In the early months of 2017, right-to-work legislation continues to garner significant attention as a number of states explore legislation. In early January, Kentucky passed legislation prohibiting employers from entering agreements that make union membership and the payment of union dues a condition of keeping or maintaining employment. Missouri followed suit one month later on February 6 by passing its own similar legislation, thereby becoming the 28th “right-to-work” state. In addition to making it illegal to condition employment on the payment of dues to a union, both laws included a grandfather clause protecting existing contracts negotiated before the laws become effective. Additionally, right-to-work legislation has passed the Senate in New Hampshire and is set for a vote in the state’s House of Representatives. On February 9, the House Labor Committee recommended voting against passage of the bill, which will see a vote of the full chamber next week. Governor Chris Sununu supports right-to-work legislation. The proposed legislation would make New Hampshire the first right-to-work state in the Northeast. Continue reading
On January 20, 2017, President Trump took a step to fulfill his campaign promise to reduce regulations on businesses when his Chief of Staff, Reince Priebus, directed federal agencies to freeze all pending regulations. Although similar moves are common for incoming administrations, the amount of contentious employment-related regulations pending either before federal courts or awaiting effective dates makes this freeze an important consideration for employers. Continue reading
On December 16, 2016, the U.S. Department of Labor (DOL) published a final rule altering the claims procedure regulations for ERISA plans providing disability benefits (the “Final Rule”). The regulations, which finalize proposed regulations issued in November 2015, amend the existing DOL claims procedure regulations related to any ERISA disability benefit claim, whether the claim arises under a welfare plan (e.g., a long-term or short-term disability plan), or a qualified retirement plan. Continue reading
On Monday, December 19, 2016, Governor John Kasich signed Ohio Senate Bill 199 into law, which allows concealed carry permit holders to store their firearms in their vehicles while parked in their employers’ parking lots while at work. Additionally, the new law incorporates key pieces of House Bill 48, which expands the types of locations where permit holders can carry their weapons, including daycare centers and college and university campuses, but only if the permit holders have been authorized to do so by the applicable organization. Continue reading
A federal Judge in Texas yesterday issued an order temporarily barring the Department of Labor (“DOL”) from enforcing its much-publicized new overtime rule, just over one week before the rule’s December 1 effective date. Continue reading
By President Obama’s September 7, 2016 Executive Order, federal contractors and subcontractors will now be required to provide paid sick leave to their employees beginning on January 1, 2017. The Department of Labor (DOL) published its Final Rule necessary to implement the Executive Order on September 30, 2016. Continue reading
On the heels of at least two discrimination lawsuits over employer wellness programs, the Equal Employment Opportunity Commission (EEOC) issued two new rules on May 17, 2016 under the Americans with Disabilities Act (ADA) and the Genetic Information Non-Discrimination Act (GINA) offering parameters for how employers can offer limited incentives for wellness plans without running afoul of the two laws. Continue reading
Marking a sea-change in labor law and a departure from decades of settled precedent, the National Labor Relations Board formulated a new joint employer standard in August 27’s Browning-Ferris Industries of California, Inc. decision.
For the past three decades, whether a joint employer relationship existed turned on the “single employer” test, that is, whether “two nominally separate entities are part of a single integrated enterprise so that, for all purposes, there is in fact a ‘single employer.’” NLRB v. Browning-Ferris Industries, Inc., 691 F.2d 1117, 1112-23 (3d Cir. 1982); adopted by the Board in TLI, Inc., 271 NLRB 798 (1984) and Laerco Transportation, 269 NLRB 324 (1984). Under the settled framework, an entity could only be found to be a joint employer if it exercised actual control over the terms and conditions of employment of another entity’s employees.
Last week’s decision injects a great deal of uncertainty into an area of labor law which was, up until now, quite predictable. Under the new rule, an entity that maintains any degree of indirect or reserved control over any of the terms or conditions of employment (such as wages, hours, hiring, firing, discipline, or direction of work) of another entity’s employees may suffice to trigger joint employer status.
This change is not to be understated, and will have immediate impacts in some industries:
- Franchisors. Although the Board has traditionally not held franchisors to be joint employers with franchisees, many (if not all) franchisors may be found to be joint employers with franchisees under the new rule.
- Staffing Agencies and Contractors. Although staffing agencies and contractors did not have the indicia of control over employees placed with their customers to be considered joint employers, many staffing agencies and contractors may now be considered joint employers under the new standard.
This is, however, by no means the full extent of the new rule. As the Board’s dissenting members pointed out, the Board’s new standard “appears to be virtually unlimited” and may also apply to a host of other scenarios, such as insurance companies that require employers to maintain safety or security standards, banks or other lenders who require performance measurements in their financing terms, consumers or small businesses who dictate the time, manner, or some method of performance of contractors, or indeed, “[a]ny company that is concerned about the quality of the contracted services.”
In their newfound capacity as joint employer, affected companies may now be held responsible for unfair labor practices committed by a contractor. In the collective bargaining context, the joint employers’ employees may be included in the bargaining units of employees of a contractor. Furthermore, litigation unfolding around the uncertainty created by the amorphous newly crafted test will prove costly.
An appeal of the Board’s decision is likely forthcoming, and it is still possible congress may weigh in. If the decision stands, maintaining economic viability in the wake of Browning Ferris for some companies may require nothing short of a fundamental change to their business models. For others, changes to certain terms in contracts between putative joint employers may be necessary to limit this new area of potential liability. For now, all businesses should carefully examine their contractual relationships with customers and contractors to stay informed of how this change in the law may apply to their operations.
This article was included in the Benesch Law @Work Newsletter. Please click the link to read more.
Chris Lalak focuses his practice on representing employers in employment litigation and counseling, as well as representing employers in traditional labor law matters. He has experience litigating discrimination claims, covenants not to compete, trade secrets, worker’s compensation cases, and matters before the National Labor Relations Board.
In a controversial decision, the NLRB found that a conflict-of-interest policy in an employee handbook is unlawful on its face. This ruling could deem many current conflict-of-interest policies unenforceable, creating harsh consequences for employers.
On June 18, 2015, the National Labor Relations Board held that an administrative law judge was correct in determining that a policy in the employee handbook that prohibited a “conflict of interest with the hotel or company” was facially unlawful. Chairman Pearce agreed that the policy, on its face, would have a chilling effect on the employees’ Section 7 rights. Continue reading
In reviving a lawsuit brought by a pregnant driver against UPS, the U.S. Supreme Court held last week that employers cannot deny accommodations to pregnant workers that are offered to other employees with similar restrictions simply because it is “more expensive or less convenient” to do so.
The ruling in Young v. United Parcel Service, Inc., 575 U.S. ___ (2015), is viewed as a victory for pregnant workers who seek light duty assignments from employers so that they may keep working. It also may prove to be a setback for the Equal Employment Opportunity Commission (“EEOC”). Continue reading