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2 Labor & Employment Law Legislation Update April 2010 By Ron Flowers Burr & Forman LLP (205)

3 AGENDA The Employee Free Choice Act Content & Status The Obama NLRB and Likely Changes Health Care Reform Effects on Employers Current Employment Law Bills Pending Before Congress

4 THE EMPLOYEE FREE CHOICE ACT AND THE NEW NLRB BOARD MEMBERS

5 UNIONIZATION PROCESS (CURRENT LAW) Voluntary recognition Private election/showing of interest Bargaining order Secret Ballot election

6 SECRET BALLOT ELECTION PROCESS Signed Union Cards MINIMUM 30% File Petition with NLRB NLRB Hearing NLRB Hearing NLRB Direction of Election Election is scheduled Union receives 50%+1 votes Union In Union receives 50%+1 votes Union In Secret Ballot Election (35-45 days after Petition) © Company receives 50% votes Union Out Company receives 50% votes Union Out

7 Employers’ Advantages In An Organizing Campaign? Direct Access to Employees The Opportunity to Correct Mistakes Capitalizing on Existing Relationships Opportunity to Communicate Facts About Unionization

8 EFCA’s Stated Purpose Amend the NLRA to: “Establish an efficient system to enable employees to form, join, or assist labor organizations, and to provide for mandatory injunctions for unfair labor practices during organizing efforts....”

9 Why Was It Introduced? Declining union membership Recent difficulty in organizing Decaying political support for unions Reduced political influence

10 What Does the EFCA Change? 1) The organization process Eliminates the secret ballot in most situations 2) The initial collective bargaining process Allows only 90 days for contract negotiations before federal mediation and arbitration 3) Increased employer penalties Increases the penalty to employers who fire employees conducting legal union activities

11 The Organization Process Current Law If more than 50% of employees sign authorization cards, an employer can request a secret ballot election. EFCA Employers could not request secret ballot elections if more than 50% of employees signed authorization cards.

12 Secret Ballot Elections Would only be held only if more than 30%, but less than 50% of employees signed union authorization cards. An unprecedented departure from current law.

13 “Streamlining Union Certification” EFCA § 2 “If... a majority of employees [sign] valid authorizations... the Board shall not direct an election but shall certify... the labor organization....” Unions would switch their emphasis from trying to gain votes to getting cards signed. Automatic unionization if only a simple majority sign authorization cards.

14 Collective Bargaining Process EFCA § 3 If negotiating the first contract, no deal is reached within 90 days, either party can request federal mediation. If 30 days of mediation is ineffective, the dispute will be sent to arbitration. The arbitration decision is binding upon the parties for two years.

15 Collective Bargaining Process Federal arbitrators would then write the terms of a binding contract, determining wages, benefits, hours, work rules and all other terms of employment – without final approval from employers.

16 Increased Civil Penalties EFCA § 4 Would require the NLRB to seek an injunction against an employer if there is reasonable cause to believe employer has (1) discharged or discriminated against employees; (2) threatened to discharge or to otherwise discriminate against an employee; or (3) engaged in a practice that interfered with, restrains, or coerces employees....

17 Increased Civil Penalties Current Law If found in violation, employer responsible for: Back pay minus any wages earned if employee was hired by another employer EFCA If found in violation, employer responsible for: Three times back pay

18 POLITICAL STATUS OF EFCA

19 Union leaders have made much about how passage of the Employee Free Choice Act (EFCA) would increase union membership by 1.5 million new members per year for the next 10 years. According to the study, An Empirical Assessment of the Employee Free Choice Act: The Economic Implications, an increase in 1.5 million union members in one year would lead to the loss of 600,000 jobs by the following year. Dr. Anne Layne-Farrar notes that if the unions’ prediction were to come true, "unemployment is predicted to rise between 5.3 and 6.2 million.“

20 What Political Leaders Are Saying… President Barack Obama: President Obama told a union audience on Labor Day: “I support EFCA” as a way “to level the playing field so it’s easier for employees who want a union to form a union…Because when labor is strong, America is strong.” On September 15, 2009, he told the AFL-CIO convention that he wants America to “build a future where the success of all of us is built on the success of each of us” and that enacting EFCA is a key to achieving that goal.

21 WHAT POLITICAL LEADERS ARE SAYING... Secretary of Labor Hilda Solis : Secretary Solis told the AFL-CIO on September 14, She and President Obama “will join in the fight for the Employee Free Choice Act.” She also pledged to “work with the White House so that together we can make the strongest case possible for EFCA.”

22 PROPOSED MODIFICATIONS OF EFCA

23 Sen. Arlen Specter (Dem. Pennsylvania) SEPT (AFL-CIO Convention) The revised legislation would not include card-check certification, but “will be totally satisfactory to labor.” Spector’s revised bill would “sharply limit” the time between petition the day of the vote. John Sweeney- Outgoing President AFL/CIO September 2009 (the New York Times) Sweeney will accept a significantly reduced election period in place of card check certification.

24 Andy Stern, President of Service Employees Int. Union November 6, 2009 “After we get through this healthcare situation, we are going to see a change in our labor laws.” Richard Trumka, President of AFL-CIO November 16, 2009 (RollCall) “We’re committed to getting healthcare done and then we’ll get to the Employee Free Choice Act. I feel very confident that...we’ll get the Employee Free Choice Act done.” January 11, 2010 (RollCall) “EFCA will pass in the first quarter of 2010.”

25 POSSIBLE LEGISLATIVE MODIFICATIONS TO EFCA Increased penalties Mandatory (baseball-style) arbitration of 1 st contract Shortened election periods (5-10 days) Ban on employer “captive audience meetings” Union access to workplace Ban on use of “persuaders”

26 EFFECT OF MASSACHUSETTS ELECTION Senator Scott Brown opposes the EFCA. Brown is the “41 st Vote” that can prevent cloture of filibuster. His election prevented the conventional appointment of Craig Becker

27 NEWLY APPOINTED BOARD MEMBERS

28 National Labor Relations Board 5 members Serve on 3 member panels Before March 27, only two members, Wilma Liebman (Democrat) and Peter Schaumber (Republican) Case before Supreme Court on 2-member panels Board typically contains 3 members of the President’s party and 2 of the other party Member Schaumber’s term expires in August.

29 March 27, 2010 Recess Appointments On March 27, 2010, President Obama appointed Democrats Craig Becker and Mark Pearce to the Board Becker’s appointment had been blocked by filibuster Becker and Pearce will serve an 18 month term, rather than the 5-year term for Congress-confirmed members Obama has no requirement to rush to renominate another Republican member In August, the Board will contain only 3 Democrat members.

30 NLRB Chairman Wilma Liebman “Without a functioning collective bargaining system, fundamental economic issues are placed off the table, including: distribution of wealth, control, and direction of economic enterprises.” The election process is “not working....Something’s wrong.” The NLRB could act “on its own” to cut the period leading to union elections.

31 NEW BOARD MEMBERS Craig Becker: Democrat who serves as Associate General Counsel for SEIU and AFL-CIO. Co-chair of the Obama transition team on labor matters. Mark G. Pearce: Democrat who practices union- side labor and employment law; has been approved by Senate Health, Education, Labor, and Pensions (“HELP”) Committee. Brian E. Hayes is a Republican who serves as Policy Director for HELP Committee. He was nominated but did not receive a recess appointment.

32 CRAIG BECKER IS ORGANIZED LABOR’S ALTERNATIVE ACORN founder Wade Rathke: Becker is Big Labor's “ secret weapon.” Becker’s writings are well “outside the mainstream.” Mr. Becker also won't give a clear answer about his role in preparing several pro-labor executive orders issued by President Obama shortly after inauguration.

33 BECKER’S OPINIONS (Minn. Law Review 1993) “Employers should be stripped of any legal cognizable interest in their employees' election of representatives.” “Employers should have no right to be heard in either a representation case or an unfair labor practice case.” Employers should not be able to challenge NLRB rulings in federal court Union organizers should be given access to employer property

34 BECKER’S VIEWS ON EFCA Becker’s view is left of the card check provisions of EFCA, which seek to neutralize the effect of employer speech Restrictions on employers' activities during elections “could be achieved with almost no alteration of the statutory framework.”

35 Changing the Board Procedures and Law Many Bush-era precedents and others are likely to be reversed in the next few years Rulemaking, although rarely used by the NLRB, is a possibility for changing the Board’s procedures Chairman Liebman has indicated that she believes many of the Board’s recent major decisions should be overturned.

36 Precedents which May Fall Definition of “supervisor” under the NLRA Restriction of employer’s ability to prohibit union organizing through systems Make “salting” easier Ability of employees to file a decertification petition within 45 days of voluntary recognition Weingarten rights for non-represented employees Inclusion of temporary employees in bargaining unit

37 Rulemaking Possibilities Reduce time between election petition and election (currently 42 days) Increase penalties for unfair labor practices; make bargaining orders more prevalent Require exchange of Excelsior list earlier in organizing effort Require equal or some access for union to facilities during organizing campaign Restrictions on captive audience meetings Modify election procedures or remove secret-ballot election

38 What Should Employers Do? Communicate Company’s Position on Unions Assess Vulnerability to Organizing – How can vulnerability be addressed? Train and motivate supervisors and managers Educate employees Construct quick reaction plan for providing further education to employees in the event of a union card-signing campaign

39 HEALTH CARE REFOM ACT

40 Effects of Health Care Reform on Employers March 13, 2013 – Employers must inform employees of the state-run exchanges, the premium tax credit, and the loss of employer coverage if they use the credit. January 1, 2014 – Employers with 50 employees must provide a minimum level of medical coverage or pay a fee for each employee. Contributions to the Health Insurance Exchange will also be required employees who do not participate in the plan but qualify for premium tax credit Large employers (200 employees or greater) must automatically enroll full-time employees into the health plan after a waiting period. Employees must be given the opportunity to opt out of the Plan Employers must offer employees vouchers for coverage under state-run plans. Small employers will receive tax credits to offset the cost of coverage. Collectively bargained plans are exempt for 8 years. W-2 and 1099 Reporting requirements are increased related to health plans and benefits

41 Breastfeeding Break Requirement The Patient Protection and Affordable Care Act amends the Fair Labor Standards Act to require employers to furnish “reasonable” breaks to mothers to provide milk to their infants who are up to one year old Applies to all employers subject to the Fair Labor Standards Act. Employers must provide mothers a private space, other than a restroom, to breastfeed the infant Time may be unpaid Employers with less than 50 employees may not be bound if it would cause an undue hardship imposing significant difficulty or expense

42 PROPOSED EMPLOYMENT LEGISLATION

43 EMPLOYMENT NON-DISCRIMINATION ACT OF 2009 (ENDA) Prohibits Employment Discrimination on the Basis of Sexual Orientation or Gender Identity. Status of Proposed Legislation Introduced on June 24, Education and Labor: House Committee Hearing held on September 23, Health, Education, Labor and Pensions: Senate Committee Hearing Held on November 5, 2009.

44 What ENDA Does:  Prohibits employment discrimination on the basis of actual or perceived sexual orientation or gender identity by employers, employment agencies, labor organizations, or joint labor management committees.  Prohibits preferential treatment or quotas.  Prohibits related retaliation.

45 What ENDA Does Not Do:  Cover businesses with fewer than 15 employees.  Apply to religious organizations and the uniformed members of the armed forces.  Allow a disparate impact claim.  Apply retroactively.

46 PROTECTING OLDER WORKERS AGAINST DISCRIMINATION ACT

47 PROTECTING OLDER WORKERS AGAINST DISCRIMINATION ACT (POWADA) Amends the ADEA to clarify the appropriate standard of proof. Status of Proposed Legislation Introduced on October 6, Nov 16, 2009: House Education and Labor: Referred to the Subcommittee on Health, Employment, Labor, and Pensions.

48 What POWADA Does: Overturns Gross v. FBL Financial Services Inc., 129 S.Ct (2009). The Gross Court held that an age discrimination plaintiff must prove that age was the “but for” reason for an adverse employment action. Applies to all cases pending on or after June 17, 2009, the day before the Gross decision. Clarifies that plaintiffs can prove their cases with direct or circumstantial evidence.

49 HEALTHY FAMILIES ACT

50 HEALTHY FAMILIES ACT Allows Employees to Earn Up to Seven (7) Days of Paid Sick Time Per Year Status of Proposed Legislation Introduced on May 18, Referred to House Subcommittee on Workforce Protections on June 11, 2009.

51 What HFA Does:  Requires employers to provide workers with up to 56 hours of paid sick leave each year.  Allows employees to use such time to:  Meet their own medical needs;  Care for the medical needs of certain family members; or  Seek medical attention, assist a related person, take legal action, or engage in other specified activities related to domestic violence, sexual assault, or stalking  Prohibits an employer from interfering with an Employee’s exercise of such rights.

52 What HFA Does Not Do:  Cover businesses with fewer than 15 employees.  Require an employer to permit employees to earn more than 56 hours of paid sick time in a calendar year.  Prohibit employers from adopting or retaining more generous leave policies.

53 Procedural Implications of HFA Notice Oral or Written Request by Employee Must include the expected duration of the period of time needed Should be provided at least 7 days in advance if need for time is foreseeable Otherwise, notice should be provided as soon as practicable.

54 Procedural Implications of HFA Medical Certification In General: Employer may require a certification from the healthcare provider if the period of time requested covers more than 3 consecutive workdays. Timeliness: Must provide certification in a “timely manner.” (Not later than 30 days after the first day of the period of time.)

55 Procedural Implications of HFA Sufficient Certification Should Provide: The date on which the period of time will be needed; The probable duration of the period of time; The medical facts regarding the condition; and A statement that either the absence from work is medically necessary for the employee, the time is taken for a medical diagnosis (and the dates of testing), or the care for someone who is not a child is needed.

56 Procedural Implications of HFA Certification Involving Domestic Violence, Sexual Assault, or Stalking Same General and Timeliness Provisions An employer may require: A police report, A court order, or Other documentation signed by an employee of a victim services organization.

57 Further FMLA Amendments Various bills have been proposed providing changes to the FMLA, including: Expanding those for whom leave may be taken Parental involvement leave Military leave for spouse deployment Modifications to recent regulations in areas such as clarifications, bonuses, and re-certifications for intermittent leave Family and Medical leave insurance program Other bills providing for paid leaves in the event of pandemics

58 Arbitration Fairness Act This bill would prohibit and nullify all pre-dispute employment arbitration agreements, except those in collective bargaining agreements. Employers would no longer be able to require employees to arbitrate, rather than litigate, any employment disputes. Similar provisions have already been enacted in the COBRA subsidy bill for government contractors receiving more than $1 million from the Federal Government.

59 Paycheck Fairness Act Would allow compensatory and punitive damages for Fair Labor Standards Act (wage & hour) violations. In equal pay cases, the employer, not the employee, would have the burden to demonstrate that differences in pay are related to job performance, and not sex-based. Wage & Hour cases are already perhaps the most difficult employment cases for employers to defend and most popular for plaintiff’s attorneys. This bill would further increase the popularity of such suits and require changes to the way employees are paid and time worked recorded.

60 QUESTIONS?