Noel Canning: Where do we go from here?

By: Jerrold J. Wohlgemuth

The U.S. Court of Appeals for the D.C. Circuit determined last week in Noel Canning v. NLRB that the recess appointments of Board Members Flynn, Block and Griffin were unconstitutional because the Senate was not technically in “recess” when they were appointed in January 2012.  That decision does not mean – as some have insisted – that the Board must stop all proceedings until new members are confirmed.  Quite the contrary.

With respect to internal Board proceedings, the decision will have no impact on the work of either the General Counsel’s Office or the Regional Offices in conducting investigations or issuing complaints.  Indeed, we should fully expect the Acting General Counsel to continue to pursue his ambitious and controversial agenda.

As recently made clear by Board Chairman Mark Gaston Pearce, the Board takes the view that the D.C. Circuit opinion applies only to invalidate the specific decision in the Noel Canning case, and it has historically viewed circuit court opinions as non-binding beyond the specific case at issue.  Accordingly, the NLRB, as constituted, will continue to issue decisions until the recess appointment question is resolved by the Supreme Court.  In this regard, the D.C. Circuit opinion is already in conflict with an earlier decision of the Eleventh Circuit in Evans v. Stephens, and the issue has been raised in more than a dozen cases pending review in other circuits.  The validity of recess appointments will be raised first at the February 5 oral argument before the Fifth Circuit in D.R. Horton v. NLRB, which concerns the similar recess appointment of Former Member Becker in 2010, and then again in March when the question concerning the appointments of Members Block and Griffin will be addressed at oral argument before the Third Circuit in New Vista Nursing and Rehabilitation v. NLRB.  Other cases are pending throughout the circuits.

Nevertheless, the appeal process may take longer than expected because the recess appointment question may not be addressed in some or all of the cases pending on appeal.  That is because of the established principle of constitutional law that a court will not consider a constitutional challenge if the case can be disposed of on other grounds.  So, for example, the Fifth Circuit will not address the constitutional question in D.R. Horton unless it first determines that the Board was correct in deciding that class action waivers in arbitration agreements violate Section 8(a)(1) of the Act.  If, as anticipated, the Fifth Circuit rejects the Board’s legal analysis, it will have no reason to address the challenge to the recess appointments.  The same will hold true going forward with respect to many of the highly controversial Board decisions issued in the last year which are pending review in the circuit courts.

Even though the recess appointment issue has apparently been resolved in the D.C. Circuit, the future of cases pending there remains unclear.  First, the Board has until March 11 to file a petition for rehearing in banc, or until late April to file a petition for certiorari to the Supreme Court.  In the interim, the Circuit Court issued an order holding many of its the pending NLRB cases – including the appeal of the Banner Health decision – in abeyance for the foreseeable future.  That order may have a substantial impact on the appeals process inasmuch as Section 10(f) of the Act permits any aggrieved party to file an appeal in the D.C. Circuit irrespective of where the events in question took place.  While employers would naturally want to appeal to the court that has already ruled that otherwise enforceable Board decisions involving Members Block and Griffin are invalid, doing so may result in their cases not being heard on any grounds until after the recess appointments issue has been resolved.

January 1, 2013: New FCRA Forms Required by New Enforcement Agency

By: Marion B. Cooper

With little or no ballyhoo, the newly created Consumer Financial Protection Bureau (“CFPB”) has assumed responsibility for enforcement of the Fair Credit Reporting Act (“FCRA”), the role previously allocated to the Federal Trade Commission (“FTC”).  This change was implemented by a transfer of FCRA rulemaking authority from the FTC to the CFPB under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The FCRA regulates consumer information.  Employers are required to follow specified procedures when they use third parties known as consumer reporting agencies to obtain consumer reports or investigative consumer reports on employees and applicants under the FCRA and the employer uses that consumer report for “employment purposes.”  Consumer reports may include credit checks, motor vehicle records and driving history and criminal background information, among other types of information.

The CFPB has issued updated FCRA notices that employers and consumer reporting agencies must use when conducting background checks on employees or applicants.  The revised forms, effective as of January 1, 2013, are available in Appendices K, M and N at the end of Title 12 of the Code of Federal Regulations Part 1022 and are substantively the same as the old forms.  Each form was revised to replace references to the FTC with references to the CFPB and to provide a link to the new website. They include:

The Summary of Consumer Rights is the form most used by employers, most notably when obtaining “investigative consumer reports” and sending pre-adverse action letters.  Consumer reporting agencies must provide the Notice to Users of Consumer Reports to their employer-customers and must provide the Notice to Furnishers of Information to certain providers of information.

Employers utilizing consumer reporting agencies to obtain consumer reports on applicants and employees who have not done so already should immediately begin using the new notices and take this as a valuable opportunity to make sure they are in compliance with all other FCRA requirements. Failure to use the appropriate notice forms may be deemed a violation of the FCRA among others. The FCRA authorizes both a private right of action brought by an individual and an enforcement action brought by the federal government through the FTC or other federal agencies, including the CFPB.  Damages available to individuals are capped at $1,000 for each violation, but can be increased by an assessment of attorneys’ fees, court costs or punitive damages. Do not forget about state laws governing these issues, some of which provide additional requirements for employers seeking consumer reports and greater protections for employees.

Finally, employers should be aware of the recent D.C. Circuit opinion in Noel Canning, a Division of the Noel Corporation v. National Labor Relations Board, No. 12-1115 (D.C. Cir. January 25, 2013). This ruling, invalidating President Obama’s recess appointments to the National Labor Relations Board, now puts into question the recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau which was implemented on the same date, and therefore, notices issued by the Bureau under his direction may also be subject to challenge.

Management and Human Resources Personnel May Not Find Protection Under Title VII’s Anti-Retaliation Provisions

By: Frank Nardulli

On January 21, 2013, the U.S. Supreme Court denied a request for appeal filed by a former loss prevention specialist who claimed that she had been unlawfully terminated in retaliation under Title VII of the Civil Rights Act of 1964 because she had opposed her employer’s handling of a sexual harassment investigation.  Brush v. Sears Holding Corp., 466 Fed. App’x 781, 2012 WL 987543 (11th Cir. March 26, 2012), cert. denied, 2013 WL 215521 (U.S. Jan. 21, 2013) (No. 12-268).  The appellant specifically challenged the Eleventh Circuit Court of Appeals’ reliance on the “manager rule” when it affirmed the dismissal of her claim.  A majority of circuit courts have adopted some form of the “manager rule,” which has significant impact on the application of Title VII and other claims against employers by management and other personnel charged with performing internal investigations or ensuring compliance with state and federal law.

Under Title VII, employers are prohibited from retaliating against employees who have opposed an unlawful employment practice or because they have participated in an investigation of discrimination.  In order to establish a prima facie claim of Title VII retaliation, it is necessary that a plaintiff establish that he or she engaged in such “protected activity.”

Under the so-called “manager rule,” an employee is not considered to have engaged in “protected activity” under Title VII’s anti-retaliation provisions if they disagree with or oppose the actions of an employer in the course of his or her normal job duties.  In other words, if it is the employee’s job to investigate claims of discrimination or ensure legal compliance, they are not afforded protection from discharge or other adverse actions for conduct that is within the scope of their employment.  For example, a Human Resources employee who disagrees with a corrective action taken pursuant to a discrimination investigation and is later discharged for “insubordination” will not be protected by Title VII’s anti-retaliation provisions.  As the name suggests, in most instances, the rule is commonly applied to management employees, but it is also applied frequently to compliance officers and human resources employees.

In order for such an employee to be found to have engaged in a “protected activity,” they must cross the line from being an employee performing their job to an employee making a personal complaint or otherwise opposing an unlawful action, such as by assisting another employee in filing a charge with the EEOC or refusing to carry-out a discriminatory employment action.  Merely challenging the method, manner, or adequacy of an employer’s internal investigation or making an internal report of a potential statutory or retaliatory violation is not a protected activity.

An understanding of the “manager rule” is valuable for all employers since it has been accepted by a significant number of circuit courts (the Fifth, Sixth, Eighth, Tenth, Eleventh, and arguably the Ninth) and district courts.  Further, its application is not limited to Title VII.  In addition to Title VII retaliation claims, the “manager rule” has been applied to claims under the Fair Labor Standards Act, the Americans with Disabilities Act, the Uniformed Services Employment and Reemployment Rights Act, the Family Medical Leave Act, the Sarbanes Oxley Act, and Title IX.  In fact, the rule originates from the Tenth Circuit’s decision in McKenzie v. Renberg’s, Inc., 94 F.3d 1478, 1486 (10th Cir. 1996), a FLSA retaliation case.

While the “manager rule” is a useful tool for employers dealing with complaints of retaliation by management or human resources personnel, employers should remember that these employees are still covered by Title VII’s anti-retaliation provisions.  Though it is doubtful that such an employee could bring a retaliation claim under Title VII’s participation clause, a management or human resources employee may still have a claim if they complain about an unlawful action in a manner that is not consistent with the scope of their employment, such as by making their own complaint of discrimination or opposing an action that they reasonably believe to be based on unlawful discrimination.

The Dos and Don’ts of Implementing a Mandatory Flu Vaccine Policy Outside the Hospital Setting

By: Meredith R. Murphy

As health experts describe this flu season as one reaching epidemic proportions, many employers are questioning the legality of requiring their employees to receive a flu vaccine shot when they recognize business and safety needs for ensuring their work environments and workforce are better protected from the flu virus.  This need is especially acute for non-hospital employers who care for individuals with compromised immune systems, such as rehabilitation centers or schools.  While a different set of considerations come into play when a hospital is assessing how to implement a flu vaccine policy (see our post from January 24, 2013 – “Firing Employees Who Don’t Get Flu Shots:  What Risks Do Hospitals Face”, Mark Nelson), non-hospital employers have business needs and health concerns that may make implementation of a flu vaccine policy desirable or necessary.

So, what should an employer consider before implementing such a policy?

  • DO evaluate the business need for the policy.  Whether it be concern for patients, clients, or customers or, rather, a need to ensure that your workforce is less likely to be on leave due to a flu outbreak, an employer must be prepared to identify its reasonable business interest if the policy is challenged.
  • DO consider what type of policy suits business needs.  Some employers are implementing mandatory policies for all employees to receive a flu shot.  Others are only requiring that certain categories of employees receive a flu shot, i.e., those with regular access to patients or individuals with compromised immune systems.  Still others are implementing a policy that “strongly encourages” flu vaccinations.
  • DO review any applicable Collective Bargaining Agreements.  Under the National Labor Relations Act, a flu vaccination policy is a mandatory subject of bargaining.  This means that a unionized employer cannot unilaterally implement such a policy without giving the union notice of the policy and bargain over the policy if the union requests.  However, as set forth under recent National Labor Relations Board caselaw, a union may waive a right to bargain over such a policy by way of a Management Rights Clause.  See Virginia Mason Medical Center, 358 NLRB No. 46 (2012).  If unionized, employers should evaluate the breadth of their clause to see if the union has waived the right to bargain regarding the employer’s right to direct employees, to determine materials and equipment to be used and/or to implement improved operational methods and procedures.  In the Virginia Mason case, the NLRB specifically recognized this type of waiver language as permitting the Medical Center to require non-immunized nurses to wear facemasks.
  • DON’T refuse to engage in an interactive process with any objecting employees.  Employers should be prepared to work with an employee’s health or religious objections to receiving a flu shot.  The Equal Employment Opportunity Commission has taken the position that employees may be exempt from a mandatory vaccination requirement based on an ADA disability or a “sincerely held religious belief, practice, or observance.”  See www.eeoc.gov/facts/pandemic_flu.html -48k-2009-10-21.  Courts have recognized that such sincerely held” beliefs may include lifestyle choices such as veganism.  See Chenzira v. Cincinnati Children’s Medical Center, No. 11-917 (S.D. Ohio, December 27, 2012).  In such instances where an employee expresses a health or religious-based objection to a mandatory flu vaccine policy, the employer should discuss reasonable accommodations with the employee, e.g., exempting the employee from the policy entirely, transferring the employee to another position temporarily (until the flu threat ends as determined by local health officials) or permitting the employee to wear a facemask when in proximity to patients and coworkers.
  • DON’T terminate any employee who refuses a flu shot without engaging in the interactive process if they are objecting for health or religious reasons.  Further, any disciplinary measures should be uniformly implemented in the case of employees in violation of the policy.  Employers may also want to consider progressive discipline for first-time offenders, e.g., issuing a warning letter for an initial failure to show proof of a flu shot or failure to wear a facemask.
  • DO ensure that any policy implemented is enforced uniformly.  Require proof that employees have received a flu shot.  In the case of objectors, seek a waiver that the employee is unable or objects to vaccination and then engage in the interactive process to agree upon a reasonable accommodation.
  • DO consider making flu shots available to employees on-site to maximize compliance with any flu shot policy.
  • DON’T implement a policy without contacting your state’s Department of Health or any other related agencies.  These agencies can provide guidance on the manner in which vaccine policies should be implemented for various categories of employers or regarding possible accommodations for objecting employees.

 

Firing Employees Who Don’t Get Flu Shots: What Risks Do Hospitals Face?

By: Mark D. Nelson

As hospitals continue to see an onslaught of flu patients, they also face challenges to flu vaccination policies designed to reduce the spread of flu to patients and fellow employees.  Hospitals are understandably concerned with protecting patients, visitors and employees from contracting the flu and the potentially serious consequences to the health of elderly and infant patients. However, protecting patients against flu can create legal liability when employees are disciplined, discharged or suffer other adverse action because they do not get a flu shot.

Employment Considerations for Flu Vaccination Policies—The National Labor Relations Act

What limitations exist on a hospital’s ability to create and implement a flu/other vaccination policy?  Under the National Labor Relations Act, a flu vaccination policy is a mandatory subject of bargaining.  This means that unionized hospitals cannot unilaterally implement such a policy without first giving the union notice of the intended policy and bargain over the policy if the union requests to do so.

A hospital does not have to bargain if the union has “clearly and unmistakably” waived its right to bargain over the issue.  A waiver is typically found in the “Management Rights” clause, which was the case in a recent National Labor Relations Board (NLRB; the Board) decision, Virginia Mason Medical Center, 358 NLRB No. 64 (2012), where the Board found a clear and unmistakable waiver in the Management Rights clause.  That clause stated, in relevant part, that the Medical Center has the right to “operate and manage the Hospital, including but not limited to the right to require standards of performance and…to direct the nurses…to determine the materials and equipment to be used; to implement improved operational methods and procedures…to discipline, demote or discharge nurses for just cause…and to promulgate rules, regulations and personnel policies….”

The Union representing the Medical Center’s registered nurses filed an unfair labor practice charge with the Board and a hearing was held before an NLRB Administrative Law Judge (ALJ).  The ALJ ruled, and the Board agreed, that the Management Rights clause did not specifically mention wearing facemasks (which the flu policy required in certain areas for non-immunized nurses), but it did “specifically allow the Hospital to unilaterally ‘direct the nurses’ and ‘determine the materials and equipment to be used’ [as well as] implement improved operational methods and procedure.’”  The ALJ noted that the Hospital had several infection control policies that required nurses to wear masks under various circumstances, and found that requiring non-immunized nurses to wear masks was within the Hospital’s authority to “determine the materials and equipment to be used [and] implement improved operational methods and procedures.”

With properly crafted language in a Management Rights clause or elsewhere in a collective bargaining agreement, a unionized hospital has the right to unilaterally implement a new flu vaccination policy or modify an existing policy.

Employment Considerations for Flu Vaccination Policies—Disability and Religious Discrimination

Hospitals, of course, have reached different decisions on how to balance the interests of patients and employees. As such, policies vary in the flexibility given to employees regarding non-vaccination and the resulting consequences:

  • Vaccination encouraged but not mandated
  • Vaccination mandated with exemptions for medical contraindication, religious beliefs (discipline/other adverse consequences for non-exempted employees)
  • Vaccination mandated and masking required for medical contraindication, religious beliefs (discipline/other adverse consequences for failure to be vaccinated or wear mask, as applicable)
  • Vaccination required (discipline/other adverse consequences for non-compliance)

Flu vaccination policies also differ regarding applicability.  Some policies apply only to employees who come into direct contact with patients.  At the other end of the continuum, the policy applies to all employees, independent contractors, students, interns, vendors and others who provide services inside the hospital.

Union and non-union hospitals should consider the potential for discrimination claims based on a flu vaccination policy that requires any group of employees to get a flu shot or face adverse consequences (such as discharge) if they fail to do so for any reason.  The Equal Employment Opportunity Commission (EEOC) would likely find such a policy to be unlawful.  The EEOC has taken the position in its “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act” guidance that

“[a]n employee may be entitled to an exemption from a mandatory vaccination requirement based on an ADA disability that prevents him from taking the influenza vaccine. This would be a reasonable accommodation barring undue hardship (significant difficulty or expense). Similarly, under Title VII of the Civil Rights Act of 1964, once an employer receives notice that an employee’s sincerely held religious belief, practice, or observance prevents him from taking the influenza vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship as defined by Title VII (“more than de minimis cost” to the operation of the employer’s business, which is a lower standard than under the ADA).”

www.eeoc.gov/facts/pandemic_flu.html – 48k – 2009-10-21

Recently, a federal district court in Ohio refused to dismiss a complaint by a registered nurse alleging religious discrimination because she was fired for refusing to comply with the hospital’s mandatory flu vaccination policy.  Chenzira v. Cincinnati Children’s Medical Center, S.D. Ohio, No. 1:11-cv-00917 (12/27/12).   The employee’s refusal was based on her “religious beliefs” in veganism. The court rejected the hospital’s argument that her veganism was merely a “social philosophy or dietary preference.”  According to the court, it was plausible the employee could show that she held her belief in veganism with the same sincerity as traditional religious beliefs.  However, this case is far from over.  The court noted that its ruling on the motion to dismiss “in no way addresses what it anticipates as the hospital’s justification for its termination of the employee — the safety of patients at Children’s Hospital.”

Not all refusals to get a flu shot are based on medical or religious reasons.  A hospital in northern Indiana fired seven employees who refused to get flu shots.  One oncology nurse who was fired said it was “a personal thing.”  The nurse said she gets other vaccinations but it should be her choice whether she gets the flu vaccine.  She said she opposes “the injustice of being forced to put something in [her] body.”  Absent a violation of applicable state law, it is doubtful this employee would have a claim against the hospital for her termination.

Considerations in Creating a Flu Vaccination Policy

Current CDC guidelines do not require hospitals to mandate flu vaccination in any form; the CDC recommends active encouragement of employees to get a flu shot.  However, some hospitals believe it is appropriate to do more to try to protect vulnerable patients from catching the flu in the hospital and then suffering severe health consequences.  These hospitals mandate that at least some groups of employees must be vaccinated.  ”

Terminating or taking other adverse action against an employee who cannot get the vaccine because of a disability (as defined in the Americans with Disabilities Act and/or applicable state law) exposes a hospital to meaningful risk of a discrimination lawsuit.  The same is true for employees who raise a “religious objection.”

Hospitals should evaluate such refusals on a case-by-case basis and explore possible reasonable accommodations of the employees’ refusal to get vaccinated, and the policy should so inform employees. Possible reasonable accommodations could be exempting the employee from the policy entirely, transferring the employee to another position temporarily (until the flu threat ends as determined by local health officials) or permitting the employee to wear a mask when in proximity to patients and coworkers.  From my perspective as a former hospital board chairman, this approach presents a balancing of the hospital’s interest in protecting patients from flu exposure while protecting the legal rights of certain employees who decline to get vaccinated.  In the final analysis, many hospitals believe that risk of harm to patients may trump an individual’s right to refuse when flu epidemics are declared.

Bye-Bye, Big Labor? What Michigan’s “Right to Work” Law Means for Employers

By: Mark D. Nelson and Alejandra Lara

Michigan’s new right to work law, which endorses the right to engage in or refrain from collective action and prohibits the closed shop, analogous to right to work laws in many other states, is not well received by labor unions.  Why do unions hate right to work laws, particularly when they change the way things have been for decades?  Because unions lose – they lose revenue because employees can no longer be forced to pay dues or agency fees to the union in order to keep their jobs.  Unions also lose power – they can no longer fine employees who violate the union’s rules.  The union continues to have the obligation to represent all employees in the bargaining unit equally, but will likely get paid less (in dues) for doing so.

The Michigan right to work law will not be effective immediately for everyone.  The new right to work law only applies to an agreement, contract, understanding or practice that takes effect or is extended or renewed after the effective date, approximately March 28, 2013.

On December 11, 2012 Michigan enacted a right to work law.  Governor Snyder signed House Bill 4003, which applies to the public sector, and Senate Bill 116, which applies to the private sector, into laws.  This legislation will prohibit an individual from being required as a condition of obtaining or continuing employment to do any of the following:

  1. Refrain or resign from membership in, voluntary affiliation with, or voluntary financial support of a labor organization.
  2. Become or remain a member of a labor organization.
  3. Pay any dues, fees, assessments, or other charges or expenses of any kind or amount or provide anything of value to a labor organization.
  4. Pay to any charitable organization or third party an amount that is in lieu of, equivalent to, or any portion of dues, fees, assessments, or other charges or expenses required of members of or employees represented by a labor organization.

If an agreement, contract, understanding or practice between or involving an employer and a labor organization violates the above provisions it is unlawful and unenforceable.  Therefore, Michigan private sector employees will retain all of their existing rights under the National Labor Relations Act and any collective bargaining agreement between their employer and union representative, should they choose to retain their union representation.  The new law will prohibit agreements from binding employees to the different facets of union membership including payment of union dues and assessments, union rules, or union fines, penalties or punishment, including union discipline or fines for working during a strike or crossing picket lines.  Ultimately, the employee will now have the ability to decide whether to join a union.

Current collective bargaining agreements are “grandfathered” and this prohibition only applies to an agreement, contract, understanding or practice that takes effect or is extended or renewed after the effective date, approximately March 28, 2013.  Therefore, employees have to abide by the current contracts until they expire.  A recent NLRB decision stated that an employer’s obligation to check off union dues continues after the expiration of a union contract establishing such arrangement.  In light of this decision, it would be prudent for employers, if a current agreement expires or is extended after March 28, 2013, to tread carefully when providing employees an opportunity to opt out of the union or payment of union dues.  Employers should ensure they are lawfully communicating with their employees whose contracts expire after March 28, 2013 when providing information or resources to them about how to opt out.

The future of big labor is uncertain.  Unions stand to lose massive numbers of members and large sums of money when employees are given a choice to decline membership.  This isn’t the entire story, though.  The National Labor Relations Board has in recent years been heavily pro-union and only stands to get stronger through appointments from President Obama.