Employment Law In the Obama Era

Employment Law In The Obama Era: Strategies For

Protecting Your Organization From

Increased Legal Risks

Presented by M. Kim Vance

Baker Donelson Bearman Caldwell & Berkowitz, P.C.615.726.5674

[email protected]

Just When You Thought You Had It All Figured Out . . .

“I don’t view the labor movement as part of the problem. To me, it’s part of the solution. We need to level the playing field . . . because we know that you cannot have a strong middle class without a strong labor movement.”

President Obama, January 20, 2009

So . . .• What has happened

• What is going to happen

• What should you do to prepare your organization

Big Labor’s No. 1 Priority For 2009

The Employee Free Choice Act

2007 Efforts to Pass EFCA

• The House of Representatives approved EFCA

• The Senate did not but EFCA was only narrowly defeated 51-48

Presidential Veto Was Assured in 2008 Under the Bush Administration

So there was no downside for Republicans

and Democrats supported by businesses to vote for EFCA in 2008

The Impact of the 2008 Election

• President-Elect Obama supported EFCA

• He was a co-sponsor of the EFCA bill H.R. 800 that was passed by the House of

Representatives in 2007

• He voted for H.R. 800

“The choice to organize should be left up to workers and workers alone. It should be their free choice.”

“In this country, we believe that if the majority of workers in a company want a union, they should get a union. We can do this.”

(Take Back America Conference, 6/19/07; Obama

Senate Press Release, 6/20/07)

The Impact of the Make-Up of Congress in 2009• Democrats hold a majority of the seats in the House of Representatives

• Democrats hold just under 60 seats in the Senate

In 2009, Congressional Leaders Will Take Full Responsibility As

President Obama Will Likely Sign Any

EFCA Legislation That Is Passed

“Responsibility” has a way of

refocusing the issues.

Example:Democratic Senator Mark Pryor co-sponsored EFCA and voted for it in 2008.

Wall Street Journal –”The Senate Goes Wobbly on Card Check” 1/2/09

• Pryor will not co-sponsor EFCA again.

• Pryor would like to find common ground between labor and business.

• Pryor says EFCA is not on a Senate fast track anyway.

Do Not Be Lulled Into Thinking EFCA Is Dead.

The AFL-CIO is aggressively marketing EFCA to the public, playing on economic concerns to build support from American workers. http://

www.youtube.com/watch?v=_-MYQ38u1rU

President’s Perspective

“I’m supportive of it, but there aren’t enough votes right now in the Senate to get it passed. And what I think we have to do is to find ways in which the core idea of the Employee Free Choice Act is preserved, which is how do we make it easier for people who want to form a union to at least get a vote and have an even playing field -- how do we do that, but at the same time get enough votes to pass the bill. That’s what we’re working on right now.”

- President Barack Obama – May 14, 2009

The Players• “You can’t win an election in

Pennsylvania without labor.”– Senator Arlen Specter – April 28, 2009

• “Now, some folks have been crowing that they have killed EFCA. Well, to paraphrase Mark Twain, the reports of EFCA’s demise are greatly exaggerated!”– Senator Tom Harkin – May 19, 2009

Potential Compromises• “Postcard check”

–Mail-in ballots• Quickie elections

–2008 average time between election petition and election was 38 days

–Compromise proposals – 10 days

How Would EFCA Change The Law?

• Unions would have to be recognized based upon a card check system without

secret ballot elections• If agreement on a first contract is not reached

within a very short time, a panel of arbitrators would set the terms and conditions of employment for bargaining unit employees.

• Damages and penalties for unfair labor practices committed by employers during union organizing attempts would be significantly increased

What is the Proposed Card Check System?

• Secret ballot elections are eliminated under the card check system in the proposed EFCA legislation.

• EFCA, as drafted now, would require that an employer recognize the union upon being presented with authorization cards signed by a majority of the employees in the proposed bargaining unit (50% +1).

AUTHORIZATION FOR REPRESENTATION

I hereby authorize the _____________ Union to represent mefor the purposes of collective bargaining.

Print Name Date

Signature Home Phone

Home Address City State Zip

Employer’s Name Address

Hire Date Type Work Performed Department

Hourly Rate Day OffDayShift

FullTime

NightShift

PartTime

Would you participate in an organizing committee?

Union Organizing: Current Law

Paid union organizers

collect signatures

NLRB reviews signed

cards and schedules election

NLRB conducts secret-ballot

elections

NLRB counts ballots, majority

rules

Employer must recognize union as legal representative and bargain

If majority vote for a union, then . . .

“Employee Free Choice Act”

Paid union organizers

collect signatures

NLRB reviews signed

cards and schedules election

NLRB conducts secret-ballot

elections

NLRB counts ballots, majority

rules

Employer must recognize union as legal representative and bargain

If majority vote for a union, then . . .

If EFCA is passed and enough employees sign union authorization cards . . .

You could be a union-free

workplace one day and a union

workplace the next.

Keep In Mind

• You may not be aware that organizing activity is occurring, eliminating your ability to educate employees

• Employees will likely be approached at home or outside the workplace, where a union organizer can represent that signing the card is “no big deal.”

• Employees will not have a chance to hear the company’s response to union arguments

Keep In Mind• Employees will probably not understand

that once they sign the union authorization card they won’t be able to change their mind – no “take-backs”

• Employees will lose their ability to vote anonymously, creating an environment where intimidation and coercion may result in cards being signed even though employees are not in favor of union representation

What Else Would Change if EFCA Becomes the Law?

• If agreement on a first contract is not reached within a very short time, a panel of arbitrators would set the terms and conditions of employment for bargaining unit employees.

Arbitration of Collective Bargaining Agreements Under EFCA• Negotiations for a CBA would have to begin

within 10 days of recognition, leaving you little time to decide on a negotiating committee and formulate initial proposals.

• If agreement on a CBA is not reached within 90 days, a federal mediator will be assigned to work with the parties on an agreement.

• If agreement on a CBA is not reached after 30 days of mediation, the matter will be sent to

binding arbitration. The agreement set by the arbitration panel would be binding for two years.

What Else Would Change if EFCA Becomes the Law?

• Damages and penalties for unfair labor practices committed by employers during union organizing attempts would be significantly increased

Damages For Unfair Labor Practices

• EFCA increases the penalty for discharging or discriminating against an employee to back pay + two times that amount as liquidated damages

• EFCA creates civil penalties up to $20,000 for employers who willfully or repeatedly violate employees’ rights during an organizing attempt

• EFCA requires the NLRB to seek a federal court injunction whenever it believes an employer has committed an ULP

Damages and penalties are increased for employers under the current version of EFCA.

The union is not subject to any of these provisions

in the current draft of EFCA

Elements of a Response Strategy

• HR Training

• Management Training

• Employee Training

• New Hire Orientation Training

Make It A Good Place To Work• Ensure communication lines are open – be

accessible and walk the floor

• Ensure managers are responsive to employee issues – rein in the rogue manager!

• Ensure managers are applying rules and guidelines in a fair and consistent manner

• Ensure that investigations are conducted into any employee problems or concerns

Fiddling while Detroit burns . . .

The Walter and May Reuther Family Education Center, Onaway, Michigan, a/k/a the United Auto Workers $33 million retreat located on Black Lake, Michigan

Costs Associated with Black Lake

• $33 million per year to operate

• Over the past five years, operation has lost $23 million

• Deficit covered by interest earned on the UAW’s strike fund and loans

New Wage Discrimination Legislation

The Lilly Ledbetter Act

Lilly Ledbetter Fair Pay Act• Ledbetter v. Goodyear Tire & Rubber Co.: Held

that persons alleging pay discrimination must file charge of discrimination within 180 days (300 days for states with EEO agencies) “after the alleged unlawful employment practice has occurred.”

• Now, clock renews each time employees are “affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation are paid, resulting in whole or in part from such a decision or other practice.”

Lilly Ledbetter Fair Pay Act

• Amends Title VII, the ADEA, the ADA, and the Rehabilitation Act of 1973

• Wage discrimination claims based on any protected classification are no longer subject to a meaningful statute of limitations

• Retroactive to May 28, 2007

Lilly Ledbetter Fair Pay Act

• Two years back pay damage cap

• Employees can:– Claim lost pension benefits– Maximize potential punitive damages by

“sleeping on their rights”

Lilly Ledbetter Fair Pay Act: Now What?

• Review compensation practices and policies, including how salaries are set upon hire

• Analyze compensation decisions such as salary increases during an employee’s tenure

• Commit to taking appropriate remedial action!

New COBRA Rules

What Other New Developments Could

the Obama Administration Bring?

Employment Non-Discrimination Act• Adds sexual orientation to Title VII• Alternative version adds transgender• 13 states and the District of

Columbia already have laws banning discrimination based on sexual orientation and gender identity

• 7 other states ban sexual orientation discrimination only

FMLA Bills Pending

• Coverage of employers with 25 or more employees rather than 50

• Mandating 7 days of paid sick leave for all employees

• Authorizing FMLA leave for employees affected by domestic violence

• Providing 24 hours of annual FMLA leave for parents to participate in children’s school activities

FMLA Court Cases – Cracco v. Vitran• Cracco took FMLA leave• Vitran hired temps to cover for Cracco• Temps discovered several problems that

had been created during Cracco’s tenure, including undelivered or damaged freight, unresolved customer complaints, and incorrectly handled overtime payments.

• Cracco was terminated the day he returned from FMLA leave.

The 7th Circuit Court of Appeals held that when an employer

discovers information during an employee’s FMLA leave that

would otherwise form the basis of a valid termination, the

FMLA does not act as a bar to such adverse employment

action.

Other Possible Legislation

• Equal Remedies Act (remove caps on damages)

• RESPECT Act (redefines supervisor)• OSHA changes (stiffer penalties for

violations)• Greater protection for whistleblowers• Increase in the federal minimum wage

What’s New With The EEOC?

EEOC Suggests That Health Risk Assessments Required

By Employers For Health Insurance Eligibility Violate

the ADA

Under the ADA, once employment begins, disability-related inquiries and medical examinations must be job-related and consistent with business necessity.

EEOC recently issued an opinion letter stating that

health risk assessments that include disability-related

inquiries and medical examinations are NOT job-related or consistent with

business necessity.

To be job-related and consistent with business necessity, the employer

must have a reasonable belief based on objective evidence that a medical condition will impair the employee’s

ability to perform essential job functions or that the employee’s

medical condition will impose a direct threat.

EEOC Issues Employer Best Practices on Work/Family Balance 4/22/09

• Train managers about the laws that impact decisions about treatment of workers with caregiving responsibilities

• Distribute and enforce a strong EEO policy that clearly addresses caregiver discrimination issues

• Ensure managers comply with company’s work-life policies

• Respond promptly to complaints of caregiver discrimination

• Protect against retaliation

Gerving v. Opbiz, LLC (9th Circuit) 4/29/09• Gerving was terminated and sued

her employer alleging – Gender Discrimination– Retaliation

• Trial court granted summary judgment to the employer

• Gerving appealed to the 9th Circuit Court of Appeals

Evidence That Her Supervisor

• Gave her poor reviews after she became a stepmother

• Told her working mothers could not perform as well as men or women without children

• That mothers should stay at home• That she would have to choose

between being a mother and a salesperson

And Her Supervisor

• Reprimanded her for making telephone calls to her children and time away from work

• A male employee doing the same thing was not reprimanded

• Made similar discriminatory remarks to another female employee during her pregnancy

Evidence of Retaliation

• Performance reviews okay until she became stepmother

• Supervisor tried to fire her shortly after she complained to HR

• Supervisor began discussing her termination with management prior to the events that were cited as the basis for termination

• Customer complaints cited as reason for termination were not uncommon

• Profanity was common in the workplace and not grounds for termination

Summary judgment was vacated and the case was remanded for trial because the Court felt a reasonable jury might conclude that Gerving’s termination was motivated by discriminatory and retaliatory animus.

SO, WHAT TO DO THIS

SUMMER?

On the other hand, you can . . .

• Set realistic budget numbers• TRAIN your management team• Talk, talk, talk to employees. Really.• Get ready to communicate with

employees about EFCA and have a campaign-in-a-box ready for action

• BE a GOOD place to work• Stay up to date on new laws and

their implications

What QuestionsDo You Have?