RECENT EEOC AND NLRB ACTIONS AND RULINGS Keeping Your Organization Out of Hot Water Presented by: Mark J. Foley Raymond A. Kresge

RECENT EEOC AND NLRB ACTIONS AND RULINGS

Keeping Your Organization Out of Hot Water

Presented by:Mark J. Foley

Raymond A. Kresge

Overview Of Discussion

• EEO Developments– EEOC Regulatory Actions– Significant EEO-Related Employment Cases– EEOC, Supreme Court and Third Circuit Trends

• Developments in NLRA Practice– National Labor Relations Board Developments– Significant Legislative Initiatives– Do’s and Don’ts for Employers Facing Organizing

Efforts

EEOC: What the numbers show for Fiscal Year 2007• Increases in:

– Number of charges– Number of charges resolved on the merits– Mediations– Money from enforcement actions

• The status quo– Slow turnaround in processing and determining

charges on the merits– Focus on systemic discrimination

EEOC Initiatives – E-RACE

• Eradicating Racism and Colorism from Employment

– Race continues to comprise the highest number of discrimination and retaliation claims filed with the EEOC (36% of all charges in Fiscal Year 2006)

– Opinion polls cited by the EEOC show that the majority of African Americans and Caucasians (non-Hispanic) think racism is a “very serious” or “somewhat serious” problem

– New forms of race discrimination are emerging• Growing number of race charges involving interracial marriages• Growing number of “race plus” charges

EEOC Initiatives – E-RACE

• What the EEOC is doing to address this problem:

– Identifying barriers to employment opportunities

– Focusing on race issues with class and systemic implications

EEOC Guidance: Caregiver Discrimination

• Driving Force: Changing demographics

• Population is aging and workers need to care for elderly• More working mothers today (59% of the workforce in 2005,

compared to 43% in 1970)• Working men spending more time caring for others (from 2.5

hours per week in 1965 to 7 hours per week in 2003)• Men and women both working more hours today

• EEOC anticipates increased litigation

EEOC Guidance:Caregiver Discrimination

• Clarifies existing law

– Federal law does not prohibit discrimination against workers based solely on caregiver status

• Does NOT have force and effect of law

– Assists EEOC in investigating claims– Guides employers in preventing and addressing

caregiver discrimination


• EEOC is focusing on:

– Working mothers– Pregnant workers– Working women of color– Working fathers– Working grandparents– Others with caregiving responsibilities


• Areas prone to caregiver discrimination include:

– Hiring– Promotions– Opportunities requiring travel– Training programs– Granting leave requests– Skill assessments for reductions-in-force

The New EEO-1 Report• Background

– Private employers with 100 or more employees, and employers with 50 or more employees and a federal government contract amounting to $50,000 or more, must file annually

– EEOC uses data to analyze employment patterns and support civil rights enforcement actions

– OFCCP uses data in determining which facilities to audit

– First change in four decades

The New EEO-1 Report

• What’s new

– New race and ethnic categories• Previously, there was no option to identify more than one

racial category• Now there is a new category – “Two or More Races, (Not

Hispanic or Latino),” for those that fit this description• Breaks Asians and Pacific Islanders into two categories

– Renames other race and ethnic categories• Black or African American• Hispanic or Latino

The New EEO-1 Report

• What’s new, cont’d

– New Job Categories• Breaks “Officials and Managers” into two categories

– Executive/Senior Level Officials and Managers– First/Mid-Level Officials and Managers

• Moves business and financial occupations from Officials and Managers to the Professionals category

– Self-identification v. visual observation• Voluntary • No need to resurvey workforces (except in Hawaii, which had

been exempt from survey)• May still use visual observation if employee declines to

complete self-identification

EEOC Enforcement Action

• EEOC v. Outback Steak House of Fla., 102 FEP Cases 16 (D. Colo., November 2, 2007)

– EEOC brought enforcement action against restaurant chain for engaging in pattern or practice of discriminating against women in hiring and in promotions

– Issue: Did employer have sufficient notice of the national scope of the EEOC’s claims?

– Holding: No.

EEOC Enforcement Action– Key points:

• Fact that underlying charges centered on three-state region of Colorado, Wyoming and Montana did not preclude national scope of litigation because the EEOC may bring an action regarding any discrimination it uncovers during an investigation

• However, the employer’s production of policies covering all of its workplaces in response to EEOC’s request for general information such as policies and practices cannot be construed as evidence that the EEOC was conducting a nationwide investigation because nearly all charges against national employers investigated by the EEOC would be transformed into a nationwide action

• Court recommends EEOC advise employer, in writing, of national scope of investigation during conciliation process (if not sooner)

Key EEO Case from the Supreme Court’s 2006-2007 Term

• Ledbetter v. Goodyear Tire & Rubber, 127 S.Ct. 2162 (May 29, 2007)

– Limitations period runs from date discriminatory pay decision was made and communicated to employee

– Pay claims involve discrete acts, not continuing violations• Cannot shift discriminatory intent from old act to recent one

– Congress intended a short limitations period

– No deference owed to EEOC

Ledbetter – The Next Chapter

– Fallout: The Ledbetter Fair Pay Act

• Would amend Title VII, the ADEA, the ADA and the Rehabilitation Act

• Would allow claims for compensation discrimination to be brought within 180/300 days of receipt of a discriminatory paycheck or benefit

• Would apply to all forms of compensation and to other practices that impact pay (such as denial of a promotion)

• Passed the House on July 31, 2007; identical bill now in the Senate

• President Bush has threatened to veto the bill

Key EEO Cases in the U.S. Supreme Court’s 2007-2008 Term

• Federal Express Corp. v. Holowecki, No. 06-1322 (on appeal from the Second Circuit)

• Issue: Can an EEOC Intake Questionnaire be treated as a charge for purposes of exhausting administrative remedies under the ADEA?

– Statute states that no civil action may be commenced until 60 days after a charge is filed with the EEOC

• Relevant Facts:– Intake questionnaire contained the information required by EEOC

regulations– The plaintiff in this case was not misled by EEOC – Employer had no notice of the intake questionnaire


• Second Circuit said “yes”

• EEOC position: Give deference to its regulations since “charge” is not defined in the ADEA; intake questionnaire can constitute charge

• Tension: Unfair to deprive plaintiffs of their rights when an agency fails to act v. frustrating role of EEOC in fulfilling its obligations and depriving employers of pre-suit resolution


• Sprint/United Management Co. v. Mendelsohn, No. 06-1221 (on appeal from the Tenth Circuit)

• Issue: Can a RIF’d employee introduce evidence of discrimination in an ADEA action against another employee, when the other employee had a different supervisor (i.e., decisionmaker)?


• Tenth Circuit said “yes”

• EEOC position: Evidence can be relevant if it has any tendency to make more probable an unlawful motivation, but may be excluded under F.R.E. 403

• Tension: Difficulty of proving discriminatory animus v. being required to defend lawsuits within lawsuits


• Kentucky Retirement Systems v. EEOC, 06-1037 (on appeal from the Sixth Circuit)

• Issue: Whether an employee benefit plan that denies older workers disability benefits available to younger workers or provides fewer benefits to older workers--in certain circumstances--establishes a prima facie case of discrimination under the ADEA?


• Sixth Circuit, en banc, said “yes”

• EEOC position: A plan that, on its face, treats older workers less favorably than younger workers constitutes a prima facie violation of the ADEA.

• Tension: What is sufficient to show proof of discriminatory animus? Must the EEOC show the employer’s use of age was arbitrary?

Third Circuit Developments

• Eichorn v. AT&T Corp., 484 F.3d 644 (3d Cir. 2007)

– Monetary relief not available for ERISA Section 510 claims, i.e., Section 510 plaintiffs limited to equitable relief only

– Decision based on Supreme Court decision in Great-West and tie-in of Section 510 to civil enforcement through Section 502(a)(3)

– Section 510 is ERISA “anti-discrimination” provision and prohibits interference with attainment of any right or benefit to which participant may become entitled.

EEOC Enforcement Action and Third Circuit Developments

• Jakimas v. Hoffman-LaRoche, Inc., 485 F.3d 770 (3d Cir. 2007)

– ERISA Section 510 claims for unlawful terminations accrue when the employee is given actual notice of the pending termination—not from the date of the termination

• Note that the statute of limitations for Section 510 claims is borrowed from state law

– Plaintiff in ERISA Section 510 action is not required to tender back the proceeds received from signing release in order to bring suit


• Ruehl v. Viacom, Inc., 500 F.3d 375 (3d Cir. 2007)

– Release did not waive age discrimination claims where employer failed to provide plaintiff with the information required by the Older Workers Benefit Protection Act (OWBPA), and failed to advise plaintiff that he had a right to receive it upon request

– Equitable tolling not available based upon invalid release because it is a misrepresentation of law, not fact

– Plaintiff cannot avail himself of the “single filing rule” available in collective and class actions where the class has been decertified

Third Circuit Developments• El v. SEPTA, 479 F.3d 232 (3d Cir. 2007)

– Issue: Do hiring criteria that bar applicants with certain criminal convictions from paratransit driver jobs have an unlawful disparate impact on African Americans and Hispanics?

– SEPTA‘s policy provides that convictions for crimes of violence bar employment as a driver for life

– Plaintiff was convicted of second degree murder 40 years prior to his application for a job at SEPTA

– SEPTA claimed business necessity defense

– Court affirmed summary judgment for SEPTA on business necessity defense


– Business necessity standard: Must show that a discriminatory hiring policy “accurately-but not perfectly-ascertains an applicant’s ability to perform successfully the job in question”

– Court does not defer to EEOC Compliance Manual, which requires that employers take into account time since conviction

– Court states that Title VII does not measure care in formulating hiring policies; it requires an employer to be able to show business necessity when challenged

• Here SEPTA witnesses could not articulate why policy was structured as it was, but expert reports provided evidence to support business necessity defense

Increased Union Organizing Efforts

• “Change to Win” Labor Federation was created in 2005 with the stated purpose of increasing organizing activity

• Change to Win member unions have committed to spending several hundred million dollars annually on organizing efforts

• Last year the AFL-CIO announced plans to spend an additional $150 million a year on organizing efforts

Increased Union Organizing Efforts

• Teamsters International had fewer than 20 field organizers three years ago; today it employs 200, and the Teamsters organized more than 20,000 new members last year.

• Laborers expect to spend $100 million a year on organizing by 2009.

• Political spending by Unions continues to increase as well. It is estimated that unions spent over $500 million to influence the 2004 elections, and that amount is sure to increase in the upcoming election cycle.

NLRB Developments – Statutory Supervisors

• Oakwood Healthcare, Inc., 348 NLRB No. 37 (2006)

– This, and two other Board decisions now known as the Kentucky River decisions, have expanded the definition of “supervisors” who are excluded from many of the protections of the National Labor Relations Act.

NLRB Developments – Statutory Supervisors (cont’d…)

– Employees are deemed supervisors if:

• They have authority to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them, or adjust their grievances, or effectively to recommend such action;

• their authority requires the exercise of “independent judgment”; and

• their authority is held “in the interest of the employer.”

– Board draws distinction between “true supervisors” and mere “straw bosses” who only have minor supervisory duties.


• The Board focused on three statutory construction issues:

– The Board first interpreted the term “assign” to refer to “the act of designating an employee to a place (such as a location, department, or wing), appointing an employee to a time (such as a shift or overtime period), or giving significant overall duties, i.e. tasks, to an employee.” In the health care context, this includes such transitory acts as occasionally assigning nurses to particular patients.

– Next, the Board evaluated the term “responsibility to direct” and found that “to be ‘responsible,’ the person directing and performing the oversight of the employee must be accountable for the performance of the task by the other, such that some adverse consequence may befall the one providing the oversight if the tasks performed by the employee are not performed properly.” “Directing” an employee need not be done on a full-time basis so long as it is done on a “regular and substantial” basis.


– The Board then turned to the meaning of “independent judgment,” finding the term required that the employee act “free from the control of others and form an opinion or evaluation by discerning and comparing data”; the degree of discretion exercised must be more than “routine and clerical.”

Salting

• Toering Electric Company, 351 NLRB No. 18 (Sept. 18, 2007)

– Significant change to the burden of proof in salting cases

– Board expressed concern that Act was being abused by Unions who filed charges on behalf of “salts” simply to disrupt non-union employers’ business.

– General Counsel must now prove that a “salt” was “genuinely interested in an employment relationship with the hiring employer” to prove a discrimination claim under NLRA

Salting

– Employer may contest genuineness of a salt’s application through evidence the individual:

• Recently refused similar employment with the employer;

• Incorporated belligerent or offensive comments on his or her application;

• Engaged in disruptive, insulting or antagonistic behavior during the application process; or

• Other similar conduct inconsistent with a genuine interest in employment

New Remedy Standards in Salting Cases

• Oil Capitol Sheet Metal, Inc., 349 NLRB No. 118 (2007)

– Board held it would no longer apply a presumption of indefinite employment in determining gross backpay amounts for union salts who successfully prove a discrimination claim

– Instead, General Counsel must prove reasonableness of claimed backpay period

New Remedy Standards in Salting Cases (cont’d…)

– Relevant evidence includes:• Salt’s personal circumstances;

• Union policies/practices on salting campaigns;

• Union’s specific plans for the employer; and

• Historical data regarding the duration of employment of salts in similar salting campaigns

Union Access toEmployer’s E-Mail System

• Media General Operations v. NLRB, 181 LRRM 2632 (4th Cir. 2007)

– Enforced Board Order holding employer violated Section 8(a)(1) by barring union agents from using employer’s email system for union business

– Employer had policy restricting email use to company business

– In practice, employees used email for a variety of non-business uses, such as personal messages, planning social events and charitable solicitations

Union Access toEmployer’s E-Mail System (cont’d…)

– Only enforcement of policy was discipline of employees who sent pornographic pictures

– Company sought to discipline union president for sending union-related messages

– Board and Fourth Circuit held an employer may not interfere with union members’ ability to communicate, nor can it discriminate between union and non-union communications

Union Access toEmployer’s E-Mail System (cont’d…)

• Board also has pending before it Guard Publishing Corp., in which the Board must determine the lawfulness of an employer’s ban on all non-work uses of email.

– The decision is expected to have a significant impact on an employer’s prerogative to control use of its email system.

Union Campaigns and Elections –Employer Speech and Interference

• Medieval Knights LLC, 350 NLRB No. 17 (2007)

– During a union campaign, the employer hired consultants to educate employees about the election process

– At a meeting of employees, consultant conducted a mock exercise on collective bargaining

– Consultant said employer could stall negotiations by giving in on lesser items and holding out on important issues such as wages, and still maintain appearance of good faith bargaining

– Board found conduct lawful since it involved hypothetical bargaining parties and consultant never said employer would engage in such tactics

• Madison Square Garden, LLC, 350 NLRB No. 8 (2007)

– Pro-union activities of company supervisors can void election results in favor of union

– During campaign, supervisors had signed flyers supporting union, handed out authorization cards and actively campaigned for union

– Supervisors ignored company’s request that they opposed the campaign or remain neutral

– Board found that due to supervisors’ power and influence over employees, such activities were potentially coercive

New Requirements for Mock Ballots

• Ryder Memorial Hospital, 351 NLRB No. 26 (Sept. 28, 2007)

– Board announced it will not set aside a representation election based on a party’s use of an altered sample ballot, provided the altered ballot is a reproduction of the Board’s newly-revised sample ballot.

– Board’s revised sample ballot contains disclaimer language stating: “The National Labor Relations Board does not endorse any choice in this election. Any markings that you may see on any sample ballot have not been put there by the National Labor Relations Board.”

Voluntary Recognition and Decertification

• Dana Corp., 351 NLRB No. 28 (2007)

– Held that employees have 45 days after receiving notice that their employer has recognized a union based on a card check to file a petition for a decertification election.

– Decision requires that the employer and/or Union notify the NLRB regional office in writing regarding a card check or voluntary recognition, and the employer must post a Board notice in the workplace for 45 days.

– Board also modified contract bar rules, so that an agreement executed after recognition will not bar a decertification petition unless employees received notice of the recognition and 45 days have passed without a decertification petition being filed.

Voluntary Recognition and Decertification

• Supervalu, Inc., 351 NLRB No. 41 (Sept. 30, 2007)

– Provision in CBA requiring employer to recognize union and new bargaining units based on a card check at non-union locations is a permissive, not mandatory subject of bargaining

– Because the subject is merely permissive, if union pressures employer to negotiate a card check agreement covering new or separate bargaining units, the employer may refuse to bargain over such a proposal and may pursue a ULP charge if the union insists on such a proposal to impasse

New Rules on Lawsuits Filed by Employers

• BE & K Construction, 351 NLRB No. 29 (Sept. 29, 2007), – Board established a new legal standard regarding employer

lawsuits against unions for activity arguably protected by the NLRA.

– Board held that so long as the lawsuit had a “reasonable basis,” it could not be found to violate the Act even if the employer’s motive was retaliatory.

Supreme Court To Review Statute Prohibiting Use Of State

Funds To Oppose Unionization

• Supreme Court recently announced it would hear Chambers v. Brown, an appeal from the 9th Circuit

• The 9th Circuit upheld a California law prohibiting private-sector employers who receive state funds from using such funds “to assist, promote, or deter union organizing.”

• The 9th Circuit had reasoned that the provision did not violate the First Amendment and was not preempted by the NLRA

• Supreme Court’s decision may have a significant impact on similar provisions in other states

New NLRB Memorandum on Remedies

• On May 29, 2007, the General Counsel issued a Memorandum on circumstances warranting additional remedies when ULPs interfere with bargaining for an initial contract.

• Regions must submit to Division of Advice cases involving ULPs during bargaining for an initial contract

• Memorandum encourages use not only of Section 10(j) injunctions in these cases, but also:– Requiring bargaining on a compressed schedule;– Periodic reports on the status of bargaining;– A minimum six-month extension of the certification year; and – Reimbursement of bargaining costs

NLRB Internal Practices and Procedures

• On September 25, 2007, the General Counsel issued a Memorandum identifying “novel, complex, or unsettled legal questions” that regional offices must submit to the Division of Advice.

• These include four categories of cases:– Those involving an absence of precedent and certain policy

priorities;– Cases requiring development of a litigation strategy in light of

adverse circuit court law or Board precedent;– Cases involving “difficult legal issues,” such as agreements to

boycott another employer or those involving undocumented worker issues; and

– Cases where 10(j) injunctive relief is contemplated

Legislative Developments

• Employee Free Choice Act

– The Bill would:

• Require employers to recognize and bargain with unions based only on a “card check”

• Dramatically alter the collective bargaining process by requiring that an arbitrator be given the power to impose contract terms where the employer and union fail to reach agreement on an initial contract; and

• Substantially increase penalties imposed on employers for labor law violations during union organizing campaigns.

• Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act

– Would overturn NLRB’s Kentucky River decisions and narrow the statutory definition of “supervisor”

Documents

RECENT EEOC AND NLRB ACTIONS AND RULINGS Keeping Your Organization Out of Hot Water Presented by: Mark J. Foley Raymond A. Kresge