National labor Relations Board

My Cousin Vinny was a wonderful movie in many respects. One of those respects involves the cross examination by Vinny of a so-called eye witness. After close questioning, the “eye witness” admitted he had made eggs and grits while the two defendants were supposedly robbing a small, rural store. As Vinny explained, the witness could not have possibly cooked his 20 minute grits and eggs during the five minutes he said he saw the defendants enter and rob the store. His time estimate was way off. As cross examinations go, it was actually good.

In Novato Healthcare Center v. National Labor Relations Board, No. 17-1221 (D.C.Cir. 3/5/2019), the employer fired four union organizers two days before the election to unionize. Like Vinny’s two defendants, the case here turned on the testimony of one person, a supervisor who allegedly saw the four organizers sleeping on the job. In reaching its result, the District of Columbia Court of Appeals could not help but point to Vinny as precedent for skilled cross-examination. The supervisor testified that she saw the four workers asleep and then 21 minutes later, the workers were still asleep. The supervisor then took she took a picture of two of the workers/organizers. If they slept more than 10 minutes, the maximum time allowed for a personal break, then they committed a fireable offense.

The four workers were working the night shift at a healthcare facility. The job duties slow down a great deal at 4:00 a.m., but they still cannot sleep while on duty. So, the question becomes were they on duty when the supervisor took the picture of them sleeping? The supervisor said she saw them asleep at about 4:00 a.m. and then still asleep at 4:21 a.m., the time of her photo. So, that would mean they had slept 21 minutes or longer.

The supervisor, however, lost her credibility when under cross-examination, she admitted to performing the following tasks during that alleged 5-10 minutes:

  • drove three blocks to the healthcare facility, stopping at one stop sign about mid-way
  • parked her car and went into the facility
  • walked to her office where she logged onto her computer and checked email
  • walked to the facility kitchen, where she checked the temperature logs for a refrigerator and for a walk-in freezer, and checked the labels and dates of the items in the refrigerator
  • walked to and through the break room, where she used the rest room and collected anti-union organizing material
  • gone back to her office and read the anti-union flyers
  • walked down the hallway, peeking into rooms along the way, checking on patients
  • and then arrived at a nurse’s station where she claims she saw the two workers (organizers/employees) asleep

And, she had already admitted under direct examination that she also opened the oven doors, inspected the stove and tidied up the kitchen. As the court of appeals recognized, that was just too many tasks for 15-20 minutes. At another portion of her cross-examination, she estimated the time it took for these various activities, one-by-one. Those time estimates pushed the time period even longer. It did not help her testimony that she denied knowing the workers were union organizers, when testimony had already established they were wearing union lanyards.Or, that she had initially denied wearing an anti-union lanyard that day and later had to retract her denial.

Too, she said all four employees were asleep at 4:21. Yet, she only took pictures of two of the sleeping workers. And, she made no attempt to wake them up. It strains credulity to think a supervisor would not wake a sleeping employee at a healthcare facility. The D.C. Court of Appeals would not buy it. After all, neither would Vinny if he were writing the opinion.

See the decision here.

 

I wrote about this McDonald’s lawsuit a couple of years ago. See my prior post here. The lawsuit represented a new approach to franchisees. For years, even decades, persons suing franchisees could not also sue the parent company. A person could sue the local McDonald’s, but not the parent company. The theory was that the parent corporation sells work systems, but does not otherwise exert control over the franchisee. That theory started to change in 2015 when the National Labor Relations Board found that a company that hired a management company could indeed be liable in those rare situations when the first company retained some minimal management control. The first company and the new company would be a joint employers, said the NLRB.

In 2016, some McDonald’s workers walked off the job to call for higher wages. They suffered retaliation and then filed complaints with the NLRB. As I mentioned in my 2016 post, a simple franchisee agreement does not normally provide enough indicia of control to justify a joint employer relationship. McDonald’s settled the investigation with the NLRB. See Reuter’s report here. McDonald’s agreed to pay $3.75 million to settle the back wage claims. See Fortune report. According to the Fortune report, a judge ruled in 2017 that McDonald’s could not be liable as a joint employer, but said the company could be found liable if the employees believed the parent company was their employer.

Jon Hyman, an employer side blogger, seems to believe the matter settled in terms favorable to the McDonald’s parent company. See his post here. Regardless, it is likely that the joint employer theory has legs and will not go away soon.

 

T-Mobile has work rules including: 1) Maintain a positive work environment, 2) No arguing or fighting; respect co-workers, 3) no photography, or video or audio recording, and 4) no access to electronic information by non-approved persons. The National Labor Relations Board found these four rules to violate the National Labor Relations Act. The NLRA allows persons to organize a union. Precursors to organizing activity includes simple discussions between employees. So, rules that hinder employees communicating with each other are sometimes viewed as anti-union. The Fifth Circuit disagreed with the NLRB. It found that only the third rule about violated the NLRA. Applying a test that asks would this rule hinder the efforts of a “reasonable employee” to organize, the court found the rule regarding recording would chill organizing activity.

The court found that the very broadly stated rule would be interpreted by a reasonable employee to prohibit even mundane organizing activities such a photographing a wage schedule posted on a company bulletin board. T-Mobile defended the rule, saying it would protect the privacy of workers. But, said the court, the good intentions of a rule do not remove its harmful effects. The court did note in a foot note that certain photographs or recordings might not relate to organizing activity. But, as the rule is stated, the rule against all recording and photography would apply to activity which would clearly involve organizing activity.. See the decision in T-Mobile v. NLRB, No. 16-60497 *5th Cir. 7/25/2017) here.

So, in essence, the court might approve a rule that was more carefully worded. But, crafting a rule that protects privacy without involving possible forms of organizing activity would be very challenging. The court did not say it, but I think the judges must have wondered why not just have a rule that explicitly protects privacy? Why go though the mental gymnastics of a rule that tries to restrict photographs and recordings but dos not restrict forming a union? It sounds like the employer was possibly trying to squeeze in some anti-employee communication rules under the guise of protecting privacy of workers. After all, we all know employers would never try to hide harmful effects behind good intentions…..

Sometimes, the San Antonio Express-News just does not get the story straight. In a story, entitled “Franchisees Fear a Chain of Ruin,” the report suggests the NLRB has made drastic changes to the law regarding joint employers. See San Antonio Express-News report. The NLRB has done nothing like that. See my prior post about that recent decision  in the Browning-Ferris Industries case here and here.

As I explained previously, the Browning-Ferris decision simply holds that in those unusual cases in which the franchisor takes a significant part in the running of the franchisee, then yes, they could be viewed as joint employers. The evidence must indicate an unusual relationship in which the franchisor takes steps to control the employees of the franchisee. That should not happen often. The sky has not fallen.

The sky could fall, yes. The NLRB could find in the pending McDonald’s case that the franchisor is a joint employer even if there is no evidence that Big McDonald’s gets involved in employment decisions by the franchisees. But, that is not likely.

The real problem with the Express-News report is it lacks balance. It quotes two defense lawyers, both from the law firm, Ogletree Deakins. The report cites to no plaintiff or employee oriented lawyers. It does not cite to or refer to any NLRB lawyers. The news outlet apparently did not seek an adverse opinion in an area of law that is generally rather adverse.

Like a story on the Spurs-Warriors game, if the reporter does not talk to any of the players on the Golden State Warriors, the story would just not be complete…..

McDonald’s hamburger chain is facing the first test of a new approach to franchise workers. The new approach started with a NLRB decision last Summer that found in certain cases, the parent franchisor could be responsible for employment decisions made by the franchisee. See my comment about that decision here.

The McDonald’s case started when some McDonald’s workers walked off the job to rally for higher wages. The NLRB received many complaints after workers suffered reprisal for their labor activity. The NLRB will hold hearings about McDonald’s workers in New York City and later in Chicago and Los Angeles. The NLRB has not explained why it believes this is a joint employer situation. But, lawyers representing individual claimants point to the larger corporation monitoring and deciding working conditions of workers. See Chicago Tribune report.

If that is all the evidence the NLRB has, that may not be enough. In the BFI Industries case that established this new standard, there was more evidence of control by the larger corporation. That case concerned a supposed independent contractor, Leadpoint, and a client employer. BFI was the larger, client employer. In that case, BFI had an agreement with Leadpoint that in effect allowed BFI to “codetermine” employment decisions. Leadpoint conducted its operations on BFI property surrounded by BFI personnel. BFI set the conditions of work that determined which Leadpoint workers would stay and who would be fired. Under the agreement, BFI retained authority to “discontinue” any of Leadpoint’s employees. There were two instances in which BFI did indeed discontinue two Leadpoint workers. See my prior post about that decision.

Joint employer under the BFI decision does not mean franchisees and franchisors are automatically joint employers. First, there must e evidence that the parent or larger corporation actually exercises some control over employees of the franchisee. As they teach us in first year of law school, its all about the evidence.

In a recent ruling, the National Labor Relations Board has adopted a new standard regarding joint employers. Joint employers is a relatively new creation in the area of labor and employment law. Joint employers, as the name suggests, refers to separate employers both being employers of the same employee. Many years ago, I worked on a case in which a large office supply house contracted out its drivers to a third party. One day the drivers worked for Acme Office Supply. The next day, they worked for Speedy Delivery Service. Based on many factors, the drivers were eventually found to be employees of both entities. Yet, both entities had completely different ownership structures.

That situation was more apparent. It was obvious the large office supply company was trying to avoid liability when it switched to a third party. And, since the large office supply business still actually supervised the drivers in every way, it was easy to see that Acme Office Supply was still an employer, at least in part. But, what if Speedy Delivery hired some of the old drivers, but not all? What if Speedy Delivery had its own human resources department? And, what if Acme had some employees on-site, but so did Speedy Delivery? That is much like the case in Browning-Ferris Industries, 362 NLRB 186 (8/27/2015). BFI operated a recycling center. BFI hired and supervised the employees who worked outside the center. But, to perform the functions of sorting and cleaning the items inside the center, BFI contracted with Leadpoint Business Services. The chief Leadpoint person reports to his corporate office in Arizona.

The Board noted that the common law test for joint employers up to now has focused on control. Who controls the employee? If both entities control, then both entities are employers. The Board then looked to the test for independent contractors, which does look at who may control the employee, not necessarily who actually does control the employee. There was some evidence that BFI exercised control over some Leadpoint employees. But, the Regional Director found these instances were too infrequent to establish control. The national level Board, however, focused not on actual control but on the degree to which the second entity could control. So, the Board by a 3-2 vote, decided that no longer will it be necessary to show that the second entity must actually exercise that authority which it possesses over the employee. Browning-Ferris, at p. 15-16 (slip opinion).

The Board then noted that BFI though its agreement with Leadpoint, possessed “significant” control over who Leadpoint hired. Although BFI did not participate in Leadpoint’s day-to-day hiring decisions, it “codetermined” the outcome of that process by imposing specific conditions on Leadpoint’s ability to make hiring decisions. Even after Leadpoint has determined that an applicant meets the required qualifications, BFI still retains the authority to reject that employee “for any or no reason.” BFI retained the authority to “discontinue” any of the personnel assigned by Leadpoint. Two BFI managers testified that BFI has never discontinued any employee or has ever been involved in discipline. But, said the Board, two such incidents occurred in which BFI requested the immediate dismissal of two workers.

So, the Board determined that BFI was mis-leading. Prevarication to a tribunal always leads to problems for that entity.

The Board also found that BFI exercised indirect control over the speed and methods of Leadpoint’s work. The speed of the conveyor belts has been a source of constant tension between BFI and Leadpoint. Apparently on their own, BFI personnel have coached Leadpoint personnel on how to work smarter, faster – with no apparent involvement of Leadpoint managers. Since BFI retained “ultimate control” over the sorting and sifting lines, the Board found it difficult to see how Leadpoint could bargain with a union over issues involving work speed and breaks. BFI also assigned work positions, and assigned specific tasks that need to be completed. It dictated the number of workers needed and the timing of the work shifts.

Regarding wages, BFI played a significant role in the rates of pay and how the Leadpoint workers were paid. Under the terms of the agreement, Leadpoint may not pay its employees more than BFI pays its employees.

So, yes, this decision is possibly far-reaching. The standard for many principles of employment and contract law start with NLRB decisions. If the NLRB finds that indirect control is “control” for purposes of the National Labor Relations Act, then that certainly could spread to other employment statutes. The other day, I heard one reporter say this could affect franchises and their corporate headquarters. Yes, indeed. If McDonald’s requires its franchisees to establish certain work schedules, pay certain wages and even positions the workers in the work area, then that would certainly make them a joint employer of the local McDonald’s employees. See decision here.

This is a 3-2 decision. That means when the next President comes into office and points his two new members of the board, this decision could change. But, until then, we have a very new standard that will change the outcome of many cases. This decision is a game;changer.

 

Well, the National Labor Relations Board (NLRB) has reversed the regional director in Chicago who had ruled that Northwestern University football players could form a union. The ruling from the national level found, instead that allowing union organizing could lead to imbalances in competitive football. See CBS news report. The ruling did not address the Chicago regional director’s finding that the players were employees for purposes of the National Labor Relations Act.

I previously wrote about this issue here and here. The unanimous five-member board in Washington, D.C. found that allowing the players to organize could lead to different standards at different schools. The national ruling cited federal caselaw that promotes stability and uniformity between management and workers.

Sure, but sooner or later, the schools will have to recognize these players are more employees than students. The movement is toward greater and greater renumeration for the players, not less.

photo courtesy of tom213

The Northwestern football players will now cast their votes for or against forming a union. I wrote about this union movement previously here. Only scholarship players may vote. The school has already appealed the NLRB’s decision that the football players are employees and may form a union. The appeal will be heard by the full NLRB board. The board is composed of Presidential appointees. See National Public Radio report

The head coach, Pat Fitzgerald, opposes the union. The starting quarterback and a senior running back oppose a union. So, perhaps the pro-labor forces will lose. But, since the appeal is pending, it may be years before we know how the vote turns out. The votes cannot be counted until the appeal becomes final.  

But, like all labor movements, the real change may occur indirectly. The NCAA has endorsed just last week a plan allowing schools to provide some additional benefits to the players. 

The National Labor Relations Board has decided that college athletes can form a union. To reach that determination, the NLRB had to first find that football players are "employees" of the school. Football players at Northwestern University had sought to form a union.  I first wrote about their request here.

The Northwestern University quarterback, Kain Colter, lead the effort apparently after he sustained an injury and experienced frustration with the NCAA. See CBS news report. He testified that at Northwestern, football comes first.  If the players can fit academics in, then good. But, football still comes first. The Head Coach, Pat Fitzgerald, testified to the contrary, that academics comes first. The NLRB apparently believed Mr. Colter. The union will seek to ensure all medical expenses are covered for the players.

The NLRB does not have jurisdiction over local and state government unions. So, any future unions would have to come among private universities. 

The implication of this may be far reaching. If the athletes are "employees," then they will be entitled to all sorts of protections. They will, for example, be entitled to minimum wage and worker’s compensation protection. The athletes receive scholarships, but do those scholarships satisfy minimum wage requirements if we factor in all the hours required of each player? 

And, of course, as union members, the athletes can now negotiate with "management" regarding work hours, break periods, and …  wind sprints? 

Every so often, I talk with an employee who has been treated badly by his employer, but for whom there is no lawsuit available.  S/he has no discrimination claim.  The employee is simply treated unfairly, for which there is no remedy in Texas.  So, I typically tell such clients they should form a union if they want fair treatment in the workplace.  They look back at me like I had just told them they should take a vacation on the moon.  

Well, some football players at Northwestern University have accepted that advice.  A group of players at Northwestern have filed papers with the Chicago office of the National Labor Relations Board seeking recognition as a union.  An organization known as the National College Players Association is helping the players with the process.  The Northwestern quarterback, Kain Colter, reached out to the NCPA for help last Summer.  Mr. Colter says the problem is not Northwestern.  Its the NCAA.  The NCAA is a dictatorship and the players want a seat at the table, says the quarterback.  

Of course, a critical issue will be whether the players are "employees" or student athletes.  To form a union under the National Labor Relations act, the football layers must be employees.  In various games this past football season, players on several teams wore arm bands that said "#APU."  APU stands for All Players United.  See ESPN news report.  I doubt any forum is ready to find that athletes are employees.  But, some players want to be heard on issues that affect them.