December 30th, 2008 | By Paul Cherner
Expect increased activity in the labor and employment law arena from Washington, DC in 2009. The Labor Movement invested more than $300 million and countless volunteer hours to help elect President-elect Obama and enlarge the Democratic majority in Congress and it expects both to enact new legislation and initiate administrative activities that will benefit labor unions and workers.
The number one priority of the labor movement is the Employee Free Choice Act (“EFCA“). EFCA would dramatically change the rules with respect to union organizing of employees by allowing a union to bypass the NLRB’s secret ballot election procedure. If EFCA is enacted, an employer would be required to recognize a union as the representative of its employees after the NLRB has verified that a majority of the employees have signed union authorization cards. After recognition, the employer and the union would have 90 days to negotiate their first collective bargaining agreement. If they are unsuccessful, a mediator from the Federal Mediation & Conciliation Service (“FMCS“) would then become involved in the negotiations. If a contract is not agreed to in the following 30 days, the issues will be submitted to an arbitrator, who will have the power to make a final and binding decision on all open issues. President-elect Obama was a sponsor of the EFCA bill when he was a Senator and Representative Hilda Solis (nominee for Secretary of Labor) voted for it when it passed the House in 2007. It is very likely that EFCA will be enacted, but not necessarily in the first 100 days of the new administration and there may be some modifications made to the proposed collective bargaining procedures and/or to a proposed statutory fine process for unfair labor practices.
President-elect Obama will be able to appoint 3 new Board Members to the 5 member National Labor Relations Board (“NLRB“) and to designate a new Chairman and General Counsel of the Board. These appointees are likely to be more favorable to unions and workers than those appointed during the Bush administration. Also pending in Congress is the “RESPECT” bill, which is intended to reverse a prior NLRB decision that broadly defined which employees were supervisors and thus exempt from union organizing efforts.
The U.S. Department of Labor (“DOL“) is expected to get increased funding and enlarge its staff, so that it will become more active in investigating and enforcing the numerous laws within its purview. There are serious efforts to increase the minimum wage (“FLSA“) and to enact new safety rules (“OSHA“). There is also talk of revising the 2004 DOL regulations pertaining to overtime exemptions, so that more employees will be entitled to overtime.
Several organizations that advocate for a more family friendly workplace are expected to make an effort to have the Family & Medical Leave Act (“FMLA“) require paid leave. There are several states that have recently passed such legislation. The recently promulgated FMLA regulations are not expected to be changed in the near future.
President-elect Obama also has the opportunity to appoint the Chairman, General Counsel and Commissioners to the Equal Employment Opportunity Commission (“EEOC“) and that agency is expected to increase its enforcement efforts during the new administration. Pending in Congress is the “Lilly Ledbetter Fair Pay Act”, intended to reverse the holding of a U.S. Supreme Court case, by allowing an individual to file an employment discrimination charge based on the last date that they were adversely affected by the alleged discrimination.
There are numerous other labor and employment bills pending in Congress which may be enacted as a result in the change in Congress and the administration, so stay tuned for an exciting 4 years.
December 18th, 2008 | By Paul Cherner
There have been many names floated in the media as potential candidates to be Secretary of Labor in the new administration. Almost all share the same characteristic, that they are pro-union, which is expected given the strong support of President-elect Obama by labor unions and their members.
According to recent news reports, it looks like Congresswoman Hilda Solis (D – CA) is the likely nominee. She began her career in the Carter White House Office of Hispanic Affairs and then worked as a budget analyst with the Office of Management and Budget. She served two years in the California Assembly and six years in the California Senate, before being elected to Congress in 2000.
She is the only Member of Congress on the board of American Rights at Work, a pro-union group headed by former Congressman David Bonior, who has been part of the transition team dealing with the Labor Department.
SEIU President Andy Stern praised the likely selection of Solis, stating: “We’re thrilled. She’s been as strong a voice for justice for SEIU workers like our janitors and homecare workers as we’ve ever had.”
Solis will be expected to be at the forefront of the unions’ efforts to enact the Employee Free Choice Act (“EFCA”) within the first 100 days of the new administration. EFCA is expected to substantially change the rules involved in organizing employees and, if passed in its present form, will likely result in a significant increase in the number of unionized workers. Solis would seem to be an ideal choice to lead the legislative battle in Congress to enact this new law, given her substantial experience as a legislator and her Congressional contacts.
December 16th, 2008 | By Paul Cherner
Section 409A of the Internal Revenue Code has made substantial changes to the manner in which certain forms of deferred compensation need to be handled. The IRS issued final regulations that require that any changes to deferred compensation arrangements that may be needed to comply with the requirements of 409A to be made by no later than December 31, 2008.
If it has not already been done, it is imperative that there be a legal review of deferred compensation arrangements to determine whether they are covered or exempt from these regulations. If they are covered, then there should be a determination as to whether they can be changed to fit within an exemption to 409A or whether there needs to be an amendment to these plans to ensure that they are compliant with the complex requirements of that law. A failure to be in compliance may result in substantial adverse monetary consequences.
The type of agreements that should be reviewed include, but are not limited to:
- Severance pay plans or agreements
- Annual bonus and incentive plans
- Stock options
- Deferred compensation plans, agreements or arrangements
- Supplemental Executive Retirement Plans (SERPs)
- Change of Control Agreements
- Phantom stock plans
- Restricted stock, restricted units and other equity-type awards
- Stock Appreciation Rights
The final countdown has begun. Don’t wait till New Year’s Eve to learn that there is a problem with these type of arrangements.
December 15th, 2008 | By Paul Cherner
Last week, 240 unionized workers at Republic Windows & Doors in Chicago ended their week long “sit-in.” It is important to note what some of the issues were in case history repeats itself.
The term “sit-in” refers to workers refusing to leave their place of employment until their demands are granted. The workers may be represented by a union, like the United Electrical Workers Union who represented Republic’s employees, or they may be unrepresented by a union and simply be engaging in collective action. Sit-ins were popular during the first half of the twentieth century, particularly during the early days of union organizing. You rarely hear about such actions anymore , since they are against the law. While they are against the law, an employer is faced with the dilemma of having such workers forcibly removed by the police and facing possible adverse publicity or, as Republic did, trying to strike a deal that results in the workers leaving the premises.
The workers claimed that they had not been paid their vacation pay and other benefits due to them under the union contract. If that were true, the workers and/or the union had legal recourse to sue Republic for unpaid wages and benefits. However, they apparently determined that the quicker route would be to stage a sit-in protest that was well publicized to leverage the employer to quickly pay these monies.
Another issue involved was that the federal law (“WARN”), requires many employers to give at least sixty days notice to their employees before they close a plant or engage in mass layoffs. While there are some exceptions to that law, most employers, if they meet certain numerical criteria, are required to give such notice. Here, Republic’s employees apparently claimed that they were entitled to the sixty day WARN notice.
An underlying issue was the union’s claim that Republic was closing its union plant in Chicago, so that it could open a non-union factory in another state under another name, where it would be producing the same product. The concept of an alleged “runaway shop” raises issues under the National Labor Relations Act. Whether or not there was such motivation in this dispute is unclear, but avoiding protracted litigation over that issue may have been another motivation for Republic resolving the controversy with the workers and the union.
The final resolution was that Republic’s creditors agreed to loan it additional funds so that it could meet the union and the workers’ demands in return for the workers vacating the plant and settling all disputes. The union and certain elected officials are now looking for a new owner to resume operations at the former Republic plant. The success of the Republic workers well publicized sit-in may result in other workers and/or unions adopting similar tactics in the future.
December 10th, 2008 | By Paul Cherner
The U.S. Department of Labor has issued new regulations (effective 1/16/09), which will require all employers subject to the Family and Medical Leave Act (“FMLA”) to update their policies and forms.
Your FMLA policy must provide for Military Caregiver Leave, allowing an eligible employee to take up to 26 weeks in a 12 month period to care for a covered family service member who has suffered a serious illness or injury in the line of duty while on active duty.
Qualifying Exigency Leave may be taken by an eligible employee for up to 12 weeks when an “exigency” arises because a covered family member belonging to the National Guard or Military Reserves is on active duty or is called to active duty. The new regulations specify 8 broad categories that are regarded as exigencies.
The new regulations provide for a revised FMLA notice to be posted, as well as new forms to be used when either of these leaves or traditional FMLA is requested. The notice and forms are available on the DOL’s website.
There is also a change in the time periods involved in administering FMLA requests.
I recommend that all employers inform their managers of these changes, in addition to conducting internal training for FMLA administrators.
