Keep Calm and Be Cautiously Optimistic – Recent NLRB Developments

Contributed by Beverly Alfon, September 25, 2018

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Gavel on white background 

The National Labor Relations Board (NLRB) is taking more steps towards positive, significant change for private-sector employers:

Joint Employer Standard

CURRENT LAW:  The Board may find that two or more entities are “joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015). The primary inquiry is whether the purported joint-employer possesses the actual or potential authority to exercise control over the primary employer’s employees.

DEVELOPMENT:  On September 14, the Board issued a proposed rule that would consider an employer a “joint employer” of another employer’s employees “only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision and direction.” However, the purported joint employer “must possess and actually exercise substantial direct and immediate control over the employees’ essential terms of employment in a manner that is not limited and routine.” It reflects the current Board majority’s initial view, and is subject to potential revision in response to public comments.  Public comments are due by November 13, 2018.

Construction Industry Collective Bargaining Agreements – Section 9(a)

Most collective bargaining relationships between employers and unions are governed by Section 9(a) of the National Labor Relations Act, which requires a union to have the support of a majority of employees in the bargaining unit. In the construction industry, however, these relationships are presumed to be governed by Section 8(f) of the Act, which allows an employer to enter a collective bargaining agreement with the union without an election or other proof of majority support. Key distinction: An 8(f) relationship can be unilaterally terminated upon expiration of the agreement, but a 9(a) agreement obligates the employer to engage in good faith negotiations with the union for a successor contract.

Current lawA union can convert an 8(f) relationship to a 9(a) relationship based on contract language alone.  Staunton Fuel & Material, 335 NLRB 717 (2001). Typical language in a one-page memorandum of agreement states that the union requested and was granted recognition as the majority or 9(a) representative of the bargaining unit, based on the union having shown, or having offered to show, evidence of its majority support – regardless of whether the union actually presented or offered to present such proof of majority.

DEVELOPMENTOn September 11, the Board invited the public to file briefs regarding whether or not it should revisit this standard. Construction industry employers should be pushing hard for this reevaluation. Briefs from interested parties must be submitted on or before October 26, 2018.

Employee Use of Company Email for Union Organizing

Current law: Employees may use company computer systems for the purpose of union organizing.  Purple Communications, Inc., 361 NLRB 1050 (2014).  This applies to both union and non-union employers.

DEVELOPMENT: Last month, the Board invited briefs on whether they should uphold, modify or overrule Purple Communications. The public comment period has been extended to October 5, 2018. On September 14, the NLRB General Counsel filed an amicus brief in a pending case and took the position that employers should be allowed to restrict non-work use of its email systems in a non-discriminatory manner, as it does with other company-owned resources.

Be cautiously optimistic, but remain cognizant of the current law.  Stay tuned.

 

 

Failed Drug Test: Diet Coke & A Poppy Seed Muffin

Contributed by Noah A. Frank, September 21, 2018

We’ve all heard Seinfeld’s Elaine Benes’s defense to a failed drug screen for opium: she eats a poppy seed muffin every day. With Coca-Cola recently announcing that it was exploring a cannabidiol-infused beverage line, companies should again buckle-up for the next wave of employment-based substance screening.

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Magnifying glass over the words “Drug Testing”

Is the Benes Defense valid? Could a poppy seed muffin a day actually result in a false-positive?

Maybe. The U.S. Department of Health and Human Services occasionally changes the cutoff levels for initial and confirmatory testing thresholds for metabolites. This testing does NOT show impairment, rather it shows how much a particular substance (like opioids, cocaine, amphetamines, etc.) are in the blood, urine, or other body tissue sampled. If a drug screen set the threshold too low, it is possible that it could detect trace amounts of opioids from that poppy seed muffin. This is why confirmatory testing using recognized standards is so important when employment decisions are to be made. So, there may be some validity to the defense, but very unlikely!

So, now what is an employer to do with the possibility of CannabidOLA hitting the shelves?

Initially, it is important to understand the two main substances involved derived from cannabis plants:

  • Cannabidiol or “CBD” is a non-psychoactive component of cannabis;
  • Tetrahydrocannabinol or “THC” is the psychoactive compound that provides the euphoric stoned or high sensation.

Both CBD and THC are believed to have medical benefits. While marijuana remains unlawful under federal law, over 30 states and Washington D.C. have made some form of medical use permissible, with 10 of these approving recreational (adult) use. The lawful medical and recreational use numbers are growing.

Companies that consider entering into the CBD-infused market should understand and ensure that their products comply with the highly regulated patchwork of state and local laws. For example, ensuring that their products will not cause the average (or even heavy) consumer to rely upon the Benes Defense.

For employers, the legality of medical and recreational use is becoming more prevalent. Prepare for these changes now – including understanding that off-duty use of (but never at-work use of or impairment from) lawful substance may be protected under disability and/or privacy laws. To the extent substance screening is used, employers may need to closely evaluate the metabolite threshold to ensure that they meet both the company’s actual policies and their enforcement (e.g., zero tolerance vs. zero impairment).

As always contact competent counsel in navigating these highly evolving laws.

 

Illinois Amends Nursing Mothers in the Workplace Act to Expand Rights of Breastfeeding Mothers

Contributed by Allison P. Sues, September, 19, 2018

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baby bottles and pacifier on white background

Illinois employers should be aware of amendments to the Illinois Nursing Mothers in the Workplace Act that expand the rights of employees who need to express milk while they are at work. Both before and after the amendments, the Act requires employers to provide a private space, other than a toilet stall, for mothers to pump at work. The amendments, which went into effect immediately when Governor Bruce Rauner signed House Bill 1595 on August 21, 2018, make some key changes to the law, each discussed below:

  • Employers cannot require employees to pump during their break time. Formerly, the Act provided that the employee’s pumping break “must, if possible” run concurrently with other break times provided. The amendments now provide that the pumping break “may” coincide with other break times, but adds that employers must provide “reasonable breaks each time the employee has the need to express milk for one year after the child’s birth.” These amendments provide moms with greater control in scheduling pump breaks according to their needs, and confirm that an employer cannot require an employee to schedule pumping breaks around other previously scheduled breaks.
  • Employers cannot reduce pay for pumping breaks. The prior version of the Act required employers to provide “unpaid” breaks for pumping mothers. The amendments remove the word “unpaid,” and instead state that an “employer may not reduce an employee’s compensation for the time used for the purpose of expressing milk.” While the Act does not expressly provide that all pumping breaks must be paid, it does prohibit employers from reducing an employee’s pay for pumping breaks. Under a fair reading of these amendments, employers should pay employees exactly as they would have if they were not taking pumping breaks. If an employee needs to pump during a regularly scheduled unpaid break, the employer does not need to pay her for that time.  However, if an employee needs to pump during a time period that is regularly paid, the employer cannot reduce her pay for that time spent pumping.
  • Employers may only restrict employees from pumping if it causes an undue hardship. The former act provided that an employer is not required to provide this break time if it would “unduly disrupt the employer’s operations.” Under the new amendments, an employer may only restrict mothers from pumping at work if it can satisfy the higher burden of showing an undue hardship, as defined by the Illinois Human Rights Act. This means an employer would need to show that a pumping break would be prohibitively expensive or disruptive given the employer’s size, financial resources, and operation, among other factors.

As before, this Act applies to employers who have more than five employees. The requirement that employers provide a private space to pumping mothers in close proximity to their work area remains unchanged. In light of these amendments, employers should review their workplace lactation policies and reach out to employment counsel with any questions.

 

Future of Illinois’ Mandatory Retirement Program Uncertain

Contributed by Kelly Haab-Tallitsch, September 12, 2018

The future of Illinois’ mandatory retirement savings program, Illinois Secure Choice, is up in the air after Governor Bruce Rauner issued an amendatory veto to change the word “shall” to “may” in key passages of the law, making the program optional, instead of mandatory.  The program is scheduled to roll-out in a series of “waves” starting this November.

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The Illinois Secure Choice Savings Act (Secure Choice Act), enacted in 2015, requires private employers with more than 25 employees that have been operating in Illinois for at least two years to participate in the Illinois Secure Choice program or offer another qualified retirement plan. Covered employers will be required to automatically enroll employees in the program and withhold five percent (5%) of an employee’s compensation (up to an annual IRS maximum), unless the employee elects a different amount or opts out of the program. Employers then remit employees’ contributions to the state-run program. Employer contributions are not permitted.

In his veto message, issued August 14, 2018, Governor Rauner pointed to concerns that the mandatory program could lead to fewer small employers offering retirement plans and the termination of existing small plans and changes in federal guidance on the relationship of state-run retirement programs with the Employee Retirement Income Security Act of 1974 (ERISA), as reasons behind his veto. He also cited the Secure Choice program’s history of delays and poor implementation.

It is unclear whether the veto will stand, or whether the Illinois Legislature will override it. A vote may not occur until November, when the legislature is scheduled to be in session next. Illinois State Treasurer Michael W. Frerichs, the state official responsible for implementation of the program, opposes the Governor’s action and has vowed to work with both parties to override the veto.

The Secure Choice program is set to roll out in a series of “waves” beginning November 1, 2018 with larger employers. Under current rules employers with 500 or more employees have until December 2018 to enroll employees, with payroll deductions beginning in January 2019. Implementation is scheduled to begin July 1, 2019 for employers with 100-499 employees and November 1, 2019 for employers with 25-99 employees.

What Should You Do?

For now, Illinois employers will have to sit tight and wait for more information. Those most likely to be affected by mandatory participation in the Secure Choice program – employers with less than 500 employees – have until at least July 1, 2019 to comply. If you do not currently offer a retirement plan you should examine alternatives, including traditional savings plans (i.e. 401(k)) and plans designed for small employers, such as a SIMPLE IRA or SEP, to determine the best option for your business. Employers with 500 or more employees (who do not offer another retirement plan) should be prepared to enroll employees later this year, if necessary.

 

Massachusetts Adds More Limits To Non-Competition Agreements

Contributed by Brian Wacker, September 5, 2018

If you are an employer with employees or independent contractors in Massachusetts, it is about to get much more burdensome to protect your customer contacts and trade secrets. In sweeping legislation affecting all employers with employees or independent contractors in the Commonwealth, Massachusetts has altered the meaning, validity and enforceability of non-competition agreements.

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man signing non-compete agreement

The new law, which goes into effect October 1, 2018, requires that any non-competition agreement affecting employees or independent contractors in Massachusetts meet eight minimum requirements in order to be valid and enforceable:

  1. If entered prior to employment, it must: be in writing; state that the employee has the right to consult with an attorney; and be provided to the employee at least 10 business days prior to employment.
  2. If entered after employment but not as part of a separation, in addition to the requirements above, it must: be supported by consideration independent of continued employment; and the employee must have ten 10 days’ notice before it is effective.
  3. It must be necessary to protect one of the following legitimate business interests of the employer: trade secrets; confidential information; or goodwill.
  4. The term of the non-competition cannot be for more than one year after employment has ended.
  5. The geographic scope must be “reasonable in relation to the interests protected,” a benchmark for which the legislature says would be a geographic area where the employee provided services in the past two years.
  6. The scope of services precluded in the agreement must be “reasonable,” which the legislature again says is a benchmark for which would be a restriction on activities the employee performed in the past two years.
  7. The agreement must contain a “garden leave” clause or other similar consideration, which requires the employer to pay the employee 50% pro-rata of his/her annual salary during the entire restricted period.
  8. It must be “consonant” with public policy.

The new law also makes non-competition agreements completely unenforceable against certain classes of employees – namely, students with internships or short-term employment, employees terminated without cause or laid off, non-exempt employees under the Fair Labor Standards Act and any employee under the age of 18 years old.

 

 

U.S. DOL Issues First FMLA Opinion Letters In Nearly A Decade

Contributed by Noah A. Frank, August 31, 2018

Constantly evolving employment risk, often brought on by a change of administration (federal or state), is one of the most difficult aspects of running a successful business. Overnight, a lawful employment practice might be interpreted as unlawful, necessitating change to avoid charges of discrimination, unfair labor practice charges, agency scrutiny, and other issues related to running the business.

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FMLA, family medical leave act

Agency opinion letters – guidance on how an agency interprets a fact-specific situation under the laws it enforces – are one useful tool to stay abreast of these developments.  On August 28, 2018, the U.S. DOL issued FMLA opinion letters FMLA2018-1-A and FMLA2018-2-A.  The last FMLA opinion letter was issued in January 2009.

FMLA2018-1-A – Organ Donor Leave

In FMLA2018-1-A, the DOL opined that an otherwise healthy employee that chooses to donate an organ may be entitled to FMLA leave because the resulting recovery generally is a serious health condition requiring one (or more) night’s stay in the hospital. As a result, an employee’s organ donation may be protected by both state and federal mandated leave laws, requiring case-by-case analysis.

FMLA2018-2-A – Application of Points Systems to Employees on FMLA Leave

FMLA2018-2-A is likely to impact many more employers. Here, the DOL issued guidance on the appropriateness of a no-fault attendance policy that have features that suspend attendance point accumulation and also suspend attendance point dissipation during a period of FMLA leave.  The DOL found such policies do not violate the FMLA, if applied in a nondiscriminatory manner.  Point reduction is a reward for working, and thus a benefit to which an employee on FMLA leave might not be entitled – as long as employees on other types of leave are treated the same.

FMLA2018-2-A is significant. Under such a policy, an employee who has accumulated attendance points and is getting close to disciplinary action (or termination) cannot “game the system” by taking FMLA leave, because the employee’s point total will remain frozen (and not automatically reduced by operation of time) during the period of the leave, up to 12 weeks.

But, proceed with caution!  FMLA2018-2-A does not embody the EEOC’s interpretation or enforcement of the Americans with Disabilities Act, nor any other agencies’ enforcement of similar laws. Of course, no points may be accumulated as a result of taking FMLA leave.

Best Practices

Policies must be applied in a nondiscriminatory fashion – including treating employees on FMLA in the same fashion as employees on other types of leave. For example, if there would be no “freeze” of the points policy for an employee taking a 2-week vacation or intermittent personal days, then an employee taking a 2-week FMLA leave or using intermittent FMLA should be treated the same.

Experienced counsel should review attendance and leave policies in conjunction with other conduct policies to ensure a cohesive and comprehensive scheme.

Similarly, careful analysis of the specific facts of a particular issue may help avoid legal complications down the road.

The Illinois Human Rights Act is Amended: Increased Filing Timeframes, Opt-Out Provisions, and a Restructured Commission. Oh, My!

Contributed by Julie Proscia, August 29, 2018

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Black and white gavel

On August 24, 2018 Governor Rauner signed PA 100-1066 into law thereby amending the Illinois Human Rights Act which revamps, and sometimes streamlines, discrimination complaints on the state level.  This legislation, effective immediately, comes after months of hearings and recommendations from both the Senate and House Task Forces on Sexual Misconduct.  I have had the privilege of sitting on the Illinois Task Force on Sexual Misconduct and take this opportunity to report on these amendments. During the course of the hearings, the Task Force heard testimony from business organizations, individual plaintiffs, and stakeholders regarding their concerns related to the current administrative system. The core discussions focused on changes that would give individuals the right to opt out of the administrative process, create parity between the filing of claims at the EEOC and the Illinois Department of Human Rights, and reduce the backlog of cases before the Illinois Human Rights Commission. The most significant amendments are:

  • The Illinois Human Rights Act is amended to increase the time frame that individuals have to file a charge, from 180 to 300 calendar days, from the date of the alleged civil rights violation;
  • Sets forth opt out provisions in which an individual may, within 60 days of filing a complaint with the Illinois Department of Human Rights, opt out of an investigation at the Illinois Department of Human Rights and proceed to circuit court; and
  • Restructures the Illinois Human Rights Commission in order to decrease the backlog of cases and theoretically prevent a backlog from occurring in the future. Effective January 2019, the Commission will, amongst other initiatives, be comprised of 7 full time members, as opposed to 13 part-time members, with dedicated staff attorneys and training for newly appointed commissioners.

So what does this mean for employers?  Some good, some bad, and some neutral.  The change from 180 to 300 calendar days is not a significant change, although on the surface it appears to be.  In the State of Illinois, an individual currently has, even before the new legislation, 300 calendar days from the date of alleged harm to file a charge with the EEOC.  As such, the new legislation creates parity in deadlines for filing between the state and its federal administrative counterpart.  The inclusion of opt out provisions can potentially increase the flow of discrimination litigation away from the administrative system, while the restructuring of the Commission is designed to decrease congestion.  In either scenario or design, prevention prior to this level of escalation is paramount.  Good policies, procedures, and annual training can reduce the likelihood of having to test the new amendments.