ACC Employment and Labor Law May/June 2018 Newsletter
IN THIS ISSUE...
Message from the ELLN Chair  
We've Changed Our Name!  
Have a Say in Your Pay: Take ACC's 2018 Global Compensation Survey  
Jackson Lewis's New Class Action Report Highlights The Impact of Technology  
ACC Foundation Releases Its 2018 State of Cybersecurity Report  
Upcoming Events  
Recent Presentations & Webcasts  
Legal and Legislative Developments  
Join Our Leadership!  
Networks
Virtual Library
Renew Your Membership
Update Your Records
Upcoming ACC Programs
Search Back Issues

Webcasts
Updates from ACC Networks

Message from the ELLN Chair
Kevin Chapman

To our Members:

Our Network’s Outstanding Sponsor – Jackson Lewis

Each year, the ACC gives out an award for the outstanding committee (now Network) of the year.  For the past two years, the Employment & Labor Law Committee (now Network) has received this award, thanks to the hard work and dedication of our members, and also thanks to the very hard work and support of our sponsoring law firm, Jackson Lewis. The ACC also gives out every year an award for the outstanding Sponsor, and this year we’re hoping that Jackson Lewis will be the recipient of that honor.

Members of our Network who are not part of the leadership group likely have little awareness of the wonderful support we get from Jackson Lewis. Most visible to the general membership are the Legal Quick Hit presentations we have at each of our monthly meetings. All of them are prepared and presented by Jackson Lewis lawyers, and all the slides and information are then posted for our members’ use on our website. These presentations, which include substantive legal discussion of breaking issues and new statutes, provide valuable material for all of us to use in our day-to-day practice and from which we can prepare internal memos and do our own presentations on the subjects. Putting together these programs every month for the Network is no small task and we very much appreciate the firm’s efforts.

Jackson Lewis also puts together for us longer webinars that we present as “webcasts” for ACC members. Webcasts are advertised to all ACC members and take an in-depth view of a particular topic. They are also available in the ACC archive for reference and use by ACC members. Jackson Lewis also develops for us InfoPAKs, which is an even deeper dive into a particular subject matter.  These detailed and researched documents take many hours of the firm’s resources and provide huge value to our members.

And for our Annual Meeting programming, Jackson Lewis takes the lead in developing programs, researching the selected topics and providing accompanying substantive materials that provide the CLE certification content for the programs and give valuable materials to participating members.  Jackson Lewis also sponsors a gala dinner/reception during the Annual Meeting, to which all members of the ELLN are invited.

Representatives from the firm meet monthly with our executive leadership team to plan upcoming events and identify topics that are of the most interest to our members. The firm is always willing to take on the challenges we give them and goes above and beyond the minimum requirements for being an ACC sponsoring law firm. All our ELLN members should consider reaching out to Jackson Lewis when you need outside counsel services.  Be sure to let your firm contact know that you are an ELLN member and that you appreciate the great work the firm does for us!
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We've Changed Our Name!
You may have noticed a subtle, but important, change in our name. In an effort to more accurately reflect the global nature of its in-house groups, ACC has renamed its in-house “committees” as legal “networks.” The Employment & Labor Law Committee is now known as the Employment & Labor Law Network. We’re always working to make our services as dynamic and up to date as your legal roles. Our name is no exception. We hope you like it!      
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Have a Say in Your Pay: Take ACC's 2018 Global Compensation Survey

Do you know what you’re worth in the market? Do you want to ensure your legal team is paid competitively to attract and retain the best talent? Help us create the most accurate compensation data for in-house counsel by participating in ACC’s 2018 Global Compensation Survey. The results of the 10-minute survey are of great value to members in the process of conducting a job search or looking to hire. Survey participants will receive a 25% discount for the completed report. Please visit the following link for more information:

 https://accresearch.az1.qualtrics.com/jfe/form/SV_eleLfeQCA06uYCh
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Jackson Lewis's New Class Action Report Highlights The Impact of Technology

Jackson Lewis’s new Class Action Trends Report looks at the latest class-action employment traps emerging in today’s work environment, particularly in the age of digital technology. Social media and other technological developments have altered just about every aspect of modern life. The move from an analog to  the digital world has brought similar changes to the workplace. But it also produces new theories of liability under old causes of action and with new methods of litigating class claims. 

Jackson Lewis examines everything from the impact of cybersecurity on the effects of the #MeToo movement, website accessibility for individuals with disabilities, the growing use and value of employee biometric information, and much more. To learn about the risks of class actions in the digital age and strategies employers can utilize to prevent them, check out the full report here:https://www.acc.com/committees/ellc/upload/Jackson-Lewis-Class-Action-Trends-Report-Spring-2018.pdf
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ACC Foundation Releases Its 2018 State of Cybersecurity Report
Cybersecurity touches every aspect of consumer and corporate culture. Preventing, preparing for, and responding to data breaches in real time is a chief concern for individuals, corporate leaders, and government regulators. Download the 2018 ACC Foundation: the State of Cybersecurity Report, underwritten by Ballard Spahr LLP, and learn what more than 600 corporate counsel say about their cybersecurity experiences, role, and practices. The full report includes common preventative tactics, lessons learned from those who have experienced a breach (including how the breach occurred and who was affected), and more. You can learn more and access the report at ACC’s website here https://www.acc.com/legalresources/resource.cfm?show=1482513
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Upcoming Events

ACC’s Corporate Counsel University - June 20-22, 2018 in Philadelphia, PA

Corporate Counsel University is right around the corner! Join ACC from June 20-22 in Philadelphia. This great learning opportunity is designed for those new to in-house practice, those with less than 5 years of experience, or those who want to sharpen their skills. Sign up today on the ACC website. https://www.acc.com/education/ccu/index.cfm?
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Recent Presentations & Webcasts

Legal Quick Hit - Purple Haze: Separating Fact from Fiction in Today’s Marijuana Environment

Presented by Jackson Lewis, P.C.

Jackson Lewis’ Matthew Nieman, Principal in the Washington, D.C. office of the law firm, presented a timely and important review of medical marijuana laws in the United States.  While currently 29 states have medical marijuana laws, the employment issues associated with these laws have largely remained on the backburner.  Mr. Nieman highlighted key decisions that are bound to shape future U.S. policies related to marijuana and accommodation for individuals using medical marijuana.  Interestingly, the phrase “purple haze” makes reference to the fact that issues surrounding marijuana cuts across party lines.  One key takeaway is that it all boils down to workplace safety. 

Get the presentation materials here http://webcasts.acc.com/handouts/ELLC_April_2018_Presentation.pdf.

Mr. Nieman can be contacted via email at NiemanM@jacksonlewis.com or by phone at 703-483-8331.
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Legal and Legislative Developments

Dodd-Frank Pay Ratio Update – How Companies Are Reacting to Mandatory Disclosure of CEO Salaries

Quick Primer

Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires public companies to disclose, typically in their proxy statement, the ratio between their CEO’s compensation and the median compensated employee.

Determining the Employee Pool.  The median compensation employees is the employee with the median (or middle) total annual compensation in your employee pool.  The employee pool includes all U.S. and non-U.S. hourly and salaried full-time, part-time, seasonal and temporary employees.  A covered company can elect any date within the last three months of the year that will serve as a final “snapshot” of its employee pool from which to select the median compensated employee.

Exceptions

De Minimis Exception – you can exclude a number of non-U.S. employees up to a cap equal to 5% of the total number of your U.S. and non-U.S. employees, but if any employee in one country is excluded, all employees in that country must be excluded.  If you use the de minimis exception, you must disclose the country from which the employees are being excluded, the approximate number of employees excluded from each country, and the total number of your U.S. and non-U.S. employees irrespective of the exception.

Data Privacy Exception – you can can exclude non-U.S. employees in a country where you’re unable to obtain CEO pay ratio info without violating the country’s data privacy laws, despite reasonable efforts (including seeking an exemption or other relief).  Like the de minimis exception, if you exclude any employee in one country, you must exclude all employees in that country.  The excluded non-U.S. employees count against the 5% cap under the de minimis exception.  Also, if you use the exception, you must obtain a legal opinion from counsel that opines on the company’s inability to obtain CEO pay ratio info without violating the country’s data privacy laws, including the inability to obtain an exception or other relief, and file that opinion as a proxy exhibit.

Acquisition Exception – you can exclude any employees that become your employees due to an acquisition for the year in which the transaction occurs.

In lieu of using the entire employee pool, the CEO pay ratio rules permit covered companies to use statistical sampling approach, which generally allows you to avoid gathering data for all employees and instead make certain statistical assumptions about the pay distributions.

Determining What “Compensation” Means.  Covered companies must select a consistently applied compensation measure (or “CACM”) that is used to determine the total annual compensation of each employee in the pool for purposes of finding the median, such as info derived from tax or payroll records (gross earnings, base salary, W-2 wages, etc.).

Permitted Adjustments

Annualization – For full-time and part-time employees who worked only part of the year, you can project the employee’s compensation for the full year.  You can’t annualize compensation for temporary or seasonal employees.

 

Cost of Living – For non-U.S. employees, you can adjust their compensation so that is matches U.S. cost of living.  If the median employee is a non-U.S. employee and you used a COLA, then you must disclose two CEO pay ratios:  one with and one without the COLA.

Pick the Median Compensated Employee and Disclose the Ratio.  Identify the employee in the pool who has the median compensation (based on the CACM and with any annualization and COLA included).  You then recalculate the median employee’s compensation in the same way as you calculate the total column in the proxy’s Summary Compensation Table (“SCT”).  In the 2018 proxy (for calendar year companies), you then disclose the ratio of the CEO’s SCT total compensation to the median employee’s SCT total compensation (e.g., 50 to 1).

 

Companies may electively supplement their pay ratio disclosures with additional information, such as additional ratios.

You can keep the same median employee for up to 3 years, unless there’s been a change in your employee population or compensation arrangements that would significantly impact the pay ratio.

What We’re Seeing in the Data

 

As we get deeper into proxy season for calendar year companies, more and more CEO pay ratios are being disclosed, and consulting firms like Pearl Meyer and Willis Towers Watson are starting to crunch the numbers.

https://www.pearlmeyer.com/ceo-pay-ratio

https://www.towerswatson.com/en/Insights/Newsletters/Global/executive-pay-matters/2018/03/Comparing-CEO-pay-ratios-what-the-first-200-filings-show

Below are the data highlights:

In the S&P 500, the ratios range from 32:1 to 636:1, with an average of 207:1. 

As you would expect, companies with a high non-U.S. workforce in low paying countries, and those with significant part-time or temporary workforces, are reporting lower median pay and higher ratios.  This makes it hard to make an apples-to-apples comparison of ratios, even in the same industry.

I’ve seen data both ways on whether there’s a correlation between the company’s size (market cap, revenue, overall headcount, etc.) and the ratio.  I think the above is more predictive.

Highest ratios in materials, consumer goods, and healthcare industries; while real estate, information technology, and financial sectors have the lower ratios.

The de minis exception is the most frequently used exception.  Looking at different data sets, about 1/3 of companies excluded employees using that exception.  In my opinion, many companies elected not to use it because it made you disclose your total number of U.S. and non-U.S. employees, which is a moving target for many multinationals.

About 10-15% of the companies excluded employees from an acquisition, depending on the data source.

Almost no companies are using the data privacy exception.  The significant administrative burdens for that exception (described above) essentially made it unusable.

The Willis Towers Watson article (link above) had some good data points from its review of 200 S&P 1500 companies

CACMS.  Total cash compensation was the most common CACM (32.5%), followed by W-2 comp (30%), base pay (19.5%), total cash comp and equity (10.5%), total comp with benefits (3.5%), Summary Compensation Table pay (3.0%) and other (1%).

Annualization.  42.5% of the companies annualized pay.

Supplemental Ratios.  Only about 10% of companies disclosed an alternative ratio, including:

3 companies that disclosed a supplemental ratio excluding non-U.S. employees

3 companies that disclosed a supplemental ratio excluding part-time and temporary employees

9 companies that disclosed a supplemental excluding a one-time equity award for their CEO

Very few companies are using statistical sampling or a COLA in their calculations.  For statistical sampling, in my opinion, companies did not want to be seen as manipulating the data, exposing them to attack from the press, shareholders, unions, or other constituencies.  For COLA, the rule that required you to disclose ratios with and without the COLA defeated the purpose.

Key Takeaways

So far, it appears covered companies are not taking a lot of chances in the first year, and they are keeping the pay ratio disclosures short and at the bare minimum for compliance (average length of about 377 words).

Large institutional shareholders have indicated that they will not rely on the pay ratio as a basis for their voting decisions.  Consistently, the proxy advisory firms ISS and Glass Lewis have not incorporated the pay ratio into their voting recommendation policies.

There’s been some negative press about high or potentially distorted CEO pay ratios, but much quieter than people have expected.

As more data becomes available and year-over-year trends emerge, perhaps the ratio will have more voting relevance or become a basis for shareholder lawsuits.

U.S. Supreme Court Rules for Colorado Baker in Same-Sex Couple Case

On June 4, the U.S. Supreme Court ruled in Masterpiece Cakeshop, Ltd., et al. v. Colorado Civil Rights Commission et al. that a state anti-discrimination agency failed to properly consider the sincerely held religious beliefs of a Colorado baker who refused to create a wedding cake for a same-sex couple.  You can read the Court’s opinion here https://www.supremecourt.gov/opinions/17pdf/16-111_j4el.pdf

Masterpiece Cakeshop, Ltd. is a Colorado bakery owned and operated by Jack Phillips, an expert baker and devout Christian.  In 2012, Phillips told a same-sex couple that he would not create a cake for their wed­ding celebration because of his religious opposition to same-sex mar­riages—marriages that Colorado did not then recognize—but that he would sell them other baked goods, e.g., birthday cakes. The couple filed a charge with the Colorado Civil Rights Commission pursuant to the Colorado Anti-Discrimination Act (CADA), which prohibits discrimination based on sexual ori­entation in a “place of business engaged in any sales to the public and any place offering services . . . to the public.” 

The Colorado Civil Rights Division found probable cause for a violation and referred the case to the Commis­sion.  The Commission then referred the case for a formal hearing be­fore a state Administrative Law Judge (ALJ), who ruled in the cou­ple’s favor.  The ALJ rejected Phillips’ argument that requiring him to create a cake for a same-sex wedding would violate his right to free speech by compelling him to exercise his artistic talents to express a message with which he disagreed and would violate his right to the free exercise of religion.  Both the Commission and the Colorado Court of Appeals affirmed the ALJ’s ruling in favor of the same-sex couple.  Upon certiorari, the U.S. Supreme Court reversed.  

In a 7-2 vote, with Justices Ginsberg and Sotomayor dissenting, the Supreme Court held the Commission violated Phillips’ rights under the Free Exercise Clause of the First Amendment of the Constitution.  Writing for the majority, Justice Anthony Kennedy said that while it is unexceptional that Colorado law “can protect gay persons in acquiring products and services on the same terms and conditions that are offered to other members of the public, the law must be applied in a manner that is neutral toward religion.” 

Describing the Commis­sion’s treatment of Phillips’ case, Justice Kennedy wrote the commissioners “showed elements of a clear and impermissible hostility toward the sincere religious beliefs moti­vating his objection.”  He added the commissioners “endorsed the view that religious beliefs cannot legitimately be carried into the public sphere or commercial domain, disparaged Phillips’ faith as despicable and characterized it as merely rhetorical, and compared his invocation of his sincerely held religious beliefs to defenses of slavery and the Hol­ocaust. No commissioners objected to the comments … The comments thus cast doubt on the fairness and impar­tiality of the Commission’s adjudication of Phillips’ case.” 

Focusing on the issue of neutral application of the law, Justice Kennedy found the Commission’s treatment of Phillips’ case violated the State’s duty under the First Amendment not to base laws or regulations on hostility to a religion or religious viewpoint.  “The government, consistent with the Constitution’s guarantee of free ex­ercise, cannot impose regulations that are hostile to the religious be­liefs of affected citizens and cannot act in a manner that passes judgment upon or presupposes the illegitimacy of religious beliefs and practices.”

The Court vacated the lower court decision without reaching the question of whether individuals are permitted to violate otherwise neutral anti-discrimination laws based on their religious beliefs.  Future cases must be resolved “with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”  The Court’s decision contrasts with several lower courts, which have asserted in similar cases that personally-held religious beliefs cannot trump individually protected civil rights.  For a comparison, see the Sixth Circuit decision in EEOC v. R.G. & G.R. Harris Funeral Homes, described in the Policy Subcommittee Report below.  

Policy Subcommittee

Pregnancy Protection Legislation Trend Continues

The trend of state and local governments enacting legislation to protect pregnant and nursing women continued this month, with South Carolina’s version of the law becoming effective on May 17, 2018. In general the South Carolina law is a carbon copy of those the Policy Subcommittee has seen in other jurisdictions, and essentially applies Americans with Disabilities Act protections to pregnant and nursing mothers.

The Policy Subcommittee expects this trend to continue, and recommends that companies begin updating relevant policies to provide the ADA interactive process to pregnant and nursing mothers.

For More Information: https://www.jacksonlewis.com/publication/south-carolina-enacts-new-pregnancy-accommodation-requirements

Non-Compete Covenant Reform

Although the courts have long reigned in the use of non-compete clauses in employment agreements, several state legislatures are considering laws that would curtail their use even further. Below is a partial summary of pending legislation at the state level, courtesy of Fisher Phillips LLP.  These bills are not yet law (and may not become law), but are on the Policy Subcommittee’s radar.  If you believe that one of these laws would impact your business, please let the Policy Subcommittee know and we can submit a comment on the ACC’s behalf.

  • Massachusetts: House Bill 4419 is an amalgam of eight pending bills before the Massachusetts legislature. If enacted, the Bill would:
    • Limit the enforcement period of non-competes to 12 months or less (unless the employee is a “bad actor”);
    • Require non-competes to be signed by both the employer and the employee, and to state that the employee has the right to consult counsel;
    • Require the employer to provide the employee the with the non-compete agreement the earlier of the time of the formal offer or ten business days before commencement of employment;
    • Make continued employment alone insufficient consideration for a binding non-compete agreement; and
    • Uphold existing aspects of Massachusetts non-compete law.
  • New Hampshire: Senate Bill 423, “An Act relative to non-compete clauses for low-wage employees” would ban non-competes between employers and “low-wage employees.” The Bill defines “low-wage employees” as an employee who earns the greater of: “(1) the hourly rate equal to the minimum wage required by the applicable federal minimum wage law; or (2) $15.00.”
  • New Jersey: Senate Bill 3518 proposes new limitations on the enforcement of restrictive covenants. Specifically, if the Bill is passed, employers would need to do the following to enforce their restrictive covenants: (1) disclose the terms of the non-compete in writing to a prospective employee by the formal offer of employment or 30 business days before the commencement of employment, whichever is earlier; (2) limit the non-compete so that it is only protects the legitimate business interests of the employer, including trade secret information; (3) limit the duration to 12 months or shorter; (4) limit the geographical reach to areas in which the employee provided services or had a material presence or influence during the two years preceding the date of termination; (5) limit the scope of activities in relation to only the specific types of services provided by the employee at any time during the last two years of employment; and (6) not restrict an employee from providing a service to a customer or client of the employer, if the employee does not initiate or solicit the customer or client. The Bill also prohibits enforcement against certain types of employees, including low-wage employees. Further, the Bill puts an economic burden on employers seeking to enforce their restrictive covenants. During the enforcement period, the employer would be required to “pay the employee an amount equal to 100 percent of the pay which the employee would have been entitled for work that would have been performed during the period prescribed under this section,” including benefits contributions and fringe benefits. Finally, the Bill requires the former employer seeking to enforce its non-compete to act quickly. Indeed, the Bill requires employers to notify former employees in writing of its intent to enforce the agreement no later than 10 days after termination, or the agreement becomes void. This quick turnaround, when combined with the commitment to paying 100 percent pay and benefits, could easily lead to under-enforcement.
  • Pennsylvania: House Bill 1938, the “Pennsylvania Freedom to Work Act,” would ban non-competes in Pennsylvania. The proposed ban would only ban non-competes and would not apply retroactively. This Bill also prohibits forum-shopping and other workarounds by requiring any “dispute arising out of or related to a covenant not to compete involving a resident of [the] Commonwealth” to be “[e]xclusively decided by a State court within [the] Commonwealth” and governed by Pennsylvania law.
  • Vermont: House Bill 566 would ban employee non-competes. The Bill itself does not define “noncompetes.” Rather it prohibits “agreement[s] not to compete or any other agreement that restrains an individual from engaging in the lawful profession, trade, or business.

    Click here to see Fisher Phillips’ full article: https://www.fisherphillips.com/Non-Compete-and-Trade-Secrets/part-iii-state-legislatures-initial-response-to#page=1

    Sixth Circuit Declares Transgender Status as Protected Class Under Title VII

    In early March, the Sixth Circuit became the first U.S. Court of Appeals to hold that transgender status is a protected class under Title VII.  The case arose when a funeral home owner terminated his funeral director for being a transgender person, because of his religious beliefs that transgender persons were acting against God’s will.  The Sixth Circuit held that the former funeral director could assert a claim for sex discrimination based on gender stereotypes, consistent with other courts’ decisions.  But the Sixth Circuit panel went further, holding that Title VII prohibits all discrimination based on transgender and transitioning status.  The Court expressed agreement with the Seventh and Second Circuits (in the Hivelyand Zarda cases), which have recently held that sexual orientation is a protected characteristic under Title VII.   The Court rejected the owner’s religious beliefs as a defense under the Religious Freedom Restoration Act of 1993, concluding that an individual’s religious beliefs can never legally justify discrimination absent a statutory exemption.  EEOC v. R.G. & G.R. Harris Funeral Homes

    New Jersey Enacts One of the U.S.’s Toughest Pay Equity Laws

    In April 2018, New Jersey Governor Phil Murphy signed a sweeping pay equity bill in April 2018 that some have called the nation’s toughest law against pay discrimination.  The measure prohibits unequal pay for “substantially similar work” based on a broad range of protected categories with only a few narrow exceptions such as bona fide occupational qualification.  The law increases the burden on employers to justify pay differences based on gender, race, national origin, age, marital status, sexual orientation, genetic information, disability, veteran status, or any other protected characteristic.  Victims of pay discrimination can sue for up to six years of back pay and the law includes treble damages, a continuing violations approach, and a ban on waivers of rights provided under the new law.  For the full text of the bill click here http://www.njleg.state.nj.us/2018/Bills/A0500/1_I1.PDF

    DOL Announces PAID Program to Encourage Voluntary Reporting of Wage & Hour Violations

    On March 6, 2018, the U.S. Department of Labor announced a six-month nationwide pilot program to encourage the voluntary reporting of wage & hour violations by employers.  Under the Payroll Audit Independent Determination (PAID) Program, employers who are not in litigation or under investigation can report wage & hour violations voluntarily to the DOL to insulate themselves against litigation.  The DOL would supervise the payment of any back pay, and employees would retain the right to “opt out” of the program to retain their private right of action under the FLSA.  

    Eleventh Circuit Upholds Jury Verdict That Employer’s Hiring Preference for Laid-Off Employees Was Pretext for Discrimination

    On March 16, 2018 the Eleventh Circuit Court of Appeals upheld a gender discrimination jury verdict against an employer that was following its hiring preference for employees who were about to be laid off.  Under the employer’s policy, a laid off employee would have priority over other internal and external candidates as long as he or she was minimally qualified for the role in question, even if other candidates were better qualified.  The female plaintiff was denied promotion in favor of a laid-off male employee who was less qualified.   The Eleventh Circuit concluded that the manager had discretion to select the plaintiff despite the hiring preference policy, and that in this instance the manager opted for the male employee at least in part because of gender animus (he had told the plaintiff that he would never hire a woman for a manager role).  The court upheld back pay and compensatory damages, but reversed an award of punitive damages.  EEOC v. Exel, Inc., 2018 U.S. App. LEXIS 6629 (11th Cir. 3/16/18).

    Fifth Circuit Vacates the U.S. Department of Labor’s Fiduciary Rule

    On March 15, 2018, the Fifth Circuit Court of Appeals vacated in its entirety the DOL’s conflict of interest regulation and its related prohibited transaction exemptions.  The court concluded that the DOL exceeded its authority in promulgating the rules.   The Trump Administration had already declared that it would not enforce these rules pending the outcome of the legal challenge.

    For more information or to get involved with the Policy Subcommittee, we encourage you to contact Committee Chairs Gregory Watchman at Gregory.watchman@freddiemac.com, Colleen Higgins Schultz at cschultz@ti.com, Michelle Walters at michelle_walters@uhaul.com, or Ryan Brown at rbrown@rosettastone.com.

    Health & Safety Subcommittee

     

    OSHA Announces Enforcement of Beryllium Standard Will Take Effect in May

    The federal Occupational Safety and Health Administration (OSHA) recently announced it will begin enforcement of the final rule on occupational exposure to beryllium in general, construction, and shipyard industries on May 11, 2018.  The start of enforcement had previously been set for March 12, 2018. 

    In January 2017, OSHA issued new comprehensive health standards addressing exposure to beryllium in all industries. In response to feedback from stakeholders, the agency considered technical updates to clarify and simplify compliance with requirements. This new timeframe will ensure that stakeholders are aware of their obligations and that OSHA provides consistent instructions to its inspectors.

    In May, OSHA also began enforcing the new lower 8-hour permissible exposure limit (PEL) and short-term (15-minute) exposure limit (STEL) for construction and shipyard industries.  If an employer fails to meet the new PEL or STEL, OSHA will inform the employer of the exposure levels and offer assistance to assure understanding and compliance.

    To access OSHA’s final rule on occupational exposure to beryllium see https://www.osha.gov/laws-regs/federalregister/2018-03-07

    Powered Industrial Trucks Standard – Information Collection Requirements

    This ICR seeks to extend PRA authority for the Powered Industrial Trucks Standard information collection. The Standard contains several information collection requirements addressing truck design, construction, and modification, as well as certification of training and evaluation for truck operators. Occupational Safety and Health Act of 1970 sections 2(b)(9), 6(b)(7), and 8(c) authorize this information collection. See 29 U.S.C. 651(b)(9), 655(b)(7), 657(c).

    To access OSHA’s published ICR on the Industrial Trucks Standard see https://www.osha.gov/laws-regs/federalregister/2018-03-01

    For more information or to get involved with the Health & Safety Subcommittee, we encourage you to contact Committee Chairs Alex Giftos (Caterpillar, Inc.) at Giftos_alexander_c@CAT.com, Linda Jo Carron (Hyster-Yale Group) at lindajo.carron@hyster-yale.com, or Renee Grant Bluechel (Zulily Co.) at rgrantbluechel@zulily.com.

    Labor Subcommittee

    Class Arbitration Agreements Held Lawful

    The U.S. Supreme Court has held that Class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA).  The decision resolves the circuit split on whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA). The justices, in a 5-4 ruling authored by Justice Neil Gorsuch, held that the Federal Arbitration Act states that arbitration agreements providing for individualized proceedings are enforceable and neither the FAA nor the NLRA require otherwise. The Court’s conservatives including Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito joined in that decision authored by Justice Neil Gorsuch.

    Citation: Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018).

    McDonald’s Seeks Approval of Joint Employer Settlement

    Earlier this year, on March 19, 2018, McDonald’s and its franchisees submitted a proposed settlement to resolve outstanding litigation concerning alleged labor law violations by McDonald’s franchisees.  The key issue was whether McDonald’s USA should be considered a joint employer with its franchisees, making it liable for their labor law violations. Since the inception of this matter, the Board has changed the standard as to what constitutes a joint employer relationship at least twice. The settlement agreement between McDonald’s and the Board must still be approved and is reported to provide the charging parties with full back pay for the alleged violations while not requiring McDonald’s to admit to any wrongdoing. The settlement leaves open the question as to whether McDonald’s is a joint employer with its franchisees, providing no precedent for employers to follow.  The expanded joint employer test under Browning Ferris stands for now, but as reported last month, we expect that the Board will revisit this standard once it is at full strength with a Republican-majority Board.

    Citation: National Labor Relations Board, News Release (03/14/18) https://www.nlrb.gov/news-outreach/news-story/proposed-settlement-agreements-presented-mcdonald%E2%80%99s-usa-llc-et-al.

    NLRB Upholds Discipline in Context of Protected Concerted Activity

    In KHRG Employer, LLC, the Board held that an employee who improperly accessed a secure area of the employer lost the protections of the NLRA even though he did so in order to engage in protected concerted activity. The employee lied to a security guard and used an access code to allow a group of 20 employers to access a secure non-public area of the employer to deliver a petition about working conditions.  The Board noted that the employer was careful to discipline the employer for violation of company policy and not related to the protected concerted activity.

    Citation: KHRG Employer, LLC, 366 NLRB No. 22 (Feb. 28, 2018).  

    NLRB General Counsel Publishes Annual Exchange with the ABA Practice and Procedure Under the National Labor Relations Act Committee of the Labor and Employment Law Section. 

    As prior General Counsels have done, NLRB General Counsel Peter Robb published the annual report of questions and answers with the ABA Practice and Procedure Under the NLRA Committee. The latest report, published on March 14, 2018, covers a wide range of topics about NLRB case handling processes including commentary on hot labor topics, case processing times lines including unfair labor practice charges and representation elections and summary statistics.

    Citation: National Labor Relations Board, General Counsel Memo, Memorandum GC 18-03 (03/14/18) https://www.nlrb.gov/reports-guidance/general-counsel-memos.  

    For more information or to get involved with the Traditional Labor Subcommittee, we encourage you to contact Committee Chairs Micah Heilbrun at micah.s.heilbrun@exxonmobil.com or Darryl Uffelmann at darryl.uffelmann@anheuser-busch.com, Douglas Hass at douglasH@lifeway.net, or Gregg Formella at gregg.formella@gmail.com


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Join Our Leadership!
ELLN is looking for members interested in serving as Network Secretary as well as leadership positions for various subcommittees. This is a great way to meet your colleagues and help shape the future of the Employment and Labor Law Network. If you would like to volunteer or learn more about what’s available, please get in touch with the ELLN Chair, Kevin Chapman, at kevin.chapman@dowjones.com.
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