchisor.

The main issue addressed in the case was whether specific federal legal requirements that are imposed upon franchisors trump the general Massachusetts independent contractor classification statute. The federal court reasoned that applying the Massachusetts independent contractor classification statute to the franchise business model would render franchisors regulated by the Federal Trade Commission (“FTC”) criminally liable under state law for employee misclassification simply by virtue of their compliance with the FTC’s requirements.

On July 27, 2020 the NLRB issued a supplemental decision involving a labor law successor employer, which unilaterally implemented terms and conditions of employment prior to commencing operations. The question presented was whether and to what extent the successor could take further unilateral action, free of the duty to bargain with the union. As discussed below, the Board determined that the applicable standard in such cases is whether the successor’s unilateral action was “reasonably encompassed” by the unilaterally imposed terms.

On June 12, 2020, the D.C. Circuit vacated a component of an NLRB decision that expanded employee rights under NLRB v. J. Weingarten. The D.C. Circuit rejected the NLRB’s determination that a mere statement of fact constituted an employee’s requests for union representation.

In a dispute between Circus Circus Casinos, Inc. (the “Employer”) and an employee, the Employer, pursuant to OSHA regulations and internal policies, required the employee to submit to a medical examination prior to participating in a fitting process for necessary equipment, to ensure the equipment would not jeopardize the employee’s safety. The employee refused to take the medical examination and returned to work. The Employer suspended the employee, pending an investigation into the employee’s refusal to take the mandatory medical examination. At the investigatory interview, the employee stated, “I called the union three times [and] nobody showed up, I’m here without representation.” The Employer proceeded with the interview, which culminated in the employee’s termination.

In mid-May the NLRB established a clear rule regarding stray marks on ballots in union representation elections, eradicating years of convoluted and inconsistent precedent. The decision, which applied retroactively, resulted in a union’s failure to amass a majority of the votes and, consequently, a reversal of the Regional Director’s Decision and Certification of Representation.

In a dispute between Providence Portland Medical Center (the “Employer”) and Service Employees International Union Local 49 (the “Union”), the representation election was decided by the narrowest margin, ultimately resulting in 383 votes for representation, and 382 votes against representation. Included in the mix was a single ballot with a clear “X” in the “Yes” box and a dark diagonal line with a smudge mark in the “No” box. The ALJ and Regional Director applied Board precedent and both concluded that the smudge mark on the diagonal line in the “No” box was an “obvious attempt at erasure,” resulting in the ballot being counted in favor of representation.

Social distancing and uncertainty about COVID-19 have altered many aspects of daily life, uprooted traditions, and redefined “normal.” Unions are seizing this opportunity in a push for electronic representation elections.

On May 6, a coalition of fourteen unions (the “Coalition”) urged Nancy Pelosi, Mitch McConnell, Kevin McCarthy, and Chuck Schumer to fund and direct the NLRB to establish a system and procedures to facilitate electronic union representation elections. The Coalition highlights COVID-19’s effect on the workforce in unemployment, underemployment, and dangerous working conditions, and submits that these effects highlight the need for union representation. Further, the Coalition asserts that the nature of COVID-19 makes in-person representation elections impractical, and, in conjunction with employer objections to elections by mail, it is exceedingly difficult for workers to form unions in the current climate.

We previously wrote about the San Diego County face-covering mandate. On April 7, 2020, the City of Los Angeles joined San Diego County and issued an Order (the “Order”) that requires certain workers to wear cloth face coverings. Notably, the Order is more expansive than San Diego County’s face-covering mandate because it covers workers in more occupations, applies to customers and visitors of certain businesses, provides face-covering maintenance requirements, and requires certain employers to furnish face coverings and other sanitary products.

The California Public Health Department issued Guidance recommending that all Californians wear cloth face coverings when in public for essential activities.  San Diego County took that guidance one step further, however, and issued an addendum to its public health order, requiring that certain employees wear cloth face coverings.  The San Diego order also requires covered businesses to follow new posting guidelines, and recommends that all San Diegans heed California’s Statewide Face Coverings Guidance.

COVID-19 presents an array of new challenges and an abundance of uncertainty for employers. Notable among them, is the possibility that communities and states will begin to issue mandatory business closures and shelter in place orders. Interpreting and complying with these orders raises a host of issues for employers to consider.

COVID-19 has disrupted the global economy and employers may soon face the need to reduce expenses associated with exempt employees. Employers can place exempt employees on furlough, or, in some cases, reduce salaries and hours, without jeopardizing the FLSA exemption, but exceptions may need to be made for certain employees on work-authorized visas.

In the early morning hours of March 14, 2020, the U.S. House of Representatives passed a bill to address concerns related to the spread of COVID-19 (the “Bill”).  The Senate is expected to consider the Bill shortly, and according to media reports, the Bill has the Trump Administration’s support.  Our summary below highlights provisions of the Bill related to leave.  This summary provides information regarding how the bill stands currently, but language changes or substantive amendments may still occur.  We will continue to monitor the Bill as it progresses through the legislative process and update this post accordingly.

UPDATE:  Click here to read our update on revisions made to the Bill.

Note at the outset that, as the Bill stands now, the leave provisions pertain only to employers with fewer than 500 employees.

The Universal Paid Leave Amendment Act of 2016 (the “Act”), which implements the District of Columbia’s new Paid Family Leave (“PFL”) program, kicks-in for employees on July 1, 2020.  However, employers must post a PFL notice in the workplace no later than February 1, 2020.

On February 5th the NLRB determined that an employer can, pursuant to a phone use policy, prohibit the possession and use of cell phones in the cabs of its commercial vehicles, and that a prohibition does not interfere with the Section 7 rights of its employees.

In an October Advice Memorandum, the Office of the General Counsel for the NLRB (General Counsel) concluded that a union’s continued actions of unlawful insistence are not a refusal to bargain if bargaining negotiations have ceased.