Employment Law

Say What? NLRB Seeks Guidance on Workplace Protections for Profane or Offensive Speech.

As states continue to pass legislation focused on the workplace, employers should be mindful that federal agencies are also continuing to regulate the workplace even in the absence of new federal legislation, especially with respect to when disputes arise regarding compensation and working conditions. Section 7 of the National Labor Relations Act (“Act”) arguably protects an employees’, including non-union employees’, rights to engage in concerted activities, including circumstances where an employee’s profane language or sexually- or racially- offensive speech is legally protected. Following criticism from the judiciary, the National Labor Relations Board (“NLRB”) announced this month it is now seeking input on the scope and applicability of this protection. READ MORE

Workplace Violence Prevention In An Active-Shooter Era

Earlier this month, the country was again rocked by mass shootings—two in less than 24 hours left the cities of Dayton, Ohio and El Paso, Texas reeling.  Like so many tragedies before, both shootings occurred at a location that was also a workplace.  Although neither was perpetrated by an employee (unlike yet another shooting earlier this summer), employees were affected.  They had to think quickly and act fast in the moment, and to deal with the psychological and emotional toll afterwards.

The Department of Labor estimates that approximately two million people will be victims of workplace violence this year.  With an employed population of approximately 157 million, this means that about 1 in 80 employees will experience workplace violence—and more will likely be aware of or witness it.

In these circumstances, employers should consider developing or updating their workplace violence prevention (1) strategies, (2) policies, and (3) practices. READ MORE

It’s Never Too Late: NLRB Rules Employers Can Update an Existing Mandatory Arbitration Agreement to Include a Class or Collective Action Waiver After Being Sued, and Can Warn Workers that Failure to Sign Will Result in Termination

Arbitration agreements are a powerful tool in resolving employment actions.  As we noted last year, the U.S. Supreme Court ruled in a landmark case that employers can use class and collective action waivers in mandatory arbitration agreements.  The U.S. Supreme Court’s 5-4 decision in Epic Systems Corp. v. Lewis, No. 160285 (U.S. May 21, 2018), was authored by Justice Gorsuch, and settled the longstanding dispute over whether arbitration agreements containing class waivers are enforceable under the Federal Arbitration Act (FAA) despite the provisions of Section 7 of the National Labor Relations Act (the Act).

On August 14, 2019, the National Labor Relations Board (NLRB) issued Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019), in which the NLRB sided with employers on two key arbitration questions following the Epic decision.  First, the NLRB found that an employer that is sued in a class or collective action can update its existing mandatory arbitration agreement to include a class or collective action waiver, barring workers from opting in to the pending litigation.  What’s more, the NLRB found that employers can warn workers that failure to sign the updated arbitration agreement will result in termination.

Employers can update an existing mandatory arbitration agreement to include a class or collective action waiver, even after workers have opted in to the collective action:

The NLRB first addressed the issue of “whether the Act prohibits employers from promulgating [mandatory arbitration] agreements in response to employees opting in to a collective action.”  In Cordúa Restaurants, Inc., Cordúa Restaurants had an existing mandatory arbitration agreement that required employees to waive their “right to file, participate or proceed in class or collective actions (including a Fair Labor Standards Act (‘FLSA’) collective action) in any civil court or arbitration proceeding,” but did not expressly prohibit opting in to collective actions.  Seven employees filed a collective action in the United States District Court for the Southern District of Texas alleging violations of the FLSA and the Texas Minimum Wage Act.  After thirteen employees opted in to the collective action, Cordúa Restaurants updated their existing mandatory arbitration agreement to expressly require employees to agree not to opt in to collective actions.  Although the NLRB, for purposes of the decision, assumed that opting in to a collective action constitutes protected concerted activity under Section 7 of the Act, it still found that promulgating the updated mandatory arbitration agreement in response to the opt-ins did not violate the Act.  The Board reasoned that Epic made clear that an agreement requiring that employment-related claims be resolved through individual arbitration, instead of class or collective action, does not restrict Section 7 rights in any way.

Employers can warn workers that failure to sign the updated arbitration agreement will result in termination:

The NLRB next tackled the issue of “whether the Act prohibits employers from threatening to discharge an employee who refuses to sign a mandatory arbitration agreement.”  After updating the mandatory arbitration agreement to include the above provision against opting in to collective actions, Cordúa Restaurants needed to distribute and execute these updated agreements.  During a pre-shift meeting, an assistant manager distributed the updated agreement to employees and explained that employees would be removed from the schedule if they declined to sign it.  After a couple employees objected to signing the updated agreement, the assistant manager stated that he “wouldn’t bite the hand that feeds [him]” and that he would instead “go ahead and sign it.”  The NLRB reasoned that because Epic permits employers to condition employment on employees entering into an arbitration agreement that contains a class or collective action waiver, the assistant manager did not unlawfully threaten the employees.

Dissent:

The majority opinion was authored by Chairman John F. Ring, Member Marvin E. Kaplan, and Member William J. Emanuel.  Member Lauren McFerran authored a separate dissent, which disagreed with the majority on both issues and found that, “[t]he record here establishes that [Cordúa Restaurants] violated Section 8(a)(1) [of the Act] by imposing the revised arbitration agreement on employees, in response to their protected concerted activity and by threatening employees for protesting the revised agreement.”  Member McFerran reasoned that although Epic blessed the use of mandatory arbitration agreements with class or collective action waivers, promulgating a lawful rule or policy in response to protected concerted activity is prohibited under Board law.  Lastly, Member McFerran found that the employees exercised their Section 7 rights by protesting the updated agreement and the assistant manager unlawfully threatened them.

Takeaways:

In its news release, the NLRB recognized that Cordúa Restaurants, Inc. is its first decision concerning the lawfulness of employer conduct surrounding mandatory arbitration agreements since Epic.  It remains to be seen how state or district courts analyze a fact pattern such as this one, but this is a very encouraging development for employers if this is a sign of what’s to come from the NLRB.  The decision strengthens employers’ power to effectuate mandatory arbitration agreements—now before and during pending litigation.

Washington Supreme Court Weighs in on the Weighty Question of Weight

In Taylor v. Burlington Northern Santa Fe Railway Company, the Washington Supreme Court recently held that obesity is always an “impairment” under the Washington Law Against Discrimination (“WLAD”). The court held that the WLAD is more expansive than the Americans with Disabilities Act and expressly refused to follow some federal court decisions that found obesity to be a disability only if it is caused by a separate underlying physiological disorder.

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Fifth Circuit Takes a Bite Out of EEOC’s Criminal Background Guidance

In the first-of-its-kind ruling last week, the Fifth Circuit held that the EEOC’s investigators and lawyers cannot rely on its “Enforcement Guidance on Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” to bring enforcement actions. Finding that the guidance amounted to a substantive rule, the Fifth Circuit panel determined that the guidance overstepped EEOC’s authority to force the State of Texas to consider hiring convicted felons to state-wide positions.  The decision on its face confirms the general principle that EEOC does not have the authority to engage in rulemaking on substantive discrimination laws and was limited to a specific injunction.  However, the decision could have far-reaching consequences for the EEOC’s various substantive guidelines. READ MORE

Regulators Offer Insights Into SEC, CFTC, and OSHA Whistleblower Program’s Trends and Priorities

On July 16, 2019, three prominent whistleblower law regulators spoke at PLI’s Corporate Whistleblowing in 2019, which was co-chaired by Orrick partners Mike Delikat and Renee Phillips. With the standard disclaimer that their comments and opinions were their own and not the official comments of their respective agencies, each spoke about their agencies’ whistleblower program’s current progress, challenges, and priorities. READ MORE

Ninth Circuit Withdraws Vasquez, Punts to California Supreme Court on Dynamex Retroactivity

On July 22, 2019, the Ninth Circuit withdrew its recent decision in Vazquez v. Jan-Pro Franchising International, Inc., and ordered that it would certify to the California Supreme Court the question of whether the worker classification test articulated in Dynamex Operations West v. Superior Court applies retroactively. READ MORE

Phase Two of New York Legislative Response to #MeToo: State Passes Comprehensive Anti-Discrimination Expansion Bill

Major changes are in store for New York employers under a new bill passed in the waning hours of the 2019 legislative session. As part of an ongoing, multi-year effort to address sexual harassment and other discrimination and harassment issues, the New York legislature on June 19, 2019 passed Assembly Bill 8421 (“AB 8421”), a compendium bill that introduces new and refined employee protections against harassment, retaliation, and discrimination in the workplace. AB 8421 amends the New York State Human Rights Law (“NYSHRL”) to usher in new affirmative protections and procedural mandates that will significantly affect employer liability under state law. Building on protections previously enacted under the 2018 state budget, AB 8421 will expand prohibitions on nondisclosure agreements and arbitration agreements to categories of discrimination and harassment beyond sexual harassment. Key elements of AB 8421 are described below. READ MORE