What Employers Need to Know Now: Neither an agency fee nor any other form of payment to a public-sector union may be deducted from an employee, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay
Public Union “Agency Fees” Violate Employees’ First Amendment Rights
On the last day of its 2017‑18 term, the Supreme Court handed down a landmark decision protecting the First Amendment rights of public employees.
In Janus v. AFSCME, the Supreme Court overturned an older decision that upheld a union’s right to force non-members to pay an “agency fee”—an amount slightly less than the cost of “full” union membership.
The case was brought by Mark Janus, an Illinois Department of Healthcare and Human Services employee, who argued the “agency fee” he was forced to pay to the American Federation of State, County, and Municipal Employees Union (AFSCME) constituted “forced speech.”
While AFSCME argued these “agency fees” would only be collected as reimbursement for collective bargaining expenses, the Supreme Court rejected this defense. Specifically, the Court recognized what millions of public-sector employees already understand: public union spending is so entwined with politics it’s impossible to determine what—if any activities—are truly non-political.
As such, the Court ruled that by requiring employees like Mr. Janus to pay an “agency fee,” the State was “forcing free and independent individuals to endorse ideas they find objectionable. Such coercion, ruled the Court, violates the First Amendment.
Bottom Line for Public-Sector Employers: In the coming months, public-sector employers should expect a number of inquiries from employees who no longer wish to pay union fees. Employers should contact counsel to discuss how to navigate potential post-Janus legal landmines.Read More
Public performance licensing of music is a well-known issue for anyone who operates a small restaurant or bar. Playing or listening to a song, something that seems so ordinary in everyday life and that most consumers wouldn’t give a second thought about, is suddenly something for which the owner/operator of a small restaurant or bar might now be liable for copyright infringement if proper licensing is not in place. Such licensing and the rates to do so have long been controlled under various antitrust consent decrees between the Department of Justice and the two biggest performing rights organizations, ASCAP and BMI. In the 1940s, ASCAP and BMI came under scrutiny for anti-competitive and unfair licensing practices, and the antitrust consent decrees have been in place ever since to protect music licensees.
As recently as 2016, the DOJ had insisted that the antitrust consent decrees were still needed to protect music licensees from potential abuses, and even reinterpreted the decrees to require 100% “full work” licensing. BMI challenged the 100% “full work” licensing requirement in court, arguing that their consent decrees allow for fractional licensing. BMI won the case at the district court and appeals court levels, and the DOJ has since declined to take the case to the US Supreme Court. This means that fractional licensing stands, and a small restaurant or bar might have to buy licenses from multiple performing rights organizations or other copyright owners to obtain full protection from copyright infringement on any given song they choose to play.
As if this were not burden enough, the DOJ is now reviewing all of the ASCAP and BMI antitrust consent decrees to see if they are still relevant in today’s marketplace. Any consent decrees deem irrelevant will be terminated, potentially allowing ASCAP and BMI to resume anti-competitive and unfair practices. If the consent decrees are terminated, public performance licensing will be thrown into further disarray, and the last shreds of certainty in music licensing will go right out the window.
The man leading DOJ’s review of these consent decrees, US Assistant Attorney General Makan Delrahim, is scheduled to be the keynote speaker at the National Music Publishers’ Association annual meeting on June 13, 2018. That address is sure to provide some illumination on the future of the consent decrees. In the meantime, concerned restaurant and bar operators can make their opinions known to the DOJ by signing onto the National Restaurant Association’s letter advocating for keeping the consent decrees in place. At Siegel, O’Connor, O’Donnell & Beck, P.C., we provide a wide range of legal advice and services to Connecticut restaurant and bar operators, and we want you to be informed about important legal issues effecting your business.Read More
Last week, the Supreme Court issued its ruling in the most important business case this term, Epic Systems Corp. v. Lewis, deciding in favor of employers using individual arbitration agreements with class-action waivers in their employment contracts. The decision is a huge win for the many employers who already use individual arbitration agreements with class-action waivers, and for those employers who do not, the decision is a clear signal that they can now limit their liability for employment-related claims if they change their employment contracts accordingly.
The Supreme Court agreed to hear arguments on the issue after a circuit split at the Court of Appeals level. The issue involved a National Labor Relations Board interpretation from 2012 that individual arbitration agreements using class-action waivers, otherwise enforceable under the Federal Arbitration Act, violated the National Labor Relations Act (NLRA). The Supreme Court held that individual arbitration agreements are enforceable as written under the Federal Arbitration Act and that the NLRA does not displace the Federal Arbitration Act to provide employees with a right to class action. Justice Ruth Bader Ginsburg, in dissent, predicts this decision will result in the underenforcement of federal and state employment and labor statutes, and employees will be less likely to pursue small-value claims on an individual basis. Other critics have observed that this decision will make it more difficult for employees to redress sexual harassment in the workplace, an important concern following the zeitgeist of the #MeToo movement. Regardless of the critiques, the Supreme Court says the law is clear, and only a policy debate in Congress, if ever taken up, might change the law down the road.
For the foreseeable future, employers can limit their liability for employment-related claims by including an individual arbitration provision with a class-action waiver in their employment contracts. This can help employers reduce their expected liability for employment claims because arbitration is less likely to result in “windfall” damage awards, arbitration is quicker and less expensive than traditional litigation, and arbitration decisions are generally non-appealable and do not create precedent for other cases against the employer.
Employers should immediately review their employment contracts to see if they include an individual arbitration agreement with a class-action waiver. If your employment contracts do not include this provision, contact your attorney to find out what you can do to limit your liability for employment-related claims through arbitration.Read More
The Connecticut Appellate confirmed today that continued employment alone will not bind an existing employee to an adverse change in contract terms.
In Thoma v. Oxford Performance Materials, Inc., Conn. App. Ct., No. AC 35313, official release 9/23/14, the Court found that a terminated executive was entitled to benefits of her original employment agreement, despite having the executive having signed a second employment agreement negating said benefits.
Specifically, the Oxford executive signed a first employment agreement with provisions including severance pay in the case of termination without cause and received at increase in salary. Some time after, Oxford decided that the benefits in the first agreement were too generous and revised the agreement. Both parties signed the second agreement, which excluded any severance benefits and did not provide any further increase in salary. As provided in the first agreement, the executive’s salary increased. When Oxford terminated the executive over a year later and failed to pay her severance, she sued Oxford.
Ultimately, the Court’s decision should not come as a huge surprise to Connecticut employers. For some time, Connecticut courts have leaned toward requiring some form of additional consideration to bind existing employees to any adverse change in their terms or conditions of employment. Employers should know that if they want to incorporate a non-compete agreement or a mandatory arbitration clause, these significant restrictions on employees must be done in connection with hiring or some incentive other than continued employment to be binding and enforceable.Read More
Hopefully, you had an opportunity to enjoy some college football last year. If not, you might be out of luck, because if a new ruling from the National Labor Relations Board stands, the game will never be the same.
Yesterday, in a stunning decision, the Board held that, “all-grant-in-aid scholarship players for the [Northwestern University] football team who have not exhausted their playing eligibility are ‘employees’ under . . . the Act.”
So, how can student-athletes also be employees? The NLRB concluded the players “are not primarily students.” That conclusion came from the following findings:
- The players spent 50-60 hours a week on their “football duties” during the month-long training camp before the school year even started;
- The players spend an additional 40–50 hours a week during the 4–5 month football season;
- These hour commitments are “more hours than many undisputed full-time employees work at their jobs”; and
- The time spent on football constituted “many more hours than the players spend on their studies.”
As a result of this ruling, the Northwestern University players, as well as athletes at other private universities who meet the above-noted criteria, can organize with a labor union. In fact, the Northwestern athletes have already joined the College Athletes Players Association.
In response to this decision, Northwestern University’s president emeritus said that if the football players were successful forming a union, he could envision a number of private universities punting their programs.
“If we got into collective bargaining situations, I would not take for granted that the Northwesterns of the world would continue to play Division I sports,” Henry Bienen said at the annual conference for the Knight Commission on Intercollegiate Athletics.
Shortsighted and overly technical, the Board’s ruling will likely hurt the players its ostensibly trying to help—all the while adding new, dues-paying members to national labor organizations. Although Northwestern is going to appeal the Board’s ruling—a process that might take years—should this decision stand, the consequences could be dire.
If, for example, schools drop football programs, there will be fewer opportunities for student-athletes to attend a major university; more likely than not, these players will opt to skip the NCAA experience, and play football in Europe, Canada, or new “developmental” football leagues that will form should college programs be eliminated.
Rather than helping student-athletes earn their degrees while playing the game they love—and perhaps even earning a shot at a lucrative professional football career—the Board’s decision only ensures that fewer student-athletes will have an opportunity to earn a degree, which would prepare them for life after football.
But why allow a few inconvenient truths get in the way of this Hail Mary bomb to organized labor?
Photo credit: CBNC.comRead More
As union membership continues to tumble, organized labor is getting desperate. First, the unions sought help from Washington; the Employee Free Choice Act, the RAISE Act and the President’s unconstitutional “recess” appointment to the National Labor Relations Board all were attempts by labor-friendly politicians to help unions gain access to the non-union American workforce. Now, federal agencies are riding to Big Labor’s rescue, using the power of the executive branch to help organizers recruit more dues-paying union members.
Earlier this year, the Occupational Safety and Health Administration (OSHA)-the Department of Labor’s workplace safety watchdog-issued a guidance letter that offered a new interpretation of a long-standing rule.This new interpretation will allow labor union officials to participate in safety inspections at the request of an employee even if the employer is non-union.
During an OSHA safety inspection, employees are entitled to have an observer accompany the government investigators on the investigators’ tour of the workplace. For nearly half a century, this observer was understood to be an actual employee of the workplace in question; indeed, OSHA’s own interpretative manual uses the word “employee” when describing the observer. But in this new guidance letter, written by OSHA Deputy Assistant Secretary Richard E. Fairfax, labor union officials could participate in safety inspections at the request of an employee-even if the employer is non-union.
By re-interpreting this “observer” law in such an expansive fashion, OSHA is giving unions an unprecedented opportunity to not only gain access to non-union facilities—an organized labor “Trojan Horse”—but also to advance the idea that without union representation employees’ personal safety is at risk
While ostensibly serving as “observers,” union representatives will be able to spread a pro-union message among employees, a sales pitch reinforced by the sudden discovery of a number of potential safety hazards and OSHA violations. Alleged violations need not be legitimate for the union’s gambit to succeed; they need only generate concern among the company’s workforce that management is fostering potentially unsafe working conditions. And with an organizer on-site, masquerading as an observer, the solution to this sudden spike in safety violations will be offered: union representation.
Employers can still fight back. First, companies must be prepared for the scenario described above. When an OSHA inspector and an organized-labor observer arrive at your worksite, it is critical to demonstrate an interest in identifying and remedying any potential safety issues. Such concern, however, does not mean acquiescence to bullying by an “observer” attempting to undermine employees’ faith in management. Have an OSHA expert, whether it is an attorney or a member of your management team, accompany the “observer” on his/her tour of your workplace. Be prepared to counter any exaggerated or erroneous violations made by the observer—a critical step in undermining the union’s credibility—while demonstrating to employees that management takes safety seriously. Furthermore, make sure the “observer” is only allowed to participate in the actual inspection; do not let him/her wander the facility unsupervised.
Already struggling with a massive increase in federal regulations, health-care “reforms” and a sea of red tape, employers now must contend with a federal government determined to reverse the decline in organized labor’s membership roles. But employers can, and, indeed, must, take proactive steps to protect their rights and the rights of their employees.Read More
Last week, we predicted that the NLRB’s “employee rights” posting requirement would be postponed. Sure enough, the Board has announced that, in light of the DC Circuit Court of Appeals recent enjoinment against the posting requirement, this new regulation has been delayed.
Therefore, the April 30, 2012 deadline for employer implementation of this rule is no longer in effective. Employers, however, should remain vigiliant, as its likely the Board will continue to press this issue.