Category Archives: Employment Policies

Seventh Circuit Upholds Wisconsin’s Right-to-Work Law

Contributed by Carlos Arévalo, July 21, 2017

On July 12, 2017, a three judge panel in the seventh circuit unanimously affirmed District Judge J.P. Stadtmueller’s ruling dismissing a lawsuit filed by two International Union of Operating Engineers (IUOE) locals that challenged the validity of Wisconsin’s right-to-work law. Judge Stadtmueller’s dismissal in September 2016 was based on the seventh circuit Sweeney v. Pence 2014 decision that upheld Indiana’s “nearly identical” law.

The Wisconsin law provides that “no person may require, as a condition of obtaining or continuing employment, an individual to…become or remain a member of a labor organization [or] pay any dues, fees, assessments, or other charges or expenses of any kind or amount, or provide anything of value, to a labor organization.”

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Black and white gavel

In Sweeney, the seventh circuit determined that the National Labor Relations Act did not preempt Indiana’s right–to-work law, even if it prohibited the mandatory payment of any dues or fees to unions, and it did not result in a taking in violation of the Fifth Amendment. The court reasoned that unions are “justly compensated by federal law’s grant to [unions] the right to bargain exclusively with…employer[s].”

On this appeal, the IUOE conceded that Sweeney controlled, but argued that it was wrongly decided and should be overturned. The IUOE relied on a strong dissent in Sweeney and the close en banc vote to rehear it. Writing for the panel, however, Judge Joel Flaum rejected these arguments and noted that they were not “compelling reasons” to overturn a recent decision. Judge Flaum also added that the unions failed to direct the court to any intervening development in statutory, Supreme Court, or other intermediate appellate court decision undermining Sweeney’s validity.

The seventh circuit’s decision affirming the Wisconsin’s 2015 law suggests a continuing trend favoring the right-to-work movement at the judicial and legislative levels of government. In February of this year, Missouri enacted its right-to-work law becoming the 28th state with a right-to-work law on the books, closely following Kentucky’s adoption of its own law in January. Opponents in Missouri have sought a referendum seeking to repeal the law, but their efforts suffered a setback when union-led referendum summaries were ruled “unfair and insufficient.” In Kentucky, labor organizations have sued seeking to block the law.

At the federal level, Republican Congressmen Steve King of Iowa and Joe Wilson of South Carolina re-introduced the National Right to Work Act bill (an effort that went nowhere in 2015) in the hope that a Trump administration would approve such legislation. Within a month, Senator Paul Rand of Kentucky introduced similar legislation in the Senate. These bills would amend the National Labor Relations Act and Railway Labor Act to prohibit the use of union security clauses requiring union membership and payment of dues and fees.

Where all of this leads is unclear, but we can be certain of one thing for the near future – this battle will continue to be fought all across the country.

Missouri Has Become the 28th Right-to-Work State

Contributed by Beverly Alfon, February 10, 2017

On February 6, 2017, the newly elected GOP Governor Eric Greitens, signed into law a right-to-work (RTW) bill that passed the state’s Republican-controlled state legislature.

Nuts and Bolts of the Missouri RTW law

  • Effective date:  August 28, 2017
  • Who it applies to:  Both private and public sector employers (except those in the airline and railroad industries, as well as certain federal employers).
  • What it prohibits:
    • No employee can be required to become or remain a union member as a condition of employment.
    • No employee can be required to pay dues, fees or assessments of any kind to a union (or any equivalent of a dues payment to any charitable organization).
  • Penalties for violations:  Criminal sanctions – a violation is a class C misdemeanor, punishable by a fine of $750 and up to 15 days in jail. Civil sanctions – private parties may obtain injunctive relief, damages and an award of attorneys’ fees.
  • Effect on collective bargaining agreements:  For collective bargaining agreements (CBA’s) entered into before August 28, 2017, the law has no effect. However, the law will apply to any CBA renewal, extension, amendment or modification after August 28, 2017. This will likely jolt Missouri unions to seek contract extensions of existing CBA’s in order to delay the impact of the law.

Unions Continue to Battle

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Flag of Missouri

The Missouri AFL-CIO has submitted different versions of a proposed initiative petition to the secretary of state’s office that is aimed at reversing the RTW law. Basically, with enough signatures, it would present the opportunity for Missouri voters to decide in 2018 whether to adopt a constitutional amendment that would protect contracts that require employees to pay union representation fees.

Perspective

Seven of eight states that surround Missouri have existing right-to-work laws, including Kentucky, which passed a right-to-work law last month. The current tally of RTW states includes: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, Nevada, North Carolina,  North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin, Wyoming. Just last week, the New Hampshire senate passed a RTW bill, which is awaiting passage by the state House.

On a federal level, two Republican Congressmen re-introduced the National Right to Work Act last week. The bill would amend the National Labor Relations Act and the Railway Labor Act to prohibit the use of union security clauses which require union membership and payment of dues and fees.

If there was any doubt, this flurry of activity confirms that the right-to-work movement is recharged.

2017 Compliance Check Up

Contributed by Sara Zorich, January 19, 2017

We are now almost three weeks into the New Year and while it might be tempting to ease into 2017, the time is now to ensure that the required compliance updates have been made to your payroll and Form I-9 procedure to comply with the 2017 changes.

Minimum Wage

The following 21 states have updates to their minimum wage that affect your payroll for 2017:

  1. Alaska (Effective 1/1/17) – minimum wage increases from $9.75 to $9.80.
  2. Arizona (Effective 1/1/17) – minimum wage increases from $8.05 to $10.00.
  3. Arkansas (Effective 1/1/17) – minimum wage increases from $8.00 to $8.50.
  4. California (Effective 1/1/17) – minimum wage increases from $10.00 to $10.50.
  5. Colorado (Effective 1/1/17) – minimum wage increases from $8.31 to $9.30.
  6. Connecticut (Effective 1/1/17) – minimum wage increases from $9.60 to $10.10.
  7. Florida (Effective 1/1/17) – minimum wage increases from $8.05 to $8.10.
  8. Hawaii (Effective 1/1/17) – minimum wage increases from $8.50 to $9.25.
  9. Maine (Effective 1/1/17) – minimum wage increases from $7.50 to $9.00.
  10. Massachusetts (Effective 1/1/17) – minimum wage increases from $10.00 to $11.00.
  11. Maryland (Effective July 1, 2017) – minimum wage increases from $8.75 to $9.25.
  12. Michigan (Effective 1/1/17) – minimum wage increases from $8.50 to $8.90.
  13. Missouri (Effective 1/1/17) – minimum wage increases from $7.65 to $7.70.
  14. Montana (Effective 1/1/17) – minimum wage increases from $8.05 to $8.15.
  15. New Jersey (Effective 1/1/17) – minimum wage increases from $8.38 to $8.44.
  16. New York (Effective 12/31/16) –minimum wage increases from $9 to $9.70.
  17. Ohio (Effective 1/1/17) – minimum wage increases from $8.10 to $8.15.
  18. Oregon (Effective July 1, 2017) – statewide minimum wage increases from $9.75 to $10.25 (Portland Metro minimum wage increase from $9.75 to $11.25).
  19. South Dakota (Effective 1/1/17) – minimum wage increases from $8.55 to $8.65.
  20. Vermont (Effective 1/1/17) – minimum wage increases from $9.60 to $10.00.
  21. Washington (Effective 1/1/17) –minimum wage increase from $9.47 to $11.00.

Employers should ensure that these required changes have been conveyed to your payroll manager and payroll provider and perform an audit to ensure that the change was made effective in your payroll system.

Form I-9

As we reported on November 17, 2016, U.S. Citizenship and Immigration Services (USCIS) released the new version of the Form I-9 on November 14, 2016. NO LATER THAN January 22, 2017, employers MUST use the revised form (dated 11/14/2016 N) for all new hires and any employee that requires reverification of employment eligibility.

Employers should review their Form I-9 practices, ensure they are complying by using the new form by the deadline, and train employees responsible for completing the form regarding the new form requirements.

Have You Checked Your State and Federal Law Posters Lately? If Not, You Should!

Contributed by Mike Wong, June 8, 2016

Under Federal, State and local laws, employers are required to post information regarding laws that protect workers in the workplace, including but not limited to wage laws, discrimination laws, workers’ compensation laws, unemployment law, protected leave laws and safety issues.  In Illinois these include the following:

  • IL Dept. of Labor State of Illinois Your rights Under Illinois Employment Laws
  • IL Workers’ Compensation Notice
  • IL Unemployment Insurance Benefits Notice
  • IL Emergency Care for Choking
  • IL Smoke Free Illinois Act
  • FLSA / Minimum Wage compliance poster
  • Equal Employment Opportunity (EEO) poster and Supplement for Pay Transparency Non-Discrimination Provision poster (for federal contractors)
  • Occupational Safety and Health Act (OSHA) poster
  • Family Medical Leave Act (FMLA) poster
  • Employee Polygraph Protection Act (EPPA) notice
  • Uniformed Services Employment and Reemployment Rights Act (USERRA) poster

An example of a local law poster, would be the poster required for the Chicago Minimum Wage.

Know the RulesWhile it is easy to post these and forget about them, it is important to review the posters as they are updated periodically. This means that you must regularly (or at least annually) check the posters to make sure that they are up to date and that all of the required posters are posted. For example, any poster addressing wages (including the state, federal and local minimum wages) should be updated any time the minimum wage is increased or changed.

This is especially important as employers can be fined for not having the correct posters up.  Indeed, the EEOC has recently again increased the fine for failing to post its posters.  Initially the fine was $100 per violation, which was increased to $110 in 1997 and then $210 in 2014.

On May 25, 2016, the EEOC announced that effective June 2, 2016, the fine for failing to have the required posters will increase from $210 to $525 for each separate offense.  This means that you could be fined up to $525 for each instance or location that you do not have the correct poster up.

Fines for failing to post the proper posters can come from investigations of charges of discrimination. However, that is not the only way that these types of violations are brought to the attention of the EEOC. In fact, the EEOC has reported that usually employers are fined after a worker reports or brings the violation to the EEOC’s attention.

Information and copies of the required posters can often be found on the state and federal administrative agency websites. Additionally, there are many vendors that offer comprehensive posters. However, if you go with a vendor’s poster, it is always important to double check the information on the poster to ensure that it covers all applicable state and federal laws, as you are the one who will be held responsible if it does not.

If you have questions, experienced labor and employment counsel can always help confirm that you have all of the required and current posters that you need to post.

Prevent Lawsuits: Implement Good Employment Policies and Gather Evidence Supporting Terminations

Contributed by Noah A. Frank, May 11, 2016

A recent federal appellate court decision underscores the importance of strong employment policies to establish the company’s expectations and potentially save the company from protracted and expensive litigation.

In Tsegay v. Amalgamated Transit Union, 1235, the court found that a union refusing to arbitrate a grievance did not breach its duty of fair representation to a union member terminated for using a mobile device while operating a passenger vehicle. No. 15-6102 (6th Cir. Apr. 27, 2016).

texting while drivingAfter passenger complaints of texting-while-driving, employer Metropolitan Nashville-Davidson County Transit (“MTA”) investigated driver Tsegay’s conduct, including video footage. MTA concluded that Tsegay looked at an electronic device in his lap several times in violation of company policy, and committed other moving violations which could be separate bases for termination. MTA suspended Tsegay without pay, and then terminated him following a meeting with his union representative for misconduct as well as dishonesty.

The union proceeded through the first two stages of the grievance process: filing a written grievance, and an in-person meeting with MTA, the union president, and Tsegay. The union presented the evidence (video, passenger’s letter, and MTA policy regarding cell phones) to its members, who voted not to proceed to arbitration. Instead of appealing this decision, Tsegay sued his union for breach of the duty of fair representation.

Tsegay claimed that the union acted arbitrarily by not going to arbitration. He argued that his cell phone records demonstrated that he was not using his phone while he was driving. However, the appellate court noted that there are many uses of a mobile device that may not appear in cell phone records, such as reading old messages, browsing the internet, and playing games. The appellate court found that the union’s decision to not arbitrate was reasonable because it was based on the union members having viewed the evidence.

This case demonstrates how employment policies and gathering the right evidence help avoid lawsuits.  In this case MTA demonstrated:

  • A written policy prohibiting mobile device use while working and driving;
  • Complaints leading to an investigation, and
  • A proper investigation showing the likelihood of a violation.

Employment policies should be written to convey several messages including, outlining appropriate conduct, company expectations, and safety considerations. The policies should:

  • Communicate clearly to multiple audiences (employees,  managers, others working on behalf of the company, and any reviewing administrative agency or jury) of varying education and language fluency; and
  • Provide a clear understanding of what constitutes appropriate and acceptable conduct.

Enforcing reasonable and effective policies will provide a legitimate, nondiscriminatory basis for discipline, avoid discrimination/retaliation lawsuits, and help employers successfully protest unemployment benefits. Policies should be reviewed by attorneys to ensure legal compliance.

Chicago Federal District Court Refuses to Apply Fifield Two Year Rule

Contributed by Jeff Glass

Readers of this update know that Illinois radically changed restrictive covenant law in Fifield v. Premier Dealer Services Inc., 2013 IL App. (1st) 120327.  In Fifield, the court required two years of at-will employment as consideration for a post-employment non-solicitation or non-compete clause entered into at the outset of employment, even if the employee voluntarily quit. The Illinois Supreme Court declined to review Fifield despite the requests of business groups and employer advocates. Since then, Fifield has remained controversial, with one appellate court and a few federal district courts declining to apply the two year rule. However, other courts have followed it and it has not been overruled, so employers ignore it at their peril.

In Traffic Tech, Inc. v. Kreiter, Case No. 14-CV-7528 (N.D. Ill. Dec. 18, 2015), the federal district court (Judge Dow) declined to grant a motion to dismiss filed on the basis of Fifield. The defendant employee had signed an employment agreement containing a non-solicitation clause when he joined the Plaintiff, but then he quit roughly a year later. Under the Fifield two year standard, the restrictive covenant should have been unenforceable. But the court denied a motion to dismiss filed on this basis, holding that “Illinois Supreme Court is not likely to adopt a two-year, bright line rule in assessing whether an employee was employed for a ‘substantial period of time’ so as to establish adequate consideration to support a post-employment restrictive covenant.” The court noted that the last time that restrictive covenants were discussed by the Illinois Supreme Court, in Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393, 403 (Ill. 2011), the court held that the enforceability depended on a totality of the circumstances inquiry that was inconsistent with the bright line approach established by Fifield. This view is consistent with the opinions expressed in this blog and elsewhere that were critical of the Fifield decision.

Fifield remains the law of Illinois but it is under attack. We will keep you updated in this blog.

Fifth Circuit Rules that Denial of Employee’s Attempt to Rescind Resignation Can Be Unlawful Retaliation

Contributed by Steven Jados

Last month, in Porter v. Houma Terrebonne Housing Authority Board of Commissioners (“HTHA”), the U.S. Court of Appeals for the Fifth Circuit ruled that a former employee’s claim of unlawful retaliation based on complaints of sexual harassment should proceed to trial.

Such a ruling is not necessarily unusual, but what makes this one unique is  the court held that an employer’s refusal to let an employee rescind her resignation can be an “adverse employment action”—one of the three prima facie elements of a claim for unlawful retaliation under Title VII of the Civil Rights Act of 1964.

Tyrikia Porter, the employee at iresignationrescindssue, tendered her resignation and before her last day of work, testified in a grievance hearing that she had been sexually harassed by the HTHA’s executive director.  Both prior to and after the hearing, HTHA management encouraged Porter to rescind her resignation. Shortly after her resignation date, Porter accepted that encouragement and sent the HTHA a letter asking to rescind her resignation.  Porter’s direct supervisor forwarded the letter to the Executive Director, with the supervisor’s recommendation that Porter be allowed to come back to work. The Executive Director refused Porter’s request.

Faced with this scenario, the court repeatedly stated that the “context” of the employer’s refusal was absolutely critical in determining whether an adverse employment action occurred. That context, according to the court, showed that Porter might have legitimately expected that she would be allowed to rescind her resignation.

In reaching that conclusion, the court noted that several HTHA representatives actually asked Porter not to go through with her resignation, and that her direct supervisor recommended that the Executive Director accept the rescission.  There was also evidence that the Executive Director had never before made a separation decision contrary to the direct supervisor’s recommendation. The court also noted that Porter had already asked—and been allowed—to continue working for a month longer than her originally-planned resignation date.

With those facts in mind, the court ruled that it was both reasonable for Porter to believe she would be allowed to rescind her resignation, and that she might have been dissuaded from complaining of sexual harassment had she known it would affect whether or not she was allowed to rescind her resignation.

Employers should note that this decision does not change the fact that courts generally have not accepted refusals to rescind resignations as adverse employment actions for discrimination claims, as opposed to retaliation claims. But employers must also remember that courts have, for many years, ruled that the definition of an adverse employment action is much broader in retaliation claims, as compared to discrimination claims. Bearing all of that in mind, the Fifth Circuit’s ruling is a clear warning to employers across the country that mixed signals from management and deviations from prior practices—whether in the context of a resignation or any other employment action—may give rise to unlawful retaliation claims.