Wyatt Employment Law Report


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Court Rejects NLRB’s D.H. Horton Decision Invalidating Limits on Class Arbitration

By Edwin S. Hopson

The U.S. Court of Appeals for the Fifth Circuit in a split decison in D.H. Horton v. NLRB, No. 12-60031, decided December 3, 2013, rejected the NLRB’s ruling that an agreement between employees and Horton requiring arbitration and prohibiting class or collective actions in arbitration was a violation of the National labor Relations Act.  That agreement also required that all employment related disputes be resolved individually through arbitration.  The Board panel of Pearce and Becker (Hayes had recused himself) had concluded that prohibiting employees from pursuing class or collective action claims in arbitration infringed on substantive rights under Section 7 of the Act. It also held that the agreement discouraged employees from filing charges with the Board.

The court in rejecting the Board’s position on class or collective actions focused on the Federal Arbitration Act which favors arbitration.  After a detailed analysis of the NLRB’s arguments as to why the NLRA should govern, rather than the FAA, the court concluded that the Board’s arguments lacked merit.  However, the court did enforce the Board’s order pertaining to discouragement of employees from filing charges with the Board.

The court also rejected challenges to the underlying Board decision based on the invalidity of Member Becker’s recess appointment and the timing of the expiration of his recess appointment.

The full text of the decision can be found at:

http://www.ca5.uscourts.gov/opinions/pub/12/12-60031-CV0.pdf


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NLRB Members Block and Griffin Are Re-Nominated by President Obama

By Edwin S. Hopson

Recently, the President re-nominated Sharon Block and Richard Griffin, both Democrats, to be Members of the National Labor Relations Board.  Last month, the U.S. Court of Appeals for the D.C. Circuit ruled in Noel Canning v. NLRB that their recess appointments to the NLRB made in early January 2012, were not valid.  The five-member board is chaired by Mark Pearce, whose term will expire August 27, 2013. The two Republican seats are currently vacant.  A number of Republican Senators have called upon Block and Griffin to resign in light of the D.C. Circuit decision.


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NLRB Touts Protections for Non-Union Employees

By George J. Miller

In the past year the National Labor Relations Board’s Acting General Counsel, Lafe Solomon, has attracted a lot of attention in the legal and business community by issuing three memoranda describing how his office has alleged that employers have violated the rights of non-union employees by enforcing social networking policies.  Taking a page from Mr. Solomon’s book, the NLRB itself has now gotten into the act.  On June 19th the Board announced that it has launched a website intended to describe the rights of employees to act together for mutual aid and protection, even if they are not in a union.”  The website address is http://www.nlrb.gov/concerted-activity

The website consists of a graphic map of the United States showing thirteen locations around the country in which it was alleged or eventually found that employers at a variety of types of non-union workplaces had violated the rights of employees under the National Labor Relations Act (“Act”).  All but one of the cases involved employees being fired for engaging in activity protected by the Act, such as complaining about supervisors, working conditions, or compensation or, in one case, simply discussing wages with a co-worker in violation of an unlawful workplace policy prohibiting such discussions.  In each case, the employers either settled early in the process or lost at trial.  The outcome in each case was back pay for discharged employees, offers of reinstatement, and rescission of unlawful workplace policies.  

In the press release announcing the new website, Board Chairman Mark Gaston Pearce is quoted as saying, “We think the right to engage in protected concerted activity is one of the best kept secrets of the National Labor Relations Act, and more important than ever in these difficult economic times. Our hope is that other workers will see themselves in the cases we’ve selected and understand that they do have strength in numbers.”

This website could well spark an increase in the number of unfair labor practice charges filed against non-union employers, particularly if the Board does not also feature cases which were found to have no merit, which it does not appear they intend to do.  So it would be wise for all non-union employers to be aware that they are not beyond the reach of the Act simply because they are non-union.  In particular, any workplace situation involving the possible discipline or discharge of employees should be analyzed in light of the protections afforded by the Act in order to avoid violating employees’ rights and being ordered to pay back pay and offer reinstatement to discharged employees.  At the same time, employers should be aware of the kind of activity that is not protected by the Act.  Unfortunately, the dividing line between the two is often not clearly marked, and a very careful judgment must be made.


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NLRB Requests Additional Briefing in Case Involving University Faculty

By George J. Miller

On May 22, 2012, in long standing case involving Park Point University in Pittsburgh, a three member majority of the National Labor Relations Board issued an invitation for briefs from interested parties on the question of whether private university faculty members seeking to be represented by a union are employees covered by the National Labor Relations Act or, instead, are managers who are excluded from the Act’s coverage.  Specifically, the NLRB is requesting briefs on eight questions, including which factors previously identified by the U.S. Supreme Court as indicia of managerial authority of faculty members are “most significant in making a finding of managerial status for university faculty members and why,” and whether “the factors employed by the Board in determining the status of university faculty members properly distinguish between indicia of managerial status and indicia of professional status under the Act?”

The two Republican members of the Board, Members Hayes and Flynn, objected to the issuance of this request, pointing out that the case has been pending before the Board in its current posture for almost five years, and various organizations representing “virtually all institutions of higher education” in the country have already filed amicus briefs in the case. They also pointed out that during the long pendency of this case, no other organizations have asked to participate in the case, and there is no legitimate reason to further delay the case.

Although the factors relevant to the managerial authority of university faculty were first enunciated by the U.S. Supreme Court over 30 years ago in a 1980 case involving Yeshiva University, and the Board has since been ordered by the courts to determine in each case “which factors were significant and which less so, and why” the Board has yet to make that determination in this case.  This is astonishing considering that the case was first filed in 2003.

This request for briefs at this time appears to be for the purpose of soliciting more input from organized labor on this issue and to engage in a sort of back door rulemaking on the issue of faculty organizing.  Although the U.S. Supreme Court made clear in the Yeshiva University case that each university is different, and the Board must make a decision in each and every case based upon the facts of that case, it appears that the Board intends to use its current three Democrat majority to create a precedent about which managerial factors are more important, and which are less important, in all cases.  It will be no surprise if the Board ultimately narrows the managerial exception and makes it easier for faculty to organize in future cases.


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NLRB’s New Rules Governing Union Representation Election Procedures Go Into Effect

By Edwin S. Hopson

New rules governing procedures applicable to the processing of representation cases before the National Labor Relations Board went into effect on April 30, 2012.  According to an April 26, 2012, memorandum issued by NLRB Acting General Counsel Lafe Solomon to NLRB field personnel, the new rules “are designed to reduce unnecessary litigation in representation cases and thereby enable the Board to better fulfill its duty to expeditiously resolve questions concerning representation.” 

The changes are:

1.         §102.64 is amended to expressly construe Section 9(c) of the National Labor Relations Act to state that the statutory purpose of a pre-election hearing is to determine if a “question concerning representation” exists.

2.         §102.66 is amended to clarify that NLRB hearing officers presiding over pre-election hearings have the authority to limit the introduction of evidence to that which supports a party’s contentions and is relevant to the existence of a “question concerning representation.”

3.         §102.66(d) is amended to afford the hearing officer presiding over a pre-election hearing the discretion as to whether or not the filing of post-hearing briefs will be allowed, and, if so, what issues are to be addressed, and the time for filing, all subject to the ultimate authority of the regional director.

4.         §§102.67 and 102.69 are amended to defer most requests for Board review—with the exception of special permission to appeal—until after the election is conducted; any such post-election request can also be consolidated with a request for review of any post-election rulings.

5.         §101.21(d) is amended to eliminate the recommendation (along with all of Part 101, Subpart C) that the regional director should ordinarily not schedule an election sooner than 25 days after the decision and direction of election in order to give the Board an opportunity to rule on a pre-election request for review, since such requests can now only be made after the election is conducted.

6.         §102.65 is amended to clarify and narrow the circumstances under which a request for special permission to appeal to the Board will be granted.

7.         §§102.62(b) and 102.69 are amended to create a uniform procedure for resolving election objections and potentially outcome-determinative challenges in stipulated and directed election cases and to provide that Board review of a regional director’s resolution of such disputes is discretionary.

Dissenting Member Hayes issued a written statement in which he argued, among other things, that the new rules are contrary to the Act and the constitution as well as contrary to past practice at the Board.  Hayes points out that only two members of a five member board approved the new rules. Chairman Pearce offered a rebuttal in the form of a concurring statement supporting the implementation of the new rules. Chairman Pearce’s and Member Hayes’ statements can be found at:

https://www.federalregister.gov/articles/2012/04/30/2012-10263/representation-case-procedures


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Joint Resolutions Proposed in the House and Senate to Overrule NLRB’s New Election Rules

By Edwin S. Hopson

On February 16, 2012, the U.S. House Education and the Workforce Chairman John Kline (R-MN), joined by Rep. Phil Gingrey (R-GA) and Rep. Phil Roe (R-TN), introduced H.J. Resolution 103 under the Congressional Review Act (5 U.S.C. §§801-808) that would block the National Labor Relations Board’s December 21, 2011, new representation election rules intended to speed up and streamline the Board’s union representation election process, to be effective April 30, 2012. Sixty-five House members as of now support the resolution.

A companion resolution (S. J. Res. 63) was also introduced in the U. S. Senate by Senator Mike Enzi (R-WY) and Senator Johnny Isakson (R-GA).  S. J. Res. 63 has the support so far from 44 Senators.

The December 2011 rules were only a portion of proposed changes announced in June, 2011.  Since December, NLRB Chairman Pearce has indicated he intended to bring up for consideration later this year the remaining proposals designed to speed up the election process. 

At a press conference on February 16, Chairman Kline stated: “With the addition of these three non-recess ‘recess’ appointees [to the NLRB], it’s very clear to us that Chairman Pearce from the NLRB intends to go back and pick up some of those provisions that were left out from the rule passed last year. We are very concerned about this board and its agenda. We’re pleased the Senate is going forward with this resolution of disapproval and we look forward to being right there with them.”

The Congressional Review Act was enacted by the Congress as a part of the Contract with America Advancement Act of 1996 and is also known as the Small Business Regulatory Enforcement Fairness Act of 1996. The law permits the Congress to review, on an expedited basis, new federal regulations issued by government agencies and, by passage of a joint resolution, overrule the regulations.  It would appear that the Republicans in the House may be able to pass the resolution, but it would seem more doubtful in the Democrat-controlled Senate.


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NLRB Inspector General Finds No Evidence Member Hayes Was Enticed to Resign

By Edwin S. Hopson

As we reported in a blog article on December 6, 2011, NLRB Republican Member Brian Hayes was being investigated by the NLRB’s Inspector General over an allegation that he had been enticed to resign his position as a Member of the Board, which at the time would have reduced the number of board members to two, leaving the Board unable to issue decisions. Mr. Hayes had earlier threatened to resign in a letter to the Chairman of the Board over certain proposed regulations being considered by the Board’s other two members. Mr. Hayes decided later and announced that he was not resigning.

In an article by Kevin Bogardus posted on the website of The Hill on January 26, 2012, it was reported that the Inspector General had completed his investigation and concluded that Mr. Hayes had not been enticed to resign his post.  “As a result of our investigative efforts, we found no evidence that enticements were made to Member Hayes to resign his position as a Board Member,” Dave Berry, the NLRB’s Inspector General wrote in a January 23 memo to Mr. Hayes and NLRB Chairman Mark Pearce. The Inspector General did note, however, that Mr. Hayes had sought employment with the law firm of Morgan, Lewis & Bockius. Nevertheless, Mr. Berry found no wrongdoing by Member Hayes.  Apparently, Mr.Hayes had recused himself from any matters before the Board where the Morgan firm was involved.  By December 22, 2011, according to the report, Member Hayes advised the Morgan firm that he was no longer interested in employment with them.

This may not be the end of the matter.  The Hill also reported that U.S. Representative George Miller, a Democrat from California and the ranking member on the House Education and the Workforce Committee, wrote a letter on January 26, 2012, to U.S. Attorney General Eric Holder requesting that the Justice Department initiate its own investigate of Mr.Hayes’ resignation threat.