What’s Ahead in 2015 for Retailers in Labor and Employment Law? Part II

The recent Ogletree Deakins webinar, “What’s Ahead in 2015 for Retailers in Labor and Employment Law,” featured leaders in the retail industry and labor and employment attorneys—Randel K. Johnson, senior vice president of the U.S. Chamber of Commerce; Kelly Kolb, vice president of government affairs at the Retail Industry Leaders Association (RILA); Hal Coxson, shareholder and chair of Ogletree Deakins’ Governmental Affairs Practice Group, and Brian Hayes, former member of the National Labor Relations Board (NLRB), shareholder, and co-chair of the Traditional Labor Relations Practice Group at Ogletree Deakins.

In part one of this three-part series summarizing the speakers’ key points, we reviewed recent congressional activity, the White House agenda, paid leave legislation, immigration reform, and recent executive orders. In part two, we will summarize current U.S. Department of Labor (DOL) initiatives and the latest from the National Labor Relations Board.

• DOL Initiatives

On March 13, 2014, President Obama directed the DOL to “streamline and modernize” overtime regulations. To that end, the DOL has been working towards updating regulations with the aim of restricting use of exemptions. As Mr. Johnson explained, the DOL aims to shrink exemptions by raising the salary test and revising the “primary duties” test. A proposed rule is expected in February 2015, which will likely set forth an increased salary threshold (possibly as high as $50,000 per year) and possibly a quantified hours test for “primary duties.” The DOL is also focused on non-traditional employment relationships—reasoning that workplaces with “outsourced” employees are a prime location for misclassification issues.

OSHA

The webinar panelists agreed that the Occupational Safety and Health Administration (OSHA) seems to be gearing up for increased activity. New reporting requirements just took effect on January 1, 2015, requiring employers to report to OSHA the hospitalization of any employee within 24 hours of learning of the hospitalization and to report amputations or loss of eye. OSHA requires that the reports be posted online.

OSHA is also proposing an electronic injury and illness reporting rule to require employers to submit injury and illness records electronically. Mr. Johnson indicated that he considers this to be a “sleeper rule” because OSHA would then post the records on a public website, presumably as raw data available for use by unions and competitors.

Additionally, a “supplemental” proposed rule would allow OSHA to issue citations without a whistleblower. Both rules are expected to be finalized in August 2015. OSHA has also indicated a possible expansion in enforcement of the General Duty Clause.

OFCCP

Mr. Johnson reported that activity by the Office of Federal Contract Compliance Programs (OFCCP) has resulted in increased complaints to the U.S. Chamber by government contractors. The specific OFCCP proposals of concern are:

• Compensation and development of a new data collection tool with an aim toward requiring employers to provide more specific compensation information with regard to how they pay employees. A final regulation is expected in August 2015.
• Employers can also expect a final regulation on anti-retaliation/whistleblower rules regarding compensation in September 2015.
• OFCCP has talked vaguely about updating sex discrimination guidelines to reflect changes in Title VII of the Civil Rights Act of 1964.

Some good news from the DOL: the Fair Labor Standards Act’s (FLSA) “Right to Know” regulation and the Injury and Illness Prevention Program both have moved to Long Term Action on the Uniform Regulatory Agenda.

• The National Labor Relations Board

Brian Hayes discussed highlights of the Board’s activity. Employers can expect the current majority of pro-union members to stay in place well into the next administration. The Board’s first policy commitment is to change the current trend of declining union membership in the private sector, which is at an all-time low. As a result of the decline in private parties’ utilization of the Board’s services, the Board has focused on the following issues:

• “Ambush Election” Rules. In December 2014, the NLRB issued the “ambush election” rules, which will become effective in April of 2015 absent intervening preclusion by legislation or pending litigation.
  • The proposed rules are “procedural changes” with the principle effect to reduce time between when a union files a petition for an election and when the election is conducted.
  • Presently, the time between petition and election is generally between 38-42 days. The “ambush election” rules narrow that time to 14-21 days.
  • This narrower timeframe will make it easier for unions to organize because employers will be severely limited in the time they have to communicate their views about unionization. Employees likely will hear only one side—the union side—and unions will be much more likely to prevail.
  • The rules remain topics of lawsuits and the panel is hopeful that the rules may be enjoined. Nevertheless, Mr. Hayes stated that prudent employers should recognize the high bar to blocking these proposed rules and do everything they can to prepare for the shorter period.

• “Micro-Units.” The organization of “micro units” allows unions to pick off discrete departments and organize incrementally throughout an employer’s workforce.
  • Specialty Healthcare announced the standard that to block a “micro unit,” the employer must demonstrate that other employees share an “overwhelming” community of interest.” No employer has met that standard to date.
  • “Micro units” will be especially problematic in the retail sector as demonstrated in recent NLRB decisions involving department stores in which a valid unit consisted of first-floor female fragrance and cosmetics employees and second-floor male fragrance employees. In contrast, women’s shoes department employees and contemporary shoes department employees were considered invalid units.

• Joint Employer Standard. The Board also is looking to a radical re-evaluation of the “joint employer” standard. The Board’s General Counsel (GC) is urging the Board to abandon a 30-year-old “joint employer” standard in favor of a much broader standard. The GC recently authorized the filing of 43 complaints against an employer for alleged unfair labor practices at franchisee-owned locations concluding, without explanation, that the employer and the franchise owners are “joint employers.” Additionally, the Browning-Ferris decision found that an entity is a joint employer with an employee leasing company. The Board may be receptive to the GC’s theory that it should examine the “economic realities” in terms of which entity controls employment processes.
  • An expansion of the joint employer standard will spread liability, may result in what otherwise would be secondary activity spreading to another entity, and may affect bargaining configurations in that leased employees may be able to vote and be represented by the same bargaining unit as regular employees.

• Protected Concerted Activity. Another agenda item for the Board is the expansion of protected concerted activity with respect to work rules, social media, employee handbooks, confidentiality policies. The following rules will not pass scrutiny:
  • rules explicitly prohibiting Section 7 activity;
  • rules reasonably construed to prohibit Section 7 activity;
  • rules promulgated in response to union activity; or
  • rules applied to restrict Section 7 rights.

During the webinar, Mr. Hayes stated that that the Board will be looking closely at employee handbooks. Overall, employers may not promulgate a rule that “reasonably tends to chill employees’” exercise of protected concerted activity. This Board has taken an expansive, broad, and liberal view of what rules “chill” employees’ rights.

• Email Policies. The Board’s recent decision in Purple Communications, Inc. establishes a presumptive right for employees, represented or unrepresented, who use employer email systems in course of their work to discuss unions and working conditions during nonworking time. Other notable decisions include:
  • Employees were engaged in a conversation on Facebook of workplace issues, and one employee “liked” Facebook comments by other employees. By that act, the employee had engaged in concerted activity.
  • An administrative law judge (ALJ) ruled that employee disclaimers when publishing work-related information online are “extremely” burdensome. A flat prohibition of employee’s use of the employer’s intellectual property is overly broad, the ALJ found.
  • An ALJ ruled that a company’s prohibition on disclosing names, addresses, phone numbers, non-company email addresses of other employees, and employee lists is unlawful.

The ALJ decisions are indicative of the Board’s trend in this area.

According to Mr. Hayes, the key takeaway for retail employers from the recent activity is that the Board is bending over backwards to find more kinds of activity to be protected concerted activity, including situations in which people may find the employee has crossed the line in disruption of operations, intermittent work stoppages, and acting rude or vulgar, in assertions of Section 7 rights.

This blog post is part two in a three-part blog series summarizing the key points addressed in the recent Ogletree Deakins webinar, “What’s Ahead in 2015 for Retailers in Labor and Employment Law.” Stay tuned for part three.