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Michigan’s premier employment law blog

Title VII Extends Protection to Sexual Orientation Says the Seventh Circuit

By: Dan Cohen – 4/6/17

Earlier this week, the 7th Circuit Court of Appeals became the first federal appellate court to extend Title VII of the Civil Rights Act of 1964 to workplace discrimination on the basis of sexual orientation. The decision should not come as a surprise following the announcement last July by the Equal Employment Opportunity Commission that Title VII does prohibit discrimination on the basis of sexual orientation, which would be considered a form of sex discrimination.

The case was filed in 2014 by Kimberly Hively, a former part-time instructor at Ivy Tech Community College who said the college did not hire her full-time because she was a lesbian. Ivy Tech denied her claim. The federal trial court dismissed the case finding that Title VII did not protect against discrimination on the basis of sexual orientation. The 7th Circuit initially agreed with the trial court and affirmed the dismissal of the case.  However, the 7th Circuit decided to rehear the appeal en banc (before the entire bench) and reversed the lower court in an 8-3 decision.

According to Chief Judge Diane P. Wood, “Hively’s claim is no different from the claims brought by women who were rejected for jobs in traditionally male workplaces, such as fire departments, construction, and policing.” Judge Wood went on to conclude that sexual orientation is a form of discrimination based upon sex. Judge Richard Posner, in his concurring opinion, acknowledged that even though Title VII was passed without consideration of one’s sexual orientation, the concept of sex discrimination has since broadened as society’s definitions of gender and sex have also broadened.

The dissenting opinion, written by Circuit Judge Diane Sykes, argued that extending Title VII protection to sexual orientation violates constitutional design and gives the court a power left for Congress. According to Judge Sykes, “however welcome today’s decision might be as a policy matter, it comes at a great cost to representative self-government.” Moreover, rejecting the notion that sexual orientation is a form of sex discrimination, Judge Sykes noted the many federal statutes that refer to both sex and sexual orientation separately.

If it stands, the decision gives Kimberly Hively and other gay and lesbian people the right to sue over what they perceive as discriminatory employment practices based on their sexual orientation. This does not end the case, which will now proceed to trial on the merits unless Ivy Tech seeks to involve the Supreme Court. However, with the current composition of the High Court, a 4-4 ruling is likely, which would not change the outcome.  Of course, one can see how confirmation of Judge Neil Gorsuch could affect the outcome of this issue when it does reach the Supreme Court.

From my standpoint, I do not believe the case requires employers to do anything different or special. We have been preaching to our clients for my entire career that decisions should be based upon legitimate, non-discriminatory business reasons, that those decisions be well-documented and that policies and rules be applied uniformly.  This decision does not change that approach.  Moreover, many businesses have already modified their EEO policies to include sexual orientation and gender identity as protected classifications.  This ruling does not necessarily require that since the rationale of the 7th Circuit is that discrimination on the basis of sexual orientation is a form of sex discrimination, which is already a protected classification.  I do, however, think it’s a good idea to include catch-all language that extends the policy to “any other protected classification.”  If you conduct business in a state or municipality that specifically protects against discrimination on the basis of sexual orientation and gender identity, it is probably worth making the modification.

Don’t Miss This Unique Opportunity To CYA … I mean, Fix Salaried-Exempt Misclassifications

Don’t Miss This Unique Opportunity To CYA … I mean, Fix Salaried-Exempt Misclassifications

Looming Required Changes Can Help Disguise Past Problems

By: Bill Pilchak – 08/17/16

     The federal government has issued so many regulations that many (most?) companies cannot comply with them all. The Government Accountability Office reports that federal regulators issued 2,400 new rules during the 2014 “presidential year” (1/21/14-1/20/15). In our field of labor and employment law, employers must abide by statutes and corresponding regulations under the Affordable Care Act , OSHA, the Family and Medical Leave Act, the Fair Labor Standards Act, Title VII, the Americans with Disabilities Act, Sarbanes-Oxley, Department of Transportation driver regulations, the plant closing law (WARN), affirmative action, prevailing wages on government contracts, Fair Credit Reporting Act, HIPAA (health information), H1b + other immigration issues, ERISA pension, health and welfare plans, deemed export regulations, etc. (Whew!) The federal regulations under those statutes comprise more than 25000 pages plus innumerable safety standards, guidance memoranda and technical “assistance” manuals.

     Worse, in addition to the regulatory labyrinth of labor and employment laws, our clients must comply with regulations on customer credit and financial data, environmental issues, food safety, product safety, patents and trademarks, taxation and more.

     Inevitably, compliance slips through the cracks. Many new clients come to us only after some agency has levied fines or an attorney asserts claims under some regulation unknown to them.

     As it turns out, most businesses share one species of non-compliance that sits like a time bomb within them: treating employees as salary-exempt when the position does not meet the technical requirements to avoid overtime.  We have written before how plaintiff-side attorneys now find it profitable to delve into the FLSA regulations to ensnare non-compliant companies. (See: Aesop for Employers http://mi-worklaw.com/aesop-for-employers-the-hyenas-and-the-maze/)

     Employers assume that as long as somebody performs non-manual, white collar work that they may be paid a salary without overtime for hours worked over 40 in a week. Not true. To be exempt from overtime, technical requirements must be met. Some frequent examples of misclassifications are:

  • “Administrative” employees must exercise independent judgment and discretion on matters of significance to qualify as salaried-exempt. So, many administrative assistants (executive secretaries) do not qualify; Office managers often lack the requisite authority; Employees who simply match facts to criteria (e.g., credit scores to interest rates; driving records to insurance rates) may not qualify.
  • “Executive” employees must have as their primary duty managing an enterprise or department with at least two fulltime employees (or part time equivalents) with the right to hire and fire or at least make recommendations that are given weight. Working supervisors might not qualify.
  •  “Professional” employees must be in a position that requires advanced knowledge typically obtained in a prolonged course of study. A PhD doing a job that others perform with only a Bachelor’s degree will not qualify. Moreover, the Dept. of Labor is stingy about designating “engineers” as professionals unless they do top-level engineering work.

     Misclassifications are time-bombs because an employee can bring overtime claims for the past two or three years, often in the form of a class (collective) action either during employment or after separation. For each $45,000 per year employee working only 45 hours per week, the overtime due would be $32,445 to $48,667 plus attorney fees that can run into six figures. At 50 hours, the liability increases to $64,950 to $97,425. (hourly rate x 1.5 x 5 (or 10) hours per week x 50 weeks (2 wks vac.) x 2 years (or 3) x 2 double damages)

     The usual dilemma is that fixing the problem often alerts employees that they have been owed overtime all along, which then results in claims.

     For the next few months only, employees can fix misclassifications with less chance of provoking claims.  Under new regulations effective December 1, 2016, employees paid a salary of less than $47,476 per year must be paid overtime.  Employers will have to reclassify them or give them raises.  The new regulation provides a “reason” to start paying employees overtime without implying they were misclassified in the past.  Since the salary threshold will adjust every three years, reclassifying those making more than $47,476 could be justified in anticipation of future increases. Reclassifying those well beyond $47,476 poses more of a risk, but still, careful working announcing a change as part of a broader new reclassification program could help disguise past arguable misclassifications.

     What to do right now: Smart employers should conduct a privileged (with their counsel) audit of salaried positions with counsel in the next 60 days, to identify and cure misclassifications as part of a change in payroll practices required by the new regulations.

Of course, Pilchak & Cohen can help in that regard.

Find us at MI-Worklaw.com.

The Smartest Man In The World Syndrome

The Smartest Man In The World Syndrome

By:  Bill Pilchak – 7/28/16

The current political landscape is causing people to have all sorts of thoughts about Presidential candidates that might not have entered our heads in the past. The politics of the past few days have touched on a phenomenon we often observe in our practice: The Smartest Man In The World Syndrome.  You may observe my own leanings in the commentary on politics below, but the ultimate point is non-partisan and relevant to business leaders.

The political/business point today is that for the umpteenth time in the campaign, Donald Trump has blurted something out which might have made an important and helpful point if articulated with a little attention to content and context. Any serious observer of politics notes with bemusement and derision how the Wiki-Leaks disclosure of Anti-Bernie e-mails has been spun and legitimate concerns obscured in recent days:

  • Wiki-Leaks releases e-mails showing the DNC sabotaging the Sanders campaign. (Legitimate, take-away-point: the system was rigged in favor of Hillary, just as Sanders had said);
  • DNC and FBI (i.e. the Obama administration) say the hackers were Russians. (Shifting attention from the DNC’s misconduct. Instead of the media’s point becoming: “If the Russians hacked the DNC, don’t we have to assume they hacked Hillary’s private server?” the media stressed: “The Russians are interfering in our election” – by disclosing true facts.)

One of more insightful talking heads addressed the question as to why the Russians did what they did.  Does Putin really prefer that Trump have his finger on the nuclear button rather than Clinton, who presided as Secretary of State while the U.S. stepped down from its world leadership role and who promises to continue the Obama legacy of drawing but not enforcing red lines in the sand, troop withdrawals and promising more flexibility on missile disarmament once he did not face another election?  The talking head expressed concern that the Russians posted the DNC e-mails as a warning to Clinton that they had hacked her server too, had the 30,000 e-mails she deleted and could disclose them (and bring her down?) any time they chose.  In other words, the concern was that the Russians could blackmail her.

Trump seems incapable of expressing a nuanced thought like that and apparently does not listen to advisors. He came close to the legitimate concern, but blundered into his opponents’ hands by inviting the Russians to disclose Hillary’s deleted e-mails.  Earlier this week, he defended Roger Ailes and sought to discredit his accusers, when even the most junior HR generalist knows that because Fox News and Ailes parted ways, Fox must have found corroboration of the harassment allegations.

Like most business leaders at the top of the organization, Trump suffers from being surrounded by yes-men who always agree with the boss’ observations. When no one tells the boss he is wrong, he believes his perspective is the truth.  (Yes, “he;” the syndrome seems to be gender-specific.) This happens to be a constant problem in our practice. In virtually every case, the owner, president or chairman is the witness we worry about most before deposition and trial.  Since he thinks he is always right, the top dog sees no value (and claims he does not have the time) to fact-check his perspective against documents, data, others’ opinions, etc., or participate in preparation sessions that might disturb his view.  Accordingly, our defense often has to steer-around Trump-like statements that are unsupported by the established facts and inconsistent with our theory of the case.  At the very least, the unchecked statements by the biggest boss provide a “question of fact” that requires a trial and precludes dismissal.  In the worst cases, the improvident statements blow up the Company’s case.

Fortunately, there are two effective treatments for The Smartest Man In The World Syndrome.  First, instead of gnashing your teeth when you next hear a Trumpism, drill down and consider why he lacks the broader perspective others might have.  Who is at his elbow, and why are they not telling him the emperor has no clothes?  Resolve to tamp down our own ego and listen to others who disagree.  Trump has brilliant kids who delivered commanding speeches at the RNC, but if he wants to overcome The Smartest Man In The World Syndrome, he should hire my daughter, Noelle.   Noelle isn’t afraid to tell “the big guy” that his perspective has more holes than Michigan roads, although I must admit, I am getting smarter as she gets older.

The second antidote is a bit easier: Read the Dilbert comic in the funny pages every day. Scott Adams has a gift for illustrating how clueless executives can be.  Study the messages there, and you soon won’t be the “pointy-headed” boss that people laugh at in the office – or on nationwide TV.

Are You Covered?

Are You Covered?

By:  Dan Cohen – 7/25/16

In the past few months, I have had conversations with several clients about their obligations under the panoply of federal laws with which they must comply. I don’t know why it surprised me to know that my most sophisticated clients are not entirely clear on which federal laws apply to them. Given the rash of new federal regulations and constant changes in the law, business owners and human resource professionals practically have to be Philadelphia attorneys to have any hope of staying on top of their obligations. So, what are the thresholds in the private sector for major federal employment laws?

EPA—1 employee: The Equal Pay Act requires employers to pay equal wages to men and women in most conditions.

FLSA—1 employee: The Fair Labor Standards Act establishes minimum wage, overtime pay, recordkeeping and child labor standards for employers with a sales volume of $500,000 or that operate in interstate commerce .

ADA—15 employees: The Americans with Disabilities Act prohibits employers with 15 or more workers from discriminating against employees or applicants because of disability, a record of a disability or a perceived disability.

Title VII—15 employees: Title VII of the Civil Rights Act prohibits employers from discriminating against employees based on race, color, religion, sex and national origin.

PDA—15 employees: The Pregnancy Discrimination Act prohibits discrimination on the basis of pregnancy, childbirth or any other related medical issues.

GINA15 employees:  Title II of the Genetic Information Nondiscrimination Act protects individuals against employment discrimination on the basis of genetic information.

ADEA—20 employees: The Age Discrimination in Employment Act prohibits companies with 20 or more workers from discriminating against people age 40 or older in hiring, firing, wages and benefits.

COBRA—20 employees: The Consolidated Omnibus Budget Reconciliation Act mandates continuing coverage when an employer with 20 or more workers offers health coverage.

FMLA—50 employees: The Family and Medical Leave Act grants up to 12 weeks of job-protected, unpaid leave to certain workers in companies with 50 or more employees who work within a 75-mile radius of the work site.

ACA—50 or more full-time employees or equivalents: The Affordable Care Act requires large employers to offer full-time employees affordable qualifying health care benefits to avoid the possibility of penalties.

WARN—100 employees: The Worker Adjustment and Retraining Notification Act requires companies to give at least 60 day notice of closings and mass layoffs.

Many of these laws require that a covered employer have the requisite number of employees “for each working day during 20 or more calendar workweeks in the current or preceding calendar year.” (See e.g., ADA, ADEA, FMLA, Title VII)

If you are below the coverage thresholds of the above federal laws, you are not necessarily without obligations concerning the subject matter of these laws. Most states have parallel legislation. For example, in Michigan, employers of all sizes are covered by the Elliott Larson Civil Rights Act, which protects employees from employment discrimination. The ELCRA protects each of the classifications protected under Title VII, but also prohibits employment discrimination on the basis of height, weight, age, familial status and marital status. The Michigan Persons with Disabilities Act also applies to employers regardless of size and protects against disability discrimination. The Michigan Payment of Wages and Fringe Benefits Act and the Michigan Whistleblower’s Protection Act also apply to employers of all sizes. Coverage under the Michigan Minimum Wage Act requires at least two employees.

One final note: Make sure you know the thresholds for coverage under the various state laws where you conduct business.


NLRB Weakens Employer’s Right to Hire Permanent Replacements

NLRB Weakens Employer’s Right to Hire Permanent Replacements

By:  Dan Cohen – 6/7/16

On May 31, 2016, in a 2-1 decision by Chairman Mark Pearce and Member Kent Hirozawa, the NLRB has once again disrupted an employer’s right to protect its business interests. The case is American Baptist Homes of the West, 364 NLRB No. 13, and the issue pertains to an employer’s right to permanently replace economic strikers.  Nearly 80 years ago, the Supreme Court established an employer’s right to permanently replace economic strikers as an “economic weapon” when faced with an economic strike. Mackay Radio & Telegraph Company, 304 U.S. 333 (1938).  While it is true that neither the Mackay Radio decision nor subsequent Board decisions suggested that the employer’s right was absolute, the Board adopted a rule back in 1964 disallowing scrutiny into the employer’s motive for hiring permanent replacements.  Indeed, the Board had held that the employer’s motive for such replacement to be immaterial absent evidence of “an independent unlawful purpose” extrinsic to the strike.  Thus, an employer had a recognized right to permanently replace economic strikers to continue is operation and counteract the union’s ultimate economic weapon.

After receiving notice from the SEIU that workers would go on strike on August 2 and unconditionally return on August 7, American Baptist retained a staffing firm to temporarily staff its continuing care facility in Oakland, California during the strike. American Baptist extended temporary employment offers to 60-70 staffing employees at a cost of $300,000.  Eighty of the 100 bargaining unit employees went out on strike on August 2.  Shortly thereafter, American Baptist started permanently replacing the striking employees by making 44 permanent job offers.  Within 24 hours of the anticipated return to work date set by the SEIU, striking employees were notified that they would be placed on a preferential hiring list.  When the striking employees returned on August 7 consistent with the prior offer of unconditional return, only some were permitted to work.  The majority were advised they had been permanently replaced and would be placed on a preferential hiring list.

The ALJ concluded that American Baptist’s’ motivation for permanently replacing the strikers—to teach the strikers “a lesson” and ensure that employees would not strike again—was related to the underlying strike and therefore did not constitute an “independent unlawful purpose.” The Board disagreed and found the permanent replacement of the strikers in violation of the NLRA. According to Chairman Pearce and Member Hirozawa, General Counsel does not have the burden of showing an unlawful purpose extrinsic to the strike, but, rather, only that the hiring of permanent replacements was motivated by a purpose prohibited by the Act.  The majority then determined that hiring permanent replacements to “teach the union a lesson” and to “curtail future strikes” were both independently unlawful.  As for the latter reason, the majority concluded that the evidence established an independent unlawful motive, specifically, a desire to interfere with employees’ future protected activity.

Replacing striking workers always has the effect of dissuading future strikes, but until this ruling, it was a long-recognized economic weapon of management. Apparently, this Board intends to divest management of their “equalizer” economic weapon.  This should not come as much of a surprising given the Board and General Counsel’s objectives of strengthening unions at every chance they get.  By changing the meaning of “independent unlawful purpose” to nothing more than antistrike animus, which the Supreme Court long ago recognized as a given when faced with a potentially devastating economic strike, the majority now suggests that economic strikes should be a “risk free” proposition for strikers. American Baptist is likely to appeal this decision, but for now, employers facing strikes and entertaining the idea of permanent replacements must be exceedingly careful.  One word to the wise—it is probably not a good idea to tell the Union that you permanently replaced the workers to “teach the union a lesson” and to “curtail future strikes.”  I would suggest making the decision to permanently replace economic strikers as a means of carrying on the business, nothing more and nothing less!



New Trade Secret Protection Coming to a Federal Court Near You

New Trade Secret Protection Coming to a Federal Court Near You

 By:  Dan Cohen – 5/17/16

         On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (DTSA), which amends the Economic Espionage Act of 1996 and adds a civil remedy for misappropriation of trade secrets. The ESA had been limited to criminal remedies with investigations and prosecutions conducted by the U.S. Attorney’s office. The law provides a new federal civil cause of action to trade secret owners whose misappropriated trade secret is “related to a product or service used in, or intended for use in, interstate of foreign commerce.” Trade secret owners can now recover:

    • their actual damages caused by the misappropriation;
    • damages for unjust enrichment;
    • injunctive relief to prevent actual or threatened misappropriation;
    • exemplary damages for “willful and malicious misappropriations (up to twice the amount of actual damages);”
    • reasonable attorney’s fees

          The law also provides authority to courts to condition future use of the misappropriated trade secret on the payment of reasonable royalties where injunctive relief is inequitable. While much of the remedial scheme of the law mirrors state trade secret laws premised on the Uniform Trade Secrets Act, the DTSA provides for one very unique and brand new remedy: the Court may order the seizure of property “necessary to prevent the propagation or dissemination of the trade secret” at issue upon ex parte application (without notice to the defendant or counsel) based upon affidavit or verified complaint.

          Applications for seizure must demonstrate a number of specified facts before the Court can issue the order and have federal marshals seize property. Among those facts are (1) a temporary restraining order would be inadequate; (2) immediate and irreparable injury will occur absent seizure; (3) the harm to the plaintiff outweighs the harm to the defendant; (4) the defendant or those acting in concert with the defendant would destroy, hide or otherwise make the trade secret inaccessible to the court if put on notice. A seizure order requires a hearing within seven days of the seizure and restricts the owner’s access to its trade secret, must protect the defendant from publicity, requires the court to secure the seized property and permits the appointment of a special master.

          The DTSA contains immunity provisions for individuals who disclose trade secret information to the government for the purpose of reporting a suspected violation of law or in a complaint or filing made under seal. Employers are required to provide notice of the DTSA’s immunity provisions to take advantage of the full range of remedies provided under the law. The DTSA states that notice shall be provided “in any contract or agreement with an employee that governs use of a trade secret or other confidential information.” Accordingly, employers may wish to modify their confidentiality agreements to provide appropriate notice of the DTSA immunity provisions.

          It is hard to say how much this adds for employers who have trade secrets worth protecting. State court actions continue to be available as the DTSA does not preempt state law. Employers may like the idea of being in federal court, which was only available in trade secret actions involving diversity of citizenship, unless another federal claim was alleged in the litigation. The federal cause of action may be attractive for the simple reason that many attorneys are not used to being in or are intimidated by being in federal court (of course, we are not such attorneys). Finally, the added feature of an ex parte seizure of a computer or cell phone containing trade secrets is one aspect of the DTSA cause of action, which might tip the scales in favor of pursuing trade secret actions in federal court. However, I would not get too excited about it as seizure orders are only supposed to be entered where there are “extraordinary circumstances.”


NLRB Upholds Standard Applied to Work Rules But Dissent Proposes New Framework

NLRB Upholds Standard Applied to Work Rules But Dissent Proposes New Framework

By: Rob Dare – 4/21/16

It seems that every week brings a new NLRB decision that declares workplace conduct rules unlawful (see the previous blog post). Last week was no different, when the majority of the Board held two rules in a Beaumont Hospital surgical services Code of Conduct to be unlawful. However, the decision is particularly noteworthy because a forceful dissent by a Member of the Board called for the abandonment of the decade-old standard used by both the Board and courts to evaluate workplace rules. The Luther Heritage standard (named for the case in which it was announced), provides that employment policies, work rules, and handbook provisions are unlawful if employees “would reasonably construe” the language to prohibit protected activities under Section 7 of the NLRA, which grants employees the right to engage in union organizing, collective bargaining, and other concerted activities for the purpose of mutual aid or protection.

The rules at issue prohibited:

  1. Employee conduct that, in the context of patient care and hospital operation, “impedes harmonious interactions and relationships.”
  2. “Negative or disparaging comments about the moral character or professional capabilities of an employee or physician made to employees, physicians, patients, or visitors.”

According to the majority, the first rule is unlawfully overbroad because it could “encompass any disagreement or conflict among employees, including those related to discussions and interactions protected by Section 7.” And the second rule is unlawful because it “would reasonably be construed to prohibit expressions of concerns over working conditions.”

Member Miscimarra, however, explained that in his view, the case (and result) illustrates the problematic nature of the Luther Heritage standard – that it places too much emphasis on the effect that facially neutral work rules have on Section 7 rights, while failing to consider any legitimate reasons employers have for implementing the rules in the first place. Listing the “multiple defects” of the standard, Miscimarra essentially argues that the “single-minded focus” of the “reasonably construe” standard “prevents the Board from giving meaningful consideration to the real world ‘complexities’ associated with many employment policies, work rules, and handbook provisions.” Here, he opines, the two rules helped serve the public interest by protecting patients and family members from needless conflict in hospital settings, but that is ignored under Lutheran Heritage.

The solution, according to Miscimarra, is to replace Luther Heritage with a balancing test where employees’ Section 7 interests are weighed against the employer’s particular business justification for the rule in question. Unpersuaded, the majority replied that a finding that “a particular rule threatens to have a chilling effect does not mean, however, that an employer may not address the subject matter of the rule and protect his legitimate business interests [with a] more narrowly tailored rule that does not infringe on Section 7 rights.”

Thus, Luther Heritage remains the standard that will be applied to employer rules. Accordingly, all employers, unionized or not, should continue to carefully craft and narrowly tailor the language within its handbook, code of conduct, etc. But, we will continue to monitor NLRB decisions and any relevant changes, as Member Miscimarra has provided a powerful road map for future work rule challenges.

NLRB Rules Against Quicken Loans

By Dan Cohen – 4/11/16

On April 7, 2016, Quicken Loans and several of Dan Gilbert’s other businesses were ordered to make 24 changes to their employee rules by Administrative Law Judge David Goldman because the rules were overly broad and violated Section 8(a)(1) of the National Labor Relations Act. Section 8(a)(1) prohibits employers from interfering with, restraining, or coercing employees in the exercise of the rights guaranteed in Section 7 of the Act.  According to Judge Goldman, the 24 work rules infringed upon employee rights to engage in concerted activities, including the right to discuss, debate, and communicate with each other regarding their workplace terms and conditions of employment.

Quicken argued that the employee manual (a/k/a “the Big Book”) had limited use, had only been distributed to some employees, was not used or relied upon by managers and that the manual played no active role in the employees’ work life. Quicken’s arguments were rejected because the evidence established that nothing amended or contradicted the offending rules and employees were not advised that they could engage in the conduct prohibited by the manual.  According to ALJ Goldman, “once offending rules are placed in an employer-developed employee rulebook and distributed to employees, it takes forceful and specific countervailing evidence of their disavowal to strip them of their tendency to coerce.”

Turning to the language of the manual, Judge Goldman found 24 rules and statements to violate the NLRA and ordered Quicken and the other companies to cease and desist from maintaining the following overly broad rules that:

  • Prohibit disclosure of unspecified “confidential information” in the employee handbook;
  • Prohibit employees from knowingly making false or misleading EEO complaints or EEO complaints in bad faith;
  • Require employees making complaints or participating in investigations to agree to maintain confidentiality;
  • Require employees to dress and conduct themselves in a professional manner;
  • Require employees to keep non-public financial or operational information confidential;
  • Require employees to resolve work-related concerns by speaking to team leaders and not taking it on-line;
  • Prohibit employees from displaying information that could be deemed harmful or offensive to the reasonable person;
  • Prohibit unauthorized postings and solicitations on company property;
  • Discourage emails that reflect unfavorably on the company and its reputation;
  • Prohibit non-business activities on company property;
  • Prohibit email use for activities other than company business;
  • Require employees to direct all press inquiries about the business and its directors to corporate communications persons;
  • Define confidential information as non-public information about the business, personnel, customers, operations and affairs;
  • Prohibit use of company resources which presents a threat of harm to the company or its reputation;
  • Prohibit conduct that is not in the best interests or the company, its clients or team members;
  • Prohibits signature lines with religious, political, sexual or other inappropriate content;
  • Prohibit employees from using personal web pages or sites that reference the company or which disclose information about the company without the permission of the marketing team;
  • Prohibit employees from sending non-business related attachments to emails or communicating with the media without express authorization from the corporate communications team;

Quicken has indicated it will appeal the ALJ’s decision to the full NLRB, and if necessary, to federal circuit court. Given the track record of the NLRB, I would not expect a reversal.  But, in order to move the case away from the Agency and into court, Quicken must exhaust its administrative remedies.  Thus, taking an appeal to the anti-employer NLRB must occur before Quicken is likely to get a fair shake.

While we applaud Mr. Gilbert and his efforts to fight what is clearly government overreach, we have been advising businesses now for several years on how to re-write many of the above rules in a way that protects important business rights and values without becoming fodder for the NLRB. Employers can still protect confidential information without prohibiting discussions about wages and benefits.  And, employers can still prohibit misconduct without labeling it as unprofessional, not in the company’s best interest or that which reflects unfavorably on the business.  Of course, some of the opinions are more troubling than others and hopefully Mr. Gilbert will have success once he can make his arguments in federal court. However, re-writing many of the work rules will save you defense costs, and disarm unions from using the unfair labor practice findings against your business in a union organizing drive or otherwise.  And, it will spare you the requirement of posting notices at your facilities for 60 days, which advise employees you violated federal law and reminds employees of their right to unionize.


Would a Justice Merrick Garland be Good or Bad for Employers?

Would a Justice Merrick Garland be Good or Bad for Employers?

By: Dan Cohen – 3/17/16

Although it may be nothing more than an academic exercise given the political wrangling that is sure to follow the nomination, I wonder how President Obama’s recent Supreme Court Nominee, Merrick Garland, would decide employment and labor cases. Tom Goldstein, publisher of the SCOTUSBlog, provided a survey of Judge Garland’s decisions in 2010, when he was a contender for the seat that was eventually filled by Justice Elena Kagan. According to Goldstein,

“Judge Garland has not been called upon to decide many civil-rights-related claims of great significance. It is difficult to label him as inclined either towards or against such claims, given that the panels on which he sat in such cases were generally unanimous…
When, however, Judge Garland participated in a divided ruling, it was generally in favor of the plaintiff…The unanimous rulings in which Judge Garland participated similarly reflect a concern that civil rights plaintiffs receive an appropriate day in Court.”

Goldstein also suggested that Judge Garland has strong views favoring deference to federal agency decisions: “In a dozen close cases in which the court divided, he sided with the agency every time.” Others have more recently suggested that he leans heavily towards enforcing decisions of the NLRB, having found in the Board’s favor in 18 of the 22 cases for which he wrote the majority opinion. At 82%, Judge Garland’s tendency of enforcing agency decisions is not far off the national average for all agency decisions, but it is significantly higher than the DC Circuit as a whole, which is far more inclined to second-guess agency decisions than its sister circuits.

The National Federation of Independent Business (NFIB), which has kept its distance from Supreme Court confirmation proceedings throughout its 73 year history, has decided to weigh in on Judge Garland at the urging of its membership. The Nation’s largest advocate for small business owners views Judge Garland as a strong ally of the regulatory bureaucracy and big labor, citing a number of examples of him siding with the NLRB, the EPA and other federal regulators. According to the NFIB, Judge Garland sided with the NLRB in all 16 of the major NLRB decisions it examined, including the D.C. Circuit’s 2009 case of Fed Ex Home Delivery v. NLRB, which overturned the NLRB’s decision that workers were employees and not independent contractors. Much to the chagrin of employers, Judge Garland’s track record strongly suggests how he would cast his vote as Justice Garland for the NLRB on some very significant issues, including the recent joint employment rulings in Browning-Ferris Industries and McDonald’s, which threaten the staffing industry and the franchise model of business with its highly controversial indirect/potential control ruling.

Pundits suggest that Judge Garland would be a “swing vote” on many issues, much like Justice Kennedy and observe that President Obama could have nominated a far more left-leaning judge like Justices Kagan and Sotomayor. However, a Justice Garland is not likely to overturn bad decisions of the NLRB or other federal regulators. While this bodes well for unions and environmentalists, it does not look nearly as promising for employers.

Even worse for employers is that the Republicans could be risking their current Senate majority by refusing to move forward with confirmation proceedings. Surely, with the prospect of even more Supreme Court vacancies in the next four years, losing the majority in the Senate and/or the Presidency to the Democrats will be far worse for employers than a Justice Garland. But, who am I to critique the Washington D.C. elite?

First Kalamazoo; Now Hesston, Kansas

By: Dan Cohen – 2/26/16

I just wonder if there will ever be a day again that I can turn on the news and not hear about an act of terrorism or someone randomly shooting innocent people. The latest victims worked at Excel Industries, which manufactures lawn care equipment in its Hesston, Kansas factory. Yesterday, at about 5:00 p.m., Cedric Ford, returned to Excel’s factory, where approximately 150 of his co-workers were working, and went on a shooting rampage shooting literally anyone who came into his sight. In all, four employees (including Ford) were killed and

another 14 injured (10 critically).

Ford has been described as a “mellow guy,” and “someone I could talk to about anything.” One co-worker indicated that, “never in a million years” would he think Ford was capable of doing something like this. The authorities, however, have indicated that “there [were] some things that triggered this particular individual.” In the coming days, I am sure there will be a whole lot more to this horrific story and what “triggering” factors may have caused Ford to act out as he did. However, it is scary to think that some of Ford’s co-workers did not think he was capable of such violence. Usually, it is just the opposite.

From 2006 to 2010, the last year for which final statistics are available, an average of 551 workers died each year in work-related homicides, according to the Bureau of Labor Statistics. Nearly 20% of those were multiple-fatality homicides in which two or more workers were killed. These numbers compare to the numbers in the 1990s, when I first started counseling employers on workplace violence prevention strategies. It will be interesting to know what risk factors were present and whether they were known to anyone, but certainly, at this point, nobody has come forward with information that Ford was perceived to be a threat, that others were scared of him or they were not surprised.

Employers should be watching this case as it unfolds because of the implications it may have on keeping their own workplaces safe. Often, there are warning signs which exist and which can be managed with proper threat assessment and prevention strategies. Do not misunderstand me: I am not suggesting that Excel missed any opportunities here to detect a problem and prevent the shootings. It is just too early to even raise that question. However, as facts are released, those of us who have experience with threat assessment and workplace violence prevention may be able to offer some constructive ideas for other employers. I don’t like to Monday morning quarterback such incidents, but the reality is that case studies of shootings help employers devise policies, plans and training protocols that can be used to increase their chances of never having to face such a tragedy.

While not all inclusive, some or the recognized risk factors include:

  •  History of violence, including prior threats, incarceration for violence, acts against animals
  • Mental Illness, including paranoia, depression and suicidal tendencies
  • Making or referencing lists or expressing a plan
  • Recent loss at work (discharge, denial of grievance, etc)
  • Lack of support system
  • Financial desperation or feeling of hopelessness
  • Extreme interest in or obsession with weapons and others shootings
  • Excessive discussions about weapons
  • Empathy with other shooters
  • Impulse control problems and willingness to exceed boundaries
  • Others expressing worry, nervousness about the individual

For a complete list of risk factors, please visit our website at www.mi-worklaw.com, and click on resources.



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