1. Michael J. Lotito, Esq. Littler Mendelson, P.C. San Francisco Office c: (415) 722-6280 o: (415) 677-3135 MLotito@littler.com September 26 & 27, 2012 Onboarding and the NLRA: Risks and Opportunities

2. NLRA – Who is Covered? Interviewing Potential Employees Individual Onboarding of Hired Employees Employment At-Will Disclaimers (Hyatt) Individual Arbitration Agreements (D.R. Horton) Notice Posting Requirements Agenda

3. NLRA – Who is Covered? Current Employees Applicants Not Supervisors – Defined as “any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” 29 U.S.C. § 152(11)

4. INTERVIEW QUESTIONS

5. Interview Questions Unlawful to discriminate in regards to any term or condition of employment, including hiring, based on an individual’s union affiliation. 29 U.S.C. § 158(a)(3). No direct questions about union affiliation. Interviewers may ask questions designed to assess the candidate’s suitability for the position.

6. Interview Questions Acceptable Were you ever promoted at your last job? Do you think your employer had a fair system of promoting employees? The nature of this job sometimes results in unexpected overtime, are you available to work overtime? Did you ever receive pay increases at your last job? Did you think this was a fair system of pay? Unacceptable I see you’re wearing a union supporter button, why are you wearing it? Are you a member of that union? Do you generally support unions? We’ve heard that Local 123 wants to organize our employees, if we hired you, you wouldn’t support them, would you?

7. EMPLOYMENT AT WILL

8. Employment At-Will – What Now? Longstanding, well-supported practice of requiring employees to sign “employment at-will” disclaimers recently called into question by NLRB settlement in Hyatt. Hyatt: allegation that an employer’s employment at-will policy was overbroad and thus violated employees’ Section 7 rights. 29 U.S.C. § 157. Currently, Hyatt has no precedential value (merely a settlement, not a decision) but extreme pro-union/pro- employee tendencies of the current NLRB raise concerns that the NLRB will hold such disclaimers a violation of employees’ Section 7 rights. 29 U.S.C. § 157.

9. Employment at Will - Proposed Language To minimize risk in light of Hyatt: “Employment with the Company is at-will. This means that employment may be terminated for any or no reason, with or without cause or notice at any time by you or by the Company. Nothing in this Handbook or any oral statement shall limit the right to terminate at will. This employment policy is the sole and entire agreement between you and the Company as to the duration of employment and the circumstances under which employment may be terminated. Only the _____________ has authority to enter into an agreement for employment other than at will and then only in writing. Unless you have a written agreement for continued employment signed by you or your authorized representative and the___________ of the Company, you are an at-will employee.” * These disclaimers can be counterproductive to establishing positive employee relations – think critically, strategically, and creatively about the needs of your workplace when implementing an employment at will policy.

10. D.R. HORTON - INDIVIDUAL ARBITRATION AGREEMENTS

11. Arbitration Agreements – What Now? Widespread practice by employers to require employees to sign, as a condition of employment, individual arbitration agreements that include class action waivers called into question by NLRB’s decision in D.R. Horton, 357 NLRB No. 184 (2012). D.R. Horton holds that the NLRA gives employees the right to pursue work- based claims in collective class action litigation as “protected, concerted activity” and thus any waiver of this right is a violation of employees’ Section 7 rights. 29 U.S.C. § 157. D.R. Horton has persuasive value but many District and Circuit Courts that have addressed the decision have rejected it. – Conflict between FAA and NLRA – AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 – NLRB lacked quorum to decide D.R. Horton

12. Arbitration Agreements – Proposed Changes D.R. Horton decided on basis of mandatory arbitration agreement that was a condition of employment. D.R. Horton decided on basis of complete waiver of class/collective action in both judicial and arbitral forum. Potential solution: Include opt-out provision. Risk assessment in light of current legal challenges.

13. NOTICE POSTING REQUIREMENTS

14. Notice Posting Requirement – Employee Rights Poster Currently enjoined by the D.C. Circuit. Employers are not currently required to post the following 11’’x17’’ notice of employees’ NLRA rights. Pending resolution of legal challenges, employers may be required to post the notice. Federal contractors are required by the Department of Labor to post a very similar notice, which satisfies the NLRB requirements. Executive Order 13496; 29 CFR 471. – Not required to post both.

17. Notice Posting Requirement – What Now? Begs the question: Do we discuss unions? And if we do…. – What is our message? – When do we deliver our message? – Who delivers our message to employees? – Which employees do we want to hear our message?

18. Questions?

19. Michael J. Lotito, Esq. Littler Mendelson, P.C. San Francisco Office (415) 677-3135 MLotito@littler.com