Allyn & Fortuna LLP
Nicholas Fortuna, August 21, 2014.
Last week The National Labor Relations Board (NLRB) expanded the meaning of what is considered concerted activity under the National labor Relations Act (NLRA). Under the Board’s decision in Fresh & Easy Neighborhood market, Inc. and Margaret Elias, the Board determined that Elias was engaged in “concerted activity” for the purpose of ”mutual aid or protection” within the meaning of Section 7 of the NLRA when she sought assistance from her coworkers in asserting a sexual harassment complaint. In doing so, the Board specifically stated in its opinion that it is overruling its 2004 decision in Holling Press, Inc., which held that a lone employee’s protest is not concerted activity. The proceeding arose out of an unfair labor charge filed by Elias regarding the manner in which Fresh & Easy handles investigations of employee complaints.
Elias, a cashier at Fresh & Easy’s grocery store, requested to participate in a company sponsored alcohol training program called “TIPS.” Her supervisor directed that she write the request on a whiteboard hanging in the employee break room including her name. Another employee altered her message on the whiteboard in a way that was considered sexually offensive by Elias. The day of the alteration, Elias copied the doctored message on a piece of paper and asked two coworkers to sign the paper attesting it was an accurate depiction of what was on the whiteboard. Both coworkers signed the paper. Later, one of the coworkers complained Elias harassed her into signing the paper, but nevertheless found the doctored message offensive. The matter was reported to Elias’ supervisor that same day. He directed a picture of the whiteboard be taken with the offending message and then erased. Elias’ supervisor then reviewed the break room video cameras and determined that a coworker named Gary Hamner altered the white board message. Elias lodged a sexual harassment complaint.
In Holling Press, Inc. similar activity was not protected activity under Section 7 of the NLRA. In Holling Press, Inc. the Board stated:
[W]here one employee is the alleged victim, that lone employee’s protest is not concerted. And, even if the victim seeks support from another employee, and that seeking of support is concerted activity, the “mutual aid or protection” element is missing. The bare possibility that the second employee may one day suffer similar treatment, and may herself seek help, is far too speculative a basis on which to rest a finding of mutual aid or protection. [343NLRB at 303-304]
By contrast, in Fresh & Easy, the Board characterized what Elias did as concerted activity and reasoned that Elias’ conduct in approaching her coworkers to seek their support of her efforts regarding ”this workplace concern” would constitute concerted activity. Elias, the Board stated, did not have to engage in further concerted activity to ensure that her initial “call for group action retained its concerted character.” The Board also clarified that the concerted nature of Elias’ request would not be diminished even if Elias’ coworkers did not agree with her sexual harassment complaint or did not want to sign her document.
The Board found that Elias’ activity satisfied the other necessary element to fall under the protection of Section 7 of the NLRA, that her concerted activity was for the purpose of ”mutual aid or protection.” The Board said that Congress intended to protect concerted activities for a broader purpose than just self-organization and collective bargaining. The clause “mutual aid or protection” encompasses legitimate activity by employees that could improve their lot as employees. The Board concluded that Elias’ activity would be deemed for mutual aid or protection even though the conduct was seemingly directed at her alone.
By overturning Holling Press, Inc., the Board eliminated the exclusion from Section 7 for complaints from single employees. Concerted activity now includes seeking help for an issue that only affects an individual where there is a remote possibility that remedying that individual’s complaint would affect future conduct.
Megan J. Muoio, August 13, 2014
After receiving 181 complaints from employees at McDonald’s about unfair labor practices beginning in November 2012, the National Labor Relations Board (NLRB) has issued an advice memorandum that could impact companies with franchisees across the U.S. The memorandum indicates that the NLRB will treat McDonald’s as a “joint employer” with its franchisees, making McDonald’s liable for the unfair labor practices of franchise owners to their employees. The advice memorandum is a directive from the general counsel of the NLRB and does not carry the weight of a ruling of the full NLRB, but the NLRB typically adopts the general counsel’s opinions. The directive will have an impact on the way companies with franchises evaluate liability for unfair labor practice complaints and may result in a Supreme Court case on this issue.
Starting in November 2012, McDonald’s employees organized a series of one-day strikes to demand a $15 per hour minimum wage. After the strikes, numerous employees filed complaints with the NLRB, alleging that they had been punished as a result of their participation in the protests, either by being fired or having their hours cut. In the advice memorandum issued on July 28, 2014, NLRB general counsel Richard F. Griffin, Jr. found merit in 43 cases of alleged unfair labor practice charges under the National Labor Relations Act and permitted them to proceed. However, if the parties cannot reach settlement of those claims, the directive stated that the NLRB will issue complaints naming McDonald’s, USA, LLC as a joint employer respondent with individual franchise owners. At least 80% of McDonald’s U.S. locations are franchise businesses, and McDonald’s has long claimed that it does not have direct control or responsibility with respect to labor issues at individual franchise locations.
For the past thirty years, the federal courts and the NLRB have classified a company as a joint employer when the company and another employer exercised “direct and immediate control” over the same employees and the terms and conditions of their employment. In recent years, however, the NLRB has been pursuing a more expansive standard for joint employers, holding that a company can be liable as a joint employer if the totality of the circumstances indicates that one employer wields influence over the other employer’s employees to such an extent that both entities would need to be present for meaningful bargaining to occur.
Courts traditionally have held franchisors separate from franchisees when franchisors merely exert control to the extent necessary to protect trademarks and ensure uniformity of the product, as McDonald’s has traditionally claimed that it does. Classifying McDonald’s as a joint employer together with each of its individual franchise owners in proceedings before the NLRB would upend decades of traditional standard join employer determinations and may expose many franchisors to increased employment liability. In the short term, the classification could affect McDonald’s continuing attempts to fend off the unionization of franchisee employees into a single bargaining unit nationwide, which is being pursued by the Service Employees International Union.
It is likely that McDonald’s will appeal this issue to the full five-member NLRB and it could make its way to the Supreme Court. Until this issue is resolved, franchisors should take extra care to review existing franchise agreements and their policies vis-à-vis franchisees to ensure that they are not controlling labor and employment activities at the franchise level and not subject to liability as a joint employer under the more expansive definition. In the future, franchisors should carefully draft franchise agreements to keep control over employment and labor relations to a minimum and only exert the control necessary to protect trademarks and copyrights, advertising, and quality of the product. Franchisors should be sure to limit contact with franchise employees during site visits, for example, and to relay any instructions or information or instructions to franchise employees exclusively through the franchise owner. If the franchisor has an employee handbook that is distributed to franchise employees, the handbook should contain appropriate disclaimers and specify that there is no employment relationship with the franchisor and that the franchisor does not exert any control over the terms and conditions of employment. In addition, the franchisor should ensure that franchisees have employees sign arbitration agreements with class action waivers, which will divert individual employee claims to arbitration. Finally, the franchisor should require its franchisees indemnify the franchisor in the event that a claim is brought under the joint employer theory. In the meantime, however, franchisors should keep a watchful eye on the NLRB in the upcoming months and track the progress of this issue as its makes its way through the court system.
Paula Lopez, July 31, 2014.
Last week, Governor Andrew Cuomo signed legislation that will provide unpaid interns throughout the State of New York with the same state law protections against discrimination and sexual harassment in the workplace as paid employees. The amended law takes effect immediately. Until recently, only unpaid interns in Oregon and Washington D.C. were similarly protected. Earlier this year, the New York City Council, by unanimous vote, passed an amendment to the City’s Human Rights Law, extending its anti-discrimination and anti-harassment provisions to unpaid interns. This law took effect on June 14, 2014. Until now, similar protections were not available to interns outside New York City since Title VII’s anti-discrimination/anti-harassment provisions under Federal law only apply to employees.
The State legislature and the New York City Council were spurred into action by an October 3, 2013 ruling made by U.S. District Judge for the Southern District of New York, P. Kevin Castel, in the case Wang v. Phoenix Satellite Television U.S., Inc., dismissing a claim for hostile work environment under the New York City Human Rights Law and New York State Human Rights Law brought against Phoenix for alleged sexual harassment committed by a supervisor who groped and forcibly tried to kiss the plaintiff while she interned for the company. Ms. Wang’s claim was dismissed because the District Judge held that as an unpaid intern, Ms. Wang did not meet the definition of “employee” and therefore was not covered by the provisions of the New York State or New York City Human Rights Law. In his decision, the District Judge noted that the City Council has frequently amended the New York City Human Rights Law to expand coverage, limit exemptions and broaden remedies but despite numerous amendments, it never sought to expand its coverage to unpaid interns and therefore he could not apply such a liberal construction to the law. The amendment creates a new section pertaining to unlawful discriminatory practices related to interns. An intern is defined as,
A person who performs work for an employer for the purpose of training under the following circumstances:
A. The employer is not committed to hire the person performing the work at the conclusion of the training period;
B. The employer and the person performing the work agree that the person performing the work is not entitled to wages for the work performed; and
C. The work performed:
(1) provides or supplements training that may enhance the employability of the intern;
(2) provides experience for the benefit of the person performing the work;
(3) does not displace regular employees; and(4) is performed under the close supervision of existing staff.
The amendment extends general civil rights protections to interns, such as prohibiting discrimination in the terms, conditions or privileges of employment as an intern on the basis of the intern’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, or domestic victim status. It expressly bans sexual harassment as well as other forms of harassment, and contains an anti-retaliation provision.
The presence of interns in the workplace has increased significantly in recent years, with internships becoming more prevalent as a stepping stone for future employment. The amendment to the New York State Human Rights Law, like the amendment to the New York City Human Rights Law, does not impose significant administrative burdens on employers or require an overhaul of company policies but, instead, is intended to close loopholes in the existing law and to extend existing protections to another class of the workforce. Employers do not need to create new anti-discrimination and anti-harassment policies. They just need to understand that interns are to be treated the same as employees with respect to such policies.
The amendment also reinforces the recent expansion of interns’ rights, including the limitations on an employer’s ability to classify individuals as interns rather than employees, as well as a series of lawsuits in which interns have been successful in recovering wages under the Fair Labor Standards Act and New York Labor Law. Recent case law and legislation have afforded interns significant rights, while exposing employers to a larger number of claims by expanding the pool of possible plaintiffs. As a result, employers in New York should ensure that their anti-discrimination and sexual harassment policies now cover interns, such policies are circulated to their employees and interns, and a mechanism for properly implementing the policies is in place.
Nicholas Fortuna, July 25, 2014.
The Supreme Court will determine next term if pregnant employees are entitled to work accommodations due to their pregnancy under the Pregnancy Discrimination Act (PDA) of 1978. The case, Young v. United Parcel Service (UPS), was granted a Writ of Certiorari after the Fourth Circuit Court of Appeals ruled that United Parcel Service was not obligated to provide any accommodations to Ms. Young due to her pregnancy.
Ms. Young claims that UPS violated the PDA because it refused to temporarily modify her work duties to accommodate restrictions as a result of her pregnancy. The PDA provides that if an employer accommodates non-pregnant employees who are “similar in their ability or inability to work” as pregnant employees, it must “treat” those pregnant employees “the same.” Young’s job at UPS was an early morning “air driver.” She was responsible for meeting a shuttle at the airport bearing letters and packages for immediate delivery. Most of the packages delivered by Young were less than 20 pounds. Her job requirements, however, required her to be able to “lift, lower, push, pull, leverage and manipulate” letters and packages weighing up to 70 pounds and to assist in moving packages weighing up to 150 pounds.
In July 2006, Young sought, and UPS granted, a leave of absence to undergo in vitro fertilization and became pregnant. In October 2006, Young gave her supervisor a note from her midwife recommending that she not lift over 20 pounds during her pregnancy. UPS refused to make such an accommodation and forced Young to take a leave of absence until she was no longer pregnant.
UPS offers work accommodations in three situations: light duty for those with on the job injuries; those that are required to be accommodated under the Americans with Disabilities Act; and those who lost their Department of Transportation certification (typically for medical reasons), but not for pregnancy. The lower courts found that UPS’s policies were gender-neutral and did not constitute direct evidence of discrimination. The Fourth Circuit went further and concluded that Young’s temporary restriction was not covered by the PDA and no separate cause of action existed to pursue accommodations due to pregnancy under the PDA. Notably, the Sixth Circuit has adopted the position Young has pressed in Ensley-Gains v. Runyon.
At the Supreme Court, Young will argue that UPS’ gender neutral accommodations, which are not offered to pregnant employees, violate the PDA. The Court will have to resolve the conflict between the Fourth and Sixth Circuit Court of Appeals and decide whether the PDA provides added protection to pregnant employees.
On July 14, the Equal Employment Opportunity Commission (EEOC) jumped ahead of the Supreme Court and issued guidance on pregnancy discrimination in the workplace, creating headaches for employers. The EEOC’s guidance essentially tracks what Young is seeking from the Supreme Court and requires employers to offer reasonable accommodations to pregnant employees. Unless the Supreme Court gives Young exactly what she asked for, employers who have modified their policies to comply with the EEOC’s new guidance will then have to change their policies to comply with the Supreme Court’s ruling, while those who wait to see what the Supreme Court does will be on a collision course with the EEOC until there is a ruling.
Two of the EEOC commissioners voted against issuing the guidance precisely because they thought it was “unwise” to issue guidance now, in light of Young’s potential for mooting any standards or practices instituted based on the new guidance. The two commissioners who voted against issuing the guidance have stated they are worried that the EEOC’s credibility is at risk.
Nevertheless, the guidance issued by the EEOC lays out an expansive view of an employer’s obligations under the PDA and imposes a reasonable accommodation requirement. The EEOC will likely have to backtrack at least somewhat after the Supreme Court decides Young.