This year is shaping up to be a dynamic one in labor and employment law. From changes to minimum wage and overtime protections to large-scale Equal Employment Opportunity Commission (“EEOC”) investigations, here’s an outline of several seminal cases to watch in 2016:
New Rule for Overtime Pay
As discussed in LeClairRyan’s Client Alert last month, the U.S. Department of Labor (“DOL”) has proposed amending the rules that govern overtime for salaried workers under the Fair Labor Standards Act (“FLSA”) by more than doubling the salary threshold for mandatory overtime coverage. If the rules are revised as anticipated, this year about 5 million more American employees may be eligible for overtime wages—and, as a result, employer payrolls will dramatically increase.
More “Systemic” Investigations by the EEOC
Coming off a year of big wins, the EEOC appears to be focused on systemic discrimination enforcement actions in part because of the greater likelihood of pursuing litigation against employers and a corresponding increase in settlements. The reason for such systemic investigations is because they are far more likely to result in litigation against the employer—and employers should be prepared.
While individual investigations tend to land an employer in court 5 percent of the time, systemic investigations meet the “reasonable-cause” threshold more than a third of the time. The EEOC is expected to push through these broad investigations into areas such as LGBT rights and pregnancy bias claims.
This expanded focus means that employers should review their policies and be ready to readjust to defend against increased EEOC scrutiny.
A Potential Boost for Big Labor
One bellwether labor case to follow in 2016 is Miller & Anderson Inc., before the National Labor Relations Board (“NLRB”), which could bolster unions’ ability to organize bargaining units.
Under the current standard, employers must consent in order for unions to organize bargaining units that include both workers solely employed by the company and jointly-employers workers, like those supplied by staffing firms. But if the Board abandons the employer consent requirement, it could allow only one of the companies to assent to a collective bargaining agreement that would affect all workers—both from staffing agencies as well as those employed solely by the user company.
The effect? Unions are more likely to win collective bargaining disputes because of the expanded definition of the bargaining unit.
Wage & Hour Watch: An “Injury” Without an Injury?
In November, the U.S. Supreme Court heard oral argument on whether courts can certify class and collective actions that cover non-injured members, in a battle that could affect the size of classes bringing employment-related claims, including those under the FLSA, Equal Pay Act and Title VII.
The case presents an ideal opportunity for the justices to either bless or forbid class actions that rely on a composite—or average—plaintiff, also known as “trial by formula.”
The outcome of the case, Tyson Foods, Inc. v. Bouaphakeo et al., will have a significant impact on the continued viability of class or collective actions to decide wage and hour lawsuits.
Increased EEOC Scrutiny on Social Media Policies
Social media issues should already be on employers’ radars, especially in light of the NLRB’s ruling last year that Facebook “likes” constitute protected activity. Now this year, the EEOC is joining the fray and is expected to scrutinize employer restrictions of employees’ social media use.
Experts expect the Commission to focus on employers’ use of social media against such watercooler activity. Areas of potential scrutiny include social media activity perceived as restricting employees’ social media rights in a way that could inhibit their ability to use it for reporting harassment and other discriminatory behavior. The Commission has suggested that this could constitute the employer attempting to “resist” employees’ rights to complain about discrimination, therefore opening the door to a “resistance” cause of action against the employer.
In light of these developments, employers should shore up their social media policies to strike a balance between lawful restrictions on employee social media conduct, without crossing the line by resisting employees’ protected activity.
The Case Against the Union “Ambush Election” Rule
Another important labor-side case is a Fifth Circuit challenge to the NLRB’s rule streamlining the union election process.
The rule, which took effect in April, made a few significant changes to NLRB procedures, including eliminating a 25-day delay between the time a regional director initiates an election and the election itself, thereby delaying the employer’s challenges to voter eligibility issues until after the election is held. The change has been dubbed the “ambush election” rule because it gives unions a mechanism to quickly gain representation, before management is able to mount an effective challenge.
NLRB data regarding the first six months after the rule took effect shows that union elections have happened faster than ever, decreasing to about 32 days from petition to election from a median of 67 days from petition to election during the same period in 2014.
The outcome of the appeal could have a heavy impact on unionized employers’ future ability to challenge NLRB elections.