• A U.S. District Court for the Western District of Washington ruled that National Labor Relations Board (“NLRB” or “Board”) Acting General Counsel Lafe Solomon’s appointment was invalid and, as a result, dismissed an NLRB suit seeking an injunction against a residential support services provider accused of firing people for engaging in protected activity. The judge found that Solomon’s appointment under the Federal Vacancies Reform Act was not valid because that Act only permits appointment of a person under specific circumstances, and none of those circumstances applied to Solomon. The judge also found that NLRB Regional Director Ronald Hooks did not have the power to file complaints against the company and, without that power, did not have the authority to request preliminary injunctive relief. Hooks v. Kitsap Tenant Support Services Inc. (See our earlier briefing on Hooks.)
  • The U.S. Court of Appeals for the Sixth Circuit upheld the NLRB’s decision in Specialty Healthcare, which heightened the standard for employers challenging narrow collective bargaining units. UnderSpecialty Healthcare, an employer challenging a proposed bargaining unit on the basis that it improperly excludes certain employees is required to prove that the excluded workers share an “overwhelming community of interest” with those in the proposed unit. The Sixth Circuit found that the NLRB acted within its broad discretion to determine appropriate units, and that it had cogently explained its decision to select the “overwhelming community of interest” test in Specialty Healthcare.The Sixth Circuit also rejected the argument that the NLRB had improperly announced a new policy through adjudication rather than through notice-and-comment rulemaking; rather, it found that the Board is not precluded from announcing new principles in an adjudicative proceeding and, moreover, had provided an opportunity for public input (a hallmark of notice-and-comment rulemaking). Kindred Nursing Centers East v. NLRB.
  • A U.S. District Court for the District of Arizona sanctioned the law firm Lubin & Enoch PC for its pursuit of unwarranted fees for work in a minimum wage lawsuit allegedly spearheaded by the UFCW to aid its organizing efforts. The underlying lawsuit, which raised claims under the Fair Labor Standards Act (“FLSA”) and Arizona law, was filed immediately following the union’s third election loss in its organizing campaign at the defendant bakery. Plaintiffs’ counsel allegedly offered to settle the FLSA claims if the bakery agreed to card check and a neutrality agreement. The judge granted the defendants’ request for $35,328 in sanctions, and awarded Lubin & Enoch only $35,000 in fees and $3,000 in nontaxable costs, finding that the firm’s request for $144,202.02 was “excessive” and that almost two-thirds of that amount stemmed from the pursuit of attorneys’ fees rather than work on the substantive claim. Orozvo v. Borenstein, et al.
  • The U.S. Court of Appeals for the Fourth Circuit ruled that the First Amendment does not shield from liability objectors who file bogus complaints with the government. The case involved a suit against two labor unions over allegedly disingenuous litigation to block a shopping center in Maryland because one of its tenants would have been a nonunion supermarket. The circuit court ruled that despite citizens’ First Amendment rights, the unions’ 14 mostly ineffective legal challenges to the commercial project – fighting everything from City Council-imposed deadlines for the developer to post fees and bonds to the construction and mining permits issued for the project – had gone too far. Under the “sham litigation” exception to the applicable First Amendment doctrine, the court found that the unions had abused their right to petition the courts beyond the point of constitutional protection, and thus revived the suit against them. Waugh Chapel South LLC, et al. v. United Food and Commercial Workers Union Local 27.
  • A federal judge for the U.S. District Court for the Western District of Virginia enjoined Team Carriers from selling trucks and trailers to Garten Trucking pending an arbitration decision regarding whether Team Carriers violated its collective bargaining agreement with the United Steelworkers (“USW”) when it failed to condition the sale on Garten hiring USW-represented employers and recognizing USW as its bargaining agent. The judge found that the circumstances of the case fell within a narrow exception to the anti-injunction provisions of the Norris-LaGuardia Act because without an injunction any arbitration award could not bring parties back to the status quo. However, the court conditioned the injunction on the union timely posting a bond of $250,000 – the total value of the equipment Team Carriers had planned to sell to Garten. The court also denied the union’s motion to compel expedited arbitration. United Steelworkers v. Team Carriers Inc.
  • The NLRB’s Division of Advice concluded that Wal-Mart Stores Inc. did not interfere with the rights of employees when it asked police officers to remove a group of nonemployee protestors from the parking lot of a Crestwood, Illinois store. Instead, the Division of Advice found that Walmart reasonably concluded that most of the 20 demonstrators congregated around a sound-and-video truck carrying the logo of Organization United for Respect at Walmart were not the company’s employees – even though two of the individuals were in fact Walmart employees – and that the company could lawfully enforce a policy that limited nonemployee groups’ property access. The Division of Advice also noted that the two individuals who were in fact Walmart employees were not forced to leave and were not disciplined by the company. Wal-Mart Stores, Inc.
  • An NLRB Administrative Law Judge (“ALJ”) held that JPMorgan Chase & Co.’s mandatory individual arbitration agreement violated federal labor law. The company required its employees to sign as a condition of employment arbitration agreements waiving their rights to bring class claims. The case arose from a charge filed by three employees who opted into a New York Fair Labor Standards Act case against the company; the employees argued that the arbitration agreement and the company’s attempts to enforce it both violated the National Labor Relations Act (“NLRA” or “Act”). The ALJ agreed, rejecting the company’s arguments that its class waiver was distinguishable from the waiver the NLRB struck down in D.R. Horton because the JPMorgan waiver included a severability clause that, the company argued, allowed for the possibility that a court could order a class action to proceed. The ALJ said that the clause – which merely maintained that if a court found the class waiver to be unenforceable, the class claims should proceed in court rather than in arbitration – did not render the agreement lawful. The ALJ also rejected the company’s argument that its arbitration agreement was distinguishable because it specifically excluded claims arising under the NLRA and protected employees’ rights to file NLRB charges. JPMorgan Chase & Co. and Chase Investment Services Corp.
  • An NLRB ALJ found that an authorized Verizon cellphone retailer’s mandatory individual arbitration agreement violated federal labor law. The case arose through a charge brought by a former Cellular Sales employee after the company moved to compel arbitration of his individual claims in a proposed wage and hour class and collective action in Missouri federal court. In ruling with the employee, the ALJ rejected the employer’s argument that the Supreme Court’s recent decision inAmerican Express Co. v. Italian Colors Restaurant overruled the class waiver ban the NLRB imposed in D.R. Horton. Instead, the ALJ claimed to be bound by the NLRB’s position that it is unlawful to require workers to sign an agreement that waives their rights to file joint, class, or collective claims in any arbitral or judicial forum. Although American Express Co. held that federal antitrust law did not preclude class waivers, the ALJ said that the arbitration agreements in both D.R. Horton and the present case would prevent employees from exercising their substantive rights under Section 7 of the NLRA. Cellular Sales of Missouri LLC.
  • An NLRB ALJ held that a Michigan manufacturer’s dress code, which prohibited employees from displaying offensive words or images on their clothing, interfered with employee rights under federal labor law. The ALJ found that the dress code was overbroad and thus unlawful, because it would lead employees to reasonably understand that the employer’s policies restricted communications and protest activities protected by the NLRA. The ALJ further found that the manufacturer acted illegally when it disciplined a union member who wore a shirt emblazoned with the word “slave,” because his activity was protected by the NLRA and was not so threatening, egregious, or opprobrious to cause him to lose that protection. Alma Prods. Co.
  • A Michigan court of appeals ruled, 2-1, that a Michigan law banning union dues or fees as a condition of employment does not violate the state constitution and is applicable to civil service employees. The case arose when the UAW sued to block the 2012 law on the grounds that the state constitution gives the Civil Service Commission (CSC) authority over state workers’ conditions of employment. The court majority upheld the law, saying that the legislature has the authority to enact legislation with regard to agency fees and “speaks for the people on matters of significant public concern.” Although the state constitution admittedly gives the CSC some authority over state workers’ conditions of employment, the court found that that authority is within a limited scope, and does not apply here. The dissenting judge said that the state constitution broadly empowers the CSC and the new law unconstitutionally infringes on that power. UAW v. Green.
  • A judge in San Francisco County Superior Court enjoined Bay Area Rapid Transit (“BART”) unions from striking, granting a 60-day cooling off period in a labor dispute involving the commuter rail system, which carries 400,000 passengers daily. After a rare Sunday hearing, the judge granted Gov. Jerry Brown’s petition to avert a second strike that the unions had threatened would begin August 12 if the parties did not reach an agreement. The judge found that such a strike would significantly disrupt public transportation services and endanger the public’s health, safety, or welfare. The court order prevents unionized BART employees from striking and covers 1,433 employees represented by Service Employees International Union Local 1021; 944 employees represented by Amalgamated Transit Union Local 1555; and 211 administrative and professional workers represented by American Federation of State, County and Municipal Employees Local 3993. The labor dispute centers around raises, health and pension contributions, and worker and public safety issues. People v. Amalgamated Transit Union Local 1555.
  • The Fourth Circuit denied the NLRB’s petition to have the court reconsider en banc its unanimous June 14 ruling striking down the Board’s controversial rule requiring employers to display posters about workers’ right to unionize. The Board had argued that the court’s prior ruling strayed from recent Supreme Court precedent requiring courts to defer to the Board’s rule-making discretion. The circuit court did not provide its reasoning for denying a rehearing. Chamber of Commerce v. NLRB.
  • An NLRB ALJ held that Boeing Co. interfered with employee rights by promulgating and maintaining a policy that “directed” employees not to disclosure information about internal human resources investigations to any employees other than Boeing investigators or union representatives. The ALJ found that employees would reasonably interpret the policy as prohibiting them from exercising their statutory right to engage in concerted activity for mutual aid or protection. In so ruling, the ALJ rejected the company’s argument that recent NLRB decisions on confidentiality rules were wrongly decided. The ALJ also rejected the argument that the company cured any violation by changing the policy to state a “recommendation” rather than a direction to employees. Boeing Co.
  • An NLRB ALJ ruled that a commercial printer’s rule banning baseball caps except those with a company logo was illegal because it blocked employees from displaying union insignias. Finding that the rule interfered with employees’ rights under Section 7 of the NLRA, which safeguards works’ ability to band together for mutual aid and protection, the ALJ said that a company can only ban the wearing of union insignia if there is substantial evidence of special circumstances that would trump the Section 7 right to wear the union logo at work. Here, the ALJ said that despite the company’s claim that the policy was based on safety concerns, it had not shown that letting workers wear hats with union logos would put anybody at risk. The ALJ also found that a supervisor acted unlawfully when he told an employee he was being reassigned because of Facebook activity that included comments supportive of the union. World Color (USA) and Conference of the International Brotherhood of Teamsters, Local 715-C.
  • An NLRB ALJ ruled that Ralph’s Grocery Co. violated federal labor law when it subjected its employees to a mandatory arbitration policy that prohibited class proceedings. Despite acknowledging the company’s argument that the NLRB lacked a quorum when it decided the D.R. Horton decision – which held that it was a violation of federal labor law for an employer to impose as a condition of employment a mandatory arbitration agreement that precludes employees from bringing class claims in any forum – the judge said she was bound to follow that ruling. The ALJ further found that adherence to the company’s arbitration policy was a condition of employment because it was deemed to be accepted by an applicant upon submitting an application and by an employee upon acceptance or continuation of employment. As a result, the D.R. Hortonholding applied, and the company acted unlawfully. Ralphs Grocery Co., The Kroger Company.