Collective Bargaining and the NLRB

PRESENTED BY:ANDREW J. MARTONEADAM C. DOERRHESSE MARTONE, P.C.(314) 860-0300

Overview Today’s National Labor Relations Board

Expansion of “joint employer” doctrine

Construction Negligence -- Illinois Supreme Court Amicus Brief

Survey Workers under the Prevailing Wage Act

MPRA of 2014 and Central State’s “Rescue Plan”

Expanding employee rights -- drug testing, social media

Expanded “Joint Employer” Rule

For 30+ years (until August, 27 2015): Two or more separate employers are “joint employers” of

a single workforce if they “share or codetermine essential terms and conditions of employment”

Hiring, firing, discipline, supervision, direction

In 2002, Board specifically required “direct and immediate” control. Airborne Express, 338 NLRB No. 72 (2002).

Expanded “Joint Employer” Rule

Browning-Ferris, 362 NLRB No. 186 (August 27, 2015)

Emphasized common-law test of “employer”

Focused on “right to control” (regardless of whether that right is exercised)

Expanded “Joint Employer” Rule

In addition, control need not be direct; indirect – even “very attenuated” -- control may suffice Browning-Ferris, 362 NLRB No. 186, *18 (August 27, 2015)

Significantly increased risks for: “Double breasted” operations Franchisees Staffing agencies General contractors

Expanded “Joint Employer” Rule –General Contractors and Subs GCs, subs may be “joint employers” where contracts provide

GC with the right to control (even indirectly) workforce

Standard contracts routinely include such general rights of control (right to enforce safety policies, right to remove workers…)

GCs may also face increasing liability under Occupational Safety and Health Act through OSHA’s Multi-Employer Citation Policy Already may be liable under less-stringent “controlling” employer test Now may be liable as “exposing” employer

Expanded “Joint Employer” Rule –Moving Forward Distance your company from any related entities

Avoid contract language granting control (including indirect right to control) non-employees

Focus contract language instead on other parties’ exclusive responsibilities

Survey Workers Update Survey Workers and the Prevailing Wage Act

Round I: Ambush in August, 2013 Unions succeeded in creating new prevailing wage

classification for “Survey Workers” Round II: Chicago Court Battle, April 2014

We Win – Cook County Court stays the inclusion of Survey Workers in the IPWA

Round III: IDOL Battle, October 2014 Split Decision – a narrower Survey Worker category’s

included in the IPWA

Survey Workers Update Survey Workers and the Prevailing Wage Act

Round IV: Administrative Appeal, October 2015 We win – Director of IDOL rescinds Determination and reset

the clock

Round V: Back to Court, November 2015 Unions appeal in Cook and St. Clair Counties

Construction Negligence- Ill. Supreme Court Amicus

Brief Carney v. Union Pacific Railroad Co., Case 118984 Union Pacific RR sold bridges, contracted for their removal Contractor-purchaser hired subcontractor to help with bridge

removal Employee of subcontractor was injured when the

subcontractor failed to secure one side of the bridge, allowing it to fall and crush the employee’s leg

Injured employee sued Union Pacific Railroad for failing to exercise its “retained control” with reasonable care

Construction Negligence- The Rule

Generally, one who hires an independent contractor is not liable for the negligence of that contractor

But a duty of care arises when the hiring party retains sufficient control over the work, such that it may be liable if it fails to exercise that control with reasonable care. Restatement (Second) of Torts, § 414

Question Presented in Carney v Union Pacific Railroad: Did Union Pacific RR retain sufficient control to give rise a § 414

duty of care?

Construction Negligence- The Rule

Restatement (Second) of Torts, § 414, cmt c“In order for the rule stated in this Section to apply, the employer must have retained at least some degree of control over the manner in which the work is done. It is not enough that he has merely a general right to order the work stopped or resumed, to inspect its progress or to receive reports, to make suggestions or recommendations which need not necessarily be followed, or to prescribe alterations and deviations. Such a general right is usually reserved to employers, but it does not mean that the contractor is controlled as to his methods of work, or as to operative detail. There must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.”

Carney v. Union Pacific RR- Union Pacific’s “Control”

Sold bridge “as is, where is, with all faults”

Contractor responsible for “all superintendence” of the bridge removal work

Union Pacific was never on site, never supervised work, and never instructed as to means of work

Union Pacific had general rights to stop, change and/or approve the work, which was required to be done in a “workmanlike manner”

Carney v. Union Pacific RR- Illinois Appellate Court’s

Ruling Found Union Pacific retained sufficient control such that it may be liable under Section 414 because: Work was required to be done in “workmanlike manner” to UP’s

“satisfaction” UP had right to terminate work or remove incompetent/unsafe workers UP had right to change work UP’s security personnel occasionally drove by worksite UP did not require sequencing plan UP visited worksite after accident and recommended alternative

method for removing subsequent bridges 2014 IL App (1st) 130105, ¶ 32 (Nov. 26, 2014)

Carney v. Union Pacific RR- Impact of Appellate Court’s

Ruling Subjects virtually every project owner and general contractor to costly liability (while own employer shielded by Workers Comp)

Standard construction contracts often grant such general rights

Ignores comment c, which expressly requires more:It is not enough that he has merely a general right to order the work stopped or resumed … There must be such a retention of a right of supervision that the contractor is not entirely free to do the work in his own way.

Carney v. Union Pacific RR- Negligent Hiring

On separate claim, plaintiff alleged that Union Pacific negligently hired the independent contractor

Restatement (Second) of Torts, § 411 allows cause of action to “third persons” injured as a result of such negligent hiring

Issue: is a worksite employee a “third person” covered by Section 411?

Carney v. Union Pacific RR- Negligent Hiring

Appellate Court found question of fact as to whether plaintiff was even a “worksite employee”

Because the plaintiff had another job, and was still “learning” this business

But he had successfully obtained workers’ compensation benefits

Carney v. Union Pacific RR- Amicus Brief

AGCI filed an amicus brief with Illinois Supreme Court

Urging Court to adopt appropriate “retained control” standard

Explaining that the type of “control” retained by Union Pacific is insufficient as a matter of law

And explaining that an employee who recovers workers’ compensation benefits cannot claim that he is not an employee in a subsequent lawsuit for the same injuries

Carney v. Union Pacific RR- Amicus Brief

Stay tuned for decision of Illinois Supreme Court

MPRA of 2014 and Central States’ Rescue Plan

Pension Fund Troubles Two recessions in 2000s Declining union membership / increasing retirees

Multiemployer Pension Reform Act of 2014 Attempt to “save” Pension Funds Severely underfunded multiemployer pension funds may

reduce benefits for active and retired employees to avoid insolvency

Central States’ Increasing Retiree Ratio

www.cspensionrescue.com

MPRA of 2014 and Central States’ Rescue Plan

Central States – one of the most critically underfunded pension funds in existence Paying out almost 3.5 times more in benefits than it

receives in contributions Absent further action, anticipates insolvency in 11 years

Central States proposed an MPRA “Rescue Plan” Anticipated to be effective July 1, 2016

MPRA of 2014 and Central States’ Rescue Plan

Central States’ Rescue Plan details: No reductions for retirees 80 years of age or older, or to

disability benefits Retirees 75 to 80 years old protected from benefit reductions

on a sliding scale

“Orphan” participants required by law to face maximum reductions (to 110% of PBGC-guaranteed amount)

Non-orphans’ benefits tied to employer’s contributions made on participant’s behalf

MPRA of 2014 and Central States’ Rescue Plan

Additional details: Phase-out of early retirement benefits for participants with 20

years of service (from 62 to 65 by 2025) Benefits accrual reduced from 1% of contributions to 0.75% of

contributions Plan is subject to a vote by participants

But U.S. Treasury could still permit implementation of the Rescue Plan if the Fund is found “systemically important” by the Treasury

And Employers wanting to take advantage of a decrease in withdrawal liability cannot do so for 10 years after plan’s implementation

Expanding Employee Rights- Drug Testing

Implementation of drug testing policy is a “mandatory subject of bargaining”

Requires bargaining with Union in absence of “clear and unmistakable” waiver

Broad zipper clauses and management rights provisions not enough

express reference to drug testing required

Expanding Employee Rights- Drug Testing

Increasing protections for employees re drug testing:

Ralphs Grocery Co., 361 NLRB No. 9 (July 31, 2014) Employee visibly impaired; odd and erratic behavior

(even unable to tie his shoes) Directed to take drug test due to suspicious behavior Employee requested union representation, but rep unavailable Employee directed to take drug test or be subject to

termination

Expanding Employee Rights- Drug Testing

In Ralphs Grocery, NLRB held: Employee was unlawfully terminated in violation of his

Weingarten rights to union representation

Once Union representation is requested, Company must (1) wait for representative to become available; (2) offer to allow (but do not require) the employee to proceed

without representation; or (3) proceed with disciplinary determination on information

otherwise available

Expanding Employee Rights- Drug Testing

Manhattan Beer, 362 NLRB No. 192 (Aug. 27, 2015) Employee injured on the job Next day spoke to Manager about possible assignment

Employee “reeked” of marijuana; and Had “glassy and bloodshot” eyes

Manager offered assignment conditioned on a drug test Employee requested union representative

Expanding Employee Rights- Drug Testing

Manhattan Beer Employee called two reps – one was unavailable, the other

was off that day and refused to accompany the employee Employment terminated for refusal to take drug test

Board ruled the employee’s termination unlawful Employee must be given “reasonable period of time” to obtain

representation

Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act

Went into effect January 1, 2014 (scheduled for 2018 “sunset”) Illinois became 20th State to legalize marijuana in some way

Dispensaries now allowed to sell marijuana to individuals with certain “debilitating medical conditions”

Still developing law - no Illinois court has yet addressed this Act in employment context

Drug Testing and the Compassionate Use of Medical Cannabis Pilot Program Act

Key limitations: CDL holders not permitted to use medical cannabis

Private businesses may restrict use on their property

Employers may adopt “reasonable” regulations re consumption / storage and drug testing (including zero-tolerance)

The Act does not provide a “medical use” defense.

Drug Testing and Collective Bargaining

Unions push for limited (if any) drug tests “Privacy” concerns related to mere “off duty” conduct

Unions ignore:Continuing effects of drug use Impact on Company image when employees seen using Impossibility of detecting time of actual use / impairment

Employers should consider need for testing in negotiations

Expanding Employee Rights – Social Media

NLRB finds social media policies unlawfully restrict “protected concerted activity” Costco Wholesale Corp., 358 NLRB 106 (2012) Design Technology Group, LLC, 359 NLRB No. 96 (2013) Hills and Dales General Hospital, 360 NLRB No. 70 (2014) Novelis Corp., 2015 WL 400625 (2015)

Your Company, -- NLRB No. – (2016)?

Note: “Section 7” rights not limited to union workforce

Expanding Employee Rights – Social Media

Protections now extend to use of Company e-mail Purple Communications, Inc., 361 NLRB No. 126 (Dec. 11, 2014)

Employee use of email (1) for “statutorily protected communications” (2) on nonworking time must presumptively be permitted if employees given email access.

Employer’s burden to prove “special circumstances” to justify restriction to maintain production or discipline

Social Media – Moving Forward

Be clear and specific re prohibited social media / email use:

Threatening, harassing, discriminatory or obscene material

Disparaging statements the employee knows to be false

Company’s proprietary, financial, strategic information

Concluding Thoughts

Questions / Comments?

Andrew J. MartoneAdam C. DoerrHesse Martone, P.C.(314) 860-0300