A Triumph for Employers: D.C. Circuit Court of Appeals Strikes Down NLRB Poster Rule

Posted on May 13, 2013 by Royal LLP

On May 7, 2013, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) invalidated the National Labor Relations Board (“Board”) August 2011 rule requiring all employers subject to the National Labor Relations Act (“NLRA”) to display a poster informing employees of their unionization rights.  This decision comes over a year after the court issued a temporary injunction, putting the implementation date on hold until legal challenges about whether the NLRB overstepped its authority were resolved.

The D.C. Circuit found that the Board’s notice posting rule violates Section 8(c) of the NLRA because it makes an employer’s failure to post the Board’s notice an unfair labor practice and because such failure can be used as evidence of anti-union animus in another unfair labor practice (such as unlawful firings or refusals to hire).  The court also considered the First Amendment implications of the rule and suggested that the First Amendment prohibited the Board from compelling employers to disseminate the Board’s carefully crafted speech.

Although more litigation on this issue is anticipated, for now, there is no obligation for employers to post the notice issued by the NLRB.

If you have any questions related to the NLRB or the NLRA, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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All or Nothing: Arbitration Provision in Employee Handbook Unenforceable

Posted on May 6, 2013 by Royal LLP

Last month, a Massachusetts federal district court found an arbitration dispute resolution policy in an employee handbook unenforceable.  Victoria Domenichetti received an employee handbook on her first day at The Salter School, LLC, which articulated various company policies.  One of these policies was a “dispute resolution policy” stating that any disputes between the employee and employer would be decided by binding arbitration.  In addition, the handbook included a commonly used statement:  “nothing in this handbook constitutes a promise or guarantee as to the terms and conditions of your employment.”  The employer also reserved the right to unilaterally modify the terms of the employee handbook without notice.  Domenichetti signed an acknowledgement that she received the handbook and was aware of its policies.  This acknowledgment included a statement that the employee has read and understands and agrees to resolve disputes in accordance with the dispute resolution policy.

After being passed over for a promotion and demoted to a part-time position, Domenichetti sued her employer alleging she was retaliated against for requesting maternity leave.  The employer moved to compel arbitration.  Domenichetti argued that the handbook did not constitute an enforceable contract because the employer retained the authority to alter the policies contained in the handbook at its discretion and therefore, the arbitration provision in the handbook was not legally binding.  The employer argued that although the handbook itself is not a contract, the dispute resolution policy contained in the handbook is a separate binding agreement.  The court denied the employer’s motion to compel arbitration and found that the arbitration provision was not enforceable because the employer reserved the right to unilaterally modify the terms of the employee handbook without notice.

The message to employers is clear:  you cannot both be free of and create contractual obligations in your employee handbook.  The solution, however, is simple.  If you want to be able to enforce an arbitration agreement, you need to make it a separate, mutually binding contract, which the employee must acknowledge, sign, and return.

If you have any questions related to arbitration agreements or employee handbooks, or if you need assistance in updating or drafting your arbitration agreement or employee handbook, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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The NLRB and Preserving Confidentiality in Workplace Investigations

Posted on May 3, 2013 by Royal LLP

The National Labor Relations Board’s (NLRB) reach into the non-union workplace has forced employers to consider revising numerous policies.  One of these policies involves confidentiality in workplace investigations.  In Banner Health Systems v. Navarro, the NLRB found that a blanket policy prohibiting employees from discussing ongoing investigations violated Section 7 of the National Labor Relations Act.  To justify this prohibition, an employer must on a case-by-case basis determine that confidentiality is necessary because witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.

Since this decision, the NLRB’s Division of Advice (Advice) has provided employers with some guidance on drafting policies about preserving confidentiality in workplace investigations.  Advice reviewed the following policy in Verso Paper’s Code of Conduct and found it unlawful:

“Verso has a compelling interest in protecting the integrity of its investigations.  In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.  To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence.  If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.”

Specifically, Advice found the last two sentences to be unlawful.  However, Advice offered alternative language for the last two sentences that would have been lawful:

“Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.”

This reinforces the NLRB’s earlier decision that an employer’s legitimate business interest in maintaining confidentiality must be balanced against an employee’s Section 7 rights.

This guidance is helpful because it provides employers with a model for policy language that will withstand at least Advice’s scrutiny.  Employers would be wise to review their policies related to workplace investigations to ensure they do not contain blanket prohibitions to maintain confidentiality in investigations and are tailored to survive NLRB scrutiny.

If you have any questions related to confidentiality of workplace investigations, or the NLRA and the NLRB generally, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Another NLRB Loss For Employers

Posted on April 29, 2013 by Royal LLP

Social media has become a thorn in the side of many employers and after viewing unsavory Facebook dialogue by employees, directed at the employer or the employees’ working conditions, employers all too often decide those employees should be fired. Recently, the National Labor Relations Board (NLRB) found that employees, who had been discharged after making remarks on Facebook, were engaging in concerted activity and that the employer, Betty Paige Clothing, had engaged in unfair labor practices.

Betty Paige Clothing is a high end clothing store in an urban area that was open later than any of their neighboring retailers and thus, Betty Paige’s young female employees expressed their safety concerns to management, as there was no security system for the establishment. The employees believed nothing was being done about their concerns and they began posting on Facebook regarding management’s lack of concern for their safety. The NLRB found that these comments amounted to concerted activity:

  • “I need a new job. I’m physically and mentally sickened.”
  • “It’s pretty obvious my manager is as immature as a person can be…”
  • “Bettie Paige would roll over in her grave.”
  • “800 miles away and she continues to make our lives miserable.”
  • “My mom works for a law firm that specializes in labor law and BOY will you be surprised by all the crap that’s going on in violation…”

The NLRB found that the Facebook postings were complaints among employees about the conduct of their supervisor as it related to their terms and conditions of employment and about management’s refusal to address the employees’ concerns and further, that such conversations for mutual aid and protection are classic concerted protected activity, even absent prior action.

It’s important for employers to recognize that if employees are complaining about their working conditions, even via social media, those complaints are likely going to be protected. Before taking any adverse actions, it is in your best interest to consult with counsel first.

If you have any questions about concerted activity and what you can or cannot do as an employer, or if you need assistance in updating or drafting a social media policy, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Keeping Unpaid Internships Legal

Posted on April 19, 2013 by Royal LLP

The season is upon us when college students and recent graduates seek out unpaid internships, looking for a way to gain “real world” experience, and a possible foot in the door, in an otherwise suffering labor market. While the prospect of hiring interns, who are eager to volunteer their time, may be appealing, employers are learning the hard way that interns can only be employed as volunteers in very narrow circumstances. Since September 2011, several purported class action lawsuits have been filed in federal and state courts alleging federal and/or state wage-hour violations on behalf of unpaid interns.

In light of these pending cases, employers must familiarize themselves with the issues surrounding unpaid internships. Under federal law, an intern must be paid unless these six factors have been met:

  • The internship is similar to training given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees and works under close supervision of existing staff;
  • The employer derives no immediate advantage from the activities of the intern, and, on occasion, its operations may actually be impeded;
  • The intern is not entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In Massachusetts, there are additional requirements in which a for-profit employer may need to show that an unpaid internship is part of a formal educational program, such as by being affiliated with a local university or college. The potential risks associated with violation of Massachusetts law are great; employers will be subject to treble damages as well as the plaintiff’s attorney’s fees.

Employers interested in continuing internship programs on an unpaid basis must implement preventative measures which should include having interns sign an agreement confirming terms and conditions including the duration of the internship at the outset, so that all expectations and regulations are in alignment; avoid any and all appearances that unpaid interns are displacing or being used to avoid hiring regular employees; and organize your program around an interactive learning experience like job shadowing or departmental rotations, always under the close and constant supervision of regular employees.

If you have any questions about establishing an unpaid internship program, or need assistance addressing potential issues regarding an already established program, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Creating a Culture of Workplace Safety

Posted on April 8, 2013 by Royal LLP

More than half of social workers employed in Massachusetts have been physically assaulted in a work related incident.  After Diruhi Mattian, a therapist, was murdered by a client in 2008, the Massachusetts Chapter of the National Association of Social Workers (NASW), along with Massachusetts Representative Sean Garballey and Senator Sal DiDomenico, began an initiative for new safety legislation which was signed into law on February 15, 2013.

This law requires that all programs which provide direct services to clients and are operated, licensed, certified, or funded by a division of the Executive Office of Health and Human Services (EOHHS), develop and implement a workplace violence prevention and crisis response plan, which must be updated annually.

There are five factors laid out in this law that employers should consider when drafting their workplace violence prevention and crisis response plans:

  •  Establish a system for centrally recording all incidents of workplace violence or threats of workplace violence against all employees that provide direct services;
  • Publish a written plan that includes measures that the program intends to take in response to any incident of workplace violence;
  • Provide each direct service worker with a copy of the violence prevention and crisis response plan;
  • Train employees about workforce violence and ways to reduce risks; and
  • Develop and maintain a violence prevention and response team or committee to monitor ongoing compliance.

Employers may choose among these practices and procedures and determine which are most beneficial to establishing a culture of safety in their workplace.

This law requires employers to provide a copy of the current plan to any employee who requests it and those programs that do not have any violence prevention training in place must have their employees enroll in training developed and offered by the EOHHS.

If you have any questions related to workplace violence prevention, or if you need assistance in updating or drafting your policy, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Be Careful What You Call It

Posted on March 25, 2013 by Royal LLP

In a recent decision, the Massachusetts Supreme Judicial Court (“SJC”) reversed and remanded the decision of a Superior Court Judge who had dismissed a plaintiff’s claim against his former city employer for failing to pay him his accrued but unused vacation time ($13,615) at the time of his termination in violation of the Massachusetts Wage Act.  This, despite the fact that the defendant employer had paid the plaintiff $19,700 in combined salary and benefit payments after his termination which exceeded the amount owed in vacation time.

The SJC essentially found that “the law is the law” and defendant’s attempt to cast the salary continuation payments as vacation pay “after the fact” must fail.  The Court went on to say that the plain language of the law requires employers to pay an employee’s earned wages on the day of termination of employment and that no matter what you try to call it, any monies paid in salary or benefits post-termination, no matter how generous, do not constitute payment for earned and accrued vacation time.  Adding fuel to the Court’s reasoning was the fact that the plaintiff’s final pay stub reflected the fact that he still had a balance of fifty (50) hours accrued but unused vacation time despite the post-termination gratuitous payments.  This, from the Court’s perspective, clearly demonstrates that the post-termination payments, which the city now attempts to claim more than compensated the plaintiff for the vacation time, did not apply to the unused vacation time.

What happened next?  The Court found that the city’s failure to pay the vacation time was a clear violation of the Wage Act and awarded the plaintiff treble damages and litigation costs and reasonable attorneys fees.

Take Away:  The Massachusetts Wage Act provides stiff penalties for employer violations, regardless of whether they are intentional, inadvertent or result from an employer’s magnanimous actions.  At the very least, employers must be careful to follow the “letter of the law” with regard to payment of wages and everything included therein at the time an employee is terminated.

In order to avoid potential ramifications as described in the instant case, we recommend that employers re-visit their policies and practices regarding wage and hour issues and seek the guidance of legal counsel when unsure of the appropriate action to be taken in a given set of circumstances.

For more information on wage and hour as well as other employment related issues, please contact Royal LLP at (413) 586-2288.

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Supreme Court to Weigh In On Employees’ Changing “Clothes” More Than The DOL Changes Its Mind

Posted on March 12, 2013 by Royal LLP

Under the FLSA, 29 USC § 203(0), employees are not entitled to receive compensation for time that is spent “changing clothes . . . at the beginning or end of each workday.”  In other words, if donning and doffing work clothes are not considered a primary activity via a collective bargaining agreement, that time spent changing is excluded from compensable time.  Given the split among circuit courts on this issue and because the term “clothing” fluctuates depending on geography, the U.S. Supreme Court has agreed to resolve the question, “Are work clothes or personal protective gear “clothes” under the FLSA?” stemming from a recent decision by the Seventh Circuit Court in Sandifer v. U.S. Steel Corp.

In Sandifer, employees filed a suit against their employer, U.S. Steel Corp., for the time that was spent putting on and taking off protective gear that included flame-retardant pants and jacket, work gloves, steel-toe work boots, a hard hat, safety glasses, ear plugs, and a “snood” (a hood that covers the top of the head, the chin and the neck).  They claimed the clothing was not “clothing” according to the Act, but rather safety equipment.  The Seventh Circuit dismissed this claim even amidst the support of the Department of Labor (“DOL”).  The Court determined that the time spent changing clothes did not constitute compensable time under the terms of the collective bargaining agreement.  The Court noted that this activity was de minimus and that the plaintiff’s attempt to rely on the DOL’s narrow interpretation of what does and does not constitute clothing, lacked any significant weight due to their wavering interpretations depending on which administration was holding office.  Notably, the DOL’s position had changed three times during the last fifteen years depending upon which President was in office at the time.  In the last fifteen years, the DOL has changed its position three times.

A final resolution of this matter by the Supreme Court should help to clarify this issue and thus, ward off potential class action suits which could result in significant financial ramifications for employers, as well as other detrimental effects.

Stay tuned to learn more about the Supreme Court’s decision on this issue.  In the meanwhile, make sure that the terms in your Collective Bargaining Agreements clearly define the scope of compensable time with regard to employees’ changing times.  If you have any questions or would like more information on this matter, contact Royal LLP at (413) 586-2288.

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The Wait is Over: New I-9 Forms

Posted on March 12, 2013 by Royal LLP

On March 8, 2013, the federal government issued the new version of the 1-9 Form (Employment Eligibility Verification Form), which is used to verify an employee’s eligibility to work in the United States.   Employers may continue to use the old I-9 Form until May 7, 2013. Subsequent to this deadline, employers must use the new I-9 Form, or face potential fine.

The revised form has several new sections, including an updated instructions page; additional data fields (i.e. e-mail address, phone number, and foreign passport information); and an expanded format so that Section 1 (Employee Information and Attestation) takes up the entire first page, and Sections 2 and 3 (Employer Authorization and Reverification) are on the second page.

The updated form is available at www.uscis.gov/i-9. To ensure compliance, employers should review the newly-revised I-9 Form now to ensure they are prepared for this change. If you have any questions about I-9 Form compliance, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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NLRB Scrutinizing Non-Disclosure and Non-Disparagement Provisions

Posted on March 4, 2013 by Royal LLP

It is a common practice for employers to require that employees sign agreements containing non-disclosure and non-disparagement provisions as a condition of employment to protect confidential and proprietary information and to protect the company’s reputation.  Recently, a NLRB Administrative Law Judge (ALJ) found such provisions to be unlawful under the National Labor Relations Act.

In this case, Quicken Loans filed a lawsuit against a former employee shortly after she resigned alleging that she had violated her employment agreement, which included non-disclosure and non-disparagement provisions.  In response to being sued, the employee filed an unfair labor practice charge with the NLRB.

The agreement contained a non-disclosure provision that defined proprietary and confidential information as:  “non-public information relating to or regarding the Company’s business, personnel, customers, operations, or affairs,” which includes “personal information of co-workers, managers, executives, and officers, handbooks, personnel files, personnel information such as home phone numbers, cell phone numbers, addresses, and email addresses.”  Finding this provision to be unlawful, the ALJ concluded that the restrictions would have a chilling effect on employees’ Section 7 rights to discuss the wages and other benefits they received, and the names, wages, benefits, addresses, or telephone numbers of other employees with their co-workers or union representatives.

The agreement also contained a non-disparagement provision that required employees to not “publicly criticize, ridicule, disparage or defame the Company or its products, services, and policies, directors, officers, shareholders, or employees . . . through any written or oral statement or image.”  The ALJ similarly found this provision to be unlawful.  The ALJ concluded that the restrictions would have a chilling effect on employees’ Section 7 rights to criticize their employers.

It should come as no surprise to hear that the National Labor Relations Board is continuing to scrutinize the employment practices of non-unionized employers.  This case is yet another illustration of the NLRB’s expanding reach into the non-unionized workplace.  In light of this decision, employers would be wise to review their employment agreements containing non-disclosure and non-disparagement provisions and consult with their employment counsel to ensure these provisions are tailored to survive NLRB scrutiny.

If you have any questions about non-disclosure or non-disparagement agreements or your obligations under the NLRA, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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