248-409-1900 dburke@mi-worklaw.com


By:  Bill Pilchak – 10/27/15

MONTREAL-  Two days of meetings with labor and employment attorneys from around the world is sure to result in interesting tidbits for our clients.  Here are some of the things learned:

The Ashley Madison Scandal Touches Business In A Special Way:  A forensic data examiner described the business implications posed by the hacking and posting of Ashley Madison subscribers.  Some companies have realized that subscribers not already “outed” to employers, spouses and significant others pose a blackmail danger that could come to haunt the company.  The blackmail could result in sweetheart contracts (pun intended) or revelation of confidential information.  Some companies have asked AM subscribers to self-identify in order to address the problem.  Others have surveyed the AM postings on-line and then contacted executives who may be vulnerable.

Upcoming Increase In Required Salary Status Provides Unique Chance To Fix Misclassification Problems.  One of the most difficult problems an employer can face is how to change an employee mistakenly characterized as salaried-exempt to hourly without telegraphing that two or three years of overtime liability may exist.  As most know, the Obama Administration has announced plans to increase the minimum required salary for exempt status from $23,660 to $50,400 in 2016 (although no official date has been set by the regulations).  Many businesses will elect to simply pay previously salaried employees overtime rather than giving a $25,000 raise.  For any misclassified salaried employees making less than $50,400, the new rules provide a unique “excuse” to reclassify the employee as hourly that will not suggest a prior OT obligation:  “As you know, the DOL has raised the salary threshold above your current pay level.  Accordingly, starting ___, you will be paid hourly and receive overtime pay…”

After Initial Surge In Petitions, Organizing Efforts Track Prior Levels Despite Quickie Election Rules:  Since April, the NLRB has been operating under new election rules that will generally require an election between 11 and 30 days after a petition for election is filed.  In April and May, there was a 38% spike in the number of petitions filed.  However, since June, organizing efforts fell back to traditional levels.  Incidentally, the average time between a petition and election has been 23 days nationwide, down from 37 days under the old rules.  However, in Region 7, which includes Michigan, the average is 19 days.  Since 2 ½ weeks is not much time to counter back-channel organizing steps, it might be wise to start preparing for a union organizing attempt before the union shows up.

NLRB Will Continue To Prosecute Arbitration Agreements Containing Class Action Waivers Until the Supreme Court Tells Them To Stop:  The NLRB has consistently contended in recent years that requiring employees to sign arbitration agreements that waive class action claims chills protected concerted activity.  Such agreements are especially important in California, where the threat of a class action tips the balance of power in favor of the employee when claims arise.  While the Board endorses this theory, federal Courts of Appeals have consistently refused to enforce Board rulings on this issue, holding that the Federal Arbitration Act controls.  Despite several adverse rulings, the NLRB keeps filing ULP Complaints.

Laws Compelling Employers To Hire Incumbents Also Compel Any Union Obligations:  New York City’s Displaced Building Service Workers Protection Act and similar laws in California, Washington, D.C., Providence, Rhode Island, San Francisco, Los Angeles, Philadelphia, St. Louis; Newark, Westchester County, New York and Montgomery County, Maryland require some employers taking over the operations (usually government service or janitorial contracts) of other businesses to hire the existing labor force.  The Service Contract Act and Executive Order 13495 likewise require incoming federal service contractors to offer employment to the employees of the outgoing contractor.  These laws ignore the fact that sometimes the workforce is the problem and assure that the workforce is passed on to another company.  An August, 2015 NLRB Board decision, GVS Properties LLC, now holds that such laws automatically saddle an incoming company with any union representing the prior workforce.  Generally, if an employer elects to hire more than 50% of a unionized workforce, it becomes a successor, who must bargain with the union.   GVS Properties holds that an incoming employer is a successor who must bargain with the union, even if it was compelled to hire the workers.