DOL Issues Guidance on Accounting for Holidays During FMLA Leave Time

On May 30, 2023, the Department of Labor’s Wage and Hour Division (WHD) published an opinion letter clarifying how to account an employee’s leave time where the employee takes FMLA leave for less than a full week during a week that includes a holiday.  In the letter, the WHD explained that, under the Family and Medical Leave Act (FMLA), the employee’s normal workweek is the basis of the employee’s leave entitlement. In situations where a holiday occurs during an employee’s workweek, and the employee works for part of the week and takes FMLA leave for part of the week, the holiday does not reduce the amount of the employee’s FMLA leave entitlement (unless the employee was required to report for work on the designated holiday). The WHD illustrated this principle through examples. The WHD emphasized the importance that an employee’s FMLA entitlement should only be diminished by the amount of leave actually taken. Significantly, however, the WHD’s letter confirmed that in situations where the employee takes a full week of FMLA leave during a week that includes a holiday, the entire week is nonetheless counted as FMLA leave, including the holiday.

DOL’s Updated FLSA Posting is Now Mandatory

In early May, the Department of Labor released a new Employee Rights Under the Fair Labor Standards Act (FLSA) posting, which contains changes required by the Provide Urgent Maternal Protections (PUMP) for Nursing Mothers Act. Substantively, these changes include: (1) the section on Nursing Mothers is now called “Pump at Work,” (2) the reference to employees subject to the overtime requirement has been removed, as previously the right to break time to express breast milk only applied to employees subject to the FLSA overtime requirement (i.e., non-exempt employees) and the PUMP Act applies to all employees (both exempt and non-exempt), and (3) the posting notes that certain narrow exceptions apply. Because of these changes, the DOL has announced that prior versions of the posting do not fulfill an employer’s posting requirements. To comply with the updated posting requirements, employers must post the DOL’s updated FLSA poster.

DOL Updates FMLA Workplace Posting

The Department of Labor has issued a redesigned Family and Medical Leave Act (FMLA) poster. In addition to the posting’s new design, the updated FMLA poster clarifies, among other things, which organizations qualify as “covered employers” under the FMLA. The poster also contains a QR code, which allows readers to quickly access additional information regarding the FMLA through a mobile device. Importantly, the DOL has not mandated that the revised poster replace prior postings. Therefore, the April 2016 and February 2013 versions of the poster will still satisfy an employer’s posting obligations. However, it is always best practice to display the DOL’s most current poster.

Updated OFCCP Disability Self-Identification Form

The Office of Federal Contract Compliance Programs (OFCCP) recently received approval to implement an updated Voluntary Self‐Identification of Disability Form that prospective and current employees must use to self-identify as having a disability.  The form must be used by federal contractors and subcontractors subject to Section 503 of the Rehabilitation Act for compliance to support required affirmative action programs. Contractors must implement the new form by July 25, 2023.

California: Employers Must Have Monitoring Policies to Enforce No Expectation of Privacy

On March 21, 2023, in Militello v. VFarm 1509, the California Court of Appeal stated that there was no expectation of privacy in work emails between employee spouses because the employer did not have a written email monitoring policy. Generally, communications between spouses may be privileged entitling them to privacy. There, the plaintiff attempted to use the communications between the employee spouses in litigation against them. However, because there was no evidence that the employees were aware or even agreed to any email monitoring practice, their spousal privilege remained intact.  Employers should implement written monitoring policies to maintain that employees have no expectation of privacy over work emails.

California: Payroll Wages Paid on Next Day that is Not a Holiday

On March 29, 2023, the California Supreme Court declined to review, thereby leaving in place, an appellate court ruling in Parsons v. Estenson Logistics, LLC, which confirmed that “when weekly-paid wages are due on a weekend or holiday, they may be paid on the next day that is not a holiday.” Subject to limited exception, payroll must be paid within 7 days following the close of the payroll period. When that deadline occurs on a weekend or holiday, wages may be paid on the next business day. Although this has long been the practice in California, by refusing to take up the case, the California Supreme Court effectively confirmed this point of law.

California: End of Staffing Agency Temporary Assignment is Not Termination

On May 10, 2023, in Young v. RemX Specialty Staffing et al.,  the California Court of Appeal stated that an employee of a staffing agency is not deemed terminated when their temporary assignment ends. There, a staffing client ended a staffing employee’s assignment for unprofessional behavior. However, the staffing employee was not terminated by the staffing agency and was paid in accordance with the regular payroll schedule. The court stated that a “discharge” only occurs when the staffing employee is fired from the staffing agency.

Connecticut: Minimum Wage Increases This Year

Effective June 1, 2023, minimum wage increased to $15.00 per hour. The increase is in accordance with the Connecticut General Assembly’s proposed changes in 2019. This increase completes the increases that were spread out across a five-year period starting in 2019. Beginning January 1, 2024, the minimum wage will be indexed to the employment cost index allowing the minimum wage to grow according to economic indicators.

Connecticut: No Expanded Definition of Supervisor for Hostile Work Environment Claims

On April 25, 2023, in Tenisha O’Reggio v. Commission on Human Rights and Opportunities, the Connecticut Appellate Court said that the definition for “supervisor” for hostile work environment discrimination claims is the same under Connecticut law as it is in federal claims brought under Title VII. Here, an adjudicator for the Connecticut Department of Labor claimed a service program coordinator to whom she reported created a hostile work environment due to the plaintiff’s race and color. The plaintiff argued that the program coordinator was a supervisor; therefor, the administrative law judge was required to impute liability to the employer. The Court disagreed and followed the U.S. Supreme Court’s rationale in Vance v. Ball State University. In Vance, the Supreme Court said that a supervisor must be able to effect a significant change on the employment status of other employees, such as hiring, firing, or altering the benefits of other employees, and not just direct the day-to-day tasks of an employee. Plaintiffs in Connecticut will now be held to the same standard applied in federal claims to successfully prove a co-worker is a supervisor for vicarious liability in a hostile work environment claim.

Delaware: State Legalizes Recreational Marijuana

As of April 23, 2023, Delaware legalized recreational marijuana, permitting adults 21 years and older to possess small quantities of marijuana for personal recreational use. Notwithstanding the legalization, employers are still permitted to conduct drug testing, implement drug-free workplace policies, and impose disciplinary consequences for employees’ use of recreational marijuana. Employers may also prohibit or regulate employees’ possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on company premises. The legislation legalizing recreational marijuana does not alter or amend any rights or privileges associated with the use of medical marijuana. While the medical marijuana laws do not require an employer to accommodate an employee’s use of medical marijuana in the workplace or require employers to permit employees to use medical marijuana on the job, employers are prohibited from discriminating against employees based on, either, their status as a registered medical marijuana patient or caregiver, or a registered medical marijuana patient’s positive drug test for marijuana components, unless the employee used, possessed, or was impaired by marijuana at work or during working hours.

Georgia: Vaping Prohibited in the Workplace

Georgia amended its smoke-free air law to include vaping in restricted areas, such as workplaces. As of July 1, 2023, SB 47 will now include in its definition of smoking use of “an electronic smoking device which creates an aerosol or vapor or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.” Violations of the law may result in a misdemeanor punishable for a fine.

Georgia: Voting Leave Law Expanded

As of July 1, 2023, SB 129 will expand the current voting leave law requirements. Employers must provide time off to vote in-person on a day that is designated for early voting in addition to providing time off on election day. Also, employees who begin work more than two hours after the polls open or leave work more than two hours before the polls close will now be eligible for voting leave.

Georgia: Kin Care Leave Sunset Date Repealed

SB 61 recently repealed the automatic sunset date for Georgia’s kin care leave law. As a result, the law no longer expires on July 1, 2023. Employers with 25 or more employees who provide sick leave must continue to allow employees to use at least five days of their accrued, unused sick leave in a calendar year for the care of an immediate family member.

Chicago, IL: Chicago Clarifies Guidance on Anti-Harassment Law

Previously on July 1, 2022, the Chicago City Council amended the City’s sexual harassment ordinance, promoting zero tolerance of violence and harassment in the workplace, and imposing new training, policy, and posting requirements and record retention obligations for employers. However, under the City’s initial guidance, businesses with employees working in Chicago were considered “employers” required to comply with the amended ordinance only if they maintained a physical presence in Chicago and/or were subject to the City’s licensing requirements. In May of 2023, the City Council published updated guidance through its FAQs, correcting its position and clarifying that the “requirements of the new sexual harassment protections apply to all employers … whose employees work in Chicago. The training requirement applies for all employees who work in Chicago, even if remote, and their managers or supervisors, even if the managers or supervisors work outside of Chicago.” Therefore, all employers who have any employees working in Chicago should review their sexual harassment training and related policies to ensure compliance ahead of the June 30, 2023 training deadline.

Indiana: Non-Compete Restrictions Expanded for Physicians

As of July 1, 2023, SB 7 will further restrict non-compete agreements for physicians. Specifically, there will be a full ban on non-compete agreements entered into on or after July 1, 2023 between employers and primary care physicians. Further, all existing physician non-compete agreements would be unenforceable as of July 1, 2023 if the employer terminates the physician’s employment without cause, if the physician terminates the physician’s employment for cause, or if the physician’s employment contract expires and the physician and employer have each fulfilled their contractual obligations. SB 7 also provides additional guidelines for negotiating the “reasonable price” of a physician’s release from a non-compete agreement, including a mandatory mediation process at the election of either the physician or employer if the parties are unable to agree. Employers should have non-compete agreements reviewed by legal counsel immediately.

Kansas: Sex Definition Limited to Male and Female

As of July 1, 2023, for purposes of any state law, rule, or regulation, SB 180 defines “sex” as the “individual’s biological sex, either male or female, at birth.” The bill specifically states that “an  individual  born  with  a  medically  verifiable  diagnosis  of ‘disorder/differences  in  sex  development’  shall  be  provided  legal protections  and  accommodations  afforded  under  the  Americans  with [D]isabilities [A]ct and applicable Kansas statutes.” Notably, this bill does not impact any federal definitions, obligations, or protections that may differ.

Lexington, KY: CROWN Act Passed

Effective May 11, 2023, Ordinance No. 49-2023 expands the definition of race, religion, and national origin discrimination to include natural hair texture, color, head coverings, and protective hairstyles including braids, locs, twists, cornrows, Bantu Knots, and afros. The Ordinance’s application is limited to discrimination in employment, public accommodations, and housing. Employers should review and update dress code and grooming and anti-discrimination policies to ensure compliance.

Maryland: Increased Restriction on Non-Compete Agreements for Low-Wage Employees

As of October 1, 2023, SB 591 will prohibit employers from including a noncompete provision in an employment contract with an employee who earns equal to or less than 150 percent of the state minimum wage. Currently, the threshold is an employee who earns equal to or less than $15 per hour or $31,200 annually. Employers should have non-compete agreements reviewed by legal counsel for compliance.

New Jersey: Expanded Unemployment Benefits for Striking Workers

As of April 24, 2023, A4772/S3215 allows unemployment insurance (UI) benefits for workers during an employer lockout, even if a strike did not immediately precede the lockout. UI benefit disqualification is also reduced from 30 days to 14 days following a strike, but benefits may be paid immediately if replacement workers are hired on either a permanent or temporary basis. Finally, there is no benefit disqualification when failure of the employer to comply with an agreement between the parties is an issue in the labor dispute.

New Jersey: Required Temporary Worker Notice Now Available

As of May 7, 2023, “Temporary Help Service Firms” must complete the new Temporary Laborer Assignment Notification issued by New Jersey Department of Labor (NJ DOL) and provide it to each temporary worker “upon assignment to a temporary position.” It appears that temporary staffing agencies will need to complete the provided form rather than their own similar form. Although the new Temporary Workers Bill of Rights law does not go into effect until August 5, 2023, applicable employers must start providing the required notice now.

New York: State Minimum Wage Update

Last month, New York Governor Kathy Hochul signed the Fiscal Year 2024 New York State Budget (the Budget), which includes a multi-year plan to increase the State’s minimum wage, beginning on January 1, 2024. Under the Budget, New York City, Long Island, and Westchester will increase the minimum wage to $16.00 per hour, effective January 1, 2024, then $16.50 on January 1, 2025, and $17.00 on January 1, 2026. The remainder of the state will increase minimum wage to $15.00 per hour, effective January 1, 2024, then to $15.50 on January 1, 2025, and to $16.00 on January 1, 2026. The Budget directs that, after January 1, 2027, the minimum wage will increase based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region. However, the Budget clarifies that the minimum wage increases will be suspended in the event of certain economic conditions. While setting a schedule for increases to the minimum wage, the Budget does not affect the salary threshold for exempt status workers under the NY Labor Law.

New York City, NY: City Council Passes Legislation to Ban Height and Weight Discrimination

Beginning November 22, 2023, New York City’s Human Rights Law will be amended to include height and weight in the list of protected classifications, prohibiting employers from discriminating against applicants and employees of the basis of their actual or perceived height or weight in all employment decisions. The new legislation contains several exemptions where: (1) preferential treatment on the basis of height or weight is required by federal, state or local law or regulation, (2) an individual’s height or weight could prevent them from performing the essential functions of the job with or without an accommodation, and (3) a certain height or weight is reasonably necessary for the normal operation of business. Importantly, the City’s Commission on Human Rights is charged with identifying particular jobs or job categories that fit within the outlined exemptions.

South Carolina: Paid Parental Leave Provided to Public School Educators and Staff Members

Governor McMaster recently signed H. 3908, extending to teachers and other school district employees the same benefits of paid parental leave that were provided to state employees in late 2022. Effective June 26, 2023, qualifying public school educators and full-time school district employees will be entitled to up to six (6) weeks of paid parental leave. Under the new law, a school district employee qualifies for the paid parental leave when they give birth or become a parent through adoption of a child under the age of 18 years old. The spouse who does not give birth (or in the case of adoption who is not the primary care provider of the child) is also entitled to two weeks off with pay. Parents who foster a child in state custody can also take two weeks of paid leave under the law. The law specifically states that posted holidays and school vacation days listed on school district calendars do not count as part of the individual’s paid time off. Passage of this new law makes South Carolina the first state in the southeast region to guarantee that public school employees statewide, including teachers, will receive paid leave when they welcome a new child.

Tennessee: Consumer Privacy Protections Passed

Effective July 1, 2025, those conducting business in the state of Tennessee or targeting Tennessee residents must comply with data privacy requirements. SB 73, also known as the Tennessee Information Protection Act, applies to businesses that control or process personal information of at least 100,000 consumers in a calendar year or control or process the personal information of at least 25,000 consumers and derive more than 50% of gross revenue from the sale of personal information. Consumers have several rights under the law, including: 1) the right to know; 2) the right to correct; 3) the right to delete; 4) data portability; 5) the right to request information about personal information sold or disclosed to third parties; and 6) the right to opt-out. Covered entities must respond to rights requests no later than 45 days and must limit their collection of personal information. In addition, they must obtain consent to process sensitive data and maintain reasonable data security practices. The law does not apply to the personal data of individuals acting in an employment context.

Utah: Non-Tipped Employees May Participate in Tip Pools

As of May 3, 2023, SB 73 allows employees who are not tipped employees to participate in a bona fide tip pooling or sharing arrangement with other employees who are not tipped employees in accordance with the federal Fair Labor Standards Act (FLSA). Note that the FLSA allows non-tipped employees to participate in tip pools only when their employer pays its tipped employees the full minimum wage and does not claim a tip credit.

Washington: Employee Protections for Off-Duty Cannabis Use

Effective January 1, 2024, SB 5123 will prohibit employers from making hiring decisions based on off-duty cannabis use or a positive pre-employment drug test that finds non-psychoactive cannabis metabolites in hair, blood, urine, or other bodily fluids. The law does not prevent employers from making hiring decisions based on scientifically valid drug screenings conducted through methods that do not screen for non-psychoactive cannabis metabolites. Currently, there are no such drug tests available. Employers may still maintain a drug and alcohol-free workplace policy and may still test for cannabis post-accident and based upon reasonable suspicion. Applicants in certain safety-sensitive positions may still be tested for cannabis.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

APPLIES TO All Employers with Employees Subject to the NRLA

EFFECTIVE February 27, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look The NLRA protects workers who discuss racism in the workplace with their co-workers and may also protect social media activity that is a call to action or involves “inherently concerted” discussions about vital categories of workplace life.

Discussion

The National Labor Relations Board (NLRB) recently issued an Advice Memorandum addressing protected workplace discussions around racism. In Kaiser Permanente Bernard J. Tyson School of Medicine, a school professor claimed she was essentially terminated for a classroom discussion about racism at the school and in the medical field, and for tweeting about her own story to encourage others to act.

The National Labor Relations Act (NLRA) protects employees when engaging in concerted activities for their mutual aid or protection. This situation was in the context of the early stages of the COVID-19 pandemic in conjunction with the mass protests against the killing of Black people and people of color by police. The employer instructed professors to discuss with students about legacies of power structures and institutionalized racism that result in gender bias and race bias in medicine. Following that instruction, the professor engaged in discussion with the students and involved another employee who was present. Here, the NLRB said that the classroom conversation was inherently concerted because it discussed issues of race faced by Black faculty and students as well as systemic racism in medicine, and that conversation was for mutual aid or protection.

Additionally, the NLRB said that the employee’s tweets were protected concerted activity on their own because they discussed terms and conditions of employment regarding racial disparities in medicine faced by medical professionals, sought the assistance of others to improve working conditions in medicine, and encouraged others to fight for racial equality and justice in the workplace. The tweets were also a logical outgrowth of the discussion from the classroom.

While the NLRA protections are typically discussed in situations involving pay or working conditions, this Advice Memorandum highlights that working conditions include addressing racism in the workplace. Employers should note that these protections are in addition to federal Title VII protections for opposing or raising concerns about racism in the workplace, as well as similar state and local rules.

 

Action Items

1. Have appropriate personnel trained on NLRA protections and employee discipline.
2. Review discipline for racial discussions, including social media posts, with legal counsel.
3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

APPLIES TO All Employers with Employees in DE, NJ, PA, and the Virgin Islands

EFFECTIVE April 3, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look The Department of Interior’s failure to provide a report or final order before the expiration of a statutory deadline does not mean a claim for whistleblower reprisal has ended.

Discussion

In Jacobs Project Management Co. v. United States Department of Interior, the Third Circuit Court of Appeals stated that a federal contractor employer engaged in prohibited retaliation against a former employee for whistleblowing and that the final order in the employee’s favor was valid despite statutory administrative deadlines.

Here, a federal contract management service’s employee reported billing discrepancies by a third-party to the Department of Interior’s (DOI) Office of the Inspector General (OIG). The employee was instructed not to speak with the OIG again without a company attorney present. However, he continued to meet with the OIG who ultimately found no evidence of misconduct. Subsequently, the federal contract management service did not get their government contract renewed and they placed the employee on a 90-day convenience leave without pay but with benefits. At the end of ninety days, the employee was terminated.

The employee filed a whistleblower reprisal claim with the OIG for retaliation, alleging that his placement on convenience leave was retaliation for his complaints about alleged third-party billing inaccuracies. Under the reprisal statute for whistleblowing federal contractors, the OIG had 180 days with an additional 180-day extension to issue a report. The OIG did not complete its report until well after the combined 360-day deadline. It took the DOI another three years to tell the employer that it never received their response to the report. The employer claimed it never received the OIG’s report and declined to issue a response since the report was issued after the statutory deadline. Ultimately, DOI issued a final order against the employer awarding the employee backpay and reinstatement rights. The employer appealed the final order claiming the DOI did not have jurisdiction due to issuing the final order after the statutory deadline.

The Third Circuit upheld the final order saying that the statute did not actually create a filing deadline on the OIG. Specifically, the deadline’s requirement to meet a timeframe did not mean that the deadline was jurisdictional or that the agency could not continue to act if a lawsuit was not filed. The deadline for agency action is really “a spur to prompt action, not as a bar to tardy completion.” Federal contractors facing whistleblower reprisal claims should note that the expiration of an agency deadline does not necessarily mean that an investigation has concluded. Such contractors should continue to ask for timely reports or final orders.

 

Action Items

1. Review adverse actions against employees engaging in protected activity, like whistleblowing, with legal counsel.
2. Consult with legal counsel upon notification of a claim or potential claim.
3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

APPLIES TO All Employers with Employees in ND, SD NE, MN, IA, MO, and AR

EFFECTIVE February 28, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Transferring an employee to a different work location or to a different department does not constitute an adverse employment action.

Discussion

In Bell v. Baptist Health, the Eighth Circuit Court of Appeals stated that a transfer of job location or a transfer to a different department did not produce a material employment disadvantage, and therefore was not considered an “adverse employment action” for purposes of a doctor’s claim for gender-based discrimination.

Here, a female doctor alleged that a colleague male doctor screamed at her, made derogatory statements to her, ignored her statements to him, threw a used syringe at her, and threatened to report her. The female doctor reported some of these instances to the hospital administration, and shortly thereafter, filed a complaint with the EEOC alleging discrimination by the male doctor. In response, the hospital created a safety plan, under which the female doctor was to report if she felt unsafe working with the male doctor (or others) and the hospital would have someone step in to cover for her. The female doctor invoked this safety plan following an interaction with a second male doctor when she reported that she thought the male doctor was intoxicated during a procedure. The male doctor was required to take a breathalyzer test to disprove the allegations, and following the passing test the male doctor remarked that he would never work with the female doctor again. That same day, the female doctor was placed on administrative leave.

Several months later, the female doctor was offered the option to return to work and transfer to a different hospital location or to remain at the location where she previously had worked with the male doctors. The female doctor was also offered the option to transfer to a different department, which would again alleviate the need to work with the male doctors. Regardless of her choice, her duties, hours, and pay would have remained the same. However, the female doctor refused all options stating she did not want to work with the male doctors. She indicated that she should not have to change departments or work locations to avoid working with the male doctors and sued the hospital for sex discrimination and retaliation.

Ultimately, the Eighth Circuit found that the female doctor did not suffer an adverse employment action. The court reasoned that the focus of what constitutes an adverse employment action is on the “material adversity,” stating that a materially adverse action is “one that might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” This may include “termination, cuts in pay or benefits, and changes that affect an employee’s future career opportunities,” but “minor changes are not enough.” The transfers offered here would not produce a material employment disadvantage, nor would they have dissuaded a reasonable worker from making or supporting a claim of discrimination. Accordingly, the female doctor’s claims for sex discrimination and retaliation failed.

 

Action Items

1. Consult with legal counsel when initiating an offer to transfer an employee to a different department or different working location following a workplace complaint.
2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

APPLIES TO All Employers with Employees in Washington, D.C.

EFFECTIVE March 7, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look A practice of employing workers only when a valid pre-hire agreement is in place is a legitimate business practice and not discriminatory. Termination of employees covered by expired pre-hire agreements is not an anti-union motive under the NLRA if that is the employer’s policy.

Discussion

In International Brotherhood of Boilermakers v. NLRB, the D.C. Circuit Court of Appeals said employers can terminate employees under a pre-hire agreement when it expires without committing an unfair labor practice. Here, under a decades-old policy, Hawaiian Dredging employed workers only when it had a pre-hire agreement with a union. Pre-hire agreements are collective bargaining agreements that permit a construction company to contract with a union before it hires any union workers. Once a pre-hire agreement expires, either party can walk away and there is no requirement to continue to bargain in good faith. Hawaiian Dredging’s pre-hire agreement with multiple unions expired but they continued to hire Boilermakers welders while attempting to negotiate a new agreement. When it became clear that the relationship between the parties had ended, Hawaiian Dredging terminated 13 Boilermakers welders. The Boilermakers union, unsatisfied with the termination of its welders, took the case before the National Labor Relations Board (NLRB) and alleged unfair labor practices under the National Labor Relations Act (NLRA). After two reviews, the NLRB found that Hawaiian Dredging’s practice of employing workers only when it had a pre-hire agreement in place was a legitimate business practice. The Boilermakers union appealed to the D.C. Circuit Court of Appeals.

The Circuit Court ultimately agreed with the NLRB and deferred to their finding that Hawaiian Dredging did not commit an unfair labor practice when it terminated the Boilermakers welders. The policy of not hiring welders unless a pre-hire agreement with a union is in place was a neutral, non-discriminatory policy. When an employee protected by the NLRA is terminated, the NLRB can use two tests to decide whether the termination was a violation of the NLRA. The first test is whether an anti-union motive was the cause of the termination. Under the second test, an anti-union motive can be inferred when an employer’s action “is so inherently destructive of employee interests” that there is no need for proof of an underlying improper motive. Employers can show a legitimate and substantial business justification for its action to rebut the charge of an anti-union motive. Under the two tests, the court found conditioning work on a pre-hire agreement was a legitimate and substantial business justification for termination. The termination was a result of the requirement of having a valid pre-hire agreement in place and was not discriminatory. Since pre-hire agreements are unique to the construction industry, employers with collective bargaining agreements should consult with legal counsel prior to terminations to ensure the terms and conditions of the agreement are followed.

 

Action Items

1. Review employment terminations covered by collective bargaining agreements with legal counsel.
2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

 

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Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase