Allyn & Fortuna LLP
Megan J. Muoio, February 26, 2014.
On February 21, 2014, the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) filed objections with the National Labor Relations Board regarding the union representation election at the Volkswagen facility in Chattanooga, Tennessee. The effort to unionize the VW plant was supported by both the UAW and Volkswagen, which wanted to set up a works council at the facility. Ultimately, however, the UAW lost the election by a vote of 712 to 626. In its complaint to the NLRB, the UAW claims that improper interference by third-parties prevented a free and fair election at the VW plant. The UAW asks the NLRB to set aside the election and to order a new election.
The election was held on February 12, 13 and 14, 2014. In advance of the election, Tennessee State Senators and other state officials made public comments regarding the prospect of union representation at the VW plant. The State officials commented in the media in the days immediately before the election that financial incentives provided by Tennessee to VW would not be available if the union was elected. These statements were spread throughout social media and widely quoted by third-party interest groups. In addition, during the election, United States Senator Bob Corker made several public statements that Volkswagen would add a new product line at the Chattanooga plant if the union vote was defeated. Although local VW management disavowed these statements, the UAW believed that Senator Corker’s statements were accurate based on his close ties to VW’s corporate representatives and his influence over VW’s business in Tennessee in the past. Senator Corker even issued a rebuttal statement, in which he stated that his statements were “1,000 percent” accurate and that local VW officials had no decision-making authority over whether a new product line would be added to the Chattanooga plant.
The NLRB has fielded numerous complaints involving union representation elections where labor or management interfered with the free and fair conduct of the election, and these disputes often involve threats of violence, intimidation or coercion. However, the union election at VW plant in Tennessee is unusual because both the union and the employer favored unionization, and all of the alleged interference came from third-parties. When evaluating alleged misconduct by third-parties, the NLRB will consider whether the conduct was so aggravated as to create a general atmosphere of fear and reprisal rendering a free election impossible.
Two previous NLRB decisions have involved complaints that third-parties claimed that the election of the union would cause a plant closure and job losses. In Frates, Inc., the NLRB considered a 1977 election in which the employer’s plan to shut down the plant in the event of the union election was obtained in an unauthorized manner by employees. The NLRB found that the disclosure of the plan (which was genuine but was not supposed to be disclosed), in the absence of a disavowal by the employer, created an atmosphere that prevented a fair election. In contrast, in U.S. Electrical Motors in 1982, the NLRB found that a newspaper story and an editorial stating that the employer might possibly close if the union was elected did not create an atmosphere of fear and reprisal that prevented a fair election. In that case, the same newspaper published an editorial from the employer expressly disavowing the earlier story and editorial.
The current UAW complaint to the NLRB attempts to fall within the rubric of Frates, Inc. The comments by the State officials were not contradicted by VW, possibly because VW is not in control of whether it receives financial incentives from Tennessee. Regarding the statements by Senator Corker that an additional product line would not be implemented if the union was elected, the UAW claims that the local VW representatives’ disavowal of Senator Corker’s allegation was undercut by Senator Corker’s later statements and the perceived close relationship between VW’s corporate representatives and the Senator.
However, even if the NLRB finds that the third-parties created an atmosphere of fear and reprisal regarding the future of the VW plant and its workers, the UAW will have to prove that the campaign by the third-parties actually affected the votes of enough workers to have changed the ultimate result of the election. The NLRB is more likely to set aside an election result when the vote is very close and there is actual evidence that workers’ votes were directly influenced by the third-party action. Here, where there is a difference of 86 votes in the union election, it may be difficult for the UAW to convince the NLRB that the alleged misconduct actually affected the election and that the result should be set aside.
Nicholas Fortuna, February 21, 2014.
The National Labor Relations Board, which is charged with enforcing the National Labor Relations Act, has recently been moving aggressively to regulate both union and non-union workplaces. The NLRB issued 19 decisions in January 2014, compared to 17 decisions in the previous five months combined. The agency is introducing regulations to streamline the union election process and expanding its jurisdiction over religious universities as to whether certain university faculty members can unionize. The expectation is that the Board will continue to use its power to govern a broader swath of workplace issues, particularly in nonunion settings.
The consensus is that the agency will move to change case law in ways that help labor at the expense of employers. The NLRB believes it has broad authority to create workplace policy because it does not bind itself by any federal court rulings except the U.S. Supreme Court. Its position is that the Circuit Courts of Appeal have no authority to direct how the agency may rule on issues properly before the Board. Employers are increasingly concerned that the NLRB may reverse earlier rulings preventing employees from using the employer’s email system for union organizing activities and also that the Board will reverse a 2004 decision finding nonunion employees are not entitled to representation during an investigatory interview that could lead to discipline.
The Board will be scrutinizing nonunion employers’ handbooks for compliance with the NLRA. Areas drawing particular attention are confidentiality, employee conduct, contact with media and law enforcement, at-will employment, dispute resolution, and no loitering rules. The following is a brief description of the concerns and approaches employers should take with respect to these issues.
Confidentiality
Employers should carefully tailor confidentiality rules that are not so broad that they are interpreted to prevent discussion of workers’ terms and conditions of employment. Whatever rule the employer imposes, it should be tied to a legitimate justification within the scope of the business, such as to prevent retaliation or harassment. The burden is on the employer to show a legitimate business reason which outweighs the employees’ rights under section 7 of the NLRA.
Employee Conduct
The Board has held that a prohibition on disrespectful or discourteous activities is a restriction on asserting rights under the NLRA, like advocating for improved terms and conditions of employment. Accordingly, the rights of workers under the NLRA are paramount to an employer’s interest in workplace decorum.
Contact with Media and Law Enforcement
Notwithstanding the logic of requiring employees’ to direct requests from the media or law enforcement to the company’s communications or security department, the NLRB has found certain policies constituted an unlawful restriction on employees’ rights. A better approach for employers is to merely request that such inquiries be directed to the appropriate department, such as the company’s communication or security department.
At-Will Employment
An employer may not require an employee to agree that an at-will employment relationship cannot be modified. Such requirements have been viewed as an unlawful waiver of the right to concerted action (unionize).
Dispute Resolution
The Board is scrutinizing employer internal dispute resolution procedures to determine if they unlawfully deter employees from filing workplace complaints with outside agencies.
No Loitering Rules
The NLRB is examining if company rules prohibiting employees from hanging around the workplace after finishing their shifts affect union organizing activity. The NLRB will look at the history of enforcement of the rule and the justification for it. For instance, it would be suspect if an employer only started enforcing the rule when a union organizing drive began.
The takeaway is that the NLRB is inserting itself much more aggressively in workplace issues. Employers must be careful in how they draft their policies to avoid unwanted action by the NLRB.
Diana Uhimov, February 12, 2014.
After an eight-year battle, Google recently prevailed in a copyright infringement case brought against it by the Authors Guild, in Authors Guild v. Google. Second Circuit Court of Appeals Judge Denny Chin approved Google’s use of its digital book library, which is available to the general public for searching in an online database. Since 2004, Google has scanned more than 20 million books, making excerpts of text viewable online, under agreements with several research libraries to digitize their collections as part of its Google Books project. Authors Guild sued Google because it failed to obtain permission from the copyright holders. However, the court dismissed the case on the basis that Google’s use of the material was fair.
The U.S. Copyright Act grants copyright holders the exclusive right to reproduce, create new versions, distribute, perform, and digitally transmit performance of the work publicly. But these rights are not absolute. One limit on the exclusive rights of copyright holders is the fair use doctrine. This doctrine permits the fair use of copyrighted works in order to further the objective of copyright law of promoting science and the arts. Copyright protection extends to the creator’s original manner of expression, rather than the particular ideas or facts conveyed, in order to incentivize creation, while preserving important information for the public domain.
The fair use defense has gained traction with the rise of digital media. It was raised, without success, in file sharing cases such as A&M Records v. Napster and Metro-Goldwyn-Mayer Studios v. Grokster. File sharing occurs when software connects users to a network that enables them search for shared files on the computers of other users on the network. Desired files can then be downloaded by network members. Now, however, the defense has been strengthened for online content providers. The Google ruling has effectively sanctioned other results that are displayed in a Google search, including images and news, and also invites competition to the market. According to James Grimmelmann, a University of Maryland intellectual property law professor, this opinion means that users are within the bounds of the law provided that they are not revealing to viewers all of the copyright-protected content, but merely show where to find content or state what you learn about it. This is also a win for libraries and scholars, who staunchly supported Google Books by intervening in the case on its behalf.
Nonetheless, it is important to note that whether or not an action constitutes fair use under copyright law remains a fact-specific inquiry. Several commonly mistaken beliefs about fair use can give rise to user liability, such as the idea that taking a particular number of words from copyrighted works, or that using the works without financial gain, constitutes fair use. In fact, courts always evaluate the following four factors to determine whether the use of a work is permissible under the fair use defense:
1. Purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. Nature of the copyrighted work;
3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole;
4. Effect of the use upon the potential market for or value of the copyrighted work.
The first factor is considered to be central to the fair use inquiry. Key to Judge Chin’s finding that Google’s digital library constitutes fair use was that its digitization was “highly transformative,” meaning that it added something beneficial or used the works differently, by offering an efficient way to find books and making them accessible to a wider audience. Chin acknowledged that Google benefits commercially from its use of books by increasing traffic to its sites, but since it does not profit directly from the books, he found that the first factor weighed strongly in favor of fair use. Generally, the commercial use of copyrighted works tends to preclude a finding of fair use. But if a work is considered transformative, fair use has been found even where an alleged infringer profited from unlicensed use. Another recent Second Circuit case, Cariou v. Prince, found fair use despite commercialization of the work, when it held that 25 of 30 photographs the defendant modified were transformative, giving Cariou’s photos a new expression, and utilizing new aesthetics with distinct creative results.
The second factor, which is rarely determinative, favored a finding of fair use given that most of the books were non-fiction. Use of non-factual, creative, or unpublished works weighs against a finding of fair use. The third factor weighed against fair use, but only slightly. Although Google scans the entirety of the books, it limits the portions it displays for each search by employing snippets and blank pages. Finally, the fourth factor supported fair use because, contrary to Authors Guild’s arguments that Google Books would be a “market replacement” for books, it would actually boost sales by providing a new way to discover them.
Hard line copyright advocates may disagree with this decision, but it has bolstered the principle of fair use. As a result, it makes it easier for the public to locate books, while simultaneously demonstrating respect for authors’ rights. The Authors Guild has filed a notice of appeal in this case.
Paula Lopez, February 5, 2014.
Employers in New York City and New Jersey are now required to provide reasonable accommodations to pregnant employees. While State and Federal laws prohibit employers from discriminating against pregnant employees, none of these laws require employers to provide reasonable accommodations. Instead, reasonable accommodations have only been required to the extent that they are available to similarly-situated non-pregnant employees.
Effective January 30, 2014, the New York City Human Rights Law was amended to prohibit discrimination based on pregnancy, childbirth or related medical conditions. And, on January 21, 2014, New Jersey’s Law Against Discrimination was amended to include pregnancy to the list of protected classes and to prohibit employers from treating pregnant employees less favorably than non-pregnant employees with similar work abilities.
The key significance of both laws is that they require employers to provide pregnant employees with reasonable accommodations if the employer knows or should have known of the condition and the reasonable accommodation does not cause the employer an undue hardship. Examples of reasonable accommodations required under the new laws include, among others: periodic breaks for rest, bathroom breaks, additional breaks to facilitate water intake, assistance with manual labor, job restructuring or modified work schedules, temporary transfers to less strenuous or hazardous work, and leave for a period of disability arising from childbirth.
In New York City, employers with four or more employees are covered under the law and independent contractors are counted as employees in determining the applicability of the law. In New Jersey all employers (except Federal employers), regardless of their size, are covered by the law.
In both New York City and New Jersey, if an employer demonstrates that a requested accommodation causes undue hardship on its business, the employer does not have to provide it. The employer bears the burden of proving the existence of an undue hardship.
The laws identify the following factors in determining whether the requested accommodation imposes an undue hardship:
- Nature and cost of accommodation;
- Overall financial resources of the employer’s particular facility(s) involved in providing the accommodation, taking into account the number of employees, the effect of expenses and resources and/or impact the accommodation will have on the particular facility;
- Overall financial resources of the covered employer (including the number of employees, and the number, type and location of its facilities);
- The type of operations the employer is engaged in (including composition, structure and functions of the workforce),
- The geographic separateness, administrative or fiscal relationship of the facility(s) involved in providing the accommodation and the overall operations of the covered employer; and
- The extent to which the requested accommodation would involve eliminating an essential job requirement. New Jersey only.
In New York City, an employer can also avoid liability under the new law if it can demonstrate that, even with the reasonable accommodation, the employee cannot perform essential job functions.
The New York City amendment includes a notice provision that requires employers to provide employees with written notice of the law. The notice must be provided to new employees at the time of hire and to existing employees within 120 days of the law’s effective date (May 30, 2014). The New York City Commission on Human Rights has created posters in various languages advising pregnant employees of their rights and providing examples of the types of reasonable accommodations that can be requested from their employers. Employers can circulate these posters to satisfy the law’s notice requirement. It is also suggested that employers conspicuously post the notice in areas accessible to their employees. New Jersey’s amendment does not contain a similar notice requirement, but continues to require employers to conspicuously post the New Jersey Division of Civil Rights’ official employment discrimination poster[1] in the workplace.
The amendments to New Jersey and New York City’s ant-discrimination laws significantly expand the protections afforded to pregnant workers by expressly requiring employers to provide reasonable accommodations to all pregnant employees. Consequently, affected employers should review their policies and procedures to ensure compliance with the law.
[1] The poster currently available has not yet been updated to reflect the amendment.
Megan J. Muoio, January 29, 2014.
On January 21, 2014, the Supreme Court heard oral arguments in Harris v. Quinn, a case that could have an impact on the future of public employee unions. The case involves home-care workers in Illinois who, ten years ago, were permitted to unionize and were classified by the Governor of Illinois as state employees for the purpose of representation by the union. According to the Attorney General of Illinois, the goal of unionization of the home-care workers was to create a professional group of home-care workers with a uniform standard of training, qualifications, and supervision. As a result of unionization, the home-care workers also received increased wages and health insurance.
Under the Supreme Court’s 1977 decision in Abood v. Detroit Board of Education, the Supreme Court held that public sector employees may be represented by a single union and that all workers in that sector – whether they chose to join the union or not – would have to pay their fair share of dues to support the union’s collective-bargaining activities regarding benefits and working conditions. The Abood decision also made clear that, although the non-union members can be compelled to pay dues attributable to collective-bargaining activities, non-union members cannot be compelled to pay dues to support a union’s political or ideological activities.
In Harris, eight home-care workers who object to representation by the Service Employees International Union brought a class action, objecting to the requirement that they pay dues to the union. The union currently represents more than 20,000 home-care workers in Illinois. The dues paid by the workers are used by the union in negotiations with the state Medicaid program regarding reimbursement rates and wages paid to the workers. The home-care workers in Harris argue that the union’s negotiations with the state Medicaid program on their behalf are an attempt to petition the government on a matter of public concern – the wages paid to government employees. The workers claim that this in a violation of their rights of free association and free speech. The workers are urging the Supreme Court to overrule Abood and eliminate the exclusive representation union for public sector employees.
The State of Illinois rejects the workers’ claim that the union’s negotiations for higher wages or reimbursement amounts from the state Medicaid program are a political act. Instead, the State urges the Court to find that the union’s activities in this case fall squarely within the purview of the Abood case because the union’s negotiations are related to benefits, working conditions and wages for the workers. The federal government joined the case in support of the State of Illinois and in defense of Abood.
This is an important case because it is very possible that the Supreme Court will overrule Abood entirely, given the Supreme Court’s prior statements. The Supreme Court recently indicated its hostility to mandatory dues paid to public sector unions by non-members in Knox v. SEIU in 2010. In that case, the union sought to impose special dues assessments and dues increases on all workers and argued that Abood required members and non-members alike to pay for these additional amounts . The Supreme Court disagreed and held that non-members were not required to pay additional amounts to the union absent an affirmative vote by the non-members. The Knox decision was widely considered to be a substantial blow to the power of public sector unions. If Abood is overruled in Harris, public sector unions will be further – and perhaps fatally – weakened.
A decision is expected by the end of the term.