As we discussed with participants in our recent Labor and Employment Law Seminar, despite recent setbacks, the National Labor Relations Board continues to issue decisions that are concerning for employers. These decisions, which impact union and non-union employers alike, often take an expansive view of the protections afforded employees by the National Labor Relations Act. In a recent case involving a complaint filed by an (alleged) independent contractor working for a non-union employer, the Board found that the contractor’s electronic communications, directed at employees of a different employer, were protected by the Act because the communications constituted union organizing activity.

In New York Party Shuttle (pdf), the Board first considered whether the complaining party, a tour guide, was an employee or an independent contractor. The Tour Guide was regularly hired by Party Shuttle to provide guided tours of New York City. He also maintained his own tour company, and booked and provided tours through his own company. The Board held that Party Shuttle failed to establish that that the Tour Guide was an independent contractor. In making its decision, the Board applied a common law test that considers a multitude of factors and places the burden on the employer to establish independent contractor status. In this case, the Board found that Party Shuttle failed to establish that the tour guide as an independent contractor.

After determining that the Tour Guide was an employee, the Board turned to the next issue, the Tour Guide’s termination.

Continue Reading NLRB Finds Discussions With Employees of Another Employer Can Constitute Protected Activity

This post was contributed by Andrew L. Levy, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group.

The Occupational Safety and Health Administration (“OSHA”) recently released a Letter of Interpretation authorizing employees at non-union workplaces to designate union organizers to act as their employee representative during an OSHA inspection. The following is an excerpt from the Letter of Interpretation, the full version of which is available here:

Question:         May workers at a worksite without a collective bargaining agreement designate a person affiliated with a union or community organization to act on their behalf as a walk around representative?

Answer:           Yes . . . [a] person affiliated with a union without a collective bargaining agreement or with a community organization can act on behalf of employees as a walk around representative so long as the individual has been authorized by the employees to serve as their representative.

Continue Reading Interpretation Letter Permits Union Organizers to Be Employee Representatives during OSHA Inspections at Non-Union Worksites

In a recent decision involving employee social media activity, the National Labor Relations Board held that a high-end clothing boutique in San Francisco violated the National Labor Relations Act when it terminated employees who complained on Facebook about working late at night in an unsafe neighborhood. The Board also found that a policy in the employer’s handbook prohibiting disclosure of wage and compensation information was unlawful.

The employees at issue in Bettie Page Clothing (pdf) raised concerns to the store manager and others about the store’s hours, which required that the employees close the store after dark. The employees were concerned about being harassed by "street people" after closing up. When the employees’ internal complaints were not successful in having the store hours changed, the employees criticized the store manager during multiple discussions on Facebook. Shortly after the posts, the employees were terminated.

The employees filed a complaint with the Board challenging their terminations. The Board affirmed the decision of an Administrative Law Judge (ALJ), holding that the employees’ complaints and sarcastic remarks about the store manager on Facebook were a discussion about the terms and conditions of employment. The Board stated that the discussions about the manager’s refusal to address their concerns over store hours were "classic" concerted protected activities, and therefore, the employees’ terminations based on those discussions were unlawful. The Board ordered the employees reinstated.

In addition, the Board affirmed the decision of the ALJ finding that the policy in the employer’s handbook that prohibited the disclosure of wage and compensation information violated Section 7 of the Act. The Board ordered the employer to rescind the policy.

As we have discussed in the past, the Board continues to take a hard line when it comes to employee discipline for social media activity. The Board has made clear its position that discussions on Facebook are the equivalent to discussions around the water cooler, but I am not sure I agree. For example, discussions around the water cooler typically do not create electronic records and have a worldwide audience. Only time will tell whether the Board’s decisions in this area will be affirmed by the courts.

Please also keep in mind that it appears that the Board has been reviewing employer policies with increased scrutiny. If you haven’t done so already, it is a good time to proactively review your policies to ensure compliance with the Act.
 

McNees Wallace & Nurick LLC’s Alcoholic Beverage and Liquor License Practice Group recently published a Liquor Law Update, which can be accessed by clicking here.  The Update contains an article on employee tip pools that readers may find interesting. 

Whether you need to acquire a liquor license, sell a liquor license, keep a liquor license, move a liquor license, expand the use of a liquor license, restrict a liquor license, or just need some advice about what you can do with a liquor license, McNees attorneys in the Alcoholic Beverage and Liquor License Practice Group are ready and able to assist you. We are familiar with the workings of both the Pennsylvania Liquor Control Board (PLCB) and the Ohio Department of Commerce, Division of Liquor Control (DOLC), and routinely interface with personnel at PLCB and DOLC.

This post was contributed by Bruce D. Bagley, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group.

On May 7, 2013, a three-member panel of the U.S. Court of Appeals for the DC Circuit vacated the NLRB’s Notice Posting Rule, originally issued by the Board in August 2011. The Rule required that virtually all private-sector employers post a Notice to Employees, informing employees of various rights under the National Labor Relations Act (Act), such as the rights to engage in union organizing, form or join a union, and strike. The Notice also described various actions by employers or unions that would be illegal under the Act.

The Rule was immediately subject to legal challenge. Notably, the National Association of Manufacturers (NAM) challenged the validity of the Rule in the U.S. District Court for the District of Columbia. In March 2012, the District Court struck down several provisions concerning how the Rule would be enforced by the Board but ultimately held that the Board did have legal authority to promulgate the Rule. Thereafter, NAM appealed the District Court’s decision to the D.C. Court of Appeals. Meanwhile, another federal District Court, in South Carolina, had vacated the Rule in its entirety in April 2012. The NLRB appealed that decision to the Fourth Circuit Court of Appeals, where it remains pending at this time.

Continue Reading NLRB’S Notice Posting Rule Invalidated by DC Court of Appeals

 This post was contributed by Joseph S. Sileo, Esq., a new addition to McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.  McNees recently welcomed Joe, Jennifer LaPorta Baker and Jennifer J. Walsh in Scranton, Pennsylvania.

As employers know all too well, an employee who is injured in connection with work can receive workers’ compensation benefits simply by establishing that the injury occurred in the course of employment and resulted in a loss of wages. Proof of employer negligence or fault is not required. In exchange for this benefit, workers’ compensation is generally the "exclusive remedy" for employees who sustain work-related injuries.   In other words, injured employees are not permitted to sue their employers for negligence in connection with their injuries. This exclusive remedy reflects the public policy bargain between employers and employees underlying Pennsylvania’s workers’ compensation system, by which workers give up the right to bring personal injury suits against their employers in court in exchange for the guaranty of workers’ compensation benefits for work-related injuries. 

Pennsylvania’s Workers’ Compensation Act does not, however, prevent injured employees from taking legal action against third parties, such as an employer’s clients, customers or vendors. For example, an employee who is injured while working on the property of an employer’s client may, in some circumstances, file a workers’ compensation claim against his or her employer and file a lawsuit against the client for negligence. 

A recent decision by Pennsylvania’s Supreme Court confirms that employers can take steps to prevent such employee-initiated third party lawsuits relating to injuries covered by workers’ compensation. In Bowman v. Sunoco, a security guard employee was injured during work when she fell on an icy sidewalk at a facility owned by her employer’s client. In addition to filing a claim with her employer for workers’ compensation benefits, the employee also sued the client for negligence. The Court held that a disclaimer signed by the employee when she was hired – stating that she waived her rights to sue the employer’s clients for injuries covered by workers’ compensation – was valid and precluded the employee’s lawsuit against the employer’s client.   

For obvious reasons, employers have an interest in protecting their clients, customers and vendors from embarrassing, costly and time-consuming employee lawsuits. In light of the Bowman decision, employers should consider using disclaimers to prevent employee lawsuits against third parties relating to work injuries covered by workers’ compensation. Such disclaimers may be particularly useful in the case of employees who routinely have direct interaction with an employer’s customers and vendors, or who perform work at client facilities or other remote locations.

Feel free to contact any member of the McNees Wallace & Nurick Labor and Employment Practice Group for assistance with labor and employment law issues and/or if you have any questions regarding this article.    

This post was contributed by Jennifer LaPorta Baker, Esq., an attorney in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group and based in the Scranton, Pennsylvania office.

U.S. Citizenship and Immigration Services (USCIS) recently released the revised Employment Eligibility Verification Form I-9, which employers are required to use to verify the identity and employment authorization of newly hired employees. Starting May 7, 2013, employers must use the new Form I-9 (with a revision date of 03/08/13) to comply with their employment eligibility verification responsibilities. The new Form I-9 was first published by U.S. Immigration and Customs Enforcement (ICE) on March 8, 2013, and had been authorized for use, along with the previous Form. Now, use of the new Form I-9 will be mandatory.

An electronic version of the new Form I-9 is available on the USCIS website. USCIS has also released an updated Handbook for Employers (M-274) available here (pdf). A Spanish version of the new form is also available on the USCIS website for use in Puerto Rico only. Spanish-speaking employers and employees in the 50 states, Washington, DC, and other U.S. territories may use the Spanish version for reference, but must complete the English version of the form.

Employers using an electronic version of the Form I-9 should receive an updated product from their software providers. Those employers must transition electronically to the new Form I-9, or otherwise take steps to implement a compliant system for completing the new Form I-9, by May 7.

Employers who fail to use the new Form I-9 on and after May 7 may be subject to penalties issued by ICE and/or the Department of Justice.

Employers should conduct internal audits of immigration policies and protocols as necessary to assess and maintain legal compliance and reduce the significant risks and liabilities associated with non-compliance. Failure to maintain compliance may result in hefty fines and stiff penalties. Common employer violations include failure to obtain the correct employee documentation as required by federal law, as well as improperly completed I-9s. Remember, there is no “good faith” defense for I-9 paperwork violations. The best defense is to conduct annual self-audits and correct defective I-9 Forms before an aggressive government agency is at your door.

This post was contributed by Adam R. Long, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group.

In 2011, the Third Circuit held that a pre-certification offer of judgment made by a defendant-employer to an individual plaintiff would not require dismissal of the plaintiff’s entire FLSA collective action, even if the offer of judgment would fully satisfy the plaintiff’s own individual claims. (Third Circuit opinion available here.) Before this decision, employers increasingly had used offers of judgment made pursuant to Rule 68 of the Federal Rules of Civil Procedure to "pick off" individual plaintiffs and defeat FLSA collective actions early in the litigation before they could be certified. The Third Circuit held that even though an offer of complete relief could moot the plaintiff’s individual claims (regardless of whether the offer was accepted), it would not defeat the broader FLSA collective action.

In June 2012, the Supreme Court agreed to review the Third Circuit’s decision on this issue. In Genesis Healthcare Corp. v. Symczyk, a 5-4 decision announced earlier this week, the Supreme Court reversed the Third Circuit’s decision and held that if the individual plaintiff’s own claims were made moot by an offer of judgment prior to certification of the FLSA collective action, the broader FLSA collective action must be dismissed. (Supreme Court opinion available here.) Justice Thomas, writing for the majority, noted that both the District Court and Third Circuit found that the defendant-employer’s unaccepted offer of full remedy made pursuant to Rule 68 had mooted the sole plaintiff’s individual FLSA claims. Justice Thomas explained that because Symczyk, the plaintiff, had not challenged this finding in a timely manner, the question of whether an unaccepted offer of complete relief mooted Symczyk’s individual claims was not properly before the Court. The Court simply accepted the Third Circuit’s position on this issue and assumed that the Rule 68 offer mooted Symczyk’s own claims. Based on this unchallenged assumption, the Court held that the FLSA collective action must be dismissed because the only plaintiff’s individual claims were moot.

In her dissent, Justice Kagan maintained that the majority decision had no effect beyond the specific case at issue, because she believed that the Third Circuit’s underlying decision on the mootness of Symczyk’s individual claims was clearly erroneous. In the view of Justice Kagan, the assumption on which the majority decision was built (i.e., an unaccepted offer of complete relief mooted the plaintiff’s individual claims) was faulty, making the Court’s holding meaningless.

Unfortunately, the Supreme Court’s decision in Genesis did not provide litigants with a definitive answer on the viability of the Rule 68 "pick off the plaintiff" strategy in FLSA collective actions. While the majority expressly held that the strategy can defeat a pre-certification collective action if the individual plaintiff’s claims truly were made moot, it did not address the underlying question of whether an unaccepted offer of complete relief actually would moot the individual plaintiff’s own claims. Justice Kagan and the three other dissenting Justices believe that such an offer would not moot the individual claims. While the Genesis decision breathes new life into the Rule 68 offer strategy for defendant-employers, the individual claims/mootness issue seemingly will continue the uncertainty for courts and litigants in FLSA collective actions.

With spring upon us and warmer temperatures hopefully just over the horizon, many employers are beginning to recruit high school students for after-school and summer employment. When doing so, employers must be aware of specific rules under both federal and state laws regarding the employment of minors (i.e., individuals under 18 years of age).

Earlier this year, the Pennsylvania Child Labor Act (“PCLA” or “Act”) went into effect. The Act is designed to clarify the state law and make it consistent with child labor standards imposed under the federal Fair Labor Standards Act (“FLSA”). For all intents and purpose, compliance with the PCLA will satisfy the employer’s obligations under the FLSA.

The Act sets forth minimum age requirements, permissible working hours and time restrictions, and permitting requirements. The most notable requirements of the PCLA are outlined below:

Continue Reading PA Child Labor Act Modernizes and Clarifies Work Hour Restrictions for Minors in Time for Summer Hiring Season

This post was contributed by Stephen R. Kern, Esq., a Member in the Employee Benefits Practice Group.

The U.S. Department of Labor (the "DOL") has recently enhanced its enforcement activities with respect to group health plans by significantly increasing the number of audits it is conducting. In addition, the DOL’s audit letters contain significant document requests that are directed specifically at compliance with the Patient Protection and Affordable Care Act ("PPACA" or "healthcare reform") compliance obligations. For example, the DOL’s audit letters now include the following:

  • Age 26 mandate – Plans must provide a sample of the written notice describing the enrollment rights for dependent children up to the age of 26 that has been used by the plan since September 23, 2010. 
     
  • Prohibition on rescissions of coverage – If the plan has rescinded coverage, it must supply a list of all affected individuals and a copy of the written notice provided 30 days in advance of each rescission. The DOL will analyze whether the reason for the rescission complies with the healthcare reform standard of fraud or intentional misrepresentation of a material fact.
     
  • Monetary limits on essential health benefits – Plans that have imposed dollar limits since September 23, 2010 must provide documentation showing the limits that are applicable for each year. A plan must also provide a sample of the notice that it sent to participants stating that the plan’s lifetime limits had been eliminated. 
     
  • Grandfathered plan status – Employers that are retaining grandfathered plan status must provide documentation to substantiate that status, as well as a copy of the notice that is part of the plan’s documents and has been provided to participants and beneficiaries.
     
  • Choice of Provider Notice – Nongrandfathered plans must provide a copy of the notice informing participants of the right to designate their choice of certain providers as well as a list of participants who received the notice. 
     
  • Claims and external review – Nongrandfathered plans must provide samples of the claims and appeals forms that have been used since September 23, 2010 plus the contracts with any independent review organizations or third party administrators that are providing the required external reviews. 

In light of this recent DOL audit activity, employers should carefully document their files regarding these healthcare reform compliance issues. To assist employers in this regard, the DOL recently published a very useful checklist entitled "Self-Compliance Tool for Part 7 of ERISA: Affordable Care Act Provisions" on its website. The DOL compliance tool allows employers to engage in a step-by-step analysis of their level of compliance with the healthcare reform requirements that are currently effective. In addition to the compliance issues referenced above, the compliance tool also deals with summary of benefits and coverage, emergency care, and preventive services. 

The increased scope of the DOL’s group health plan audits echoes the recent expansion of other DOL investigations and audits of employers (e.g., wage and hour audits, and other areas of labor and employment law compliance – see our recent blog article for more information).  If you have any questions regarding DOL audits or PPACA, please do not hesitate to contact any member of our Labor & Employment and Employee Benefits Practice Groups.