Category Archives: New Developments

Employers May Restrict Use of Organization’s E-mail

Reversing prior, if contentious, law, the National Labor Relations Board held this week that an employer’s property interest in its e-mail system would allow it to restrict employees from using the system for communications unrelated to their jobs, as long as (a) alternative means are available for employees to communicate effectively with each other concerning the terms and conditions of their employment, and (b) the rules do not discriminate against the exercise of employees’ protected rights to concerted action.

We recognize that there may be some cases in which an employer’s email system furnishes the only reasonable means for employees to communicate with one another. Consistent with the principles stated above, an employer’s property rights may be required to yield in such circumstances to ensure that employees have adequate avenues of communication. Because, in the typical workplace, employees do have adequate avenues of communication that do not infringe on employer property rights in employer-provided equipment, we expect such cases to be rare.

We hold … that an employer does not violate the Act by restricting the nonbusiness use of its IT resources absent proof that employees would otherwise be deprived of any reasonable means of communicating with each other, or proof of discrimination.

Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 N.L.R.B. No. 143 (2019) , slip op. at 8. The decision can be found at this link.

Employers May Require Confidentiality During Investigations

In a decision released today, the National Labor Relations Board reversed prior law concerning confidentiality during open workplace investigations. Commenting on the employer rules in the case, the majority wrote:

The rules at issue do not broadly prohibit employees from discussing either discipline or incidents that could result in discipline. Rather, they narrowly require that employees not discuss investigations of such incidents or interviews conducted in the course of an investigation. Employees not involved in an investigation are free to discuss such incidents without limitation, and employees who are involved may also discuss them, provided they do not disclose information they either learned or provided in the course of the investigation. Further, the rules do not restrict employees from discussing workplace issues generally or limit the employees’ ability to discuss disciplinary policies and procedures. Finally, we note that the rules do not prohibit a union-represented employee from requesting the help of a union representative during such an investigation (if the Respondent’s employees were to unionize), pursuant to NLRB v. J. Weingarten, 420 U.S. 251, 267 (1975).

Apogee Retail LLC d/b/a Unique Thrift Store, 368 N.L.R.B. No. 144 (2019), slip op. at 8. The full decision can be found at this link.

E.E.O.C. Announces September 30, 2019, Deadline for 2018 EEO-1 Submissions Including Component 2 Data

Brief History

Annual EEO-1 survey data must be reported (a) by employers that are covered by Title VII and have more than 99 employees and (2) by federal contractors and their immediate subcontractors that are covered by E.O. 11246 and have more than 49 employees and a relevant contract of at least $50,000.

In 2016, the E.E.O.C. expanded the kinds of data that  should be reported in the EEO-1. The expanded data, “Component 2 data,” included compensation data analyzed by pay tier, category, age, race, sex, and ethnicity.  

In 2017, the O.M.B. revoked its Paperwork Reduction Act approval of the E.E.O.C.’s 2016 expansion of required EEO-1 data. The National Women’s Law Center and others challenged the validity of O.M.B.’s action. The court sided in part with the plaintiffs, and invalidated O.M.B.’s stay. E.E.O.C. suggested that employers and the agency itself might need substantial time to prepare their procedures to submit and to accept the Component 2 data. The Court required an accelerated response.

Recent Development

On April 3, E.E.O.C. filed its response to the Court’s efforts to move the process along more expeditiously. The Agency has rescheduled the EEO-1 submission deadline for 2018 data, including Component 2 data, to September 30, 2019.

The EEO-1 reporting portal is not yet capable of receiving the Component 2 data. Presumably, E.E.O.C. will issue instructions over the coming months, as the reporting enhancements come on line.

Revised F.M.L.A. Forms Now Available

The U.S. Department of Labor has revised its approved forms for various stages of the F.M.L.A. process. The new forms, which are valid for the next three years, can be found here.

Minneapolis Minimum Wage Ordinance-Update

Here is an update, current as of June 14, on the Minneapolis City Council’s movement toward an increase in the minimum wage for employees working within the city of Minneapolis (Council File Number: 17-00723).

  • A draft ordinance has been presented to the City Council (technically to the Committee of the Whole). The draft is available here.
  • A slide presentation on the proposed ordinance is available here. Note that the ordinance will cover employees who normally work within the City for at least two hours in a given workweek.
  • A public hearing will be held on Thursday, June 22, 2017, at 3:30pm. Comments can be submitted before that time by e-mail to this address.
  • The final draft ordinance will go before the Council’s Committee of the Whole on Wednesday, June 28, 2017, at 10:00am. The Council is expected to act on the matter on Friday, June 30, at it’s 9:30am meeting.

The City’s staff has prepared a report on the issues, which is available here. Among its many important points is a comparison of buying power. See paragraph a on page 21.

Note also that there has been no traction to date on changing the State’s law that bars tip credits toward the minimum wage. (For mid-priced restaurants, which present relatively affordable options served by employees who receive customer gratuities, the increase in minimum wage without a tip credit is likely to result in cuts to already slim profit margins, and/or increased wage disparities between customer-facing staff (front of house) and those supporting the efforts behind the scenes (back of house), and/or higher prices for consumers.)

Information on Minnesota’s current minimum wage laws can be found here, here, and here.

If you have questions concerning this or other employment-related laws, please call or contact us.

Court Enjoins New Overtime Rule

The United States District Court for the Eastern District of Texas on November 22 issued a nationwide injunction against the implementation of the U.S. Department of Labor’s Final Rule on, among other things, increasing the minimum salary threshold for an employee to be exempt from overtime. State of Nevada vs. U.S. Dept. of Labor. The Rule had been scheduled to become effective on December 1, 2016.

There remain several ways the saga might continue to unfold. The appellate court could stay the injunction pending resolution of an appeal. The appellate court could also keep the injunction in place while the appeal proceeds. As of this writing, the chances appear unscientifically to be about fifty-fifty. (The appellant would be the Secretary of Labor, but note that the next Secretary would not be obligated to continue an appeal begun by the current Secretary.)

If you have already restructured your compensation and/or staffing in order to comply with the new rule, you have the choice between retaining the new structure, which most organizations are likely to do, or reverting to the previous structure, which carries the risk that you will have to change once again if the injunction is stayed or the rule is reinstated after appeal.

The District Court’s reasoning for issuing the injunction is sound. The Court decided that the new rule had the effect of making an employee’s salary as important as their duties when determining whether the person should be exempt. Raising the importance of an employee’s salary to the level of their duties was contrary, the Court ruled, to the intent of Congress.

Bargaining with Unions that Represent a Minority of Employees

Generally, a private-sector employer that is not in the construction industry has an obligation to bargain with a union only when that union represents a majority of employees in the relevant unit. Sometimes the union is recognized voluntarily by the employer; sometimes they are certified by the National Labor Relations Board (“N.L.R.B.”), a federal agency. Either way, that union becomes the “exclusive bargaining representative” for covered employees. Now, though, employers may soon receive demands to bargain with unions that do not represent a majority of employees.

In the recent case of Children’s Hosp. of Oakland, 364 N.L.R.B. No. 114 (2016), the National Labor Relations Board held that an employer was required “to  arbitrate pending grievances arising under an expired collective-bargaining agreement with the union that was party to that agreement, even if the union has been superseded by another union….” That part is important, but there was another piece of the case that may prove to be more difficult to implement.

In a concurrence, Member Hirozawa wrote with approval about a doctrine that many labor lawyers thought had been put to rest. He articulated the basis for an employer’s duty to bargain with a union on behalf of that union’s members, even if the union does not represent a majority of the unit employees. Noting that a covered employer’s statutory obligation to bargain is “subject to the provisions of” Section 9(a) of the National Labor Relations Act , he wrote, “I think it is also useful, however, to consider what the subject-to-Section-9(a) clause does not mean.  It does not mean that for an employer to have a duty to bargain with a union on behalf of its employees, the union must be a Section 9(a) exclusive representative.”

That non-exclusivity doctrine, which had been argued by, among others, Charles Morris, a well-respected author and law professor, appeared to have been struck down for good after the N.L.R.B.’s Office of General Counsel issued an “Advice Memorandum” ten years ago. Now, though, Member Hirozawa’s concurrence has breathed into it new life, and Prof. Morris, sensing that the doctrine might once again be stirring, has posted a comment on the topic.

What does it all mean? It means that employers may soon be receiving demands to bargain from unions which concede that they represent only a minority of employees. How to respond depends, as always, on an assessment of each employer’s values, situation, goals, and options.

Please let us know if you would like additional information or assistance.

Trade Secrets, Overtime, and Other Priority Developments

It’s been a busy time in the world of employment law. A few recent developments have particular priority for human resources managers and general business lawyers. This post concerns three of those developments: trade secrets, overtime exemptions, and changes to the E.E.O.-1 form.

New Trade Secret Protections and Requirements

One development concerns proprietary and confidential information. A new law offers the first federal protections for trade secrets. It’s an important law. Part of it authorizes the seizure of things that were used in the process of allegedly diverting trade secrets, such as computers and storage media. That’s an important contingency that should be considered when provisioning critical hardware, proprietary software, and network access.

Another part of the law requires the supplementation of all agreements with employees and contractors which addresses confidential information or trade secrets. Those materials must now contain a notice to employees (or reference to a separate, available document) to the effect that trade secrets may be used in a limited fashion to engage in whistleblowing activity or in employment litigation alleging whistleblower retaliation.

In light of the Defend Trade Secrets Act, employee agreements, handbook policies, and other materials which contain provisions on trade secrets should be reviewed and supplemented with appropriate text as soon as possible. (And, of course, this is a good opportunity to be sure that other developments from the past few years are properly implemented, such as Minnesota’s Women’s Economic Security Act and the N.L.R.B.’s application of Section 7 to handbook and other employee policies.)

New Overtime Eligibility Rule, Pay Equity, and the E.E.O.-1

Most employers by now have received multiple announcements of the final rule issued last month by the U.S. Department of Labor concerning the increased salary threshold required to be exempt from overtime. Organizations should review their options on classifying and compensating affected employees. There are several ways to proceed in compliance with the regulation, depending on employer objectives.

Just complying with the new rule, though, could leave an organization vulnerable to adverse assessments in the near future, assuming that the categories of data required for the E.E.O.-1 form expand as planned. Here’s why, and what to do:

All organizations with 100 employees and many smaller organizations must file an E.E.O.-1 annually with the U.S. Equal Employment Opportunity Commission. The form includes information on current employees by job category, ethnicity, and sex. If the current rulemaking proceeds as planned, the form will also include twelve compensation bands. Now hold that thought….

There’s been a resumption in the discussions among some circles about comparable worth analyses. The comparable worth approach seeks to close the gender-based pay gap by comparing compensation by gender within “comparable,” but not “equal,” jobs. Minnesota and California have long required comparable pay assessments in the public sector. Minnesota now also requires comparable pay for private and third sector employers with at least forty employees having government contracts of at least a half-million dollars. There is an increased focus, and in some areas also legislative activity, around employee protections for discussing compensation issues. Add in the increase in data collection, analysis, and dissemination that current technologies and vendors are providing, and it seems likely that there will be an increase in lawsuits attempting to prove sex discrimination through a deep analysis of how employers have arrived at gender disparities in the compensation of comparable, but not equal, jobs. Let’s go back to those E.E.O.-1 changes.

The new form will funnel multiple jobs and job categories into a dozen compensation-based bands for employers (and sufficiently related employer groups) having 100 employees. By doing so, the information will help the government to assess the distribution of jobs by compensation level as well as by the various other attributes entered into the form.

The information should also help employers to smooth out gender- (and other non-job-) based inequities, whether derived from bias, history, or other sources. Smoothing out those arguable inequities would minimize exposure to a range of problems based on a comparable worth analysis, including investor inquiries, government contract compliance, and even discrimination claims, which have generally been unsuccessful but are showing signs of making a comeback. And what might happen if the EEO-1 shows inequities that are not self-remedied? In litigation, the information would likely become available (from the employer, not the government) to plaintiffs challenging job bias.

Now let’s go back to that new F.L.S.A. regulation. Employers should review the overtime classifications of currently exempt workers who make less than the new salary threshold. They could take this opportunity to review, as well, their other employees’ overtime classifications. But any adjustments employers make—e.g., to classification, compensation levels, compensation mechanisms, reporting lines—should anticipate the forthcoming E.E.O.-1 requirements. This is a good time to rationalize classifications and compensation, and to develop a plan to squeeze out any vestige of bias in the way that employees are compensated and assigned. More guidance on ways to implement the new rule will appear in a later post.

A comprehensive approach to these issues also answers one of the common questions raised by the new F.L.S.A. regulation: “How do I communicate the effects of the rule change to my workforce?” Communicating a systematic review of compensation to make the process more transparent and more equitable can increase an employee’s perception of fairness; and research indicates that increased perceptions of fairness result in a decreased litigation risk. (Other elements to communicate in the course of implementing the regulation depend on employer objectives and choices, but the message to employees need not be negative and the effect on employer budgets need not be extreme.) More information on the subject of communication will appear in a later post.

Note that employers are likely to have an obligation to bargain over one or more aspects of compensation adjustments for unionized employees. The scope of the bargaining duty will depend on the specific collective bargaining relationship, including both contract language and past practice.

A careful implementation of the new overtime salary rule could be an affordable opportunity to improve morale, enhance recruiting and retention, minimize bias-related exposure to liability, and promote regulatory compliance. Let us know if we can help.

Update stream from publisher Wolters Kluwer

N.L.R.B. on Recent Decisions Regarding Employee Rights Posting

The following text is the entire public announcement by the National Labor Relations Board on April 17, 2012, concerning the requirement that employers post notices of certain federal labor law rights:

“In light of conflicting decisions at the district court level, the D.C. Circuit Court of Appeals has temporarily enjoined the N.L.R.B.’s rule requiring the posting of employee rights, which had been scheduled to take effect on April 30, 2012.

“In view of the D.C. Circuit’s order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court.

“In March, the D.C. District Court found that the agency had the authority to issue the rule. The NLRB supports that decision, but plans to appeal a separate part that raised questions about enforcement mechanisms. The agency disagrees with and will appeal last week’s decision by the South Carolina District Court, which found the N.L.R.B. lacked authority to promulgate the rule.

“Chairman Mark Gaston Pearce said of the recent decisions, ‘We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.'”

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