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Sixth Circuit Approves NLRB Micro-Bargaining Units

On August 15, 2013, the Sixth Circuit Court of Appeals affirmed the National Labor Relations Board’s (NLRB or the Board) controversial ruling in Specialty Healthcare, 357 NLRB No. 83 (2011), which has allowed the proliferation of what some term “micro-bargaining units.” This decision makes it easier for unions to organize employees from all industries into smaller units than in the past and makes it challenging for employers to successfully challenge smaller bargaining units.

The Board’s Specialty Healthcare decision overruled its decision in Park Manor Care Center, 305 NLRB 135 (1991), which set forth the Board’s previous test for determining the appropriateness of a bargaining unit in non-acute healthcare facilities. Park Manor Care established a “pragmatic and empirical community of interest” approach that considered traditional community-of-interest factors, as well as evidence considered relevant by the Board during rulemaking concerning acute-care hospitals and the Board’s prior experience involving the types of facilities in dispute or units sought. In Specialty Healthcare, the Board ruled that an employer claiming that the proposed bargaining unit should include additional employees must be able to show that the excluded employees share an “overwhelming community of interest” with the employees in the proposed bargaining unit. Under Specialty Healthcare, numerous decisions have found small units appropriate that would not have been approved under previous Board law.

In Kindred Nursing Ctrs. E., LLC v. NLRB, Case No. 12-1027 (6th Cir. Aug. 15, 2013), the successor in interest to Specialty Healthcare’s facility in Mobile, Alabama challenged the Board’s ruling that a bargaining unit of Certified Nursing Assistants “constituted an appropriate unit.” Pursuant to Specialty Healthcare, the Board had found a unit of fifty-three CNAs to be an appropriate bargaining unit, while Kindred Nursing argued that the bargaining units should have included an “additional eighty-six non-supervisory, non-professional service and maintenance employees.” In its attack on the Specialty Healthcare decision, Kindred Nursing argued that the Board had abused its discretion because it

“adopt[ed] a new approach and [did] not return to applying the traditional community-of-interest approach; (2) [did] not ‘reiterate and clarify’ the law by adopting the overwhelming-community-of-interest test, but inappropriately imports this test from another area of labor law; (3) violat[ed] section 9(c)(5) of the National Labor Relations Act in its application of the traditional community of interest test and adoption of the overwhelming-community-of-interest test; and (4) [made] all of these changes through adjudication instead of rulemaking.”

In rejecting Kindred Nursing’s arguments, the Sixth Circuit first stated that it must uphold both the Board’s bargaining unit determination and its interpretation of the National Labor Relations Act (“NLRA”) unless the Board had abused its discretion. The Court noted that in exercising its discretion, the “Board must cogently explain why it has exercised its discretion in a given manner.” Citing oft-quoted precedent that the Board must select an appropriate unit and is not required to select the most appropriate unit, as well as the principle that the Board has the discretion to develop standards for determining the appropriateness of a bargaining unit, the Sixth Circuit found that it was in the Board’s discretion to overrule its own precedent and adopt a test based on prior Board precedent – even if it represented a material change in the law. Furthermore, the Court found that the Board had not departed substantially from prior law as it had previously relied upon the overwhelming-community-of-interest test in prior cases, and that it had explained its reasons for adopting its new standard. The Court noted that the Board’s new test had been approved by the District of Columbia Circuit prior to the Board’s holding in Specialty Heatlhcare. See Blue Man Vegas, LLC v. NLRB, 529 F.3d 417 (D.C. Cir. 2008).

The Court also rejected Kindred Nursing’s arguments that the Board improperly changed its bargaining unit standards by adjudication rather than by rulemaking, and that Specialty Healthcare violated Section 9(c)(5) of the NLRA. The Court first noted that the Supreme Court had specifically held in NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974), that the Board is not precluded from choosing adjudication as a method of developing new standards. As for Kindred Nursing’s Section 9(c)(5) argument, the Court held the Board’s decision did not violate this Section 9(c)(5) because it does not assume that a requested bargaining unit is per se appropriate; rather, Specialty Healthcare requires an employer to make the showing of an overwhelming community of interest only after the proposed bargaining unit is deemed appropriate.[1]

In light of the approval of the District of Columbia and Sixth Circuits, it is likely that Specialty Healthcare’s “overwhelming-community-of-interest” test will be the rule unless or until the make-up of the Board changes sufficiently, which is unlikely during the remainder of President Obama’s second term, or it is reversed by the U.S. Supreme Court. Moreover, it has been applied in industries beyond non-acute healthcare facilities. With the increased risk of targeted organizing campaigns aimed at small units of sympathetic employees, the need for employers in all industries to proactively consider union avoidance strategies has never been more important.

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[1] The Supreme Court has interpreted section 9(c)(5) to prohibit the Board from approving bargaining units “based solely upon the extent of organization.” NLRB v. Metro. Life Ins. Co., 380 U.S. 438, 441-442 (1965).

Employer Liability Under State Medical Marijuana Laws

Across the country, employers in states allowing medical marijuana use have been grappling with whether these statutes impact employer policies concerning drug testing and maintaining a drug-free workplace. Though the statutes allow for marijuana use for medical purposes (and some for recreational purposes), these statutes do not consistently address the impact of legal medical marijuana on employers, if at all. And the number of states enacting such legislation is continuing to grow.

Since 1996, 20 states[1] and the District of Columbia have enacted some form of legislation that allows for the non-criminal use of marijuana for medical purposes. In fact, in the last three years, eight states have passed medical marijuana laws – and Illinois became the 21st jurisdiction to legalize medical marijuana when Governor Quinn signed HB 1 into law on August 1.

As such, companies that employ individuals in states with medical marijuana may be uncertain as to whether or under what circumstances they can take action with respect to an employee that fails a drug test or otherwise admits to being a medical marijuana patient.

Civil Protections – Where Do We Stand Today?

Most of the states that have enacted a medical marijuana law have statutory language that is silent about medical marijuana patients’ civil protections. Of the 21 jurisdictions that have medical marijuana on the books, 15 do not provide for any form of employment protections.[2] In fact, supreme courts in California, Oregon, Washington and Montana have all upheld employer decisions to discharge employees that were medical marijuana patients. The plaintiffs in these lawsuits have argued that medical marijuana users are protected under such statutes because the law itself creates the sought-after employment protections, that the employer’s decision to discharge the user violates the public policy of the state, and/or that the employer discriminated against them on the basis of a disability when it failed to accommodate their medical marijuana use. The courts, in response, have held that the medical marijuana statutes in their state only protect patients from criminal sanctions and do not create any civil remedies or protections. As such, the courts have held that these statutes do not create a clear public policy that might otherwise support a wrongful termination claim or establish that medical marijuana users belong to a protected class. With respect to claims based on asserted disabilities, courts, like the Supreme Court of Oregon, have held that federal law preempts any argument that an individual is protected from disability discrimination on the basis that they are a medical marijuana patient.

Another argument that was recently tested by a plaintiff in Colorado is that an employer’s decision to discharge a medical marijuana user who fails a drug test violated the state’s “lawful activities” statute. Colorado, like many states, prohibits employers from taking action against an employee for engaging in lawful activities or using lawful products outside of the workplace. In a decision dated April 25, 2013, the Court of Appeals of Colorado held that the state’s “lawful activities” statute did not bar the employer from discharging an employee who tested positive for marijuana after a random drug test and who was also a licensed patient. Coats v. Dish Network, LLC, case nos. 12CA0595, 12CA1704 (Co. Ct. App. April 25, 2013). The court held that since the Colorado statute did not specify whether an activity’s “lawfulness” was determined by state or federal law, and marijuana is illegal under federal law, employees that use medical marijuana are not shielded by the statute from the risk of termination.

Despite the lack of civil protections in a majority of jurisdictions that have legal medical marijuana, a few states do provide clear restrictions on an employer’s ability to discriminate against a medical marijuana patient. In Connecticut, Maine and Rhode Island, medical marijuana patients are given protected status and employers are prohibited from discriminating against an employee merely due to their status as a medical marijuana patient. Under Illinois’ HB 1, Illinois also now prohibits such discrimination.

In addition, Arizona and Delaware have adopted much more explicit and impactful statutorily language that bars an employer from discriminating against a registered and qualifying patient who has failed a drug test for marijuana metabolites or components. The only exceptions to this rule are that an employer may act upon the results of a failed drug test if the patient “used, possessed or was impaired by marijuana on the premises of the place of employment or during the hours of employment” or failing to do so would jeopardize an employer’s “monetary or licensing related benefit under federal law or regulations.” See ARS 36-2813 and Del. Code Title 16, § 4905A. Neither statute has been tested in the courts, but the language of these statutes appears to plainly prohibit employers from firing an employee who is a qualified medical marijuana patient based solely on a failed drug test. Rather, in these two states, most employers will need to prove that their decision was based on the fact that the employee used, possessed or was impaired by marijuana while on the job.

Uncertainties Around Illinois Statute

Whether Illinois’ medical marijuana statute provides similar protections is a more uncertain question. With regard to employer liability under the proposed statute, HB 1’s provisions are generally couched in what they do not prohibit, leaving open to interpretation what it may bar with regard to workplace decision-making. HB 1 first states that it does not prohibit “an employer from enforcing a policy concerning drug testing, zero-tolerance or a drug free workplace provided the policy is applied in a nondiscriminatory manner.” The bill also states that employers are not limited from “disciplining a registered qualifying patient for violating a workplace drug policy.” These initial provisions suggest that Illinois’ statute is in line with the majority of jurisdictions, but then it goes on to provide that “[n]othing in this Act shall limit an employer’s ability to discipline an employee for failing a drug test if failing to do so would put the employer in violation of federal law or cause it to lose a federal contract or funding.” This language, like that in Arizona and Delaware, appears to potentially prohibit employers from relying upon a failed drug test for marijuana unless the employer has contrary obligations under federal law or regulation. The statute continues down this road by also stating that it does not create a cause of action against an employer for actions based on a good faith belief that the medical marijuana user used, possessed or was impaired by marijuana while working. It also provides that an employer may consider a patient to be impaired when they exhibit “articulable symptoms … that decrease or lessen [the employee’s] performance of the duties or tasks of the employee’s job position.” This provision further states that if an employee is disciplined under this section, that they must be given an opportunity to contest the employer’s determination.

Taking these latter provisions into account, there are strong arguments in favor of the position that Illinois’ medical marijuana does provide similar civil employment protections as found in Arizona’s and Delaware’s statutes. First, the bill states that employees cannot sue an employer for actions that were based on a good-faith belief that the employee was impaired, that the belief that an employee is impaired must be based on “articulable symptoms,” and that employees must have an opportunity to rebut the idea the they were impaired. These provisions suggest that an employer may be found to have acted in bad faith and subject to liability if it discharges an employee without an articulable basis for why it believed that the employee was impaired or fails to give an employee a chance to challenge an assertion that they were impaired on the job. In addition, the statute appears to tie the ability of an employer to discipline an employee for failing a drug test to an employer’s obligations under federal law. This framework creates a plausible argument that the statute does provide protections for medical marijuana users who do not use or are not impaired by marijuana on the job. However, the pronouncement that employers are not limited in keeping drug testing, zero tolerance, or drug-free workplace policies seems to conflict with such a finding. Perhaps one way to read these provisions consistently is to find that the statute allows employers to maintain such policies, but that they must treat medical marijuana patients in the same manner as other employees that have been prescribed legal medications. In reality, the only way we will know the answer to this question is when the law is inevitably relied upon by a qualified patient who is fired for failing a drug test that is positive for marijuana.

Recommendations for Employers in Medical Marijuana Jurisdictions

So, how should employers respond to these increasingly more common medical marijuana laws? For those employers who have federal contracts or are otherwise subject to federal regulations concerning drug-free workplaces, your practices do not need to change. According to the Department of Transportation, which regulates and provides drug testing requirements for certain safety-sensitive positions, it is “unacceptable for any safety-sensitive employee subject to drug testing under the Department of Transportation’s regulations to use marijuana.” Thus, employers subject to such or similar regulations should continue to comply with applicable federal law.

Employers that are not subject to federal drug testing regulations should review their substance abuse policies to ensure compliance with local and state law. Employers in states that generally do not provide for employment protections should still consider whether their state has a “lawful activities” or “lawful products” statute or whether courts in their state may be more favorable to finding a clear public policy protecting medical marijuana users. In light of the holdings of those decisions that have addressed the issue, courts in these states will likely find that their state law does not establish a clear public policy in favor of medical marijuana patients. However, this analysis may differ in Colorado and Washington, both of which now allow for legal recreational use. In those states that do provide for some form of employment protection, you should carefully revise your policies to be consistent with those laws.

Employers should also consider whether or when they will conduct drug testing. With the passage of these laws, employers should expect that more of their employees may be using marijuana outside of the workplace. Similarly, employers should expect more challenges, based on the long period of time that marijuana metabolites remain in an individual’s system, from employees that have failed drug tests but who claim they were not impaired while working. In Arizona, Delaware and Illinois, employers should revise their substance abuse policies to make sure they conform to state law and ensure that employees who are qualified patients are not disciplined solely on the basis of a failed drug test. Lastly, employers should train their supervisors and managers to recognize signs of impairment (whether due to marijuana, alcohol, or other substances) and how to deal with inquiries from employees regarding their use of medical marijuana.

[1] States that provide for some form of legalized medical marijuana states are: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington.

[2] The six jurisdictions that do provide some level of civil protections are: Arizona, Connecticut, Delaware, Illinois, Maine, and Rhode Island.

Are You Ready For Your Company’s Holiday Party?

Many companies start planning their holiday party now. Employers need to know that an employer can be held liable for accidents and injuries caused by their employees who over indulge themselves with alcohol at the party, even if the employee initially made it home safely! You read that correctly. The California Court of Appeal, in Purton v. Marriott International, Inc., recently held that the company was potentially liable for a fatal motor vehicle accident caused by one of its employees who had attended the company’s hosted party. While the employee arrived home safely, the employee left about 20 minutes later to drive another co-worker home. The co-worker was also intoxicated. During this trip the employee struck another car, killing its driver. The trial court granted summary judgment for the employer on the ground that the employer’s potential liability under the doctrine of respondeat superior ended when the employee arrived home.

The court of appeal reversed and held that an employer may be found liable for its employee’s tortious conduct “as long as the proximate cause of the injury occurred within the scope of employment. It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.” The court explained that a jury could conclude that the proximate cause of the injury, i.e., the employee’s alcohol consumption, and the negligent conduct, i.e., the car accident, occurred within the scope of his employment. The court further found that the going and coming rule, which generally exempts an employer from liability for the torts of its employees committed while going to or coming home from their work, was an “analytical distraction” because the “thrust of [plaintiff’s] claim for vicarious liability was that [the employee] was an `instrumentality of danger’ because of what had happened to her at work.” As such, the court focused on the “act on which vicarious liability is based and not on when the act results in injury.” The court also stated that the record presented sufficient evidence for a finding that the employee in question breached a duty of due care he owed to the public once he became intoxicated and that the employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.”

This case certainly gives the definition of “within the course and scope of employment” a broader meaning. That said, the moral of the story: (1) don’t drink and drive; (2) don’t let your employees do so either; and (3) limit your employees’ consumption of alcohol at company events.

The New National Labor Relations Board: Will It Be More of the Same — Or Worse?

For the first time in more than ten years, the National Labor Relations Board will have five Senate-confirmed board members and no battles over recess appointments. However, the new Board will continue to be dominated by pro-union members selected by President Obama. The three Democratic members are: current Chairman Mark Pearce; Nancy Schiffer, associate general counsel for AFL-CIO; and Kent Hirozawa, chief counsel to Pearce. The two Republican members are seasoned management-side labor lawyers Philip Miscimarra and Harry Johnson III.

The confirmation of these Board members ends, at least moving forward, the uncertainty caused by the President’s recess appointments which were ruled invalid by the U.S. Court of Appeals for the D.C. Circuit. For employers, this new Board is not likely to behave much differently than the Board has since the President was elected. In fact, employers can expect this Board to continue to issue decisions that favor unions and employees. In addition, the Board may well exercise its rulemaking power with greater vigor than before.

Here is what employers may see from this new Board:

1. The Resurrection of the “Quickie/Ambush” Election Rule

In December 2011, the Board adopted a final rule that made numerous and substantial changes in how union election would be handled. The rule was not implemented because a federal court decided that the Board’s vote to adopt the rule was improper. Significantly, the court did not object to the substance of the rule and its changes. The new Board could reconsider the rule and take another vote and employers can expect the 3-2 Democratic majority to approve it. It is also conceivable that this Board could propose a rule that calls for additional changes to the election procedures that would assist unions in winning elections, such as making voting by mail the preferred method of casting ballots; Chairman Pearce has previously indicated his interest in taking a fresh look at the rule.

2. Take a Hard Look at Bush-Era Board Decisions

As the Board composition changes with each change in the Presidency, it is common for Boards to re-examine decisions issued under a prior Administration of the other political party. The Board under George W. Bush was accused of wholesale reversal of rulings under the Clinton Administration. This new Obama Board can be expected to continue its reversal of Bush-era Board decisions. By way of example:

Many have expected the Board to overrule a 2007 decision in Register-Guard, in which the Bush-era Board held that an employer can maintain a policy that prohibits employees from using its email system for non-job related solicitation including union organizing. Current Board law gives unionized employees the right to a union representative at an investigatory interview the employee reasonably believes may lead to discipline. During the Clinton administration, the Board extended this right to representation to non-union employees. That extension was reversed by the Board during the Bush administration, by a 3-2 vote. It would not be a surprise for the new Obama Board to extend representation rights to non-union employees again.

3. Continued Focus on Non-Union Employers’ Policies

Under the Obama administration, the Board has aggressively focused on policies and practices of employers who have no unionized employees. The Board has examined at-will statements, social media policies, confidentiality clauses, dress code policies, premises access policies and disciplinary action based on these policies and practices. Employers should expect the Board to continue its examination of any policy or practice that could interfere with employees’ ability to engage in union organizing or other activity protected by the National Labor Relations Act.

4. Micro Bargaining Units

In August 2011, the Board ruled in Specialty Healthcare that the Board will approve the bargaining unit requested by a union unless the employer can prove the unit improperly excludes employees who share “an overwhelming community of interest” with the employees in the proposed unit. Under Specialty Healthcare, the Board has issued numerous decisions finding that small units are appropriate; those units would not have been approved before Specialty Healthcare became law. Employers can expect the Board to continue to abide by its decision and can hope the Board will provide greater guidance and clarity on how this new standard will be used.

Will the new Board be the same as the old Board? Time will tell. It is unlikely the new Board will be more employer-friendly and it is distinctly possible it will be even more aggressive in issuing decisions and rules to enhance unions’ ability to organize employees.

This Conversation May Be Recorded

Editors Note: Frequent LaborSphere contributor Jerrold J. Wohlgemuth recently wrote a post for our friends at LifeSciencesNow. While directed at the pharmaceutical industry, the message is one that all employers can and should ake to heart. Below is the text of the post. The original may be viewed here.

As the pharmaceutical industry changes, it must take note of the impact such change has on employee relations and the potential for lawsuits. Big Pharma has shed thousands of jobs in the past few years, with reports showing that the industry has lost more than 6,000 jobs from January –May 2013, up from the approximately 5000 lost in the first 5 months of 2012. And there will be more to come as the industry continues to react to lab failures, pressure to cut costs and lower prices due to lower profits, and increased competition from generics.

The result is employee disruption felt not only by those displaced, but also by the remaining workforce which often finds itself under stress from having to maintain productivity with fewer numbers, and who may feel threatened by the culture of layoffs. Either way, employee relations becomes strained and confrontational.

A significant development in the technology age is the finding in claims filed with the U.S. Equal Employment Opportunity Commission (EEOC) and state agencies that employees have been using smart phones or other mobile devices to surreptitiously record conversations with supervisors, managers and human resources representatives in lay-off meetings, performance reviews and disciplinary actions. And it should be no surprise that female employees are using smart phones to record male supervisors making inappropriate sexual comments and advancements. While most recordings reflect that management is engaged in proper communications with employees, the recordings are nevertheless being carefully evaluated by investigators to help determine whether or not to file a claim against the employer. Some recordings become smoking gun evidence of harassment or discrimination.

Employers should assume that employees are and will continue to record conversations with management, and should therefore take appropriate steps to protect themselves:

- Do not say anything you would not want a jury or government investigator to hear;

- Be on the alert for a set-up where the employee tries to get a supervisor or manager to repeat something said at another time;

- Bring a witness to meetings with employees;

- Ask the employee if he/she is recording the conversation, advise that it is not permitted, and get verbal assurance from employee that he/she is not recording;

- Have employee sign a statement that he/she did not record the conversation;

- Draft policies prohibiting unauthorized recordings in the workplace;

- Train supervisors and managers to be on the lookout for employees using mobile devices to record conversations.

Remember, every conversation may be evidence in a government investigation or lawsuit.

New Jersey Safe Act Provides Unpaid Leave For Victims Of Domestic Violence

On July 13, 2013, Governor Chris Christie signed the New Jersey Security and Financial Empowerment Act (New Jersey SAFE Act) into law. Effective on October 1, 2013, the New Jersey SAFE Act, covering public and private employers with 25 or more employees, provides up to 20 days of unpaid leave in one 12-month period when an employee or their child, parent, spouse, domestic or civil union partner has been the victim of a domestic violence incident or a sexually violent offense and the employee has been employed by the employer for at least 12 months and 1,000 base hours during the 12-month period immediately preceding the leave.

Under the New Jersey SAFE Act, each incident of domestic violence or any sexually violent offense constitutes a separate offense for which the eligible employee may take leave, so long as the employee has not already exhausted the allotted 20 days for the 12-month period. The unpaid leave may be taken intermittently in intervals of no less than one day, as needed for the employee or the employee’s family or household member to handle issues arising from the incident such as:

Seeking medical attention for, or recovering from the injures caused by the domestic or sexual violence;

Obtaining services from a victim services organization;

Obtaining psychological or other counseling;

Participating in safety planning, relocation or other activities to increase the safety of the employee or the
employee’s family or household member and to ensure economic security;

Seeking legal assistance to ensure the health and safety of the employee or the employee’s family or household member; or

Attending, participating in, or preparing for a court proceeding related to the incident of which the employee or the
employee’s family or household member was the victim.

An eligible employee may elect, or the employer may require, the employee to use any or all accrued paid time off during any part of the 20-day leave provided under the New Jersey SAFE Act. If the employee’s request for leave under the New Jersey SAFE Act is also covered by the New Jersey Family Leave Act or the federal Family and Medical Leave Act, the leave must count simultaneously against the employee’s entitlement under each law.

Before taking leave under the New Jersey SAFE Act, the employee must give the employer written notice, if the necessity for the leave is foreseeable, as far in advance as reasonable and practical under the circumstances. An employer may also require the employee to substantiate the domestic violence or sexually violent offense which is the basis for the leave. If the employee provides one or more of the types of documentation listed in the Act such as a restraining order or a letter from the prosecutor, it will be deemed sufficient.

All documentation regarding the leave must be retained by the employer in strictest confidence unless the employee voluntarily authorizes disclosure or it is required by federal or State law, rule or regulation.

The employer must conspicuously display notice of employees’ rights and obligations under the New Jersey SAFE Act in a manner to be prescribed by the Commissioner of Labor and Workforce Development, and must use “other appropriate means to keep its employees so informed.” Neither the posting, nor guidance regarding what other appropriate means must be used has been issued.

The New Jersey SAFE Act prohibits discrimination, harassment and retaliation against employees who have exercised their rights under the Act. Aggrieved individuals have a private right of action within one year of the alleged violation to bring suit in Superior Court for recovery of the fully array of damages available to a prevailing plaintiff in common law tort actions, including reinstatement, compensation for lost wages and benefits, an injunction to restrain continued violations and reasonable attorneys’ fees and costs. In addition, the employer may be assessed a civil fine of $1,000 or up to $2,000 for a first violation, and up to $5,000 for any subsequent violations.

Updates regarding employers’ notice requirements and means to keep employees informed will follow when issued.