February 2016 Was Largely Unkind to the NLRB in Minnesota and Nearby States

Like Punxsutawney Phil, the National Labor Relations Board (NLRB) emerged from the comfort of that agency’s “den,” in February 2016, only to see some of its decisions “overshadowed” by the U.S. Court of Appeals for the 8^th Circuit when the court refused to enforce them on appeal.  In one case the appellate court reversed a Board decision that had found an employer unlawfully disciplined an employee for soliciting union support from co-workers while they were working.  In another case involving an employer in the construction industry, the court determined that the NLRB had issued an “unlawful order” when it tried to enforce an operating engineers (IUOE Local 150) collective bargaining agreement for employees already covered by an agreement with the Laborer’s Union (LIUNA).  These were big victories for those involved as well as employers everywhere, yet it remains to be seen whether they signal an extended season of cold shoulder treatment for the NLRB in 2016.  If nothing else these recent court rulings signal that our federal appellate court in the 8^th Circuit will not rubber-stamp the Board’s growing list of aggressive decisions, many of which employers see as favoring unions and employees over employers.

Employers unlucky enough to land in the NLRB’s world often find it necessary to pursue their cases on to the federal courts of appeals in order to feel that they have a reasonable shot of prevailing.  A prime example that has gained national attention, is the Board’s ruling in its D.R. Horton case involving a non-union employer.  In that case the NLRB ruled that the employer unlawfully interfered with its employees’ protected right to engage in “concerted activities” by enforcing an arbitration agreement whereby employees waived their right to pursue class action claims in court.  The 5^th Circuit Court of Appeals, in Louisiana, refused to enforce the D.R. Horton decision, criticizing the Board’s attempt to equate lawsuits with strikes and other employee group activities that have long been protected by federal labor laws.  Undeterred, the NLRB has continued to make similar findings against employers outside the 5^th Circuit.  In fact, just as the 8^th Circuit Court of Appeals was rescuing two employers from unfavorable NLRB decisions the agency issued yet another “Horton-like” decision against a Minnesota Applebee’s restaurant franchisee.  As in the D.R. Horton case, the NLRB’s February 2016 Applebee’s ruling found that the employer’s handbook “Dispute Resolution Program” violated federal labor law by including a waiver provision on class-action lawsuits.  

There is no reason to think that the Applebee’s franchisee will not appeal the Board’s decision; after all, the NLRB lost on appeal in D.R. Horton and since then at least two other U.S. Courts of Appeals have criticized the Board’s rationale for declaring class-action lawsuits as a protected form of concerted employee activity under federal labor law.  If February 2016 is any indication the 8^th Circuit will be no less friendly to the NLRB in this appeal.  It is unfortunate, however, that employers must fight to within one step of the Supreme Court in order to win these cases.

Questions? Contact Minnesota attorney James Sherman at (952) 746-1700 or by email at jasherman@wesselssherman.com

Legal Brouhaha between the U.S. Soccer Federation and the Union for the Women’s National Soccer Team, Illustrates the Importance of “Dotting I’s and Crossing T’s” in Collective Bargaining

In a lawsuit filed in federal court in Chicago on February 3, 2016, the United States Soccer Federation is seeking a “declaratory judgment” that its collective bargaining agreement (CBA) with the Women’s National Soccer Team Players Association, remains in effect through the end of 2016. The Players Association, the union representing the U.S. Women’s Soccer Team, is alleged in the lawsuit to have declared that the CBA either already expired prior to 2016, or was terminable at will.  The union therefore contends that the players are free to go on strike at any time of their choosing.  Women’s team players have made no secret of their dissatisfaction with the fact that they are paid less than players on the men’s national team, despite the fact that the women are past Olympic and recent World Cup Champions, whereas the men have failed to advance in world competition.  No doubt the players’ union intends to leverage its demands for improved wages and other terms for the women’s national soccer team players, under threat of a strike.  The federation’s lawsuit seeks to enforce a CBA it contends bans the union from striking in 2016.

The U.S. Women’s Soccer Team are the 2015 World Cup champions and are expected to qualify for and play in the 2016 Summer Olympics, in Brazil. Additionally, the national team serves as the backbone of the newly formed National Women’s Soccer League (NWSL).  Not only does it allocate its nationally known players such as team captain Carli Lloyd, Alex Morgan and Hope Solo to play in the new professional league, the national team also pays their salaries. A players’ strike in 2016 would be devastating to the national team as well as to women’s professional soccer in America.  With so much as stake, how is it that there is any uncertainty as to the expiration date of the CBA governing the terms and conditions of the U.S. Women’s National Soccer Team?  An examination of the recently filed lawsuit and the parties’ contentions, holds important lessons for employers and unions alike, regardless of their industry.

 

The U.S. Soccer Federation’s complaint states that activities for the Women’s National Team focus on four (4) year periods, due to the World Cup and Olympics, each of which takes place every 4 years. In 2000 the Players Association was certified as the exclusive bargaining representative for the players on the Women’s National Team.  The most recent collective bargaining agreements covered two such 4-year periods, from January 1, 2005 – December 31, 2012.  Consequently, in the fall of 2012 the parties began negotiations presumably for a new 4-year CBA commencing in January of 2013. 

There appears to have been nothing particularly unusual about the collective bargaining between these parties. Negotiations took place over a 6 month period and included in-person sessions scheduled in various cities around the country, as well as telephone and email discussions between representatives of the Players Association and U.S. Soccer.  However – and this is the source of all the problems now, in 2016 – the parties never reduced the results of their negotiations to a concise and complete, written contract. As a result, the Player’s Association, now under new and seemingly more aggressive union leadership, is disclaiming the existence of a binding CBA in 2016.  U.S. Soccer’s lawsuit alleges that the player’s union is threatening to strike based on its position that there is no CBA to prevent it from doing so.

Lacking any signed contract, the U.S. Soccer Federation’s lawsuit is relying on a number of documents and communications to support its claim that a CBA exists, barring the union from striking and that it remains in effect until December 31, 2016.  Exhibits to the federal complaint include:

• A short, written Memorandum of Understanding (MOU), signed by the union in March of 2013, memorializing an agreement on terms and conditions for players participating in the newly formed professional soccer league, the NWSL. The MOU had a stated term of 4 years.
• An email forwarding the MOU, in which Ruth Uselton, an attorney representing the Players Association in its negotiations, stated: “As we have previously agreed, the general principle we are working under is that items we have not specifically covered in the Memorandum of Understanding would remain the same as under the prior CBA, but with appropriate increases/adjustments/changes.”
• A transcript of sworn testimony from the previous Executive Director of the Players Association from an unrelated hearing, in which he stated that the parties were under a CBA which will expire on December 31, 2016.

It appears the parties had anticipated drafting a stand-alone, written, 4 year contract, as Ms. Uselton’s email went on to state that “[w]e will address the specifics when we get to drafting the new CBA.” Yet for reasons unknown, they never got around to doing so although the lawsuit contends that both parties acted as though they were bound to an agreement during the past 3 years.  As a result, U.S. Soccer now lacks any actual written CBA signed by the union and explicitly providing for an effective date through the end of 2016 (i.e. a clear “duration clause” standard in CBAs).  Now that the union has disavowed any agreement in 2016, management is left to argue that its handful of communications with the union comprise an enforceable agreement of the parties to continue to be bound to the 2005 - 2012 CBAs (including its “no strike” clause), through the end of 2016. Clearly, this is not a good position in which management in any industry wants to find itself.

It may be that the parties never actually achieved an agreement, in which case the U.S. Soccer Federation will lose its lawsuit and may wish it had continued bargaining in 2013 until a clearly written CBA was completed and signed.  On the other hand, if an agreement truly was achieved and the players’ union simply refused to put it in writing, its conduct arguably would have violated Section 8(d) of the National Labor Relations Act.  Federal labor law requires parties to union negotiations to reduce bargained for agreements to a writing signed by the parties. Therefore, the federation could have filed an Unfair Labor Practice, or ULP charge against the union with the NLRB back in 2013. In either case, the apparent failure to deal with things years ago has created a potential catastrophe for the federation and NWSL, should the players go on strike in 2016.

To think that all this uncertainty and litigation could have been avoided by reducing the parties’ 2013 agreement to a clearly written document, with an unambiguous “duration clause” specifying that the CBA remained in effect through December 31, 2016, is a powerful lesson to all who negotiate with unions.  Considering how union contract negotiations frequently involve multiple meetings, over many weeks or months, it is well worth the time to prepare a complete, stand-alone contract with clearly written language, especially on such critical provisions as prohibitions on strikes and the duration of those prohibitions! Unfortunately, it is all too common for parties to protracted union negotiations to cut corners in the end by relying on a short memo, letter of understanding, etc. While there is nothing inherently unlawful or wrong in doing this, management should always exercise great care to ensure that its interests are protected in an enforceable writing. Relying on union complacency is extremely risky, especially where union representatives may come and go.

So the take-away of this soccer related labor dispute? Get it in writing and get it all in writing!

James Sherman is a management-side labor and employment attorney with over 25 years of experience in this field.  He is licensed to practice law in the states of Minnesota, Wisconsin and Illinois, where the referenced lawsuit is pending.  Mr. Sherman has negotiated contracts with a number of labor unions in a variety of industries, in many states. Contact him by phone (952) 746-1700 or email jasherman@wesselssherman.com. 

Individual Denied Permanent Resident Status for Falsifying I-9

Form I-9, the Employment Eligibility Verification employers must complete for all newly hired individuals, is such a simple looking two-sided form, yet there seems to be no end to the complications that it causes employers and employees alike.  A recent court decision illustrates just how problematic Form I-9s can be, where the court used an employee’s misrepresentations on the form years later to prevent him from becoming a lawful permanent resident.  As a consequence, the individual was subject to deportation and the employer lost an employee.

The individual in question applied to become a permanent resident after marrying a U.S. citizen.  However, when filling out I-9s at his various jobs, he always checked a box indicating that he was “a citizen or national of the United States.”  He testified that he wanted his employers to think he was a citizen, because he believed he would lose his job if he was not a citizen.  An individual is inadmissible to the United States, and ineligible to become a permanent resident if he falsely represents himself as a citizen of the United States for any purpose or benefit under the Immigration and Nationality Act.  Although an individual is not inadmissible for falsely representing himself as a national, the court determined, based on his testimony that he was intending to represent himself as a citizen, not a national, by checking that box. 

The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for most employers to discriminate against applicants or employees based on citizenship or immigration status.  Therefore, if the individual was legally authorized to work, even if not a citizen, his job should not have been in jeopardy.  Because of this individual’s potential misunderstanding of the law, he is no longer eligible to become a permanent resident, and his employer is deprived of someone who may have been a valuable employee.  To avoid such a situation employers should make it clear to new hires that, although they will verify employment eligibility (as they are legally required to do), they do not discriminate based on citizenship (as they are legally prohibited from doing).

Questions? Contact Minnesota Attorneys at (952) 746-1700 or email chbeggan@wesselssherman.com to arrange a consultation.

EEOC Remains Active/Highly Aggressive in 2016

Already this year, the EEOC has introduced two very significant measures that are sure to delight plaintiff lawyers while causing serious concerns for employers and their management-side attorneys, including your friends here at Wessels Sherman.  The more troublesome new measure is the EEOC’s proposal to significantly modify the information employers must report each year as part of the agency’s EEO-1 reporting requirements.  Specifically, starting in September of 2017 the proposal is to require employers to include additional information in their annual EEO-1 reports to the government, setting out pay ranges and hours worked for their employees.  It takes little imagination to think of how a federal governmental agency such as the EEOC might use this kind of information if employers are made to disclose it, annually.  Another new proposal involves new guidelines on retaliation prohibited under the various laws administered by the EEOC, such as Title VII, ADA, ADEA and EPA.  These guidelines are designed to educate the public on how the EEOC views retaliation claims, which continue to be the fastest growing type of claim filed with this agency.  No doubt they also will educate more plaintiffs on how to sue.  

According to the EEOC the additional data gathered under its proposed new EEO-1 reporting requirement, would be used to assess discrimination complaints of all types (race, sex, age, disability, religion, national origin, etc.).  If in the course of such investigations it identifies any pay disparities in the employer’s EEO-1 reports, the EEOC would expand its investigation to include scrutiny of the employers wage and hour practices. Under this scenario, while investigating an individual applicant’s or employee’s charge of discrimination the EEOC would look at the employer’s EEO-1 reports for any indication of disparity among all employees regarding pay or hours worked.  The data could be used to launch a full-scale investigation into potential “systemic pay discrimination,” followed by class-action claims in the discretion of the EEOC’s investigator and Regional Director.  Obviously, if the proposal goes through and employers are required to disclose pay and hour ranges in their annual EEO-1 reports, employers can expect more lawsuits along with dissemination of information that is otherwise regarded as proprietary and confidential.  

The EEOC’s proposed revisions to its guidance on retaliation claims are the first since 1998.  This new guidance broadens the definition of the sorts of “adverse employment actions” employees can challenge as the basis for a claim of unlawful retaliation.  For instance, terminating an employee has always been regarded as the consummate unlawful “adverse employment action” if done in retaliation for an employee’s exercise of rights under Title VII, ADA, ADEA, etc.  But what if an employee claims retaliation based on less severe actions, such as denying a requested vacation, or being spoken to more harshly by a supervisor?  Different courts have addressed this question with different results and, as one might expect, the EEOC’s proposed definition is very employee friendly, and even includes non-work related actions, as long as they might deter reasonable individuals from engaging in protected activity.  In addition, the proposed new guidance attempts to usurp the role of courts to determine how evidence is weighed to prove retaliation by connecting an employee’s protected activity (e.g., complaining of discrimination, participating in an investigation, etc.) to a challenged adverse employment action.  This guidance states that an employee can discredit the employer’s explanation for taking the adverse action and show a causal connection between the protected activity and the adverse action through a “convincing mosaic” of evidence that would support a claim of retaliation.

Both of these actions are just proposals at this point, and interested employers and other parties can submit comments before any final action is taken.  Comments will be accepted on the pay data proposal through April 1, and on the retaliation proposal through February 24.  Employers are advised to use 2016 to audit in preparation for the possibility that employers may be essentially open to inspection by the federal government, in 2017.

Questions? Contact Minnesota Attorneys at (952) 746-1700 or email chbeggan@wesselsherman.com to arrange a consultation.

Recent Court Decisions Demonstrate the Value of Knowledgeable Defense Counsel in Employment Cases

Employers rightly are concerned with legal expenses; however, acting as one’s own lawyer in responding to EEOC, MDHR and other agency charges of employment discrimination, retaliation or other workplace claims can be a risky proposition.  Things can sometimes go terribly wrong when these claims are mishandled (e.g. when a single claim blows up into a class-action lawsuit on behalf of multiple “similarly situated” individuals). Of equal importance, however, is when important defenses are not raised, forfeiting opportunities for victory on procedural technicalities and other grounds.  Calendar year 2016 has begun with several poignant examples of clever defense strategies that secured dismissal of employment lawsuits for employers.

In two recent cases, the Eighth Circuit Court of Appeals, which covers Minnesota, Iowa, Nebraska, Arkansas, Missouri and the Dakotas, dismissed employment discrimination lawsuits because the plaintiffs in those cases failed to disclose their pending discrimination claims, when they filed for bankruptcy proceedings.  The court held in each of these cases that allowing the plaintiff to pursue recovery of money damages based on employment discrimination claims they failed to disclose to creditors in bankruptcy, would be inconsistent with their representations to the bankruptcy court.  As a result, the court held that the plaintiff’s must be stopped from proceeding with their employment claims.  This is not an uncommon scenario in employment litigation, so employers named as defendants should always keep in mind the potential for dismissing a complaint on grounds that the plaintiff has filed for bankruptcy without disclosing his or her workplace lawsuit.

In another interesting case, a former employee filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) and cross-filed it with the Minnesota Department of Human Rights (MDHR).  The EEOC took five years to investigate the charge before dismissing it and issuing a right-to-sue!  Shortly after that, the MDHR also dismissed the charge, and the plaintiff filed a civil action, alleging violations of Title VII of the Civil Rights Act of 1964 (Title VII) and the Minnesota Human Rights Act (MHRA).  On the employer’s motion the court dismissed the MHRA claims due to the five-year delay between the filing of the charge and the dismissal.  While recognizing that the result may seem harsh, the court noted that the plaintiff could have requested a dismissal and right-to-sue letter earlier.  Although the plaintiff is still free to pursue his Title VII claims, this partial dismissal is significant because the MHRA provides much more favorable remedies to a successful plaintiff.

In another case, a plaintiff’s claims were dismissed because the plaintiff failed to file his case within 90 days after receiving his right-to-sue from the EEOC.  Under Minnesota state court rules, an action is begun, or “commenced” when a summons and complaint are served on the opposing party.  Thereafter, the rules provide that the case does not have to be filed with the court until a reasonable amount of time after service, not to exceed one year.  In this case, the plaintiff served but did not file his complaint within the 90 day period following the EEOC’s dismissal of the underlying charge.  The defendant moved the court to dismiss the complaint because the EEOC’s right-to-sue letter specifies, based on language in Title VII itself, that a civil action must be filed within 90 days.  The court agreed, noting that federal law trumped Minnesota rules of civil procedure in this regard.

In each of the above cases, plaintiffs’ employment lawsuits were dismissed over what plaintiff lawyers no doubt would complain are “technicalities,” without the court reaching the merits of their claims.  Obviously these recent decisions serve notice to plaintiffs and their counsel of the need to understand the many state and federal procedural nuances of employment law.  Just as important, however, is the need for defense counsel and lawyers who advise employers, to recognize these defenses when they present themselves.

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Questions?  Arrange to speak to an experienced employment attorney from Wessels Sherman by contacting Christine Beggan at (952) 746-1700 or email chbeggan@wesselssherman.com.