December 27, 2009
Persons who lost their jobs during the period September 15, 2008 and December 31, 2009 have received a welcome holiday gift. Under the American Recovery and Reinvestment Act of 2009, employees who were involuntarily terminated from their jobs were entitled to a 65% federal subsidy for their COBRA premiums. The subsidy, however, was to last only nine months, i.e., through December 31, 2009.
The 2010 Defense Appropriations Act, however, has extended the period of the subsidy to 15 months, meaning that those who began receiving the subsidy earlier in 2008 may receive the subsidy for up to 15 months.
In addition, the deadline for eligibility has been extended to February 28, 2009. Anyone who is involuntarily terminated for reasons other than gross miscondcut between now and February 28, 2009, if eligible for COBRA will be eligible for the subsidy.
North Carolina has joined the growing number of states imposing strict limits on smoking in public places and places of employment. The new statute prohibits smoking in state government buildings and state owned motor vehicles. It also bans smoking in state psychiatric hospitals.
In addition, smoking is now prohibited in all “enclosed areas” of restaurants and bars.
The statute allows smoking in “designated smoking” guest rooms hotels, motels, or other “lodging establishments.” However, no more than 20% of the rooms may be designated as smoking rooms.
Smoking is also permitted in “cigar bars” so long as the cigar bars are freestanding and the smoke from the bar does not migrate into areas where smoking is prohibited. The term “cigar bar” is clearly defined as an establishment that generates at least 60% of its revenue from the sale of alcoholic beverages and 25% from the sale of cigars. It must have a humidor on the premises and prohibit entry to anyone under age 21. Cigar bars will be required to make quarterly reports to the North Carolina Department of Health and Human Services regarding their revenues. Smoking is also permitted in private clubs.
Persons managing restaurants and bars where smoking is prohibited are required to post no smoking signs, remove indoor ashtrays, and to require anyone who smokes to extinguish his or her tobacco product. If a patron continues to smoke after being advised to stop doing so is subject to a fine of up to $50.00.
Local governments may elect to impose more re-strictive guidelines, so long as they do not conflict with the state statute. Local guidelines may include modestly higher penalties for repeat offenders.
The new law becomes effective January 1, 2010.
New Penalties, Damages, and Injunctive Relief.
The two provisions of the proposed Employee Free Choice Act (EFCA) that have received the most press are the provision mandating recognition of unions that establish majority status based solely on authorization cards and the potential for collective bargaining agreements imposed by a third party arbitrator. However, there is a third equally important component of this proposed legislation which would for the first time impose real economic penalties on employers who interfere with employees’ attempts to unionize.
As explained in a previous post, under current law a union wishing to organize a bargaining unit of employees generally begins by soliciting employees to sign authorization cards. These cards authorize the union to act as the exclusive bargaining representative of the employees. Once the union has cards from at least 30% of the employees, it may petition the NLRB for a representation election (although unions rarely file petitions absent cards from well over 50% of the employees). However, even if the union has cards from 100% of the employees, the employer has the right to insist that an election be held.
Once the election petition is filed, both the union and the employer begin an intense campaign, with the union lauding the benefits of union representation and the employer seeking to convince employees that unionization is not in their best interest. Under the National Labor Relations Act, in theory the election is to be held under “laboratory conditions” with a number of rules to protect the employees’ right to organize. However, in practice, these campaigns can become reminiscent of the “dirty tricks” of Watergate.
Many, perhaps most, employers will campaign within the parameters of the Act. Those employers may oppose unionization, but they will campaign within the limits of the regulatory scheme There are some employers, however, who are not satisfied to operate within the bounds of the Act. There are legendary stories of employers such as a large textile manufacturer in the south who have been ruthless in their opposition to unions resulting in years of litigation..
These less scrupulous employers are quite willing to discharge employees who seek to unionize. Such a discharge is a clear violation of the Act, as the statute expressly prohibits discrimination based upon union activity. However, by the time an employee’s unfair labor practice charge against the employer travels through the process of investigation, hearing by an administrative law judge, review by the National Labor Relations Board, and possibly a proceeding before a federal circuit court, years have passed and the discharged employee has moved on to a new job.
The only remedy under current law is back pay, and that back pay will be reduced by wages the employee has received in the interim. Consequently, if an employee seeking to organize a union is fired and quickly obtains another job at comparable or higher wages, the employer has no exposure to any penalty for its unlawful act. Although the Board has the right to seek injunctive relief pending its processing of an unfair labor practice charge when it deems such relief appropriate, the authority is used in a very limited fashion.
The EFCA Changes
The EFCA authorizes the Board to impose damages upon an employer who interferes with the right of employees to unionize. In addition, the new statute would require the Board to seek injunctive relief to stop such interference.
The statute, as currently proposed, would provide three cumulative remedies whenever an employer during the course of a union organization campaign or during the period after the union has been recognized when the parties are negotiating their first collective bargaining agreement (1) discharges or discriminates against an employee or threatens to discharge or otherwise discriminate against an employee because of the employee’s union activities; or (2) engages in any other unfair labor practices that “significantly” interfere with, restrain, or coerce employees in the exercise of their rights under the Act.
First, if a charge is filed alleging such violations, the Board must give the highest priority to investigating the charge. If the Board concludes the charge has merit and that a complaint should be issued, the agency is required to seek injunctive relief in federal court.
Second, if the employer discharges employees because of their union activities, the employees will be awarded, in addition to the back pay actually lost, liquidated damages equal to twice the amount of back pay awarded.
Finally, if an employer “willfully” or “repeatedly” commits unfair labor practices in violation of Section 8(a)(1) and/or 8(a)(3) of the Act, during the relevant period, the employer will be “subject to” a penalty of $20,000 for each violation.
Analysis of the Changes
Conceptually, the “teeth” provided by the EFCA with regard to penalties is long overdue. The National Labor Relations Act was passed in 1935 to assure workers the right to unionize. The initial statute was lopsided in providing rights to employees and limiting actions by employers, but providing no sanctions for unions. The amendments to the Act in 1947 under the Labor Management Relations Act (Taft-Hartley) brought more balance to the statute by adding limits to union activity. However, employers and unions were always free to take a “so what” approach, because the only penalty exacted by the National Labor Relations Board was the requirement to post a notice of the infraction and a promise to refrain from continuing the unfair labor practice. Employers had a risk of usually moderate back pay liability as well.
Union density in the private sector has fallen from approximately 35% in the 1950’s to less than 10% today. Unfortunately, when employees seek to unionize, far too often they face the risk of discharge by their employer. The EFCA would impose economic sanctions for such unlawful discharge that are hopefully high enough to make employers less willing to violate the statute to defeat the union.
Although employers who wrongfully interfere with employees’ right to organize in blatant disregard of the Act should be subject to real sanctions, the EFCA scheme has at least two problems. First, these wayward employers are “subject to” penalties of $20,000 per violation. It is uncertain whether the penalties are mandatory or discretionary. If the penalties are discretionary, what are the criteria to be followed in imposing them? .
Similarly, the statute would impose liability for anything an employer does “willfully or repeatedly” during the organizing period and the period following during which the first contract is negotiated which “interferes with, restrains, or coerces” employees in the exercise of their right to organize under the Act. This language is taken from Section 8(a)(1) of the Act. Virtually every unfair labor practice by an employer violates 8(a)(1)–everything from a supervisor interrogating employees about their support of or opposition to the union to engaging in surveillance of union activity. Determining when acts are willful and when not may be difficult, since many violations occur at the hands of first line supervisors who may willfully interrogate an employee, for example, without the knowledge of top management.
If the EFCA is to operate fairly to both unions and employers, the Board should draw on its 74 years of experience with the Act to provide regulatory guidelines to all parties. Historically the Board has declined to use its regulatory authority and has essentially regulated through its decisions. The EFCA should provide impetus for the Board to draw on its experience and resources to give all parties clear notice of the governing rules for union organizing campaigns. Such regulations should not be subject to modification every time the Board membership changes. Sadly, in recent years, some fundamental rules have changed regularly with the change in political tides and Board membership.
June 11, 2009
Background and Introduction
Employees in Europe and much of the rest of the world have enjoyed generous vacation time mandated by law for many years. In fact, 147 nations mandate vacation of some sort. The United States is the only industrialized nation in the world without a minimum annual leave law. Even China mandates three weeks off. Canada mandates two weeks for all employees and three weeks for those with five years or more with the employer.
According to the Bureau of Labor Statistics, the average American today annually works a full month (160 hours) more than in 1976. Job-related stress costs American business $344 billion a year in absenteeism, lost productivity and health costs. Indeed, some 75% of visits to primary care physicians come from stress-induced problems.
Not surprisingly, the Pew Research Center reports that more free time is a number one priority for middle class Americans with 68% listing it as a high priority.
In 2008, only 52% of American workers took a vacation of a week or longer, and only 14% took two weeks or more of vacation time.
Men who do not take regular vacations are 32% more likely to die of heart attacks and 21% more likely to die early of all causes, while women who do not take regular vacations have a 50% greater risk of heart attack and they are twice as likely to be depressed as those who take regular vacations.
The foregoing is excerpted from the data contained in the proposed Paid Vacation Act of 2008 recently introduced into the House of Representatives by Rep. Grayson of Florida. I might add that there is data suggesting that European workers are more productive per hour worked (Americans are more productive per person because we work many more hours). I have long hypothesized that there might be a connection between more time off and higher productivity, not to mention better health.
Paid Vacation Act of 2009
The Paid Vacation Act of 2009 (HR 2564) would mandate one workweek of paid vacation during each 12 month period for employers with 100 or more employees beginning on the date of enactment. The provision would be added to the Fair Labor Standards Act as an amendment.
Beginning three years after the date of enactment, employees of employers with 50 or more employees would be entiteld to one workweek of paid vacation during each 12-month period. Employees of employers with 100 or more employees would be entitled to two weeks.
Employees would be obligated to give 30 days’ notice prior to taking vacation. Employees would be eligible if they had worked for at least 12 months for the employer and worked at least 1250 hours.
The time could not be accrued and rolled over.
The Significance of the Proposed Act
Although I do not have data in hand yet as to the number of employees in the United States whose employers provide paid vacation, my recent study of paid time off and sick leave in general suggests that a substantial majority of employers do provide such paid time off. Persons least likely to have paid vacation are those at the bottom of the wage and socio-economic scale.
Although this bill would increase cost for some employers, in theory it might reduce health care and other costs. Of course, whether the United States is willing to join its other industrialized colleagues in mandating time off remains to be seen. One way or another, though, 2009 is shaping up to be a very interesting year in the world of labor and employment law.
June 9, 2009
Federal COBRA Continuation Coverage Plans
The ARRA provides subsidies for “COBRA continuation coverage,” which is required by federal law for “group health plans.” A group health plan generally includes any plan sponsored by an employer or employee organization to provide health care.
The subsidy applies to health insurance (including self-insurance) and Health Reimbursement Arrangements (HRA). However, it does
not apply to Flexible Spending Accounts (FSA) or Cafeteria Plans!
State Mini- COBRA Plans
Most states have “Mini-COBRA” plans that cover employers with fewer than 20 employees. The ARRA subsidy applies to State “mini-COBRA” plans if the coverage is comparable to COBRA.
Comparable continuation coverage does not include every State law right to continue health coverage. To be comparable, an eligible individual must generally have the right to continue coverage substantially similar to that provided under the group health plan at a monthly cost based on a specified percentage of the plan’s cost of providing such coverage, i.e., a limit on the premium.
What If the State Plan Varies in Length or Has Different Qualifying Events?
The fact that a state plan has a shorter or longer period of continuation coverage than the federal COBRA program does not disqualify the State program from being “comparable” for purposes of the subsidy. Likewise, the fact that the state plan applies different qualifying events does not make participants ineligible for the federal subsidy. The critical issue is how the premium is calculated.
The State Mini-COBRA program in a particular state provides for a maximum of 6 months of continuation coverage(rather than 18 months under COBRA). The premiums, however, are the same as those paid for active employees. In addition, the State
requires that an employee be covered by the employer’s group health insurance program for a minimum of three months prior to the qualifying event in order to receive the State Mini-COBRA benefits.
Such a State program is treated as comparable continuation coverage for purposes of the ARRA and participants are eligible for the subsidy.
June 9, 2009
September 1, 2008
To be eligible for the subsidy, an employee must be involuntarily terminated between September 1, 2008 and December 31, 2009. An employee involuntarily terminated before September 1, 2008, is not eligible for the subsidy, even if the employee’s COBRA coverage did not start until after September 1.
An employee was laid off on June 15, 2008, but received severance pay, including health insurance benefits, through December 31, 2008. The employee is not eligible for the subsidy in March 2009. It is the date of involuntary termination that controls–in this case June 15, 2008.
February 17, 2009
This is the date the ARRA became law. Persons eligible for COBRA after September 1, 2008 and prior to February 17, 2008, who do not have it (even if they had it and dropped it), may elect COBRA during an extended enrollment period.
March 1, 2009
The first day of subsidy for most persons who had COBRA continuation coverage in effect on February 17, 2009.
December 31, 2009
This is the last day that an employee can be involuntarily terminated and still be eligible for the COBRA subsidy, unless the subsidy is extended by Congress.
September 30, 2010
The COBRA subsidy runs for nine months only, unless Congress extends the period of subsidy. Consequently, an employee who was involuntarily terminated on December 31, 2009 would be eligible for the COBRA subsidy through September 30, 2010.
On December 15, 2009, an employee is involuntarily terminated and elects COBRA coverage that day. She will receive the subsidy for 9 months, until the earlier of August 15, 2010, or until she becomes eligible for other group health plan coverage or Medicare.
Mandated Collective Bargaining Agreements.
Under the current law, once a union is certified by the National Labor Relations Board (the “Board”) as the collective bargaining representative of the employees, the parties must meet “at reasonable times” to negotiate “in good faith” in order to reach agreement on a collective bargaining agreement. However, neither party is required to “agree to a proposal” or [make any] concession.” There is no time limit for reaching an agreement, and often the first agreement takes a number of months to complete.
When the parties are unable to agree, either party may resort to use of economic weapons like a strike or a lockout. In addition, if the parties reach true impasse–a situation like stalemate in chess, in which no movement is realistically possible–the employer may unilaterally implement its last offer.
Although there are flaws in this scheme, and it might benefit form somewhat firmer parameters, most employers and unions do reach agreement within a reasonable period of time.
The EFCA would bring a dramatic change to the process. First, the statute would require that the employer begin bargaining within ten days following a request from the union, unless the parties agree to extend the time. (Currently there is no such time limit.) The parties are then required to “meet and commence to bargain collectively” and “make every reasonable effort to conclude and sign a collective bargaining agreement.”
If the parties do not reach agreement within 90 days (or a longer time agreed to by the parties), either the union or the employer may notify the Federal Mediation and Conciliation Service (FMCS) of a dispute and request mediation. The FMCS must then “promptly” communicate with the parties and use its” best efforts,” to bring them to agreement through mediation and conciliation.
If, however, the parties are unsuccessful in reaching agreement within 30 days following the first request for mediation (a period which may be extended by mutual agreement), the FMCS must refer the dispute to an arbitration board. These arbitration boards are to be created pursuant to regulations to be promulgated by the FMCS. The arbitration panel will then render a decision settling the dispute and the decision will be binding upon the parties for a period of two years, unless amended during such period by written consent of the parties.
The Significance of the EFCA Changes
The EFCA would change the bargaining process for first contracts significantly. First, the statute imposes an unrealistically short time limit on the parties for negotiating a comprehensive collective bargaining agreement. An agreement can easily take six months or more, even when the parties are working diligently toward an agreement. Neither the union nor the employer can typically devote full time to the process. Wages, work rules, benefits, discipline and discharge, dispute resolution, seniority, promotions, and numerous other matters must be addressed and reduced to writing. Granted, the parties can agree to extend the time. However, it would be preferable to begin with a more reasonable period of time.
In contrast to the present rule where mediators need only be contacted when a work stoppage is in the offing, mediation is now imposed unless the parties can quickly craft an agreement. If mediation is not successful, a neutral third party–an arbitration board–will impose an agreement upon the parties. Although one may presume that the arbitration board will piece together an agreement from the parties’ proposals, as written the EFCA does not set out parameters for the arbitrators.
Unfortunately, there are employers who after being unionized do not bargain in good faith and they seek to undermine the process. In those circumstances, the proposed EFCA procedure or some variation on it makes sense. However, the proposed statute appears a bit too rigid for the more typical good faith negotiations.
June 8, 2009
The Employee Free Choice Act
The Employee Free Choice Act (EFCA), which is highly likely to be adopted in some form by the current Congress, is the most sweeping revision of the National Labor Relations Act (the “Act”) since the Labor Management Relations Act (Taft Hartley) of 1947. There were major amendments in 1959 and 1974, but none of those reached the very core of the Act–union organizing–in the way the EFCA does.
The proposed statute, which has now been introduced into both the House (HR 1409) and the Senate (S 560) with numerous sponsors, would make three major changes to the Act. In order to provide some background for readers not familiar with the Act, I will divde the discussion into three parts.
Part 1. Union Organizing By Card Check
Under current law, if a union wants to organize the employees of an employer, it distributes union authorization cards to the members of the proposed bargaining unit. These cards authorize the union to act as the exclusive bargaining representative of the employees. If the union presents cards from over 50% of the members of the proposed bargaining unit, the employer may recognize the union voluntarily. However, in almost every instance, the employer will insist that the union file a petition for an election to be administered by the National Labor Relations Board (NLRB). Unions can simply file petitions on their own with cards from merely 30% of the members, but they rarely do so as statistically they are unlikely to win an election unless they have 50% to 75% of the employees supporting the union at the time of the filing of the petition.
Once the petition is filed the appropriate bargaining unit is determined (by the NLRB when the parties do not agree or when the proposed unit is not “appropriate”) and an election is scheduled. Then the union and the employer launch into intensive campaigns. As a broad generalization (with myriad exceptions), employers have the upper hand in such campaigns as they have greater resources. There are consulting firms, for example, that specialize in helping companies defeat a union organizing drive. In addition, employers can have captive audience speeches on work time, whereas unions generally are limited to offsite meetings.
If the union receives a majority of the votes cast in the secret ballot election on election day, it wins. If not, the employer wins and the employer can be assured that there will be no more organizing attempts by the defeated union at least for another year.
If the union does prevail, the parties must negotiate “in good faith” to reach agreement on a contract. Although most parties do so successfully, some employers will seek to drag negotiations out long enough that support for the union wanes.
The Significance of the EFCA
The EFCA as proposed introduces a radical change. Under the legislation, once a union presents the NLRB with cards signed by a majority of the employees (50% plus 1) and the Board is satisfied that the cards are legitimate, then the Board must certify the union as the collective bargaining representative without an election. The EFCA is unlikely to be adopted in its current form, as there are many vocal opponents. However, it is highly likely to pass in some form. Whatever the final bill looks like, unions will have a much easier time of organizing employees.
Employers are not always aware of union organizing campaigns until they are well underway. Consequently, if a union is able to collect signed authorization cards from over 50% of the members of the proposed bargaining unit without the employer’s being aware of the campaign, an employer could be shocked to suddenly find a union on its doorstep.
There are rationale arguments both for and against this change. The one thing that is certain, however, is that the EFCA is sure to change the landscape for employers and unions for years to come.
June 7, 2009
In the current Congress numerous employee-friendly bills have been introduced. Among the most significant and most likely to be adopted are changes to the National Labor Relations Act–the first amendments in over 30 years and perhaps the most significant amendments since the Act was first adopted in 1935, or at least since the Taft-Hartley amendments in 1947. This post begins a series explaining and analyzing the proposed changes to the Act.
The RESPECT Act
Senators Dodd, Durbin, and Kennedy recently introduced the “Re-empowerment of Skilled and Professional Employees and Construction Tradeworkers Act” (RESPECT) (S. 969). The proposed statute would modify the definition of a “supervisor” in the National Labor Relations Act (NLRA). Congressman Rob Andrews and Congresswoman Rosa DeLauro have introduced companion legislation in the House of Representatives.
The NLRA defines a supervisor as an:
individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.
The amendment would add “and for a majority of the individual’s worktime” after “interest of the employer” and strike the words “assign” and “responsibility to direct them.” The amended section of the statute would read, therefore:
any individual having authority, in the interest of the employer and for a majority of the individual’s worktime, to hire, transfer, suspend, lay off, recall, promote, discharge, reward, or discipline other employees. . .
What Is the Significance of the RESPECT Act?
On its face, this looks like a modest change, but it could have far-reaching impact, particularly in health care. There has long been tension as to who is and who is not a supervisor. Supervisors are not allowed to organize into unions. When a union seeks to organize an employer for the first time, the bargaining unit defined by the parties must exclude supervisors. Consequently, employers generally want to treat as many employees as possible as supervisors, while the union wants to minimize the number of persons identified as supervisors in order to limit the size of the bargaining unit.
There has long been tension between the more conservative and the more liberal members of the National Labor Relations Board (NLRB). When I worked at the Board the staff often joked that for some Board members “everyone was a supervisor.”
The issue came to a head in the broad context of charge nurses. Generally in a hospital each unit has at least one charge nurse. The nurse may assign others duties and oversee the unit for his or her shift. However, charge nurses usually do not have the power to hire and fire nor perform other managerial functions. In 1996, the Board held in Kentucky River Community Care, Inc,; 323 NLRB No. 209 (1997), that six registered nurses in a 110 member bargaining unit were not supervisors because the nurses did not use “independent judgment” when they exercised “ordinary professional or technical judgment in directing less-skilled employees to deliver services in accordance with employer-specified standards.”
The Supreme Court ultimately rejected the Board’s reasoning, however in NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706 (2001). In 2006, the Board decided Oakwood Healthcare, Inc., 348 NLRB No. 37 (2006), finding charge nurses supervisors and devising a new test for measuring who is and who is not a supervisor, consisten with the Supreme Court’s pronouncement in Kentucky River. The result is employees who perform even limited supervisory duties part of the time may be viewed as supervisors and prohibited from joining labor organizations. By requiring that an employee can only be deemed a supervisor under the NLRA if he or she acts as a supervisor the majority of his or her worktime and by eliminating the words “assign” and “responsibility to direct them,” the amendment would allow most charge nurses, and perhaps many other part-time supervisors, to be represented by a union.
Needless to say, unions are lobbying hard for the bill, while employers are generally opposed to it.
On May 18, the Healthy Families Act was introduced in the House of Representatives. The bill would require employers with 15 or more employees to provide workers with paid sick leave.
The proposed statute, which had been introduced in the previous Congress in 2007, would require employers to provide workers with up to seven days of paid sick leave annually on an accrued basis. Similar legislation has been introduced in the Senate by Sen. Edward Kennedy.
Under the proposed statute workers would earn one hour of paid sick leave for every 30 hours worked to a maximum of seven days (56 hours) per year. Employers would be permitted to allow employees to accrue more than 56 hours but would not be required to do so.
The statute would require that workers begin accruing leave on their first day of employment. A worker could begin using accrued leave after completing 60 days of employment. Accrued but unused leave would carry over from one year to the next to a maximum of 56 hours, unless the employer allowed greater accumulation.
Employees would be allowed to use leave for their own illness or to care for sick parents or children. In addition, leave could be used to visit a physician or other health care provider for preventive care. Further, leave could be used for absence which resulted from “domestic violence, sexual assault, or stalking,” in order to obtain medical care, to obtain services from a victim services organization, or to participate in related legal proceedings.
The proposed legislation would allow employers to require that employees provide certification by their doctor if they are absent for more than three consecutive days.
According to Representative DeLauro of Connecticut, the bill’s sponsor, almost half of all U.S. private sector workers have no paid sick leave. Among the lowest quartile of wage earners, 79% have no leave.
A recent report by the Center for Economic and Policy Research comparing laws and policies related to sick leave in 22 different countries, notes that the United States and Japan are the only countries of the 22 examined that do not provide any short-term paid sick leave to workers. All of the countries, except for the United States, provide long-term paid sick leave to workers with serious illnesses.
In this era of Swine Flu concerns, there is some data suggesting that paid sick leave helps to reduce the spread of contagious illness.
One major employer concern is the abuse of sick leave. Large employers lose about $850,000 annually from unscheduled sick and other personal days. However, San Francisco, which enacted mandatory sick leave in 2007, reports no negative impact on business compared to businesses in surrounding communities.