The NLRB has been debating implementation of so-called “quickie election” rules on and off since 2011. Earlier this week, by a 3-2 vote, the NLRB finalized, and published in the Federal Register, its new election rules, which will become effective in April. In announcing the adoption of the new election rules the NLRB stated: “The National Labor Relations Board has adopted a final rule amending its representation-case procedures to modernize and streamline the process for resolving representation disputes.” The NLRB Chairman Mark Gaston Pearce stated: “I am heartened that the Board has chosen to enact amendments that will modernize the representation process and fulfill the promise of the National Labor Relations Act.”
While the NLRB attempts to discuss the overall benefits of these new rules, what these amended rules do in reality is make it easier for unions to win elections by, among other things: (a) shortening the timeline between the election petition and the actual election, (b) making it easier for unions to communicate with employee voters, and (c) eliminating a number of methods employers had to challenge election issues before the election takes place.
New Procedures – Some Details
The NLRB has provided a very detailed “NLRB Representation Case-Procedures Fact Sheet” on its website. This document describes the new procedures in detail and even provides a table that compares the current election procedures with the new procedures that will be effective on April 15. To review this Fact Sheet, click here.
Some of the key changes to the election procedures include the following:
Electronic Filing/Communications – Parties may file documents, such as petitions, electronically, rather than by fax or mail.
Election Voter List/Expanded Excelsior List – The employer must include available personal email addresses and phone numbers of voters on the voter list (aka Excelsior list) in order to permit non-employer parties to communicate with prospective voters about the upcoming election using modern forms of communication. Under current procedures, only a home address was required. The timing for providing the list was also materially shortened. Under the current rules, this list had to be provided to the NLRB seven days after the election agreement was approved or the regional director directed an election. Under the new rules, this list will have to be provided within two business days of the same events. In addition, employers should note that email addresses are now requested on the new I-9 form and thus employers will likely be required to review this form and other employee personnel records to determine if it has an email address for each employee in the bargaining unit before finalizing the Excelsior list.
Pre-Election Hearing -- Pre-election hearings will now be set 8 days after the hearing notice is served in almost all cases.
Early Identification of Disputed Issues – The employer will no longer be able to wait until the pre-election hearing to raise issues. Under the new rules, the employer will be required to respond to the petition by filing a written Statement of Position. In this submission, it must state its position on key issues before the pre-election hearing opens, and generally within 7 days of the pre-election hearing notice being served. Issues not raised at that time by the employer will be barred from being raised at the hearing. However, the union will be able to wait and can respond to the issues raised by the non-petitioning parties at the opening of the hearing. In addition, as part of its Statement of Position, the employer must provide a list of prospective voters with their job classifications, shifts and work locations, to the NLRB’s regional office and the other parties. This is a new requirement.
Litigation of Eligibility and Inclusion Issues – Generally, only issues necessary to determine whether an election should be conducted will be litigated in a pre-election hearing. All other issues will now have to be deferred must be litigated post-election and then only if not moot.
Earlier and more complete information to employees – Under the new rules, the employer will be required to post a Notice of Petition for Election containing more detailed information on the filing of the petition and employee rights within two business days of the region’s service of the petition for election. This Notice of Election will provide prospective voters with more detailed information about the election and the voting process.
The NLRB shares significant information about these new election rules on its website. For more information and background, you can click the following documents: NLRB Press Release; NLRB Fact Sheet; NLRB Comparison Table (new and old rules).
What Should Employers Do
These new election rules will have a major impact on how employers can respond to union organizing activity and an election petition. Employers will need to be more prepared in advance if they wish to effectively communicate their message in a timely manner in the event of union organizing. Employers concerned about unionization should meet with their labor counsel to discuss their options and methods for combatting these new procedures. However, below are some very basic tips that will likely be applicable to most employers with any concerns about union organizing and these new procedures:
- Employers should make sure that their views on unionization are made known to both management and non-management employees. Employers should use labor relations experts/attorneys in this effort to make sure they do not say anything improper.
- Employers should make sure that their supervisors are trained to recognize the signs of union activity and who to notify if they suspect union activity, so that the employer can effectively recognize and deal with any campaign before it is too late to effectively do anything about it.
- Employers may want hire labor relations experts to audit their workforce to determine vulnerability. This should only be done by a trained expert because the NLRA has very strict guidelines on what can be done to obtain certain information from employees.
- Employers should consider interviewing and identifying attorneys and consultants in advance that it can use to help them in a union campaign, because under the new rules, there will be little time for employers to locate and hire these experts if it does not learn about the campaign until the time of the election petition.
As California employers know, California recently enacted a statewide paid sick leave mandate for California employers. Although employers need not start providing paid sick leave benefits until July 1, 2015, the law’s posting and notice requirements take effect January 1, 2015, according to guidance published this month by the California Labor Commissioner’s office. This means that beginning January 1, 2015, California employers must display a poster in the workplace informing employees of their paid sick leave rights under the new law. The Labor Commissioner’s office has published a template poster that employers may use to satisfy the posting requirement. The template poster is available here. Note that in many instances, an employer’s paid sick leave policy (or a combined paid time off policy) may provide for more generous benefits than required under the new paid sick leave law. In such circumstances, the employer may want to revise the template poster to accurately reflect the specific paid sick leave benefits the employer provides. Alternatively, employers may consider posting the Labor Commissioner poster along with their own specific policy.
In addition to the posting requirement, employers must also begin complying with the law’s notice requirement effective January 1, 2015. Under the law, employers are required to provide non-exempt employees with information, upon hire, on their paid sick leave benefits as part of the Wage Theft Prevention Act Notice (Labor Code section 2810.5). Post-hire, a revised notice is required to be provided within 7 days of any changes to the paid sick leave policy (this will also apply to employees hired prior to January 1, 2015 where the employer is adopting or modifying paid sick leave policy). Although this notice is only required to be provided to non-exempt employees, employers certainly are permitted to provide the notice to exempt hires as well. The Labor Commissioner’s office has published a template notice that employers may use. The template notice is available here.
Displaying the paid sick leave poster and providing notice of paid sick leave benefits beginning in January is likely to cause some confusion for employees whose leave entitlements will not begin until July 2015. Where applicable, employers can modify the text of the Wage Theft Prevention Act notice to make clear that paid sick leave benefits do not begin accruing until July 1, 2015.
The Labor Commissioner’s office has also posted on its website some frequently asked questions and answers relating to the paid sick leave law. California employers are encouraged to review this guidance here to ensure their paid sick leave policies and practices are in compliance with the new law, as interpreted by the Labor Commissioner.
Continuing its trend of enacting burdensome ordinances requiring employers with employees in San Francisco to comply with specialized wage and hour requirements, the San Francisco Board of Supervisors has now passed two ordinances aimed at providing wage and hour protections for employees of “formula retail establishments.” These ordinances are collectively referred to as the Retail Workers’ Bill of Rights. These ordinances are effective January 4, 2015 but do not become operative until July 3, 2015.
The Retail Workers’ Bill of Rights applies to employers operating a Formula Retail Establishment with 20 or more employees in the city of San Francisco, including corporate officers and executives. A “formula retail establishment” means a business located in San Francisco that falls under the San Francisco Planning Code’s definition of “formula retail use” (section 703.3) except that the business must have at least 20 retail sales establishments located worldwide. Formula retail establishments are commonly referred to as “chain stores” and include, among other things, retail stores, chain restaurants, fast food restaurants, and bars. Professional service establishments such as medical offices and/or salons/gyms are not considered formula retail establishments.
The Retail Workers’ Bill of Rights imposes five main requirements on employers:
- Advance Notice of Work Schedules and Changes: Prior to the start of employment, an employer shall provide a new employee with a good faith written estimate of the employee’s expected minimum number of scheduled shifts per month, and the days and hours of those shifts (not including on-call shifts). The employee may request a modification in the proposed schedule, which the employer is required to consider (but not required to accept) and respond to prior to the employee’s start of employment. Post-hire, an employer is required to provide employees with at least two weeks’ notice of their work schedules, by doing one of the following at least every 14 days: (1) posting the work schedule in a readily accessible location in the workplace; or (2) electronically transmitting the work schedule to employees. The work schedule must include any on-call shifts. If the employer thereafter changes an employee’s schedule, the employer must give the employee notice of the change, along with “predictability pay” of one hour of pay at the employee’s regular rate for a change with more than 24 hours’ notice but less than 7 days’ notice. If the employer makes a change with less than 24 hours’ notice, the employer must pay the employee 2 hours of pay for each changed shift of four hours or less, and 4 hours of pay for each changed shift that is more than four hours. Predictability pay does not apply to on-call shifts, which are separately addressed below. Predictability pay is not required if the change is necessitated by certain acts beyond the employer’s control (electric outage, etc.) or if (a) another employee previously scheduled to work the shift is unable to work due to illness or use of PTO and did not give the employer at least 7 days’ notice of the absence; (b) another employee previously scheduled to work the shift fails to report to work and/or is fired or sent home as a disciplinary action; (c) the change results only from an employer request to an employee to work overtime; or (d) the employee requests and/or causes the change to his or her own schedule.
- Pay for On-Call Shifts: For each on-call shift that an employee is required to be available but is not called in to work (with less than 24 hours’ notice that the shift has been cancelled or moved to another date or time), the employee must be paid 2 hours of pay (regular hourly rate) for each on-call shift of 4 hours or less, and 4 hours of pay for each on-call shift of more than 4 hours. The same exceptions to the predictability pay requirements also apply to the on-call pay requirements.
- Equal Treatment for Part-Time Employees: Employers are required to provide part-time employees (those working fewer than 35 hours per week) with the same starting hourly wage as that provided to full-time employees (those working 35 or more hours per week) holding comparable positions. However, pay differentials are permissible if based on considerations other than the part-time status of the employee. Employers are also required to provide part-time employees with the same access to paid and unpaid time off offered to full-time employees of the same job classification. However, a part-time employee’s eligibility for paid or unpaid time off may be pro-rated based on the number of hours that the employee works. Employers must also provide part-time employees with the same eligibility for promotions as full-time employees of the same job classification, though the employer may condition promotion on the employee’s availability for full-time work and/or on reasons other than the part-time status of the employee. Finally, the new ordinances require that if an employer has a need for additional workers, before hiring new employees or using contractors or a temporary staffing agency to perform work, the employer must first offer the additional work to existing part-time employees if the existing employees are qualified to do the work and the work is the same or similar type of work the employee already performs. The employer is only required to offer the part-time employee the number of hours required to give the employee 35 hours of work per week.
- Sale of Business: If a covered retail establishment is sold, the successor is required to retain the seller’s non-managerial incumbent employees who have been employed for at least 90 days prior to the sale. The successor employer must retain these incumbent employees for at least 90 days and under the same terms of employment already in place (rate of pay, job classification, and number of work hours). If the successor employer determines that it needs fewer employees than were employed by the prior owner, the successor employer must retain incumbent employees based on seniority and/or the terms of any applicable collective bargaining agreement. During the 90-day retention period, the successor employer may not discharge a retained employee without cause.
- Notice and Recordkeeping: Covered employers will be required to post a notice of employees’ rights under these new ordinances. The San Francisco Office of Labor Standards Enforcement (“OLSE”) will prepare and publish the required posters for employer use. Employers are required to retain pertinent personnel records for three years and these records are subject to inspection by the OLSE.
The Retail Workers’ Bill of Rights provides for administrative investigation and enforcement by the OLSE. Additionally, the City Attorney’s office may file civil actions against non-compliant employers. Retail employers covered by these new ordinances should review them promptly and take action to ensure compliance before the operative date of the ordinances, which is July 3, 2015. The text of the ordinances is available here and here.
Earlier this week, the IRS issued the 2015 optional standard mileage rates used to calculate the costs of operating a vehicle for business, charitable, medical or moving purposes. Beginning on January 1, 2015, the standard mileage rates are as follows:
- 57.5 cents per mile for business miles driven, up from 56 cents in 2014;
- 23 cents per mile driven for medical or moving purposes, down half a cent from 2014; and
- 14 cents per mile driven in service of charitable organizations.
Under California Labor Code section 2802, California employers are required to reimburse employees for reasonable expenses necessarily incurred in the performance of their job duties. This includes expenses associated with the use of their personal vehicles for business purposes. Most employers use the standard mileage rate to satisfy their obligation to reimburse employees for expenses associated with using their personal vehicles for business travel. Although employers are not required to use the IRS optional standard mileage rate, and can instead try to calculate an employee's "actual" expense associated with personal vehicle use (which includes more than just the cost of gas, but also the cost of wear and tear, etc.), the latter method carries risk of being challenged for not providing adequate reimbursement.
The action continues on the minimum wage front in December. Earlier today, State Senator Mark Leno introduced a bill to accelerate the proposed increase to California’s statewide minimum wage. Leno has been a strong proponent of an increased statewide minimum wage.
Today was the first day of the California legislative session so it is very difficult to tell what will happen with this bill. However, the bill, as introduced, would raise California’s minimum wage to $11 in 2016 (instead of $10 under current legislation passed in 2013) and $13 in 2017. After 2017, the bill calls for regular minimum wage increases indexed to inflation.
Senator Leno introduced a similar bill last year, but it died in committee. Given the current climate on minimum wage, this year’s version likely has a better chance of ultimate success. We will continue to keep you posted on the progress of this and other employment-related bills as they are introduced and move forward during the legislative session.
In case you were too busy eating Turkey and/or watching football, we wanted to make sure you were aware of two wage and hour developments in California from last week:
Premium Pay for Certain Holidays Being Proposed
First, San Diego Assemblywoman Lorena Gonzalez announced that she is going to introduce a bill that guarantees that all California workers (part-time and full-time) receive double their regular rate of pay if they are required to work on Thanksgiving or Christmas. (Note: In Ohio, state representative Michael Foley already introduced a bill that would require stores in Ohio to pay triple the regular hourly rate for workers who are required to work Thanksgiving). Assuming Gonzalez’ bill does get introduced, we expect it to have substantial support from her fellow lawmakers. This bill would be introduced in next year’s legislative session (2015) and will not affect Christmas this month. Currently, Gonzalez plans to only include Thanksgiving and Christmas as days requiring premium pay. However, it is certainly possible that amendments to expand the scope of the bill are debated and that additional holidays or other dates (Black Friday, Christmas Eve etc.) are considered.
Sacramento Considering Citywide Minimum Wage Ordinance
Second, Sacramento Mayor Kevin Johnson has announced that he will put together a task force shortly after January 1 to consider the issues surrounding raising Sacramento’s minimum wage above the current state level ($9 currently increasing to $10 in 2016). Mayor Johnson claimed that the task force will include representatives from the business community and from organized labor. He announced that he will ask the group to look into a variety of issues surrounding a potential Sacramento minimum wage including whether to do it, the timing of it, and what if any exemptions should be provided. The Mayor has not identified a particular dollar figure for the new minimum wage and that issue will likely also be considered and proposed by the task force. We expect that any minimum wage increase is likely to be supported by the City Council and the citizens of Sacramento.
We will keep you updated on these issues as they develop.
On the last day to sign or veto bills this legislative session, California’s Governor signed into law two bills clearly aimed at attacking and limiting arbitration and arbitration agreements in California. The first, AB 2617, prohibits mandatory, pre-dispute arbitration agreements in contracts for the provision of goods or services, to the extent an individual is required to waive the right to bring a civil action for violation of civil rights relating to hate crimes or political activity. The statute does not expressly state that it applies to employment arbitration agreements and is instead specifically tied to the Ralph Civil Rights Act (Civil Code section 51.7), which prohibits violence or threat of violence against a person because of a person’s protected characteristics (e.g. political affiliation, sex, race, color, religion, marital status, etc.), and the Bane Civil Rights Act (Civil Code section 52.1), which prohibits interference by intimidation or coercion with a person’s constitutional or statutory rights. The new law prohibits a person or business entity from requiring an individual to waive the rights provided by these statutes, including the right to pursue a civil action for a violation of these statutes. The new law applies to contracts entered into, modified, renewed or extended on or after January 1, 2015. Any person seeking to enforce an arbitration provision waiving the right to bring a civil action under these statutes will bear the burden of proving that the waiver was entered into knowingly and voluntarily and not as a condition of the contract or of providing or receiving the goods or services.
Although the new law is tied specifically to hate crime statutes, there is some potential for the law to impact arbitration agreements in the employment arena. In some instances, courts have held that certain types of employment discrimination and harassment claims may also constitute hate crimes within the meaning of Civil Code sections 51.7 and 52.1. These statutes are very broadly and poorly worded, leaving some room for differing interpretations by courts. The new law may also be held to apply to arbitration provisions in independent contractor agreements.
While the scope of the new law and its impact is far from clear, it does seem clear that the new law is contrary to the Federal Arbitration Act and would be deemed preempted as to agreements governed by the FAA. There almost certainly will be many legal challenges to the legality of this new law.
Also in an effort to decrease the attractiveness of arbitration as a forum for dispute resolution, Governor Brown signed into law AB 802, which requires major arbitration providers such as JAMS and AAA to publish at least quarterly on their websites (beginning in January 2015) detailed information concerning arbitrations they have handled, including (1) the name of any non-consumer party involved in the arbitration (i.e. the name of the employer), (2) the nature of the dispute (e.g. employment), (3) where the non-consumer party is an employer, whether the employer was the initiating or responding party, (4) the annual wage (in a range) earned by the involved employee, (5) the amount of the claim, which party prevailed, and the amount of any award, including attorneys’ fees, (6) whether the employee was represented by an attorney and, if so, the name of the attorney and the law firm, (7) the name of the arbitrator and the amount of the arbitrator’s fees, and (8) the total number of times the employer previously has been a party in arbitration or mediation before the dispute resolution provider. This new law has the obvious (and likely intended) effect of destroying the usual benefit of privacy that arbitration and mediation provide.
We will keep you posted as to further developments in this area.
Yesterday, California’s Governor signed AB 1897 into law, notwithstanding tremendous opposition from business and trade groups. Under AB 1897, which takes effect January 1, 2015, a client employer will share civil legal responsibility and civil liability for all workers supplied by a labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage. A “client employer” means a business entity that obtains or is provided workers to perform labor within its usual course of business from a labor contractor. However, it does not include business entities with a workforce of less than 25 workers (including those hired directly by the client employer and those provided by a labor contractor) or businesses with five or fewer workers supplied by a labor contractor at any given time.
The new law makes the client employer jointly liable with the labor contractor for civil liability relating to the payment of wages and/or failure to provide workers’ compensation coverage. However, the statute expressly permits client employers to include indemnification provisions in their service contracts and to enforce those provisions as a remedy against the labor contractor for liability created by acts of the labor contractor. Labor contractors may also contractually agree to indemnity provisions in their favor for acts on the part of the client employer that lead to liability. The statute sets forth one exception to the ability of the parties to shift liabilities by contract – a client employer may not shift to the labor contractor any legal duties or liabilities under Cal-OSHA.
Under the new law, a worker or his representative must notify the client employer of violations at least 30 days prior to filing a civil action against the client employer. Of course, the new law also prohibits client employers or labor contractors from taking adverse action against a worker for providing notifications of violations or filing a claim or civil action.
Looks like Christmas came early for the plaintiffs' bar, which will now have more potential pockets to pick in wage and hour actions filed against California employers.
Since 2005, California has required employers with 50 or more employees to conduct sexual harassment training of supervisors within 6 months of assuming a supervisory position and biennially thereafter. Last week, Governor Brown signed AB 2053 into law, expanding the mandated content of this training to include training on prevention of “abusive conduct.” The statute defines "abusive conduct” as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. The statute further provides that abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance. However, “a single act shall not constitute abusive conduct, unless especially severe and egregious.”
The new law does not further specify the content of the training on prevention of abusive conduct, nor does it mandate that any specific amount of time be allotted to this topic within the 2-hour sexual harassment training. The new law takes effect January 1, 2015. Employers covered by California’s training requirement should review and revise their training materials to ensure that prevention of abusive conduct is covered.
To be clear, this new training requirement does not create a private right of action by an employee against the employer to seek damages for workplace bullying. It is a training requirement only. That said, if an employee is “bullied” because of a characteristic protected under California’s Fair Employment and Housing Act (e.g. race, gender, religion, disability, age), the employee could bring a claim for harassment or discrimination under that law. Additionally, even if bullying is not directed at an employee because of a protected characteristic, it is still possible for a bullied employee to pursue a claim for intentional infliction of emotional distress. For these reasons, employers (regardless of whether they are covered by the new training requirement) may wish to include language in their employee handbooks making it a violation of company policy for employees to engage in workplace bullying/abusive conduct toward other employees. Employers should also take workplace complaints of abusive conduct/bullying seriously by conducting prompt investigations and taking appropriate remedial action.
As expected, yesterday Governor Brown signed the paid sick leave bill (AB 1522) into law, making California the second state to mandate that employers provide paid sick leave to their employees (Connecticut was the first). This means that starting in July 2015, California employers generally will have to provide their employees with at least 3 paid sick leave days per year. Our recent post on the bill is available here. California employers who already provide paid sick leave to their employees will want to review their policies against the requirements of the new law to ensure compliance. Employers who currently do not provide paid sick leave will want to review the new law and adopt a compliant sick leave policy.