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On June 18, 2020, the U.S. Supreme Court issued a decision allowing the Deferred Action for Childhood Arrivals (DACA) program to continue operating. In so holding, the Court found the Department of Homeland Security (DHS) did not provide an adequate justification for terminating the DACA program and, thereby, violated the Administrative Procedure Act (APA).[1] But the Court’s decision does not resolve the matter entirely.

The Court did not rule on the legality of the DACA program itself. Instead, it merely repudiated the way DHS tried to rescind it. Although the Court held the DHS’s justification to terminate DACA was arbitrary and capricious, it recognized the DHS has the authority to rescind the program if it follows the required APA procedure. Thus, the DHS could try again to end the program by explaining more clearly its reasons for doing so.

Below, we answer two questions: (1) What is the status of the DACA program; and (2) What impact will the Court’s ruling have on DACA recipients and employers?Continue Reading Understanding the employment implications of the Supreme Court decision upholding DACA

The start of 2020 has already proven to be a busy year for employers in New Jersey. In addition to becoming the first state in the nation to mandate severance payments for mass layoffs, New Jersey has enacted some sweeping changes to its independent contractor laws.

Governor Phil Murphy recently signed five bills aimed at addressing misclassification of workers. These bills impose new requirements on companies, expand the scope of liability, and give the New Jersey Department of Labor and Workforce Development significant new authority.Continue Reading New Jersey enacts major changes on the independent contractor front

Today more than ever, U.S. businesses supplement their workforce with independent contractors as a solution to competitive and customer pressures. The use of contractors is entirely legal. But the correct classification of workers as contractors, as opposed to employees, is a complex analysis with frameworks that differ across a variety of governing laws. Employers, therefore, sometimes get this wrong. Recognizing the likelihood that workers are sometimes misclassified as contractors, on August 29, 2019, the National Labor Relations Board (the NLRB or Board) issued an important opinion for businesses when it held that misclassification of employees as contractors is not a violation of federal labor law.

NLRB pro-business opinion

Velox Express, Inc. is in the medical courier business. It supplements its driver workforce with independent contractors. Velox terminated its contract with one such driver, Jeannie Edge, when Edge began voicing concerns on behalf of herself and other drivers that Velox had misclassified them as contractors instead of employees. Edge filed an unfair labor practice charge claiming that the driver misclassifications violated the National Labor Relations Act (the Act). The administrative law judge agreed. In Velox Express, Inc. and Jeannie Edge, the Board, which has a three-member Republican majority, affirmed the judge’s ruling that Velox misclassified Edge and other drivers as independent contractors under the Act, but held that the misclassification, in and of itself, did not violate the Act. 368 NLRB No. 61.

Section 8(a)(1) of the Act provides that it is an unfair labor practice for an employer “to interfere with, restrain, or coerce employees” from exercising their legal right to engage in protected concerted activity under the Act. The Board explained that an employer’s mistaken classification of employees as independent contractors does not interfere with or threaten any workers’ right to engage in protected activity under the Act, even if independent contractors cannot join a union. Id. at 6. The Board’s rationale was that when workers are classified as independent contractors, they still retain the right to disagree with their classification and engage in protected activity, which is exactly what Edge did. The employer violates the Act only if it responds to the protected activities with threats, promises, and interrogations. Id. at 6. The Board held that “[e]rroneously communicating to workers that they are independent contractors does not, in and of itself, contain any threat of reprisal or force or promise of benefit.” Id.
Continue Reading On the eve of Labor Day, a win for business from the NLRB

The National Labor Relations Board (Board or NLRB) issued on Friday its first proposed regulation in a series that will overhaul parts of union election procedures. The Board’s 113-page proposed rule, which was published in the Federal Register today, Monday, August 12, modifies three of the board’s election processes: (1) the handling of blocking charges; (2) the voluntary recognition bar; and (3) certain collective bargaining relationships involving employers in the construction industry. This piecemeal approach is consistent with Board Chairman John Ring’s statements at the American Bar Association’s labor and employment conference last November and is part of the rule-making agenda the Board announced in May.

Under the Obama administration, the Board passed the “quickie” or “ambush” election rule, which significantly shortens the time between the date an election petition is filed with the NLRB and the date the election is held, requires preelection hearings to be held very shortly after the filing of a representation petition, and requires employers to provide union representatives with far more information on potential voters than in the past. These new procedures were derided by employers and business groups, which was most clearly evidenced in 2017 when the Board received over 7,000 responses to its invitation for comments on whether to roll back these changes.

In the Board’s Friday announcement, a three-member majority, over one Board member objection, said, “The board believes, subject to comments, that the proposed amendments will better protect employees’ statutory right of free choice on questions concerning representation by removing unnecessary barriers to the fair and expeditious resolution of such questions through the preferred means of a board-conducted secret ballot election.” Chairman Ring added, “There are few more important responsibilities entrusted to the NLRB than protecting the freedom of employees to choose, or refrain from choosing, a labor organization to represent them, including by ensuring fair and timely board-conducted secret ballot elections. We believe that the changes we propose today further the goal of protecting this vital freedom.” The Board’s lone Democrat, Lauren McFerran, objected to the proposed rule-making.
Continue Reading NLRB publishes proposed changes to union election procedures

On March 18, 2019, New Jersey Governor Phil Murphy signed new legislation (S121) that significantly impacts the scope of certain employment agreements and settlement agreements between employers and employees/former employees. The controversial legislation addresses the following:

  1. Ban on waiver of substantive and procedural rights in employment contracts related to discrimination, harassment or retaliation claims

The legislation voids any provision in an employment contract that waives “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment.” In addition, the legislation prohibits an employer from prospectively waiving any right or remedy under the New Jersey Law Against Discrimination (NJLAD).

This language could impact agreements such as jury trial waivers and arbitration agreements. To the extent that the law touches arbitration agreements, however, it will likely face challenges on the grounds that the law conflicts with, and is preempted by, the Federal Arbitration Act.Continue Reading New Jersey bans NDAs and certain waivers of rights in agreements with employees

On January 31, 2019, the three-member National Mediation Board (NMB), which oversees labor relations for the airline and railroad industries, published a proposed rule-making to simplify the process for workers covered by the Railway Labor Act (RLA) to decertify the unions representing them.

Currently, RLA-represented employees seeking to decertify a union must identify an individual willing to be personally named and represent the bargaining unit. After more than 50 percent of the unit’s members sign an authorization card that clearly states their desire to no longer be represented by the union, the named person is authorized to apply to the NMB to hold a representation election. Then, the NMB will hold an election with options to vote for (1) the current union representation, (2) the named individual, (3) a write-in candidate, or (4) “no union.” To decertify the incumbent union, the majority vote must be for either “no union” or the named individual – who would then disclaim interest in representing the bargaining unit.Continue Reading National Mediation Board proposes simplifying decertification under the Railway Labor Act

In a recent decision involving SuperShuttle drivers, the National Labor Relations Board (NLRB or Board) overruled a 2014 decision making it less likely a worker would be deemed an independent contractor, returning to the more employer-friendly common law test to determine independent contractor status.

In 2014, the Board purported to clarify the standard for evaluating whether a worker is an independent contractor (see FedEx Home Delivery, 361 NLRB 610 (2014)). In FedEx, the Board articulated a new factor in the contractor analysis – whether “putative independent contractor is … rendering services as part of an independent business” (Id.) In doing so, the Board diminished the significance of the putative contractor’s entrepreneurial opportunity in the independent contractor analysis by making it one aspect of the newly created “independent business” prong (Id. at 619).

Last week, the Board overruled FedEx and returned to the traditional common law test. SuperShuttle DFW, Inc., 367 NLRB No. 75 (2019). Under that test, “entrepreneurial control, like employer control, is a principle by which to evaluate the overall effect of the common-law factors on a putative contractor’s independence to pursue economic gain” (Id. at *9). The Board held that the test articulated in FedEx “fundamentally shifted the independent contractor analysis … to one of economic realities, i.e., a test that greatly diminishes the significance of entrepreneurial opportunity and selectively overemphasizes the significance of ‘right to control’ factors relevant to perceived economic dependency” (Id. at *7-8).Continue Reading NLRB returns to more employer-friendly independent contractor test

The U.S. Court of Appeals for the Seventh Circuit recently reversed its prior decision and upheld an Illinois district court ruling that the federal Age Discrimination in Employment Act (ADEA) does not protect job applicants from disparate impact claims. But beware, as this seemingly apparent win for employers in Illinois, Indiana, and Wisconsin may drive employees to bring their claims under more forgiving state anti-discrimination laws, which often provide for greater damages.

Case background and decision

The plaintiff in Kleber v. CareFusion Corporation, No. 17-1206, 2019 WL 290241 (7th Cir. Jan. 25, 2019) was a 58-year-old attorney who applied for and was denied a general counsel position. The job posting sought an attorney with three to seven years of experience. CareFusion hired a 29-year-old attorney for the role. In his lawsuit, Kleber argued that CareFusion’s “cap” on experience effectively weeded out older applicants.

Initially, a three-judge Seventh Circuit panel found that the ADEA did apply to disparate impact claims by job seekers. But when the full Seventh Circuit reheard the case, it ruled 8–4 that Section 4(a)(2) of the ADEA covers only discrimination against current employees, meaning that non-employee job seekers cannot sue companies for so-called disparate impact claims alleging neutral practices that adversely affect older applicants, thus affirming the district court’s original finding. Comparing the text of various ADEA provisions, the full Seventh Circuit’s majority opinion concluded that Congress did not intend for the Act to cover applicants asserting disparate impact claims.

Importantly, the ruling does not limit an applicant’s ability to sue for intentional age discrimination, such as a potentially ageist comment by a recruiter or a job posting stating “applicants over 40 need not apply.”

The Seventh Circuit joins the Eleventh Circuit (covering Alabama, Florida, and Georgia), which issued a similar ruling in 2016.Continue Reading Seventh Circuit limits ADEA’s scope, but beware state law

San Francisco’s Office of Labor Standards Enforcement (OLSE) continues to raise the cost of doing business at the foot of the Golden Gate by requiring employers to provide some of the most generous benefits to employees in the United States. The OLSE has amended certain of its rules regarding employer obligations, and will begin enforcing these changes (adopted by San Francisco voters and the City’s Board of Supervisors) as of January 1, 2019. Below are some of the highlights employers should consider as they make their way in the new year:

  • Health Care Security Ordinance (HCSO) increases the minimum dollar amount employers must spend on health care on behalf of all covered employees (those who have been employed for more than 90 days and who regularly work at least eight hours per week in the City of San Francisco). As of 2019, San Francisco employers with 20–99 employees worldwide must spend $1.95 per hour, and those with 100 or more employees worldwide must spend $2.93 per hour. Businesses with less than 20 employees remain exempt from the HCSO.

The 2019 “Exemption Threshold” (minimum amount for managerial, supervisory, and confidential employees to be exempt from the HCSO) has increased to $48.46 per hour or $100,796 per year.Continue Reading San Francisco increases costs and requirements for employers in 2019

On January 11, 2019, the National Labor Relations Board clarified and narrowed the standard for finding that an employee engaged in protected concerted activities under the National Labor Relations Act. See Alstate Maintenance, LLC, 367 NLRB No. 68 (2019). In doing so, the board overturned a 2011 decision – WorldMark by Wyndham, 356 NLRB 765 (2011) – that held that an employee who protests at a group meeting is necessarily engaged in concerted protected activity.

Summary of decision

In Alstate, a manager approached airport baggage handlers (referred to as skycaps) and requested that they help unload a soccer team’s equipment. One of the skycaps, Trevor Greenidge, responded that “we did a similar job a year prior and we didn’t receive a tip.” When the soccer team’s equipment arrived, the skycaps walked away. The employer terminated Greenidge “for griping about not being tipped.” Greenidge contended that his comment regarding lack of tips (not the act of walking away from the unloading task) was protected concerted activity and thus his termination violated the Act.

The board rejected the employee’s argument, concluding that Greenidge’s conduct was neither concerted nor engaged in for mutual aid or protection. In reaching this conclusion, the board reaffirmed the standard for protected concerted activities derived from its earlier decisions in Meyers Industries, 268 NLRB 493 (1984) and Meyers Industries, 281 NLRB 882 (1986).Continue Reading NLRB clarifies standard for protected concerted activity