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National Labor Relations Board Rules Student Assistants are Employees and Can Unionize

On August 23, 2016, the National Labor Relations Board (the “Board”) held that graduate and undergraduate student assistants who perform teaching and research roles at private colleges and universities are statutory employees under the National Labor Relations Act (the “NLRA” or the “Act”) and are therefore entitled to unionize. Columbia University, Case 02-RC-143012 (August 23, 2016).

The decision overturned a 2004 case involving graduate students at Brown University. There, the Board held that the relationship between graduate assistants and Brown was primarily educational, rather than economic. It also found that the “fundamental belief that the imposition of collective bargaining on graduate students would improperly intrude into the educational process and would be inconsistent with the purposes and policies of the Act.” Brown University, 342 N.L.R.B. 483, 493 (2004); see also http://www.putneylaw.com/cu_102715.html.

However, in Columbia University, the Board found that there was no “convincing justification” for depriving “an entire category of workers of the protections of the Act.” Instead, the Board determined that the definitions of “employer” and “employee” under the NLRA are “very broad” and that the policy of the NLRA … is to “‘encourage the practice and procedure of elective bargaining’ and to ‘protect the exercise of workers of full freedom of association, self-organization and designation of representatives of their own choosing.'” Therefore, the “fundamental belief” of the Brown board is “unsupported by legal authority, by empirical evidence, or by the Board’s actual experience.”

Takeaway for Employers

This decision is the latest instance of the Board’s vacillation on the issue of student unionization, and reflects the current Board’s willingness to overturn established precedent and to offer “very broad” protections to employees that seek to unionize.

Private university employers should prepare for unionization efforts from their graduate and undergraduate student assistants and research assistants. We remind employers that under the election rules recently adopted by the Board (see http://www.putneylaw.com/cu_122214b.html), union campaigns can appear with little notice, and elections can occur in as little as two to three weeks from the date a union files a representation petition.

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If you have any questions regarding the NLRB decision, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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Mayor de Blasio Signs Executive Order Requiring Large Retail Establishments Receiving Financial Assistance to Enter into Labor Peace Agreements with Unions

On July 14, 2016, New York City Mayor Bill de Blasio signed an executive order, effective immediately, that requires large retail establishments which receive at least $1 million in government assistance and operate on a city development project to enter into labor peace agreements with unions; thereby making it easier for their workers to unionize.

Specifically, the executive order applies to retail and food service businesses that have 10 or more employees and occupy 15,000 square feet or more in development projects. These businesses must agree, “at a minimum,” to maintain a “neutral posture” with respect to unions’ efforts to represent workers. The union must agree to refrain from “picketing, work stoppages, boycotts or other economic interference.”

The “labor peace clause” that allows the workers to unionize would remain in effect for the longer of (1) 10 years after the project began or (2) the term of financial assistance from the city.

Possible Legal Challenges

The executive order may conflict with National Labor Relations Act (“NLRA”) rights by requiring covered employers to enter into a labor peace agreement with a union even before the employer hires any employees. We anticipate that there may be legal challenges to the executive order on the basis that the federal NLRA preempts the executive order. Pending any anticipated challenges, the executive order stands and should be complied with by covered employers.

We will keep you apprised of any developments regarding the executive order.

Takeaway for Employers

The executive order does not apply to projects awarded financial assistance prior to July 14, 2016. Retail and food service employers should weigh the costs and benefits of entering into labor peace agreements before agreeing to contracts which would bring them within coverage under the executive order.

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If you have any questions regarding the executive order, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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Governor Cuomo Signs Executive Order Establishing Permanent Joint Task Force on Employee Misclassification and Worker Exploitation

On July 20, 2016, New York Governor Andrew Cuomo signed Executive Order No. 159, which established the “Joint Task Force on Employee Misclassification and Worker Exploitation.” The Joint Task Force will focus on state labor law violations in 14 targeted industries: nail salons; farming; cleaning; home healthcare; laundry; childcare; supermarkets; retail; trucking; construction; landscaping; car washes; janitorial services and waste disposal. The Joint Task Force will also involve coordinated enforcement efforts and investigations by 10 New York State agencies, including the Department of Labor, the Division of Human Rights and the Department of Health.

The Joint Task Force is the latest effort by New York State to crack down on unpaid wages, dangerous health and safety conditions, and other forms of worker exploitation. Previously, the Governor’s executive orders created temporary task forces to address worker exploitation and employee misclassification in specific industries. The Joint Task Force is a permanent entity that reflects a merger of those previous temporary task forces.

Takeaway for Employers

Employers, particularly those in the targeted industries, should continue to ensure that employees are correctly compensated and not exposed to dangerous working conditions. The Joint Task Force likely comes as welcome news to those employers in the targeted industries that have diligently complied with applicable workplace laws while facing competition from less conscientious employers.

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If you have any questions regarding the executive order, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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Connecticut Becomes the Ninth State to “Ban the Box” on Employment Applications

On June 1, 2016, Connecticut Governor Dannel Malloy signed Public Act No. 16-83, “An Act Concerning Fair Chance Employment” (the “Act”), which prohibits most employers from requesting criminal history information on an initial employment application. The Act, which covers any employer engaged in business in Connecticut that has one or more employees, goes into effect on January 1, 2017.

Under the Act, employers may not require a job applicant to complete an initial employment application containing any question related to the applicant’s prior arrests, criminal charges, or convictions. Unlike other ban-the-box legislation that prohibits inquiries into an applicant’s criminal history until after a conditional offer is made (such as New York City’s), the Act merely restricts inquiries “on an initial employment application.” The Act does not define “initial employment application” but the Connecticut Department of Labor appears to interpret the term literally to mean the employment application itself.

The Act does not apply when: (1) an employer is obligated pursuant to a federal or state law to ask about criminal history for the position in question; and (2) a position requires a security, fidelity, or equivalent bond. Furthermore, the Act does not impact several still-enforced State prohibitions on employers: (1) rejecting applicants or terminating employees because of criminal records subject to erasure under state law; and (2) rejecting applicants or terminating employees because of a prior conviction for which the individual has received a provisional pardon or certificate of rehabilitation.

Takeaway for Employers

Employers should revise job applications used in Connecticut to remove questions concerning an applicant’s prior arrests, criminal charges, or criminal convictions.

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If you have any questions regarding the Act, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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EEOC Announces Revisions to its Proposal To Require More Pay Data From Large Employers

On July 13, 2016, the United States Equal Employment Opportunity Commission (“EEOC”) announced a revised version of its proposed rule to change the Employer Information Report, also known as the EEO-1 Survey (“EEO-1”). For more information about the EEOC’s proposed rule, please see our January 29, 2016 alert at http://putneylaw.com/cu_012916.html. The proposed rule only applies to employers with 100 or more employees.

Under the revised proposed rule, the due date for companies to submit the EEO-1 survey would be pushed back from September 30 to March 31. The 2016 EEO-1 report filing deadline will remain September 30, 2016.

The EEOC’s revised proposed rule also moves the “workforce snapshot” period from the third quarter to the fourth quarter, October 1st to December 31st. The “workforce snapshot” period is the pay period when employers count the total number of employees for that year’s EEO-1 report. Again, this change will not affect the 2016 EEO-1.

The EEOC’s new proposed rule also now specifies that it will require employers to report on income provided in Box 1 of the W-2 form. Box 1 includes income that is received between January 1st and December 31st of the relevant calendar year. Previously, the EEOC’s proposed rule did not specify which box on the W-2 it would use as the measure of individual compensation.

Takeaway for Employers

The public will have 30 days, until August 15, 2016, to submit comments to EEOC concerning the revised rule. Even with the revisions, if adopted, this rule will significantly increase the amount of time and effort necessary for employers to complete the EEO-1 form.

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If you have any questions regarding the revised proposed rule, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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Employers Cannot Shorten the Statute of Limitations for NJ LAD Claims

On June 15, 2016, the New Jersey Supreme Court, in Rodriguez v. Raymours Furniture Company, Inc., No. A-27-14, 074603, held that parties may not agree to shorten the two-year statute of limitations under the New Jersey Law Against Discrimination (“LAD”). “A private agreement that frustrates the LAD’s public-purpose imperative by shortening the two-year statute of limitations period for private LAD claims cannot be enforced.”

In Rodriguez, the plaintiff, Sergio Rodriguez, applied for a position with the defendant, and signed an employment application containing a contractual provision that required all applicants, if hired, to agree to waive the two-year statute of limitations under the LAD. Rodriguez also agreed that any potential LAD claims against the employer would have to be filed within six months from the date of the adverse employment action.

In July of 2011, Rodriguez filing a lawsuit in the Superior Court of New Jersey against Raymours in which he alleged that his discharge was based on an actual or perceived disability in violation of the LAD. He contended that he was fired two days after returning to his full work duties, and that other employees with less seniority or distinguishing features were retained. The trial court enforced the contractual provision shortening the statute of limitations for LAD claims to six months, and granted summary judgment to Raymours. The trial court found that the contractual provision itself was clear and unambiguous, and that shortening the statute of limitations was not unreasonable nor against public policy. On appeal, the Appellate Division affirmed; despite noting that the employment application was a contract of adhesion, it also found that the contractual provision was clear and unambiguous and was neither unreasonable nor against public policy.

The New Jersey Supreme Court unanimously reversed. The Court reasoned that the broad private right to contract may not contravene the public policy behind a statute like the LAD. The Court opined that the “LAD occupies a privileged place among statutory enactments in New Jersey” and that “it has long been recognized that the LAD seeks unequivocally to ‘eradicate’ discrimination.” As such, the Court found that “[r]estricting the ability of citizens to bring LAD claims is antithetical to that societal aspiration and defeats the public policy goal.” Thus, the Court held that the LAD’s two-year statute of limitations could not be amended by a private agreement. The Court also noted that its decision did not affect contractual provisions where parties agree to submit LAD claims to arbitration or other alternative dispute resolution processes.

Takeaway for Employers

Employers should review, and amend if necessary, any employment applications or agreements that contractually shorten the filing of NJ LAD claims to be less than the two-year statute of limitations period. Employers should also consider other measures to help protect themselves, such as implementing jury trial waivers and/or arbitration provisions.

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If you have any questions regarding the NJ LAD and the New Jersey Supreme Court’s decision, please do not hesitate to contact us.
212-682-0020 | PutneyLaw.com.

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United States District Court Grants Preliminary Injunction Against Department of Labor’s Persuader Rule

On June 27, 2016, the United States District Court for the Northern District of Texas granted a motion to enjoin the United States Department of Labor (the “DOL”) from enforcing its recently revised “Persuader Rule.” National Federation of Independent Business. v. Perez, Case No. 5:16-cv-00066-C (N.D. Tex. 2016). The revised Persuader Rule would have essentially required employees and third party consultants (including attorneys) to the DOL arrangements to “persuade” employees regarding their right to union representation and collective bargaining. For more information about the Department of Labor’s Persuader Rule, please see our alert dated June 23, 2016, at http://putneylaw.com/cu_062316.html.

The District Court held that the plaintiffs demonstrated a substantial likelihood of success on the merits on all of their claims. Specifically, the District Court found that the DOL’s Persuader Rule exceeds the DOL’s authority under the Labor-Management Reporting and Disclosure Act of 1959 by effectively eliminating the statute’s “Advice Exemption.” As such, the DOL lacked statutory authority to promulgate and enforce this new Advice Exemption interpretation. The District Court also found that the plaintiffs were likely to succeed on their claims that the DOL’s new Advice Exemption interpretation (1) is arbitrary, capricious and an abuse of discretion; (2) violates free speech and association rights protected by the First Amendment; (3) is unconstitutionally vague in violation of the due process clause of the Fifth Amendment; and (4) violates the Regulatory Flexibility Act. The District Court further concluded that the plaintiffs demonstrated a substantial threat of irreparable harm and that the balance of hardships weighs in plaintiffs’ favor and will not disserve the public interest. Thus, the District Court determined that a nationwide injunction is appropriate, pending a final resolution of the merits of the case.

Takeaway for Employers

Barring a reversal by the United States Court of Appeals for the Fifth Circuit, or the United States Supreme Court, it is unlikely that the DOL’s Persuader Rule will be implemented as intended. Regardless of this ruling, employers may wish to try and take advantage of the DOL’s statement that it will not enforce the new rule to open-ended or multi-year agreements entered into prior to July 1, 2016, even if activities undertaken (and payments made) pursuant to such an agreement occur after July 1. We will continue to provide updates in the event of any developments.

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