One of the most common work rules that any employer utilizes is a rule prohibiting "walking off the job" without permission. This newsletter has included many articles over the last year or so warning employers of the current view of the Administration and the NLRB, that many employer work rules are over broad and "chill" legitimate union and other protected concerted activities. A classic example of a protected concerted activity is a general work stoppage or strike, whether a union is involved or not. The NLRB has concluded that a general work rule prohibiting walking off the job might be interpreted by employees to prohibit such a general work stoppage or strike.
The author believes that the NLRB has discarded many years of precedent as well as common sense in making such rulings. The hope was that common sense would come back to prevail, and/or that the courts of appeals in addressing such NLRB decisions, would strike them down. However, in December, the Eleventh Circuit Court of Appeals enforced an NLRB decision that a work rule prohibiting "walking off the job" violated the National Labor Relations Act. Ambassador Services, Inc. v. NLRB, 197 LRRM 2556 (Eleventh Circuit, 11/15/13).
Editor's Note: The danger in having an invalid work rule according to NLRB principles, is that the disciplinary action under such rule will be deemed unlawful, and could also be used against an employer who wins a union election by unions who contend that the election was invalid and must be set aside, and another election directed. It is possible for an employer to show that despite the alleged invalid work rule, disciplinary action was nevertheless lawful. The author recommends that when an employer rewrites its employee handbooks and other work rules, that the handbooks and rules be reviewed by a competent labor lawyer. The situation, however, is not so critical that all employers should immediately rewrite their handbooks and work rules.
As stated in the prior article, the National Labor Relations Board protects concerted activity on the part of employees. Concerted activity refers to the concept of two or more employees joining together to improve their work situation. A relatively recent application of the concept pertains to employers who require all applicants and employees to sign arbitration agreements that require all allegations of law violations (with some exceptions) to go through private arbitration rather than through the court system, and generally prohibit class or collective actions. The U.S. Supreme Court has generally upheld the legality of such arbitration agreements and class action waivers, because of the Federal Arbitration Act. However, the NLRB has ruled that any employment agreement waiving an employee's rights to bring class or collective actions in court, is unlawful, because it prohibits employees from engaging in the concerted activity of filing a class or collective action lawsuit. The NLRB thus finds such waivers to be unlawful.
In December, the Fifth Circuit Court of Appeals rejected the NLRB ruling, and upheld the right of an employer to require that all employment-related disputes are to be resolved through individual arbitration. D.R. Horton, Inc. v. NLRB, 197 LRRM 2637 (Fifth Circuit, 12/3/13). The court did enforce the NLRB ruling to the extent that it required the employer to rescind or revise the arbitration agreement to clarify that employees are not prohibited from filing unfair labor practice charges with the NLRB.
The case arose when an employee brought a nation-wide class action that the employer improperly classified him and others as exempt under the statutory overtime provisions of the wage-hour law. The employer responded that the arbitration agreement barred collective claims but invited individual arbitration procedures. The claimant then filed an unfair labor practice charge, and the Board issued an order finding that the arbitration agreement interfered with the right of employees to engage in "concerted activity" under the Labor Act. The employer then petitioned for review in court, and the ruling was overturned.
Editor's Note: Many large employers across the U.S. are instituting individual employment agreements with their employees. Such agreements are generally lawful, provided they are properly drafted and implemented. Such agreements may offer the advantage of avoiding class and collective action litigation, as well as avoiding the additional expenses and risks that often occur in court litigation. There are some downsides to such agreements, however. One downside is that such agreements are not entirely popular with employees, but this issue can be avoided if proper implementation measures are taken. The other downside is that arbitration agreements make it a little easier for employees to "sue" even if their dispute goes to arbitration rather than to court.
Government officials reported that over 2.1 million people have selected plans from either state or federal healthcare exchanges by the end of the year, the vast majority enrolling in December. While these numbers are well short of the more than 3 million enrollees the Administration expected, the numbers are an improvement over the 365,000 that had signed up the first two months. Several extensions in enrollment had been allowed by the Administration for those wishing to sign up for coverage beginning in 2014.
Administration sources also indicated they had reduced error rates on the enrollments from about 30% to 10% by the end of November. After enrollment, insurers have extended payment dates for coverage beginning the first of January to January 10.
In addition to lower than expected enrollments, there is also a problem in that the mix of those who have enrolled is older than hoped, and insurers need younger customers to balance the costs of those who are older and tend to be sicker. Estimates are that more than one-third of the enrollees are 55 or older, and insurance carriers indicate that they need strong enrollment from younger people, who are likely to be healthier, to prevent sharp rises in premiums. Normally, fewer than 20% of enrollees in individual and family coverage are over age 55.
Other problems are the "sticker shock" as consumers find out that many out-of-pocket costs are also increasing under the exchanges, as many are experiencing higher deductibles and co-pays and smaller networks. The total out-of-pocket expenses under bronze exchange plans are kept at an annual $6,350.00 for individuals and $12,700.00 for families of four. For a 40-year-old adult, the average monthly premium for a bronze plan is about $300.00 a month, with a typical silver plan costing around $320.00 a month. According to government figures, about 20% of enrollees selected a bronze plan, and 60% selected a silver plan, which has slightly better coverage.
For small businesses concerned about or confused by ObamaCare, a website is available at which users can learn what they need to know and do to comply with the law. Business.USA.gov/healthcare. Small businesses under 50 employees still have options to buy small group health coverage and qualify for tax credits under the Small Business Health Options Program, which is available only from insurers and brokers.
Employers often hear rumors of employees being fined for crossing picket lines during union strikes or other work stoppages. Indeed, a union's ability to fine its members is one of the arguments raised by employers in union organizational campaigns. Employers rarely get to see the results of an actual case to see how unions operate in this regard. A recent case involving a 2012 strike at Caterpillar is quite revealing in this respect. International Association of Machinists Local Lodge 851 (Caterpillar), 197 LRRM 1886 (ALJ decision, 11/12/13).
During the strike, employees were offered strike benefits of about $100.00 per week if they assisted the union by engaging in striker picket line-related functions. This was announced at meetings that the union had with employees prior to the commencement of the strike. Employees were also told that if employees returned to work during the strike, they would be subject to fines. However, the extent of any fines had not yet been determined and would not be determined until after the strike was over. In the meantime, a number of the employees abandoned the strike and returned to work.
Subsequent to the strike, a committee was chosen to hear charges against those union members who crossed the picket line and to determine the amount of fines to be levied against them. One employee was fined $21,558.00, another $15,564.00, and a third $11,938.00. Other union members who returned to work received fines that were either lower or higher than the three persons involved in the case.
One of the three persons fined, Jackson, was a relatively newly hired employee, who did not attend the union meetings, and was not aware of the union's position toward returning to work, benefits, or fines. He testified that because he was short of money, he called the union telephone number, talked to a union official, and asked the official what the consequence would be if he crossed the picket line. The employee was allegedly told that he would get fined and the union would not represent him in the future. When he asked about the amount of the fines, he was told it would be $100.00 to $200.00. The union official denied the telephone conversation.
The second employee, Jones, said he typed out a letter of resignation of his membership, which he mailed to the union local address. The union denied receiving any such letter. Jones testified that he also handed a copy of the letter to a shop steward on the picket line, and told the shop steward that he was resigning from the union before returning to work. Jones testified that the shop steward said he did not think that a person, once a member, could resign. According to Jones, he told the steward that this was incorrect and that the steward could check with the labor board. Jones testified that the steward then took the letter, crumpled it up, and threw it into a garbage pail. The steward denied the conversation.
The union thereafter sent out a letter to the three persons, notifying them that under the union constitution a trial date had been set. At least one of the three members in question attended the trial and claimed he had sent in a resignation letter, tendering a copy of the letter that also had his writing on it. The trial committee rejected testimony and sent him a letter advising him that he was fined $11,938.00 and that he would not be eligible to hold any union office for a period of five years.
The NLRB administrative law judge hearing the case involving unfair labor practice charges subsequently filed by the three union members, stated the following rule of law. The judge concluded that if the members resigned from the union before they abandoned the strike, then the imposition of the fine would violate the Labor Act. The question before the administrative law judge was whether or not the individuals actually resigned before they returned to work.
The NLRB administrative law judge did not credit the claimants' testimony, finding that if their testimony was credible, they would have taken more steps to insure that they could prove that they resigned prior to returning to work. The judge indicated that, given the possibility of being faced with a large fine, the members would have taken greater steps to ensure they had proof of resignation prior to return to work. The judge credited the testimony of the union steward and the union official that no such resignation information had been received. The judge also did not credit the one member's testimony that the union official told him that if they returned to work, they would face a fine of only $100.00 to $200.00. Instead, the administrative law judge credited the union's testimony that at the time of the alleged conversations, the union had not yet determined how much the fines would be.
Editor's Note: This case visibly demonstrates the application of the union rules, fines, and "justice."