Workplace Prof Blog

Fourth Circuit Strikes Down NLRB's Notice Posting Rule

UPDATE:  I was informed by someone at the Department of Labor that, since 2010, DOL requires federal contractors to post virtually the identical notice; indeed, the NLRB used the DOL rule as a model.  Given the numebr of such contractors, this is nothing to sneeze at.  But it would be nice if other employees also knew what their legal rights were.

The Fourth Circuit has now joined the D.C. Circuit in striking down the NLRB's notice posting rule, in Chamber of Commerce v. NLRB (a 3-0 decision, with 2 Obama nominees).  Unlike the D.C. Circuit's broad, quasiiconstitutional decision, the Fourth Circuit limited its holding to whether the NLRA gave the NLRB power to require employers that have acted unlawfully to post informational notices.  The court concluded that it did not.

The short version of the holding is that, unlike other statutes that gave agencies the power to require notices, the NLRA limited the NLRB to a reactive role.  In other words, the Board cannot act unless it is acting on a ULP charge or representational matter; thus, it is unable to impose an independent duty on employers that have not otherwise violated the Act (like the D.C. Circuit, the Fourth Circuit did not strike down the NLRB's practice of requiring notices in case-by-case determinations as a ULP rememdy or prior to an election).  I find this view of the NLRA too narrow and think the court was too quick to dismiss the Board's attempt to fit the rule under its power to "necessarily carry out" the provisions of the Act.  That said, it is a far more defensible holding that the broad one from the D.C. Circuit.  Unfortunately, the result is the same--assuming these cases stand, the NLRB won't be able to punish employers for not posting notices absent an amendment of the NLRB.  Although I still think the NLRB should ask employers to voluntarily post notices (and sweeten the pot by changing the notice to add more language about the right not to join a union, whcih it should have had in the first place).  Even if a small number of employers use it, it's better than none.

Hat Tip:  Patrick Kavanagh

-JH

ADAPT Forum on Internships: Internships and Traineeships: Occupational Transition or Exploitation?

Lots of news and cases these days around the world about the plight of unpaid interns.  Our friends at ADAPT send us word that they will be holding a forum on the issues surrounding this important labor and employment law topic.  The name of the forum is: Internships and Traineeships: Occupational Transition or Exploitation? Here is a description:

We are pleased to inform you that the Association for International and Comparative Labour Studies (ADAPT) has launched a new discussion forum on the contentious issues of internships and traineeships. In our opinion, debating this matter from an international and comparative perspective is the best way to reflect upon the central questions related to labour market regulation: What is the meaning and value of labour and which is its proper legal definition? In reference to internships and training, are we talking about work or a simple learning experience? Which is the legal definition and, consequently, the most effective way to regulate internship? According to the different definitions and purposes, shoul d internships be paid or unpaid? How to evaluate and certificate the competence gained after a period of an internship? Who monitors and controls the regularity and the quality of internships? Should internships be limited to school alternation or school-to-work transition only? Is it possible to utilize people’s work without a formal contract?

We do not have pre-determined answers to all these questions, yet we strongly believe that today’s improper use of internships will have serious consequences not only on young people but also on the future of our economies and on the development of a sound society. This is why we want to open this forum and ask your contribution and suggestions, in order to provide the right answers to such a complex issue. We are aware that an international and multi-disciplinary approach could help us to devise a theoretical framework and some practical solutions in order to avoid that such an important lever in terms of school-to-work transition degenerates into forms of exploitation of young people.

This is an open access 2.0 forum. A simple registration is required.

The solutions provided in this forum will be discussed during the upcoming international conference, Internship and Traineeship for Students and Young People, Training, School-to-Work Transition or Exploitation?, organised by our International PhD School on Human Capital Formation and Labour Relations on October 25-26, 2013 in Bergamo.

You are welcome to join us in this forum and attend the conference, also by submitting a contribution in response to our call for papers.

For further information, make contact with our staff at news@adaptinternational.it

PS

Labor & Employment Roundup

It's time for another labor and employment roundup:

• Among the reasons for my needing to do a quick roundup is preparations for two summer conferences:

1.  The inagural Labour Law Research Network (LLRN) conference in Barcelona next week.  The program looks great, present company notwithstanding.

2.  The annual Southeastern Association of Law Schools (SEALS) conference, Aug. 4-10 in West Palm Beach (and to all those who are thinking boondoggle--yes, it's in a nice place, but we take over an entire Southern Florida hotel in August and, as a result, get incredibly cheap rates).  As has been the case for the last several years--primarily due to the work of Michael Green and Paul Secunda--there are numerous labor and employment panels (by my count, six panels with a primary L&E focus, plus many more related).  One new feature this year at SEALS is a "New Voices" series that involves a call for papers from scholars with five years or less experience to discuss works-in-progress with more senior faculty--we have a L&E New Voices panel with several great-looking papers.

• The May unemployment numbers are in: 175,000 new jobs, with an 7.6% unemployment rate (up from 7.5% the month before).  The numbers look OK--a bit better than projected--and there seems to be a slight decrease in discouraged workers.

• In a case in which Connecticut state employees challenged their dismissal, the Second Cir. granted summary judgment to the plaintiffs, holding that the layoffs targeted union members.  According to the court, this violated their First Amendment right to association and, in doing so, applied strict scrutiny.  Given that the standard for these cases has been a mess of late, expect a cert. petition and a decent likelihood of it being granted.

• An employer recently settled charges that it fired two workers, and sued one of them, for filing charges with the NLRB.  In addition to paying $315,000, the employer agreed to drop the suit, rescind a wage-gag rule, and stop paying an attorney to represent employees in a coercive manner (the attorney claimed to represent the employees--allegedly via coercion--and required all contact with employees to go to him first.  Even by labor law standards, that's some pretty agressive action.

• An update on the cert. petition and amicus briefs for Noel Canning.  The conference is set for June 20.  My favorite quote from the Washington Post article:

“This stuff is catnip for law nerds,” Washington lawyer John P. Elwood wrote in a post on the legal blog the Volokh Conspiracy — which, it should be said, is itself catnip for law nerds.

• Speaking of the dysfunctional state of NLRB appointments, former member Peter Hurtgen suggests a temporary compromise of having only two Democratic and two Republic members.  I admire Hurtgen, but I'm not sure that having the White House give up its normal prerogative to have a majority on the NLRB solves anything--seems like it simply gives the minority party more incentive to block nominations.

• Also, in NLRB news--the Board refused to adopt the General Counsel's suggestion to change the Spielberg/Olin arbitration deferral standards.  The GC wanted more limited deferral, to occur only when it is shown that the arbitrator adequately considered the statutory rights at issue.  Not entirely clear why the NLRB didn't agree, but it shows that descriptions of the NLRB as being a hack for union interests isn't accurate.

• The Fourth Circuit recently issued a decision in a sexual harassment case in which the alleged harasser commited suicide after the accusation was made.  The court affirmed summary judgment for the employer in yet another case that shows, in spite of popular opinion, how difficult it is to win sexual harassment claims.

Hat Tip:  Jonathan Harkavy, Patrick Kavanagh, and others.

-JH

Yesterday's Supreme Court Chevron Decision and Its Impact on the NLRB

A very interesting guest post today by Lise Gelernter (Buffalo) on the potential impact of yesterday's U.S. Supreme Court decision involving administrative law and the FCC, which could have some impact on the NLRB's power to interpret the jurisdictional bounds of its own statute:

As an administrative law geek, I read the Supreme Court’s Chevron decision issued yesterday (City of Arlington v. FCC 569 U.S. __, slip op. No. 11-1545 (5/20/13)) with great interest.  And then I started wondering if it had any impact on the NAM v. NLRB case concerning the NLRB’s authority to require employers to exhibit posters about employees’ collective bargaining rights. 

In the Arlington v. FCC case, the majority (with Justice Scalia writing the decision and Justice Roberts strongly dissenting, joined by Justices Alito and Kennedy) said that courts had to defer, under Chevron, to the FCC’s determination that it had the jurisdiction or authority to interpret an ambiguous part of its statute.  The statute in question required state and local governments to act on wireless antennas siting applications “within a reasonable period of time.”  47 USC §332(c)(7)(B)(ii).  The FCC had promulgated a rule interpreting “reasonable” to mean 90 days for applications for new antennas on existing towers, and 150 days for all other applications.  The question was “whether a court must defer under Chevron to an agency’s interpretation of a statutory ambiguity that concerns the scope of the agency’s statutory authority (that is, jurisdiction).” 

 The majority found that there was no difference in Chevron treatment of “jurisdictional” questions and “run-of-the mill” applications of an agency’s governing statute.  Slip op. at 5.  The bottom line was:

judges should not waste their time in the mental acrobatics needed to decide whether an agency’s interpretation of statutory provision is “jurisdictional” or “nonjurisdictional.”  Once those labels are sheared away, it becomes clear that the question in every case is, simply, whether the statutory text forecloses the agency’s assertion of authority.

Id. at 9.  The Court upheld the Fifth Circuit’s decision to grant Chevron deference to the FCC because the statutory grant of authority was ambiguous and the FCC’s interpretation of its authority was “a permissible construction of the statute.”  Id. at 4.  The ambiguity was found in  the “reasonable period” language in §332(c)(7)(B)(ii) and a “saving clause” that provided “that nothing in the [Communications] Act, except those limitations provided in §332(c)(7)(B) ‘shall limit or affect the authority of a State or local government’ over siting decisions.”  Id. at 2 (emphasis added).  The City of Arlington had argued that the “saving clause” took away the FCC’s authority to set specific time limits on siting decisions.  The Fifth Circuit had determined that the effect of the saving was ambiguous and that the FCC’s determination that it could impose specific time limitations was a “permissible construction of the statute.”  Id. at 4.

Although the DC Circuit’s decision in the NAM v. NLRB case is framed differently, I wonder if that court’s insistence on Section 8(c)’s limitations on the NLRB’s ability to require employers to post the NLRB’s words about collective bargaining rights isn’t really just a decision not to grant Chevron deference to the Board’s finding that it had the jurisdiction to require the poster.  As was true for the FCC, the NLRB has a broad grant of rulemaking power under §6; the NLRB has “the authority from time to time to make, amend, and rescind . . . such rules and regulations as may be necessary to carry out the provisions of this Act.”  §201 of the Communications Act gives the FCC the similar authority to “prescribe such rules and regulations as may be necessary in the public interest to carry out [its] provisions.”  Shouldn’t the NLRB’s interpretation of its statute in a regulation get the same deference test applied as was true for the FCC?  It can be argued that the DC Circuit just began with the wrong analysis.

Some might argue that the NAM v. NLRB case is very different because it is based on a First Amendment analysis, not a Chevron-type analysis.  But the DC Circuit was very careful to tie everything back to the statute in the form of the limits that §8(c) imposes on the NLRB, not really on the First Amendment.  The court’s conclusion states: “We therefore conclude that the Board’s rule violates § 8(c).”  Slip op. at 23.  Thus, the issue in that case really is whether or not §8(c) precluded the Board from issuing its rule (which was the issue the litigants focused on).  The Arlington v. FCC case says that if the Board’s statutory interpretation is permissible, the court should defer to the Board’s interpretation in the face of the ambiguity raised by the interplay of §8(c), the §7 rights the NLRA grants, and the broad §6 rulemaking authority.  Of course, a court could find that the Board’s interpretation is not permissible, but that is not what the DC Circuit did.  The court short-circuited the traditional Chevron analysis that the Arlington v. FCC case requires.

I think Lise's analysis has some really bite to it and will be interested to hear what readers think of her theory in the comments.

PS

Busy Beltway Labor Law Day: NLRB Nominations and DOL Secretary Committee Vote

In addition to the Third Circuit's divided, pro-Noel Canning decision this morning which Jeff has described here in his post from today, Washington has been busy with labor-oriented topics.

To wit, the Senate Health, Education, Labor and Pensions (HELP) Committee held a hearing on the five recently nominated members for the National Labor Relations Board (NLRB) (Democrats Mark Gaston Pearce, Richard F. Griffin, and Sharon Block, and Republicans Harry I. Johnson and Philip A. Miscimarra).  Surprisingly, the hearing lacked histrionics from either side, and a vote is planned by the Senate commitee next week on May 22nd.  My prediction would be to expect a party line vote sending the nominations to the Senate floor, where, of course, a Republican filibuster should be expected. It will be interesting to see how the GOP justifies this filibuster given that its complaints about the Obama administration surround the use of the recess appointment power, and now Obama is given them the nominees they asked for in the first place. There is some urgency here because the Board will lack a quorum as of August 27th, when Chairman Pearce's term expires.

In other news, the Senate HELP committee voted today 12-10 along party lines to forward the nomination of Thomas Perez to be Secretary of Labor.  Perez, who is exceptionally qualified to hold this position based on previous positions in federal and state government (he is the assistant attorney general in charge of the Justice Department's Civil Rights Division and he formerly headed Maryland's Department of Labor, Licensing and Regulation), has been under GOP attack for his purported role as assistant AG for civil rights. Not sure what the GOP will do on the Senate floor. They might have a hard time holding together a filibuster on this one, especially since their allegations against Perez appear to have turned out to be all smoke and no fire.

In any event, busy day today in Washington D.C. And I have feeling, the fireworks have just started.

PS

Third Circuit Agrees With Noel Canning

Today, the Third Circuit just issued its decision (2-1) in NLRB v. New Vista Nursing & Rehab [ Download New Vista ].  I've haven't had a chance to really read it (including the dissent, it comes in at a whopping 157 pages), but it basically follows the D.C. Circuit's conclusion in Noel Canning that recess appointments are only allowed for intersession Senate recesses.

A few interesting things in New Vista.  First, this case--which substantively involved an employer's technical Section 8(a)(5) election challenge--involved former Member Becker's appointment.  This obviously expands the impact of this issue on past Board decisions, although I'm guessing not significantly, as there are probably not a lot of decisions involving Becker that are still pending and include this argument (which the Thrid Circuit held is not waivable).  Second, this only brings up the pressure for Supreme Court review, especially given the split with the Eleventh Circuit.

A final point is that, although I don't think it's an accident that courts are using the NLRB for this issue, what we're dealing with is much bigger than the NLRB.  This a separation of powers fight, and a big one.  Given the Republicans' de facto rule requiring a supermajority for all appointments, these cases severely limit the president's ability to make nominations.  The irony is that these decisions could end up giving the president more power if the Democrats finally decide to go nuclear and change the current filibuster rules, which only requires a majority vote.  I won't make a prediction on that, as there are a lot of factors at play as this battle plays out.  However, although I'm not predicting this either, don't be surprised if the Court ultimately cites its political question doctrine and just lets the elected officials go at it without court interference.  I'm not sure the Justices will be able to resist a big issue that brings in questions of textualism and originalism, but there is a reasonable argument that the political question doctrine is justified here.

Stay tuned!

Hat Tip:  Patrick Kavanagh

-JH

Penn State Labor Studies and Employment Relations Program Elevated to "School" Status

Some counter-momentum for schools of industrial relations in the United States?:

Paul Clark, Professor and Director of the new School of Labor Studies and Employment Relations at Penn State University wrote the LERA listserv this morning:

I am pleased to announce that on May 3rd, Penn State’s Board of Trustees voted to elevate our program from a Department to a School.  The change is effective immediately. 

Our new School of Labor and Employment Relations offers six degree programs in residence (BA & BS in LER, MS in HRER, 5-Year BS in LER/MS in HRER, 5-Year BS in Spanish/MS in HRER, and 4-Year JD/MS in HRER degrees) and five programs online ((BA & BS in LER, MPS in HRER, 5-Year BS in LER/MPS in HRER, and BS in Organizational Leadership degrees).  The elevation of the program to school status is the culmination of a lot of hard work by faculty, staff, and alumni over our 70 year history.  In recent years we have established a successful research Center on Global Workers Rights and are in the process of starting a new International Human Resources Management Project that will become a full-fledged center in the next year or two.  We also have reinstated our Labor Education and Research Program and created a new management outreach program called the Academy of Human Capital Management.

While our name will change, we will remain a part of the College of the Liberal Arts at Penn State.

We think the change in our status is a positive thing for our program and for the field of labor and employment relations.  We look forward to working with other programs to help move our field forward in the years ahead.

I, of course, agree whole-heartedly.  There has been too many shuttering of industrial relations programs in the US in the last decade or so, while focus has shifted to corporate-oriented Management and Human Resources programs in business schools around the country.  I can only hope the success at Penn State resonates with other campuses around the country.  As income inequality in this country grows dramatically and unions face increasing attacks from their corporate-sponsored opponents, these types of schools are essential to provide an academic viewpoint slowly disappearing.

PS                     

Call for Signers for Academic Letter in Support of Confirmation of Bipartisan NLRB Nominee Package

There has been much conversation of late about the Noel Canning NLRB recess appointment decision and whether it is likely to be heard by the U.S. Supreme Court. In the meantime, many are urging the Senate to confirm a full package of NLRB nominees (3 Ds, 2 Rs as is traditional).

On this basis, Lynn Rinehart at the AFL-CIO is asking academics to support confirmation of all five NLRB nominees:

As you know, we face a growing crisis in the enforcement of workers’ rights in the wake of Noel Canning and the stalemate in the Senate over NLRB appointments.

The Senate Labor Committee will hold a hearing next Thursday, May 16, on the five nominees to the NLRB.

In connection with that hearing, Erin Johansson at American Rights at Work is coordinating an academic sign-on letter in support of confirmation of the five-member bi-partisan package.

We urge you to add your name to the letter.  You can sign by visiting this page. 

PS

D.C. Circuit Strikes Down NLRB Notice Rule

Here we go again.  You know the saying, "Bad facts makes bad law"--well, for the D.C. Circuit you might replace "bad facts" with "NLRB."  I know from my time as an NLRB appellate attorney that a lot of circuit judges don't like the NLRA, but much of the D.C. Circuit seems to go into a frenzy when presented with an important NLRB issue.  Recently, we saw the court strike down over 150 years of recess appointment practice in Noel Canning; today, the court expands the First Amendment far beyond what I've seen (in an admittedly narrow area) and strike down the NLRB's long practice of equitable tolling--all in a case involving something as common as a government employee right's notice.  The case is NAM v. NLRB (the judges were Randolph, Henderson, and Brown--another reminder that the White House's inability to get nominees on teh D.C. Circuit has a real impact).

Although the court starts with Section 8(c), which prevents the NLRB from using non-threatening speech as evidence of a ULP, the bulk of its holding makes an argument that First Amendment prohibits the government for telling companies to disseminate government information (Judges Henderson and Brown would also hold that Section 6 does not allow the Board to issue prohphylatic rules either).  Indeed, based on my quick reading of the opinion, it seems to cast doubt on the ability of the government to require notice postings in most instances, or at least punish any employer for refusing to post notices (it did hold that its opinion didn't oerturn pre-election notice posting requirements, which don't implicate Section 8(c)).  In other words, we may see challenges to FLSA, OSHA, and EEOC notices--although I'm guessing that most employers are used to these and don't get as worked up about informing their employees about the right to be paid the minimum wage, not to die at work, and not be discriminated against than they do about informing employees about their right to unionize.

In spite of the broad First Amendment language, the court ultimately holds that the central problem is that the NLRB cannot issue a ULP finding for a failure to post a notice or use that failure as evidence in a ULP case.  One might think that the Board would still be able to "require" the notice postings--but be unable to punish an employer for not following the requirement.  However, the court killed that option for the time being by refusing to sever the notice requirement from the enforcement provisions because the Board had earlier decided not to issue a voluntary rule.  That seems like a weak reed to knock out the entire rule, especially given that the court left open the question whether the NLRB had authority to issue an enforcement-less notice rule.  If the Board even gets its quorum question settled, it may try to issue the notice requirement while avoiding the enforcement problems.  Issuing a notice requirement without a way to enforce it perhaps seems a wasted effort, but I think there is some force in a government requirement, even one without a penalty.  On the other hand, the NLRB may be exhausted by its attempt to merely inform employees of their rights and just give up.  I'll also note that the court stressed the Board's failure to list employees' right to decertify in the notice, which--as I've noted before--I thought was bad judgment.  That wouldn't have affected the outcome, but it didn't help.

Of perhaps even greater significance was the court's rejection of the NLRB's alternate means of enforcing the rule:  by tolling the statute of limitations for a failure to post.  But, the court didn't just reject tolling for notice violations.  Instead, it when much farther by rejecting the Boad's use of equitable tolling in general.  

In many ways, this is the same thing we've seen for a long time from circuit court and the D.C. Circuit in particular.  But I do think that this case and Noel Canning illustrates a new level of activism.  The court is reaching far beyond what it needs to strike down a NLRB rule without much thought (or at least much care) about the broader ramifications.  For instance, the court dismisses the Board's reliance on a decision upholding a Bush-era rule requiring posting of notice of workers' right not to join a union or the right to make dues objections because the challenge to that case did not have a free-standing First Amendment claim.  Fair enough, perhaps, but the court didn't seem to grasp the signficance that this ruling might cut different ways.  For instance, once unions start attacking restrictions on its speech (seriously, what's been taking so long?!), will the D.C. Circuit be just as committed to its construction of the First Amendment?  We'll have to see . . . .

Hat Tip:  Patrick Kavanagh

-JH

Slater on Interest Arbitration

Joe Slater (Toledo) just posted on SSRN his article (OSJDR) Interest Arbitration as Alternative Dispute Resolution: The History from 1919 to 2011. Here's the abstract:

This paper comes from a February 2012 Symposium, "The Role of ADR Mechanisms in Public Sector Labor Disputes: What Is at Stake, Where We Can Improve & How We Can Learn from the Private Sector." It discusses the history of an important form of alternative dispute resolution: the use of what is called “interest arbitration” to resolve bargaining impasses in public-sector labor relations. This process is used in many states as an alternative to strikes. While interest arbitration has been a crucial part of public-sector labor law and labor relations for decades, it has come under increased scrutiny recently. Indeed, in the wave of laws passed in 2011 restricting the rights of public-sector unions to bargain collectively, interest arbitration was repeatedly attacked, and in several states it was eliminated or restricted.

This paper gives a historical overview of the development of interest arbitration, discussing how and why it developed as it did. This development was neither inevitable nor “natural” in that many other western democracies generally allow public workers to strike. But only a few states in the U.S. allows any public workers to strike. Thus, the question is: why did U.S. law and policy develop the way it did? This paper traces the relevant history from 1919 through to the new, restrictive laws of 2011. It starts with the Boston Police strike of 1919 — a seminal event in the history of public-sector labor law, that had a profound and lasting impact on how U.S. policymakers felt about dispute resolution in public sector labor law. It then turns to the first public-sector labor law permitting collective bargaining — passed, ironically in view of recent events, in Wisconsin in 1959 — and describes how concerns about dispute resolution were central to debates over that law. The paper continues by explaining how interest arbitration in public-sector labor relations has evolved and how it has worked from the 1960s into the 21st century. Finally, the paper explores the very recent developments in this area in the laws of 2011.

rb

NLRB Files For Cert. in Noel Canning

Yesterday, the NLRB filed a cert. petition with the Supreme Court to overturn the D.C. Circuit's decision in Noel Canning.  You can see the petition here.  Lyle Dennison at SCOTUSblog has a nice summary of the issue here, including the fact that it's highly unlikely that the Court will hear the issue this term, leaving the NLRB twisting in the wind for a while longer.

Given the delay in resolving the issue, were largely back to where we were before:  One settled NLRB member, whose term is expiring later this year and who has been renominated; two recess appointments whose status is up in the air and who have been renominated; and two new nominees.  Basically, by the end of the year it's possible the the NLRB will have a full five members, no members, or something in between (how's that for covering all the bases?).  The Senate has scheduled hearings on the pending nominations for May, but I don't know how seriously to take that.  Stay tuned.

Hat Tip:  Patrick Kavanagh

-JH

Duff on Labor and the NFL Antitrust Exemption

Michael Duff (Wyoming, visiting Denver) has just posted on SSRN his essay What Brady v. N.F.L. Teaches About the Devolution of Labor Law.  Here's the abstract:

In this essay I argue that the Eight Circuit got things very wrong when it found, in Brady v. National Football League, that a district court’s injunctions issued against the NFL in connection with player-filed antitrust suits were barred by the Norris LaGuardia Act of 1932 (NLGA).  I argue that the Court’s misreading of the NLGA strikes at the “statutory music” of labor law so dramatically as to represent a judicial unmooring from it.  I chronicle other recent important, but relatively minor, judicial departures from the music.  I also discuss a major but less recent departure – the employer lockout.  I distinguish Brady from these departures, concluding that invocation of the NLGA—the original and arguably the foundational American labor law statute—to protect wealthy NFL owners from player-filed antitrust suits is a bridge too far.  That the NFL wants to be exempted from antitrust law, I understand.  We should be honest, however, and modify antitrust law to affirmatively grant the exemption (or not).  We should not contort and abuse labor law in a manner that makes a mockery of it.  On the other hand, I consider whether cases like Brady are inevitable when judges are propping up a labor law regime originally meant to maintain industrial peace throughout an era in which there is little industrial strife.  Perhaps it is natural that a labor law regime that cannot do what it was supposed to do because of a shift in the zeitgeist (whatever caused the shift), coupled with legislative ossification preventing the regime’s innovation, will be vulnerable to bad faith manipulation.  In Brady, the manipulation consisted of the court’s misapplication of the NLGA and its putting on of blinders as all parties advanced positions difficult to characterize as having been made in good faith.  I question in light of the debacle why anyone would want the labor law we now have.

rb

 

House Votes To Freeze NLRB

Late last week, the House voted (219-209) for the Preventing Greater Uncertainty in Labor-Management Relations Act.  The bill would require the NLRB members to cease their work, while allowing other functions, such as the regional offices, to continue.  The impetus is the D.C. Circuit's Noel Canning decision.  According to The Hill:

The House voted Friday to freeze the work of the National Labor Relations Board (NLRB), a reaction to a federal court's finding that two of the NLRB's current three board members were unconstitutionally appointed by President Obama in 2012.

Members narrowly passed the Republican bill, H.R. 1120, in a mostly partisan 219-209 vote. Every Democrat voted against it, and they were joined by 10 Republicans. . . .

[T]he GOP-favored legislation would freeze the work of the NLRB board as it is currently constituted and block the enforcement of the decisions the board has made since Obama's appointments have been in place. Rep. John Kline (R-Minn.) said the court ruling calls into question all of the board's decisions, and that its work should therefore be frozen. . . .

What is more intersting is how the Republican reaction will play out with the recent new NLRB appointees.  There could easily still be objections in the Senate to allowing the NLRB to continue, period.  That said, the language used in this bill and similar support for Noel Canning stresses the recess appointments more than anything else (and, yes, I know that hostility to the NLRB is a big part of it too).  Moreover, would two well-paid law firm partners put themselves through the appointments ringer if they didn't feel like there was a good chance that they would be confirmed?  I doubt it, but we'll have to see.

Hat Tip:  Patrick Kavanagh

 

New Labor Law Casebook

Congratulations to Seth Harris, Joe Slater, Anne Marie Lofaso, and David Gregory on the publication of their book Modern Labor Law in the Private and Public Sectors: Cases and Materials (LexisNexis, June 2013).  Here's the publisher's description:

Modern Labor Law in the Private and Public Sectors: Cases and Materials presents a truly modern approach to labor law in the United States. It incorporates two modern trends in labor law: the shift of union density from the private-sector to the public-sector and the growth of organizing outside the NLRA process.  The book incorporates both these modern trends, so students entering the practice of labor law - on the side of unions, employers, or government agencies - will understand what they are likely to encounter.

Modern Labor Law in the Private and Public Sectors: Cases and Materials is structured around the life cycles of the organizing and collective bargaining processes.  Each chapter in the book begins with cases and materials relating to private-sector workers and also includes materials relating to the same issue in the context of public-sector employment.  During the course of writing, the authors continually updated the content to reflect the changes in public-sector labor laws in several states and the new debates over policy.

rb

Estreicher on Labor Strategy

Sam Estreicher (NYU) has just published in St. John's Law Review his article "Strategy for Labor Revisited."  [ Download Estreicher Paper ] The abstract:

What follows is an unofficial transcript of an off-the-record conversation among three of the labor movement's leading strategists. The meeting was convened by C, or "cooperationist," who had been forover ten years the president of a local union, part of a major industrial union, representing 3,000 employees who had been hired to staff a new manufacturing plant in a Southern town ("Newplant"). Newplant had been widely touted as a breakthrough in U.S. labor-management relations because it was consciously designed to promote greater participation of production and maintenance workers in business decisions. In bitterly contested local elections last year, C was voted out of office and now serves in a staff capacity at the AFL-CIO. A, or "adversarialist," a longstanding friend of C, is the research director of another industrial union. A was very active in the Students for A Democratic Society in the 1960s, and after graduating from Antioch College began his career as a labor organizer, working for a succession of unions that had been active in the McGovern-Kucinich wing of the Democratic Party. S, or "stay the course," is the highly respected chief of staff for a national union representing government workers. Section headings and citations are supplied by the editor and do not appear in the original transcript.

Check out this novel take on some of the various strategic options that unions might consider in the current economy.

-JH

In my prior post, I summarized the analysis in Horton Hatches the Egg: Concerted Action Includes Concerted Dispute Resolution, which Tim Glynn and I recently uploaded on SSRN.  As I described, we argue that NLRB correctly concluded in In re D.R. Horton that the labor laws protect the right to concerned action in the form of concerted dispute resolution.  We then demonstrate why this right conflicts with and trumps the FAA’s arbitration mandate.  Along the way, we discuss why courts confronting the enforceability of arbitration clauses in employment must address these issues, regardless of what happens to the Horton decision on appeal. 

Our final section addresses the implications of our analysis. Courts should refuse to enforce arbitration clauses that, like the one in Horton, require an employee to resolve employment-related disputes in individual arbitration and waive the right to pursue joint of collective adjudication of claims in any forum. But this does not mean that all arbitration agreements in the employment context are unenforceable.  Agreements to arbitrate individual claims are enforceable as long as employees are free to bring aggregated claims in court; conversely, employers might well be able to bar access to judicial forums, if they adequately allow for concerted enforcement of legal claims in arbitration. 

But, as we demonstrate, there are important limitations on next-generation arbitration agreements. The NLRA declares it an unfair labor practice to require agreements that reasonable employees may believe bar concerted action, and, given the Supreme Court’s declaration in Stolt-Nielsen that “arbitration” means “bilateral arbitration,” an agreement providing merely for “arbitration” must bar concerted pursuit of claims. The bottom line is that employers must make clear in their agreements that some form of concerted relief remains available. We wonder whether most employers will choose to do so.  To explore the exciting details, again, you can check out the article. 

Last, but certainly not least, for those of you wondering about the title, it’s a play on Dr. Seuss, Horton Hatches the Egg (1940), a classic children’s tale in which Horton, an elephant, promises to sit on the egg of Mayzie, the lazy bird, while she flies off for a short rest. Needless to say, Mayzie doesn’t return, but faithful Horton continues to warm the egg for nearly a year, in the process undergoing a variety of ordeals. His performance is all the more remarkable since Mazie clearly provided no consideration for his promise.The result is a perhaps genetically unlikely elephant-bird, which might well symbolize the next generation of arbitration agreements if Horton is generally accepted.

CAS

Should Colleges Train Scabs

One of my favorite bloggers on higher education, Dean Dad at Confessions of a Community College Dean, asks: Should a public college partner with a private company to train scabs?  I'd encourage Workplace Prof Blog posts to read the entire post and to comment over at Dean Dad's blog.

Anya Kamenetz has a thought-provoking piece about the Milwaukee Area Technical College’s agreement to run welding programs for Caterpillar.  Caterpillar is expecting a strike, so it wants the local technical college to train its managers and non-unit staff to be able to do union jobs if its welders walk off the job. MATC is responding to employer need, offering training in an employable skill and thereby supporting the local economy.  Now the Steelworkers’ union is petitioning MATC to refrain from what it considers pre-emptive strikebusting.  It’s an ugly, sticky issue. 

There’s nothing objectionable about a technical college teaching welding.  It has done that for years, and I assume has done it well.  And there’s nothing unusual about a college contracting with specific private employers to run classes or training workshops for its employees.  Community colleges have done that for decades.  * * *

In this case, the union is essentially asking the college to take a moral position that training these workers in this skill at this time is wrong.  * * *  [T]hinking through the consequences of taking a self-consciously moral position gets complicated quickly.  Suppose MATC told Caterpillar to go away.  The governor of Wisconsin isn’t known for being particularly union-friendly; I can imagine severe political (and therefore budgetary) consequences for the college far beyond the loss of the contract.  Something like that is going on now in Michigan, where some public colleges are trying to sign long-term contracts with unions to beat the “right to work” deadline, and legislators are threatening budgetary retaliation. * * *

Wise and worldly readers, what would you do?  If you ran MATC, would you honor the union request, or would you run the program?

rb

The Right to Concerted Legal Redress

Many thanks to my colleague Rick for his post on the abstract for Horton Hatches the Egg: Concerted Action Includes Concerted Dispute Resolution, which Tim Glynn and I recently uploaded on SSRN.  We don't disagree with him that the smart money might well bet on the FAA in this collision, but we're pretty sure this will be a heavier lift for a textualist Court than at least some of the prior decisions.

In any event, while we (naturally) think the piece is worth a read in full, in the interests of shameless self-promotion and on the remote possibility that some of you might want a short summary, here goes.

A little over a year ago, the National Labor Relations Board decided In re D.R. Horton, which held that employers may not compel employees to waive their NLRA right to pursue collective legal redress of employment claims. Instead, the NLRA mandates that some mechanism for concerted dispute resolution remain available in arbitral or judicial forums.  The decision was appealed to the Fifth Circuit, where it remains pending after oral argument.  That court has to face not only the underlying substantive issue but also various challenges to the composition of the Board itself.  A successful challenge would vacate Horton and threaten a number of other Board decisions (and, indeed, perhaps the decisions of a number of other agencies to the extent that the Fifth Circuit might fall into line with the D.C. Circuit in Noel Canning v. NLRB, invalidating most recess appointments).

Our article, however, mostly avoids the quorum issues since the question the Board decided – whether an arbitration agreement can bar all joint and collective resort to legal remedies in any forum, arbitral or judicial – will confront courts whenever an employer moves to stay a lawsuit pending arbitration. And in such proceedings the Horton analysis will continue to have influence, regardless of whether the Board decision is affirmed or vacated. In fact, in our view, the courts are required to address this analysis, not because of (or at least not only because of) Horton itself, but because it reflects the correct interpretation of the NLRA as well as its predecessor, the Norris-LaGuardia Act.

Indeed, we think the threshold question – whether the labor laws protect the right to concerted action in the form of concerted dispute resolution – is scarcely debatable. While we track through the case law establishing that principle, tracing it back to the Norris-LaGuardia Act’s invalidation of yellow dog contracts, the bottom line is that it’s hard to imagine a reading of that statute and the NLRA that would protect employees from contracting away their right to strike and picket but nevertheless allow them to agree not to join together as co-plaintiffs or in class or collective actions to vindicate their rights in appropriate forums. Of course, if you have doubts or your curiosity is piqued, you can go check out the article!

The real stumbling block for Horton is not the clear requirements of labor law but, as Rick suggests, the Federal Arbitration Act. Now, we agree with Rick that the FAA has, at least until now, been king of the hill when it comes to its intersection with other federal statutes. That has been due to the Supreme Court’s rather impressive ability to interpret the FAA not to conflict with the other statutes and thus avoid having to confront the correct result should it find an irreconcilable conflict. But we believe even the present Court would have to recognize that, in the Horton scenario, the irresistible force of the FAA has met the immovable object of the labor law right to concerted dispute resolution.

Ironically, it is the Supreme Court’s recent decisions regarding arbitration that have made the conflict inevitable. In its most recent FAA jurisprudence, the Court has gone well beyond insisting that arbitration clauses be enforced on the same terms as other contractual provisions.  In Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758, 1775-76 (2010) and AT&T Mobility v. Concepcion, 131 S. Ct. 1740, 1750 (2011), the Court stated that the enforcement of arbitration clauses as written means, absent qualifying language, that arbitration must be bilateral, that is, only between the parties to the agreement. Taken together, these decisions indicate that an (unqualified) mandatory arbitration clause in an otherwise enforceable contract will preclude joint, collective, or class enforcement in both arbitral and judicial forums and therefore abridge employee rights to concerted action.

Thus, there is a conflict between the two regimes, and the Court will have to decide which trumps where an otherwise valid arbitration agreement purports to limit what would be employees’ right to concerted dispute resolution or other concerted activity. For us, the answer is easy: applying normal principles of statutory interpretation, the labor statutes (the NLA and the NLRA) effects a pro tanto repeal of the FAA. Indeed, as an obvious starting point, both regimes expressly so provide!  Thus, the FAA finds arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” And the Norris LaGuardia Act contains an express repealer: “All acts and parts of acts in conflict with the provisions of this chapter are repealed.”  29 U.S.C. §115.

Moreover, we believe that, by fair implication, the NLRA also repeals conflicting applications of the FAA.  A simple hypothetical, drawing on the plain language of the FAA, makes the point pellucid. While we usually think of the FAA as governing disputes about legal rights, § 2 it is framed much more broadly to validate any “agreement in writing to submit to arbitration an existing controversy.” What would this section say about the scenario in NLRB v. Washington Aluminum Co.,  370 U.S. 9 (1962), the seminal NLRA concerted action case? In the case itself, the Supreme Court affirmed the Board’s finding that seven workers who had left work together to protest the shop’s bitterly cold but not unlawful conditions had engaged in protected concerted activity under Section 7. If the FAA’s broad bilateral arbitration enforcement mandate survives the NLRA in this context, an employer could require that all employees to agree, as a condition of employment, to submit Washington Aluminum-like complaints or disputes—all “controversies over conditions in the shop”—exclusively to individualized, binding arbitration.

Needless to say, so reading the FAA would effectively repeal the labor law.  The bottom line then has to be otherwise:  the labor statutes trump the conflicting FAA.  Obviously, the full analysis with all of its twists and turns requires a deeper dive than this, so I again shamelessly invite you to read the piece. . . .

Finally, I should note that reaching this result required dealing with some pesky issues which you can pursue if you’re so inclined. For example, there’s an argument (that we don’t think much of) that courts have to leave these questions, at least in the first instance, to the primary jurisdiction of the NLRB. And there’s an argument that Glynn and I view as bizarre (but has been accepted by some courts) that the FAA in fact trumps the labor laws. It goes this way: while the FAA was enacted in 1925 and the NLA and NLRA in the ‘30s, the FAA was reenacted in 1947 as part of a routine codification of the United States Code and it is therefore the later in time and trumps the “earlier” statutes in the event of conflict. Really.

I’ll come back to some of the implications of our analysis in a follow-up post.  And it will be shorter.  Really. 

CAS

Sullivan & Glynn on D.R. Horton

Charlie Sullivan & Tim Glynn (both Seton Hall) have just posted on SSRN their article (forthcoming 64 Alabama L. Rev. (2013)) Horton Hatches the Egg:  Concerted Action Includes Concerted Dispute Resolution.  Here's the abstract:

As interpreted by the Supreme Court, the Federal Arbitration Act has largely swept all before it, validating agreements to arbitrate almost all disputes, including those involving claims under statutes regulating the employment relation. That era may be nearing an end. The National Labor Relations Board recently held in In re D.R. Horton that employers may not compel employees to waive their NLRA right to pursue collective legal redress of employment claims. Instead, the NLRA mandates that some mechanism for concerted dispute resolution remain available in arbitral or judicial forums. Unsurprisingly, this decision has generated an enormous amount of litigation. Although the case itself is pending before the Fifth Circuit, courts across the country are now confronting Horton-based challenges to the enforcement of mandatory arbitration clauses in employment contracts. To date, they have generally rejected these challenges on various grounds.

This Article will explore why these courts are wrong and why agreements that bar concerted dispute resolution are indeed invalid. The Board’s articulation of labor law rights ordinarily is entitled to judicial deference. But such deference has been called into question in Horton itself in part because of a recent circuit court decision invalidating recess appointments to the Board. As we will demonstrate, however, no deference is necessary because Horton reflects the correctnot merely a reasonableinterpretation of the NLRA as well as its predecessor, the Norris-LaGuardia Act.

Moreover, although the Supreme Court has seemingly treated the Federal Arbitration Act as a “super-statute” that overwhelms all before it, the Court has simultaneously denied doing more than applying what textual analysis and interpretive conventions require. The Horton question will force the Court to confront the collision between what it says and what it does. Established doctrines of statutory interpretation, recently and resoundingly reaffirmed by the Court, dictate a contrary result. Indeed, to the extent the concerted activity mandate of federal labor law conflicts with provisions of the FAA, the former clearly supersedes the latter.

With apologies to Dr. Seuss, Horton meant what it said and said what it meant. Courts must follow, one hundred percent.

For what it's worth, I agree completely with Charlie and Tim about what the Court should do, but I do not expect that this is what the Court will do.  As I have argued elsewhere, the Court is, in FAA cases, all too willing to subsume plain language to the Court's policy preference for arbitration.  I suspect that the Court will do as it did in Concepcion, and find that the D.R. Horton rule would have the effect of discouraging employers from promulgating individual employment arbitration agreements and therefore is inconsistent with the FAA. 

One might argue that Concepcion is distinguishable because it involved a potential conflict between the FAA and a state common-law doctrine (unconscionability) instead of a federal statute (NLRA).  But I wouldn't read too much into this given the express language in the FAA Section 2 preserving state common-law defenses to arbitration agreements.  If the Court in Concepcion was willing to erase that language, I see no reason why the Court will give the language of the NLRA any higher priority.

rb

Rosado Marzan on Organizing Unions in the U.S. with International Framework Agreements

César F. Rosado Marzán (Illinois Institute of Technology, Chicago - Kent College of Law) has posted on SSRN his forthcoming piece in the UC Irvine Law Review entitled: Organizing Unions in the U.S. with International Framework Agreements: An Exploratory Study. 

Here is the abstract:

Union density continues to decline, while income inequality continues to climb. But while union density falls we have experienced the counterintuitive rise in international framework agreements (“IFAs”), or agreements signed by global union federations (“global unions”) and multinational corporations. IFAs can be construed to contain employer pledges to not put obstacles on workers who want to organize. Can a global employer’s pledge to not oppose workers’ organization facilitate their unionization? In an exploratory fashion, I interviewed union and multi-national firms that signed IFAs to better comprehend how these novel agreements can aid the organization of workers. The results of this exploratory study show that the organizational inroads vary from nonexistent to very modest, even with the employers’ pledges not to oppose unionization. Economic and political obstacles seem to significantly hinder union organization even when the employers sign IFAs. The article concludes that even though the organizational results of the cases were not entirely positive, the cases suggest that unions that think creatively and experiment with the IFAs beyond mere neutrality pacts could counter the economic and political roadblocks to unionization. Therefore, the article provides hypotheses for further research to clarify how IFAs can be more effective organizing tools and for unions to experiment with the global agreements.

I really like how Cesar went to the proverbial horse's mouth to interview those involved in such agreements in Germany and other countries (during hsi research leave in Europe last year). I think his insights will be very helpful going forward in deciding whether IFAs can play a meaningful in the post-Wagner Model world we now find ourselves in.

PS