Court of Appeals Issues Decision Regarding Vesting of School District Retiree Health Insurance Benefits
March 19, 2014
New York Labor and Employment Law Report
March 19, 2014
March 17, 2014
March 7, 2014
February 25, 2014
February 20, 2014
February 18, 2014
February 13, 2014
On February 12, 2014, President Obama signed an Executive Order requiring that all new federal contracts and subcontracts contain a clause specifying that the minimum wage to be paid to workers under those federal contracts and subcontracts must be at least $10.10 per hour beginning January 1, 2015. The federal contracts and subcontracts covered by this Executive Order include procurement contracts for services or construction and contracts for concessions. This new $10.10 minimum wage will also apply to disabled employees who are currently working under a special certificate issued by the Secretary of Labor permitting payment of less than the minimum wage. Beginning January 1, 2016, and annually thereafter, the minimum wage for federal contractors will be increased by the Secretary of Labor based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, and rounded to the nearest multiple of five cents. The Secretary of Labor is required to publish the new minimum wage at least 90 days before the new minimum wage is scheduled to take effect. For tipped employees, the hourly cash wage that must be paid by a federal contractor must be at least $4.90 beginning on January 1, 2015. In each subsequent year, the federal contractor minimum wage for tipped employees will be increased by 95 cents until it equals 70 percent of the federal contractor minimum wage in effect for non-tipped employees. If an employee’s tips, when added to the hourly wage, do not add up to the federal contractor minimum wage for non-tipped employees, the federal contractor will be required to supplement the employee's hourly wage to make up the difference. The Secretary of Labor is expected to issue regulations by October 1, 2014, to implement the provisions of the Executive Order.
February 5, 2014
The National Labor Relations Board ("Board") reissued a proposed rule today that would significantly shorten the timetable for union representation elections. This same proposed rule (which has become known as the "quickie" or "ambush" election rule) was initially issued by the Board on June 22, 2011. After the proposed rule was met with strong opposition from employer organizations, the Board issued a final rule on December 22, 2011, that was a scaled-down version of the proposed rule. The final rule became effective on April 30, 2012. However, on May 14, 2012, the U.S. District Court for the District of Columbia declared the final rule to be invalid because the Board lacked a quorum when it voted on the final rule. The Board appealed the decision, but recently announced that it was withdrawing its appeal. As some had predicted, the Board's withdrawal of its appeal set the stage for its reissuance of the broader June 22, 2011, proposed rule. The proposed rule:
If this proposed rule is implemented, it will significantly shorten the time period from the filing of a union representation petition to the date on which a representation election is held. This creates a distinct advantage for the union, because it gives the employer less opportunity to counteract a union campaign which likely began well before the filing of the representation petition. Comments on the proposed rule from interested parties must be received on or before April 7, 2014. After the comment period, the Board may revise the proposed rule, or may issue it as a final rule. The Board’s decision to reissue the original proposed rule that was issued on June 22, 2011 (rather than the final rule that was issued on December 22, 2011) seems to indicate that the Board may not be willing to make significant changes before a final rule is issued. However, it is likely that the final rule -- in whatever form it is issued -- will once again be challenged by employer organizations in federal court on the ground that the Board exceeded its rulemaking authority.
January 27, 2014
On January 27, 2014, the U.S. Supreme Court issued a unanimous decision clarifying the meaning of "changing clothes" under the Fair Labor Standards Act ("FLSA"). In Sandifer v. United States Steel Corp., the Supreme Court adopted a fairly broad definition of the phrase "changing clothes," which should provide employers with some comfort that provisions of a collective bargaining agreement excluding clothes-changing time from compensable hours worked will likely be applied to time spent by employees donning and doffing most forms of protective gear. In general, the FLSA requires employers to pay employees for time spent donning and doffing protective clothing and equipment, if the employer requires employees to wear such protective clothing and equipment, and if the employee must change into and out of the protective clothing and equipment at the work site. However, Section 203(o) of the FLSA provides that such time is not compensable if the employer and the representative of the employer's employees have agreed to a provision in their collective bargaining agreement to exclude from hours worked "time spent in changing clothes or washing at the beginning or end of each workday." In Sandifer, a group of U.S. Steel employees contended that even though their collective bargaining agreement excluded time spent "changing clothes" from compensable work time, they should nevertheless be compensated for such time because many of the items they were required to wear were protective in nature. The employees argued that the items they were required to wear should not be considered "clothes" under the FLSA because those items are intended to protect against workplace hazards. The employees also argued that, by putting on those protective items over their own clothes (rather than substituting those protective items for their own clothes), they were not engaged in "changing" clothes under the FLSA. The Supreme Court refused to interpret the phrase "changing clothes" as narrowly as the employees urged. With respect to the definition of "clothes," the Supreme Court examined the dictionary definition of the term that existed at the time Section 203(o) of the FLSA was enacted, and held that the term includes all items that are designed to cover the body and are commonly regarded as articles of dress. The Supreme Court further held that the definition of "clothes" does not necessarily exclude items that are worn exclusively for protection, as long as those items are designed to cover the body and are regarded as articles of dress. With respect to the definition of "changing," the Supreme Court again examined the dictionary definition of the term that existed at the time Section 203(o) was enacted, and held that the term can mean either substituting or altering. Accordingly, the Supreme Court concluded that time spent by employees altering their garments by putting on and taking off articles of dress constituted "changing clothes" under the FLSA, and that the employees were not entitled to compensation for such time based on the exclusion set forth in the collective bargaining agreement. Applying these definitions, the Supreme Court considered 12 items of protective gear: a flame-retardant jacket, a pair of pants, and a hood; a hardhat; a snood (which is a hood that covers the neck and upper shoulder area); wristlets; work gloves; leggings; metatarsal boots; safety glasses; earplugs; and a respirator. The Supreme Court found that the first nine items qualified as "clothes," but the last three did not. Thus, the Supreme Court was left to consider the question of whether courts should tally the minutes spent donning and doffing each item, in order to deduct the time spent donning and doffing the non-clothing items from non-compensable time. Recognizing that "it is most unlikely Congress meant Section 203(o) to convert federal judges into time-study professionals," the Supreme Court stated that courts should analyze whether the time period at issue can, on the whole, be characterized as "time spent in changing clothes or washing." The Supreme Court articulated a "vast majority" standard for courts to use in their analysis:
If an employee devotes the vast majority of the time in question to putting on and off equipment or other non-clothes items (perhaps a diver's suit and tank) the entire period would not qualify as 'time spent in changing clothes' under Section 203(o), even if some clothes items were donned and doffed as well. But if the vast majority of the time is spent in donning and doffing 'clothes' as we have defined that term, the entire period qualifies, and the time spent putting on and off other items need not be subtracted.
The Supreme Court concluded that the employees of U.S. Steel spent a vast majority of the time in question donning and doffing items that fell within the definition of "clothes," and that their time was non-compensable under the terms of the collective bargaining agreement. Although courts addressing this issue in the future will be bound by the broad definition of the phrase "changing clothes" set forth in the Supreme Court's Sandifer decision, courts will be left to analyze on a case-by-case basis whether employees spend a "vast majority" of the time in question donning and doffing items that qualify as clothes or non-clothes items.
January 13, 2014
January 8, 2014
January 5, 2014
In collective bargaining, a “final” proposal is often a term of art, used to signal the end of a party’s willingness to move. However, negotiators frequently will continue to move even after a purportedly final offer. In the view of the National Labor Relations Board ("NLRB"), “final” does not always really mean final. Recently, the Fifth Circuit Court of Appeals agreed with the NLRB's view. In Carey Salt Co. v. NLRB, the Fifth Circuit Court of Appeals affirmed the NLRB's holding that labor negotiations had not reached impasse, even though the union had asked for the company’s “final” proposal, the company had provided it, the union had rejected it, and the parties had thereafter confirmed that they were far apart. These facts, on their face, would seem to suggest that the parties had reached impasse, and that the company was therefore entitled at that point to suspend negotiations and implement its final offer. However, the NLRB looked behind these facts, and concluded that the union, when it requested the company’s final offer, had not intended to bring negotiations to a halt. The NLRB credited the union’s testimony that the union had wished only to poll its membership on the company’s position and continue bargaining. The union’s negotiator testified – without significant rebuttal – that his request for a “final” offer had included the caveat that the parties negotiate further after receiving it. Under these circumstances, the NLRB held, and the Fifth Circuit affirmed, that the company had prematurely seized on the final offer phraseology to declare impasse and to decline to meaningfully negotiate thereafter. This strategy had disastrous consequences for the company, not the least of which was that it was ultimately responsible for wages lost during an ensuing strike, which – as a result of the company’s premature cessation of negotiations and implementation of its final offer – was held to constitute an “unfair labor practice strike.” Although the Fifth Circuit does not have jurisdiction over employers in New York, the Court's decision illustrates the treacherous waters that employers in any state must navigate when assessing whether impasse – always an evasive concept – has truly been reached. The Fifth Circuit's decision includes a particularly scholarly recitation on the subject of impasse in collective bargaining, recounting and discussing precedent on this difficult issue. A second issue addressed in the case is whether, and under what circumstances, purportedly “regressive” proposals – i.e., company proposals that reduce previous terms or concessions – can be a factor in assessing “bad faith” bargaining on the part of the company. The NLRB held that the company had bargained in bad faith by introducing so-called regressive proposals. However, the Fifth Circuit rejected the NLRB's position, clarifying that regressive proposals are lawful as long as they are not designed or intended to avoid or frustrate bargaining. The Fifth Circuit found no evidence that the regressive proposals had been deployed in a bad faith manner in this instance. Therefore, the Court rejected the NLRB’s sweeping conclusion of bad faith based on these proposals alone.