Executive Labor Summary - July/August 2014

by Constangy, Brooks, Smith & Prophete, LLP


NLRB extends Weingarten right of union representation to drug and alcohol test situations - On July 31, a three-member panel of the National Labor Relations Board in Ralph's Grocery Co. ruled that a union-represented employee has a right, upon request, to have union representation for a "reasonable suspicion" drug or alcohol test being required by an employer. "Weingarten rights" under the National Labor Relations Act – the presence of a union representative upon request – generally apply when an employee in a unionized work setting is asked to participate in an employer's investigatory interview that the employee reasonably believes may lead to discipline. The Board ordered Ralph's to rescind the employee's discharge for refusal to take the requested test, finding that discharge was inextricably linked to the assertion ofWeingarten rights.

In the Ralph's case, managers noticed some conduct on the part of an employee that caused them to believe he might be under the influence. The employee was directed to submit to a drug and alcohol test. He refused, and was informed that his refusal would result in termination. He then requested union representation. Management tried but was unable to find a union representative, and after about 10 to 15 minutes of delay directed the employee to take the test and indicated that a refusal would constitute a positive test result. The employee still refused and was discharged.

An Administrative Law Judge found that the discharge interfered with the employee's exercise of hisWeingarten rights, and the majority of a three-Member panel of the Board agreed. The majority, consisting of Chairman Mark Gaston Pearce and Member Nancy Schiffer, rejected the employer's argument that the employee had been discharged, not for exercise of his Weingarten rights, but instead for insubordination and refusal to test. Pearce and Schiffer determined that there was no way to divorce the employee's refusal from the assertion of Weingarten rights and found that the employer penalized the employee for refusing to waive those rights.

The lone Republican on the panel, Member Harry Johnson, disagreed with the Board's order to rescind the discharge, finding that the employer discharged the employee because it believed, based on observations, that the employee was under the influence of drugs or alcohol. The other panel members disagreed, finding that the discharge report did not mention an offense other than the refusal to take the test as the basis for the discharge.

The Ralph's decision makes it clear that a current Board majority either views Weingarten rights as applying to requests to submit to drug and alcohol tests, even in the absence of any investigatory interview questions, or views a request for a reasonable cause drug test to be an "investigatory interview question." Absent a requirement in a collective bargaining agreement, an employer generally has no obligation to advise an employee of Weingarten rights and an employee has no right to any particular union representative. The Board has gone back and forth on whether Weingarten rights apply to non-union workplaces, but employers should be watching for the current Board to assert such an expansion.

"Petitioned-for" bargaining units at department stores get a mixed reception from the Board - The Board in July issued two decisions involving retail department stores, applying its standard from Specialty Healthcare (the "micro-bargaining-units" case) for determining appropriate bargaining units, and reached different results in each case. Under the Board's Specialty Healthcare standard, the Board will generally accept as appropriate a petitioned-for unit of employees who are readily identifiable as a group with a "community of interest." A party contending that the proposed unit is inappropriate has the burden of showing that other employees should be included in the unit because they share an "overwhelming community of interest" with the employees in the proposed unit.

In one case, involving a Macy's department store in Massachusetts, the Board approved a petitioned-for unit of all sales employees in the cosmetics and fragrance department. The unit, though only one department, was based on a grouping that the employer used for administrative or operational purposes. Thus, the Board readily found that the unit satisfied the community of interest required for an appropriate bargaining unit. The Board rejected the employer's argument that a wall-to-wall unit of all store sales employees was needed due to an overwhelming community of interest of all sales employees in the store. The Board found that "the fact that the petitioned-for employees work in a separate department, report to a different supervisor, and work in separate physical spaces supports [the] finding that the petitioned-for employees do not share an overwhelming community of interest with the other selling employees."

In the other case, involving a Bergdorf Goodman store in New York, the Board nixed a proposed unit of all shoe salespersons in two separate departments. The Board found that the grouping was arbitrary, with essentially the only commonality being that the employees had the same function, selling shoes. The Board thus found that the employees lacked a sufficient community of interest for an appropriate bargaining unit.

What are some takeaways here? First, the Board is expected to apply its Specialty Healthcare standard broadly across many business sectors. Second, employers' organizational groupings and structures will probably continue to be important factors in making unit determinations. Employers seeking to avoid a "micro-bargaining-unit" balkanization of their workforces and workplaces may be able to restructure their organizations to increase the size of the smallest appropriate unit by ensuring that the larger grouping has an "overwhelming community of interest." To do that, functional integration within the group, and common supervision and terms and conditions of employment may be important. Concerned employers should review their organizational structures in advance of union organizing efforts and consider the vulnerabilities of the current structures and possible fixes for a perceived micro-bargaining-unit problem.

NLRB decides not to take a chance on Supreme Court review of its position on class action waivers in arbitration agreements - The NLRB let pass a July 15 deadline to seek Supreme Court review of a federal appeals court decision rejecting the Board's position on class action waivers in arbitration agreements. The Board continues to advance its position that employees have a Section 7 right under the NLRA to pursue arbitration on a class, collective or group basis, and not to be subject to a class or collective action waiver in a private arbitration agreement. However, its position has been rejected by three federal appellate courts, including the U.S. Court of Appeals for the Fifth Circuit in the highly publicized D.R. Horton case that we have reported on here and here. The Board's decision not to seek review means that D.R. Horton will remain the law in the Fifth Circuit states of Louisiana, Mississippi, and Texas. Two other federal appeals courts have rejected the NLRB's position on this issue as well: the U.S. Court of Appeals for the Second Circuit (Connecticut, New York, and Vermont), and the U.S. Court of Appeals for the Eighth Circuit(Arkansas, Iowa, Minnesota, Missouri, Nebraska, and the Dakotas). In addition, the Ninth Circuit, although not having definitively decided the issue, has indicated that it might join the Second, Fifth, and Eighth circuits. The Ninth Circuit hears appeals from federal courts in Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Northern Mariana Islands.

Apparently, the Board is content to continue to assert its position through unfair labor practice cases outside the Second, Fifth, and Eighth circuits. Otherwise, it runs the risk that the Supreme Court will invalidate its position in all 50 states. The Board recently found the Supreme Court to be a tough audience in the Noel Canning case, so it may be looking for a case with better facts or, as is more likely, it may be hoping for changes on the Court before the issue gets there.

Employers who have or are contemplating class waivers in arbitration agreements will want to keep an eye on this issue.


NLRB officially goes to pot - Though many employers may have felt that the NLRB has been "going to pot" for years, the NLRB's Office of General Counsel, Division of Advice, made it official with the August 7 release of an Advice Memorandum from late 2013 that indicates that the Board will assert jurisdiction over many commercial marijuana processing and distributing businesses. On consideration of the question of the Board's jurisdiction over a business called Maine Wellness, "an enterprise that grows, processes, and retails medical marijuana," the Division of Advice takes the position that the enterprise is within the jurisdiction of the NLRB if it satisfies the monetary threshold for jurisdiction. According to the memorandum, the business satisfies the interstate commerce requirement for Board jurisdiction because it purchases equipment and supplies in other states, even though all the production of the business flows to medical marijuana dispensaries in Maine. The assertion of jurisdiction gives the Board an entry to regulate a business that is growing like a weed in many parts of the country. Agricultural employees – workers who plant, cultivate, and harvest – are exempt from the NLRA, but agricultural processing employees are not. Labor unions, including the Teamsters and the UFCW, are already attempting to organize workers in the marijuana industry.

Grocery workers stage strike -- to bring back their CEO! - A family feud between cousins who owned stock in the Market Basket, a New England grocery chain, led to the ouster of the Chief Executive Officer, Arthur T. Demoulas, and this "man bites dog" story. Taking a cue from the labor movement, employees walked out in protest (and in support of their old CEO), and customers joined in with a consumer boycott. How it all will end is unclear at press time, but a strike in support of management is not something we see every day. Press reports indicate that the former CEO is looking to buy a controlling interest from his cousin's side of the family to end the dispute. The new, current management is considering using replacement workers to somehow gain an operational upper hand and preserve the corporate valuation that may be diminished by the walkout and consumer boycott. Meanwhile, the grocer has cut the hours of part-time workers, apparently due to the loss of business caused by the consumer boycott.

House Democrats want to make union organization a new civil right – good luck with that. -Democrats in the U.S. House of Representatives, led by sponsor Keith Ellison (D-Minn.), have introduced proposed legislation on July 30 to make violation of the NLRA a civil rights violation. Under the proposed "Employee Empowerment Act," remedies for NLRA violations would be consistent with those available under Title VII and some of the other federal anti-discrimination laws. Section 10 of the NLRA would be amended to allow workers to sue in federal court after the NLRB has an unfair labor practice charge for 180 days. Plaintiffs could recover compensatory damages (for example, emotional distress), punitive damages, and attorneys' fees and costs. According to proponents of the legislation, remedies for violating the NLRA are weak, and unlike Title VII of the Civil Rights Act, no forceful penalties for violations exist. The good news for employers is that, with the current makeup of Congress and the outlook for the 2014 elections, this legislation is not likely to go anywhere.

"It's only a flesh wound!" UAW sets up local in Chattanooga despite Volkswagen election defeat -After losing a fairly close NLRB election at Volkswagen's Chattanooga manufacturing facility earlier this year, the United Auto Workers union is not going home to lick its wounds – in fact, it's not going home at all. Instead, the Union has established Local 42 in Chattanooga as part of its long-term effort to organize workers at the plant. The idea apparently is to make some core group of workers more comfortable with union membership. From that core group of members, the UAW apparently hopes to build its support and gain recognition through a "card check," which the union may expect the company to accept.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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