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Labor Law “Reform” – What Form Will It Take?

Labor Law “Reform” – What Form Will It Take?. Clinton S. Morse, Esq. Introduction. Why is it suddenly important to know? What is changing? Who needs to prepare? And when?. Why?. Unions Slip Off HR “Radar Screen” Union membership has been falling for 50 years. Union's Declining Membership.

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Labor Law “Reform” – What Form Will It Take?

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  1. Labor Law “Reform” – What Form Will It Take? Clinton S. Morse, Esq.

  2. Introduction • Why is it suddenly important to know? • What is changing? • Who needs to prepare? And when?

  3. Why? • Unions Slip Off HR “Radar Screen” • Union membership has been falling for 50 years

  4. Union's Declining Membership 1930 - 2007 40.0% 35.0% 30.0% 25.0% Percent of Labor Force 20.0% 15.0% 10.0% 5.0% 0.0% 1930 1935 1942 1948 1952 1958 1962 1970 1975 1982 1988 1992 2003 2006

  5. In 2008, Union members accounted for 12.4 percent of employed wage and salary workers. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent. The union membership rate for private industry workers is 7.6 percent.

  6. Decline in Union Membership 1975-2007 Source: 2008 Directory of U.S. Labor Organizations

  7. Why? • Management less concerned with unions • More employment laws occupy HR • Old: NLRA, FLSA, Title VII • New: ADEA, ADA, OSHA, ERISA, FMLA • Compounded by state employment laws • HR more focused on compliance, not on union-free management strategies

  8. Unions Are Still Around, Strong in Some Areas • Unions represent 36.8% of the public sector workforce – nearly 5 times that of private sector • SEIU, Teachers and AFSCME have registered enormous gains • And unions gained 428,000 members in 2008; 311,000 in 2007

  9. Increase in Union Membership 1975-2007 Source: 2008 Directory of U.S. Labor Organizations

  10. Union Membership by StatePercent of Workforce (2008) 578 19.8% 67 10.6% 29 10.4% 71 12.3% 47 12.2% 19 6.1% 259 16.6% 392 16.1% 101 13.8% 458 15.7% 42 7.1% 396 15.0% 2,029 24.9% 18 5.0% 771 18.8% 19 7.7% 78 16.5% 847 15.4% 153 10.6% 199 16.7% 70 8.3% 68 5.8% 716 14.2% 349 12.4% 939 16.6% 275 16.9% 181 8.0% 2,740 18.4% 285 11.2% 89 7.0% 146 4.1% 146 8.6% 703 18.3% 132 3.5% 227 8.8% 139 5.5% 102 6.6% 68 5.9% 58 7.2% 329 12.6% 52 13.4% 70 3.9% 181 9.8% 151 3.7% 57 5.3% 80 4.6% 449 4.5% 68 23.5% 35 12.2% 482 6.4% 136 24.3% Source: Bureau of Labor Statistics, Data on Union Membership, 2008.

  11. UNION MEMBERSHIP IN VIRGINIA, 2008 Source: http://www.bls.gov/ro3/unionva.htm

  12. What is Changing? • Labor Law “Reform” • Employee Free Choice Act (EFCA) • Compromise

  13. Support for Change? • President Obama’s Support of Organized Labor • Democratic control of House, Senate and Executive Office • Union Investment • Unions invested $400M in elections • Even allocating $10M to “punish” lawmakers who don’t vote “right”

  14. EFCA–Dramatic Changes in U.S. Labor Law • Primary goal – eliminate secret ballot election • Require employers to recognize and bargain with unions on simple basis of “card check” that shows majority of employees have signed union authorization cards

  15. Union Organizing: Current Law Employermustrecognizeunion as legalrepresentativeand bargain NLRBreviewssignedcards andscheduleselection Paid unionorganizerscollect signatures NLRBconductssecret-ballotelections NLRBcountsballots,majorityrules Ifmajorityvote fora union,then . . .

  16. Union Organizing: “Employee Free Choice Act” Employermustrecognizeunion as legalrepresentativeand bargain NLRBreviewssignedcards andscheduleselection Paid unionorganizerscollect signatures NLRBconductssecret-ballotelections NLRBcountsballots,majorityrules Ifmajorityvote fora union,then . . .

  17. EFCA – Card Check • Card checks are unreliable • Organizers are trained to conduct card-signing campaigns in secret • Misrepresentation of what signing a card means • Card signing accompanied by pressure, misrepresentation, harassment, and intimidation to force employees to sign

  18. EFCA – Other Mandates • Shortens the Collective Bargaining Process for first–time contracts • Requires mandatory use of federal mediation service after 90 days • Contract would be imposed on employer through binding arbitration 30 days after

  19. EFCA – Other Mandates • Provides tripleback pay to any employee discharged during a union organizing campaign • Imposes substantial fines on employers violating NLRA during organizing campaigns • Example: if employers try to “fix” things - employer problems- after a campaign starts (so employees will not have to join a union to improve wages, benefits, working conditions, etc.) – they can be fined up to $20,000. • Employers who caution employees that unionization may force them to shut down or move production are at risk of fines as well

  20. EFCA – Double Standard • Despite it’s exposure as a union “power grab” and want recognition only on the card check basis – unions still insist on employee secret ballot vote to decertify or kick the union out

  21. EFCA Based on Wrong Assumptions Myth: Employers systematically abuse the current labor laws and will do anything to prevent unions from getting in. Reality: Between 2003-2007, objections were filed in only 5.1% of all RC cases, including employer-objections. Those objections were sustained, on average, less than 1% of the time.

  22. EFCA Based on Wrong Assumptions Myth: The NLRB is impotent and slow, resulting in undue delay in election complaint resolution and denying justice to workers who desire to organize. Reality: In 2006, 94.2% of initial RC elections took place within 56 days after the union filed a petition, and the median time period was 39 days (barely one month). In NLRB fiscal year 2008, post-election objections requiring a hearing reached decision in average of 72 days; those not requiring a hearing reached decision in 28 days.

  23. EFCA Based on Wrong Assumptions Myth: The combination of employer abuse and an ineffective NLRB has led to a skewed playing field where the secret-ballot election always favors the employer. Reality: In 1995 (Clinton era), unions won 50.9% of all RC elections In 2005 (Bush era), unions won 61.1% of all RC elections Union win rate was 60.9% in 2006 and 59.9% in 2007 So, why do we need to change a process where unions already win more than half the time?? Reality: MAKE NO MISTAKE ABOUT IT. EFCA is because only 7.6% of the private sector workforce belong to unions or unions want more dues payers to put in millions of dollars of dues in big labor’s pockets.

  24. The Current Status of EFCA • In 2007 the House overwhelmingly supported EFCA; the Senate filibustered the proposal • 2009: Majority support in both House and Senate • House members will not vote until assurance that EFCA will reach Senate floor • With Franken from Minnesota, and with reappointment to replace the late Senator Kennedy, Senate has 60 Democrats including Independents who vote with Democratic majority • Unions need at least one Republican to vote against cloture

  25. The Current Status of EFCA • EFCA stalls in Senate with as many as 10 Democratic Senators rumored to oppose bill in its current form. • Reports have circulated all summer of possible compromises.

  26. Possible Compromise • Retain Secret Ballot Election with 5-10 day election period • Union access to company property • Elimination of Employer Captive Audience Speeches • Monetary penalties for Employers who violate law during organizing campaign • Baseball style arbitration – arbitrator picks between last, best and final offers

  27. Is Labor Law Reform Sidelined • On August 27, 2009 Senate Majority Leader, Harry Reed announced that Senate had too many contentious issues to bring EFCA up this fall – no resolution this year

  28. Specter’s “Deal” • On September 15, Senator Arlen Specter announced that he had successfully negotiated the “compromise” that had been rumored all summer • He proclaimed that he had the 60 votes necessary in the Senate to bring it to vote and the bill would be passed by year’s end • However both Labor and Management immediately shied from his proposal • And a current headcount confirms his proposal does not have the support he claimed • So the battle goes on...

  29. Options for Labor • Make No Changes – Push for a Senate Vote on Cloture – Smoke Out Supporters-Punish Nonsupporters • Wait for the 2010 Election and Hope for More Democrats in the Next Congress • Divide Employer Community – Costco/Whole Foods/Starbucks Coalition – No Success So Far • Ignore the Employer Community and Line Up 60 Votes for a “Compromise” Bill if They Can.

  30. What About The NLRB? • In 1993, Craig Becker, on Obama NLRB nominee today, wrote that the employer role in union elections could be virtually eliminated by NLRB rulemaking-no action needed by Congress • U.S. Chamber opposes Becker as “out of the mainstream” • Soon 2 union attorneys (Craig Becker and Mark Pearce) likely will join Chairperson Liebman (a former Teamsters’ attorney) at NLRB • In 2010, a Democrat will replace Republican Ron Meisberg as General Counsel (“Chief Prosecutor”) at NLRB

  31. Recommendations for Senior Management on Maintaining Non-Union Status • Do you want to risk that nothing will change? • When will the other shoe drop and what should you be doing now? • “An ounce of prevention is worth a pound of cure.”

  32. Don’t Forget About Union Avoidance • Use This Time to Renew Union Free Management Programs • Keep Pressure on Congress

  33. EFCA – Other Mandates • Provides tripleback pay to any employee discharged during a union organizing campaign

  34. EFCA Based on Wrong Assumptions • UNIONS CLAIM EFCA NECESSARY BECAUSE EMPLOYERS CHEAT TO WIN IN CURRENT ELECTIONS PROCESS BUT...NLRB FIGURES SHOW THAT UNIONS WON 61.1% of elections in 2005, 60.9% in 2006, 60.4% in 2007 and 66.8% in 2008, so why change a system when unions already win more than half the time. • MAKE NO MISTAKE, EFCA is because only 7.6% of employees in private sector are union members. Unions want new members to put millions of dollars in dues into big labor’s pockets.

  35. THANK YOU Clinton S. Morse, Esq. clinton.morse@leclairryan.com 540.510.3023

  36. Hot Topics in Labor and Employment LawFall 2009 Susan R. Blake, Esq. Dominion Enterprises Clinton S. Morse, Esq. LeClairRyan, P.C.

  37. What are we covering today? • Wage and Hour Update • Discrimination and Retaliation Update • ADA Update • FMLA Update • GINA Update • Lilly Ledbetter Fair Pay Act Update • Immigration Update • FCRA Update

  38. Discrimination Claims are Increasing • Retaliation charge filings were 32,690 in FY 2008, up 22.6% from FY 2007 – and 80% higher than the FY 1997 number. Retaliation is now the second most frequent charge filing with EEOC office nationwide. • FY 2008 saw the greatest number of Charges at 95,402. This was a 15.2% increase from FY 2007. • In FY2008, all charge filings were up but age discrimination claims were way up. Age filings were up 28.7%. • In FY2008, race, sex and retaliation charges were the most frequently filed. • In FY 2008, the EEOC filed 290 lawsuits, resolved 339 lawsuits and recovered $376,000,000 for employees. In FY 2007, the EEOC recovered $345,000,000. • http://www.eeoc.gov/stats/charges.html, March 11, 2009.

  39. Discrimination, Harassment & Retaliation Verdicts & Settlements • Walgreens paid $24 million dollars on March 27, 2008 to settle a race discrimination class action • NASCAR settled a $225 million dollar claim of racial discrimination and sexual harassment for an undisclosed amount on December 3, 2008 • Merrill Lynch paid $1.550 million dollars to settle a religious and national origin discrimination case on December 31, 2008

  40. Discrimination, Harassment & Retaliation…cont. • Lockheed Martin paid $2.5 million dollars to settle a racial discrimination class action on January 2, 2008 • University of Phoenix paid nearly $2 million dollars to settle a religious discrimination class action claim on November 10, 2008 • Tavern on the Green paid $2.2 million dollars to settle harassment and retaliation claims on June 2, 2008.

  41. Interesting Wage and Hour Verdicts and Settlements • Wage & Hour Claims--In 2008, there were countless large verdicts and settlements. Here are a few: • Wal-Mart settled $640 million dollars in wage and hour lawsuits for $352 million dollars on December 24, 2008 • Freedom Communications, Inc. paid $22 million dollars to settle a wage and hour lawsuit in California. The attorneys fees that will be paid will be in excess of $12 million dollars. • Fastenal Company, a construction supplier, agreed to settle overtime claims for $10 million

  42. Wage and Hour Claims • In FY2008, DOL collected $185 million in back wages for 228,000 employees • In an 8 year period beginning in 2001, DOL has collected $1.4 billion in back wages. www.dol.gov/esa/whd/statistics/

  43. Top Wage and Hour Employer Mistakes • Misclassification of employees as exempt or as independent contractors • Failure to pay otherwise exempt employees on a salary basis • “Off-the-clock” and regular rate cases • Donning and doffing activities • Unpaid on-duty meal periods • Denied reimbursements • Miscalculated commissions and bonuses • Tip pooling

  44. Why Wage and Hour Lawsuits? • Lawyers for employees would rather have a wage & hour case, not a discrimination case • Courts understand wage & hour issues • Jurors understand the law • The damages are not hard to determine • Employees get attorney’s fees if they win

  45. Immigration Update • Immigration and Customs Enforcement (ICE) - ICE is responsible for enforcing the nation’s immigration and customs laws. One known vulnerability is the presence of undocumented workers who have secured jobs by fraudulent means, including presentation of false documents, completion of fraudulent benefit applications and theft of identities. • U.S. Department of Labor (DOL) – the DOL, while it does not have an immigration enforcement mandate, often involves itself in I-9 compliance matters.

  46. Enforcement Efforts Focus on the Verification of Employment Eligibility • It is unlawful for an Employer to knowingly hire or continue to employ an individual who is not eligible to work in the United States. • The I-9 Employment Eligibility Verification Process is required by all employers and all employees. • In April 2009 ICE announced an new enforcement strategy to reduce the demand for and use of illegal employment.

  47. Why Should Employer’s Pay Attention?

  48. The $40,000 Donut • In July 2009 Krispy Kreme’s Ohio Plant agreed to pay ICE a $40,000 fine for its hiring practices after investigators found the company had failed to comply with the I-9 process. The “tip” on this investigation came from the local Sheriff’s office.

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