Federal Courts Disregard Longstanding Worker Rights

Workers continue to lose ground in federal courts, where judges are disregarding a ruling by the National Labor Relations Board (NLRB) that says companies cannot require workers to sign away their right to bring class action arbitrations and lawsuits.

 The NLRB’s  administrative decision in January  served as a theoretical  counterpoint to an earlier 5-to-4  decision by the U.S. Supreme Court in AT&T Mobility v. Concepcion.

 The Concepcion case involved alleged false advertising by AT&T and a $30 claim by a California plaintiff, who sought to prosecute the case as  class  arbitration . As the  dissent noted in Concepcion: “What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?”

 The Supreme Court majority held that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class action lawsuits  – which means that contracts can exclude class action arbitration. 

 The NLRB ruling involved national homebuilder D.R. Horton’s practice, begun in 2006, of forcing all employees to agree as a condition of employment, not to pursue class or collective litigation of claims in any forum –  arbitral or judicial.  In its ruling, the NLRB said it has long held –  “with uniform judicial approval” –  that the National Labor Relations Act “protects employees’ ability to join together to pursue workplace grievances, including through litigation.”  

According to Thompson Reuters’ journalist Nate Raymond,  courts generally are rejecting the NLRB decision, some on the grounds that the  Federal Arbitration Act controls, and others cite the Supreme Court’s Concepcion decision. For example, in recent months:

  •  U.S. District Judge Gene Pratter in Philadelphia agreed with Tenet Healthcare and confirmed an arbitrator’s finding that a nurse could not bring classwide wage-and-hour claims in arbitration. The nurse’s lawyer had cited D.R. Horton in arguing that the arbitrator had erred.
  •  U.S. District Judge D.P. Marhsall in Little Rock, Arkansas, on Aug. 1, 2012 concluded that the FAA trumped the NLRA. and compelled individual arbitration in a putative class action of guards suing Securitas Services Inc.   Marshall said that accepting the NLRB’s reasoning would mean favoring litigation over arbitration, in contrast to the federal policy of favoring arbitration.
  •  Employees at Waffle House Inc. cited D.R. Horton in an effort to convince U.S. District JudgeCarlos Murguia of Kansas City, Kansas, to not compel individual arbitration. They lost. “Although Concepcion may not speak directly to the issue before the court,” the judge wrote, “it does illustrate a guiding principle: arbitration agreements are enforceable even when they prohibit the use of a class action.”

 Thomas Reuter News Service reports that  judges in New York, California, Pennsylvania, Florida and Georgia have refused to allow employee class actions to move forward on the basis of the NLRB’s holding, in cases against Jenny Craig, Citigroup, P.F. Chang’s and UBS, among others.

The Concepcion decision likely will have a devestating impact upon workers who are cheated by unscrupulous employers out of overtime pay or hourly wages.

“Class claims frequently offer the only vehicle for consumers or employees to challenge unlawful actions that cause limited damages to each individual while often reaping millions for business,” law professor Ann C. Hodges writes in an American Constitutional Society blog analysis of D.R. Horton. “… In the workplace, Fair Labor Standards Act cases seeking minimum wage or overtime payments are most likely to be abandoned on this basis and Horton involved such a claim, alleging that the nonunion employer misclassified employees as exempt from overtime pay.”

The Progressive States Network (PSN) in a recent report entitled, Where Theft is Legal: Mapping Wage Theft Laws in the 50 States, estimates that more than 60 percent of low-wage workers suffer wage violations each week. On average, the PSN reports, low-wage workers lose $51 per week to wage theft, or $2,634 per year. For low-wage workers, that amounts to 15% of their annual income, at average earnings of $17,616 per year.

Federal judges are appointed for life (in good behavior) and earn annual salaries of $174,000..

* See earlier reporting by this blog on federal court judges’ hostility to employment discrmination lawsuits.

Business Opposes the NLRB ‘Poster Rule’

What They Don’t Want You to Know …

A melodrama is being played out in federal court about whether American workers should be informed of rights that they have possessed for 70 years under the National Labor Relations Act (NLRA).

Most workers think the NLRA pertains only to union organizing but it provides most workers the right to join together to improve their wages and working conditions with or without a union. The NLRA can come into play, for example, when an employer fires a non-union employee(s) for discussing a safety concern or other concerns about working conditions.

Employers are spending millions to prevent workers from knowing their rights!

The National Labor Relations Board (NLRB) issued a rule last summer that would have required most private sector employers to post a notice on Nov. 14, 2011 informing all workers of their rights under the NLRA.  This is called the NLRB “Poster Rule.” There was an immediate outcry from business groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers and Associated Builders and Contractors (all of which filed lawsuits to block the rule).

Twice delayed, the rule was scheduled to go into effect on April 30, 2012. That’s not going to happen now because of recent federal court rulings in multiple lawsuits. Here are the legal developments:

  • The  U.S. Court of Appeals for the District of Columbia Circuit  in Washington, D.C., on April 17, 2012 issued a temporary injunction prohibiting implementation of the rule, pending appeal.
  • U.S. District Judge David Norton of South Carolina ruled on April 13, 2012 that the labor board went beyond its legal authority when issuing the rule.
  • U.S. District Judge Amy Berman Jackson of Washington, D.C., on March 2, 2012 ruled that the NLRB had the authority to adopt the poster rule, though she said the NLRB exceeded its authority with respect to certain penalty penalties for failing to comply with the rule.

The NLRB says the notice is needed because “many employees protected by the NLRA are unaware of their rights under the statute.”   Requiring employers to post the notice would, according to the NLRB, “increase knowledge of the NLRA among employees, in order to better enable the exercise of rights under the statute.”

Most union workers are aware that the NLRA protects their right to organize but non-union workers may have no idea that the NLRA also protects them,  whether they want to join a union or not. Section 7 of the NLRA guarantees employees the right to engage in “concerted activities” not only for self-organization but also “for the purpose of . . . mutual aid or protection. . . .”

The broad protection of Section 7 applies with particular force to unorganized employees who, because they have no designated bargaining representative, must “speak for themselves as best they [can].”  NLRB v. Washington Aluminum Co., 370 U.S. 9, 14, 82 S.Ct. 1099, 8 L.Ed.2d 298 (1962).

At this point, it is anyone’s guess whether  the NLRA posters will ever see the fluorescent light of break rooms in businesses and factories around the country.  I suggest workers print out this article or an equivalent and (anonymously) post it on their employee bulletin board.

Other Federal Laws

OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970

Some experts say the Occupational Safety and Health Administration should take the lead on combating workplace bullying.*  There is overwhelming evidence that workplace bullying can lead to serious injury and even death.  In fact, a term has been coined for workers who are driven to suicide as a result of bullying – “bullycide.”  In several other countries, workplace bullying is considered a health and safety issues and is regulated by a federal agency like OSHA. 

The Occupational Safety and Health Administration in May 2011 adopted a safety program for its own workers that includes a workplace anti-bully policy. The policy is contained in a 278-page document, the OSHA Field Health and Safety Manual,  which outlines safety practices for OSHA’s field offices. It was drafted in cooperation with the National Council of Field Labor Locals, a union that represents OSHA workers.

OSHA’s workplace bullying policy is significant because the General Duty Clause of the Occupational Safety and Health Act of 1970 requires employers to “furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees … .” However, OSHA has not enforced that provision with respect to workplace bullying.

The stated purpose of the workplace bullying policy adopted by OSHA for its own workers,  contained in the manual’s “Violence in the Workplace” chapter. is: ”To provide a workplace that is free from violence, harassment, intimidation, and other disruptive behavior.”

Here is the OSHA General Duty Clause, Section 5(a)(1) SEC. 5:

Duties

(a) Each employer —

(2) shall comply with occupational safety and health standards promulgated under this Act.

(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees …

*See Susan Harthill. “The Need for a Revitalized Regulatory Scheme to Address Workplace Bullying in the United States: Harnessing the Federal Occupational Safety and Health Act.” University of Cincinnati Law Review 78.4 (2010): 1250-1306.

WAGE AND HOUR LAWS

The Fair Labor Standards Act (FLSA) does not address workplace bullying per se but it can be used to combat certain types of abuse. The FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.  The FLSA is administered by the U.S. Department of Labor Wage and Hour Division  If one aspect of the bullying campaign is failure to pay proper wages or overtime, for example, the FLSA is one potential remedy.

THE NATIONAL LABOR RELATIONS ACT

The National Labor Relations Act  (NLRA) was passed in 1935 to protect the right of employees in the private sector to create labor unions, engage in collective bargaining and to take part in strikes. The act is also known as the Wagner Act, after its sponsor, Sen. Robert F. Wagner.  The act is regulated by the National Labor Relations Board.

 Specifically, the National Labor Relations Board protects the rights of employees to engage in “protected concerted activity,”  which is when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.  A single employee may also engage in protected concerted activity if he or she is acting on the authority of other employees, bringing group complaints to the employer’s attention, trying to induce group action, or seeking to prepare for group action.

A few examples of protected concerted activities are:

  • Two or more employees addressing their employer about improving their pay.
  • Two or more employees discussing work-related issues beyond pay, such as safety concerns, with each other.
  • An employee speaking to an employer on behalf of one or more co-workers about improving workplace conditions.

Most employees in the private sector are covered by the NLRA. However, the Act specifically excludes individuals who are employed by federal, state, or local governments, agricultural laborers, some close relatives of the employer, domestic servants in a home, independent contractors, employers subject to the Railway Labor Act, etc.

FAMILY AND MEDICAL LEAVE ACT

The Familiy and Medical Leave Act (FMLA offers potential help for employees who are suffering health effects from workplace abuse.  Administered by the Wage and Hour Division of the U.S. Department of Labor, it  entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

Twelve workweeks of leave in a 12-month period for:

-the birth of a child and to care for the newborn child within one year of birth;

-the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;

-to care for the employee’s spouse, child, or parent who has a serious health condition;

a serious health condition that makes the employee unable to perform the essential functions of his or her job;

– any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or

Twenty-six workweeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness who is the spouse, son, daughter, parent, or next of kin to the employee (military caregiver leave).