update on employment law · connecticut whistleblower free speech (public interest) whistle blowing...

Update on Employment Law

What You Need to Know for the New Decade

The Labor & Employment GroupMurtha Cullina LLP April 14, 2010

Quick Round-Up of Significant Trends/Changes

Health Care Reform

Coverage to age 26

Tax credit for small business

FSA cap

Annual Limit Cap

Non-Discrimination•

No Part D tax credit

Break time for nursing mothers

No Discrimination

New Poster

Effect on Wellness Plans--

Information collection

Employee fill out doctor’s note to meet 3 day minimum

Federal and state initiatives

ADA/Rehab Act

Federal contractors

ADA requirements to independent contractors under Rehab Act

Title VII

Race and Criminal Background checks

Mediations

Delays

Reasonable Factors Other Than Age

See Appendix A for additional information

Retaliation

A Growing Problem

Retaliation Cases Are On The Rise

In 2007 the Equal Employment Opportunities Commission received 26,663 charges of retaliation.

In 2008: 32,690

How Do Cases Arise?

Anti-Discrimination Statutes

Title VII, ADA, ADEA

Independent Federal Whistleblower Protections

OSHA, FLSA, FMLA, ARRA

Connecticut Whistleblower

Free speech (public interest)

Whistle blowing to public agency

How Does An Employee Prove Retaliation ?

That he/she engaged in protected activity

That she/he suffered an adverse employment action; and

The adverse employment action was caused by the protected activity.

Bad Discrimination Cases Can Lead to Good Retaliation Claims

• Employees who lose on their discrimination or whistleblower claims often have excellent retaliation claims

What Does “Engaging In” Protected Activity Mean?

Someone who participates in a protected activity

Someone who opposes an unlawful employment practice defined by statute

Someone who “blows the whistle”

Who Participates In Protected Activities?

Someone who has:

Made a charge

Testified

Assisted or

Participated

In any manner in an:

Investigation

Proceeding

Hearing or

Litigation

What Do They Participate In?

Speaking Up Makes the Claim

Employee does not have to prevail on the merits of their complaint regarding unlawful employment practice to establish participation in a protected activity.

Protected Activity: Opposition

An employee is protected if:

she or he directly or indirectly communicates

a good faith belief

employer’s activity constitutes a form of employment discrimination or other violation of law

Opposition?

“Opposition”

includes both formal and informal complaints.

“Opposition”

complaints can be combined with complaints about issues not related to discrimination.

What Does A Complaint Look Like?

Complaint must either explicitly or implicitly communicate a belief that the conduct violates an employment discrimination statute or other law.

“Broad and ambiguous complaints of unfair treatment”

are OK.

Would a reasonable person interpret the complaint as opposition?

What Else Does A Complaint Look Like?

Critical letters to customers

Protests concerning discrimination in society in general

Supporting other employees who have filed protected complaints

Encompasses passive conduct such as involuntary participation in an employer’s investigation of a claim (discrimination or other protected activity) made by another employee

What Isn’t A Complaint?

Complaints that are equivocal and vague

General lists of grievances

Reasonable Good Faith Belief

Opposition must be based on

Reasonable and good faith belief that

The opposed practices are unlawful

Adverse Action: What Is That?

Termination

demotion

loss of pay,

particularly vicious and prolonged abuse by a supervisor

Other Retaliation?

NOT SO EASY

Any conduct that “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

No longer look to test of did the action affect the “terms and conditions”

of employment or

was it an “ultimate employment decision”

Context Matters

denial of sick pay

denial of tuition reimbursement

denial of training opportunities

assigning employee to “unpleasant”

delay in processing grievance

unchecked harassment by co-

workers

investigating employee for performing actions that were part of her responsibilities

charging personal time for attending deposition

barring employee from accessing an office to which she normally had access

denying business trip when employee’s compensation was tied to revenue

change in schedule

failure to invite employee to lunch

Situations That May Not Be Materially Adverse

Not recommending the employee for an award

Requiring the employee to take two hours of training while on leave without pay and not paying for his time

Intimidating the employee by staring and yelling at him

Giving employee “minimal”

change in responsibilities when those job duties were not “dirtier, more arduous, less prestigious or objectively inferior”

Situations That May Not Be Materially Adverse

Assigning employee undesirable duties which were within her job description, without loss of pay or title

Denying an employee’s request for temporary change of assignment which would not qualify the person for a promotion

Keeping an employee “entirely out of the departmental information ‘loop’”

Giving an employee a cold shoulder

Being deprived of mentoring given to other new employees

Not Out Of The Woods Yet…

Retaliation claims can extend to actions after the employment relationship has ended:

providing unjustified negative job reference

refusing to provide a job reference

Causation

A Three-Step Process

1) Employee must raise an inference of causation

2) employer must articulate a legitimate, non- discriminatory reason for the adverse action

3) if legitimate reason is articulated, employee must show that the employer’s reason is a pretext for the true discriminatory motive and that retaliation is a motivating factor in the adverse decision.

Temporal Proximity

• The closer the temporal proximity the more likely the court is to infer causation

“Very Close”

6 months—not close enough

Important Steps Employers Can Take to Minimize the Risk of

Retaliation

Education

Company policies should

encourage all employees to help prevent and detect unlawful activity

prohibit discrimination and retaliation for reporting what employees reasonably believe to be wrongdoing.

Reporting Issues

Employees should be provided with multiple avenues of reporting any alleged wrongdoing, including one that is outside of the employee’s direct line of supervision.

More Education

Employers should educate managers and supervisors on compliance with applicable laws, rules and regulations, as well as training on awareness and prevention of retaliation.

Investigations

Employers should make certain that complaints and claims made by employees are promptly, thoroughly, and fairly investigated by someone who is knowledgeable about the subject matter of the complaint.

Remember:

Someone may be looking

Keep Records, Take Notes

Consistency

Avoid claims of constructive discharge resulting from discipline

Ensure that discipline:

Is appropriate

Similar to that taken against others in similar situation

Confidentiality

Employers should restrict communication about the claims to those who need to know

Communication among those in the need to know group should be restricted to formal communication

avoid casual conversations and email

Enforcement of Immigration Laws: Government Site Visits and AuditsImmigration Compliance Plans

and Best Employment Practices

Government Audits & Site Visits

Form I-9 Audits

Public Access File Audits/Investigations by the Department of Labor Wage and Hour Division (H-1B)

Site visits by United States Customs & Immigration Services (USCIS) Office of Fraud Detention and National Security (H-1B)

I-9 Form

All employees –

citizen and noncitizen –

hired after November 6, 1986 and working in the United States must complete an I-9 Form (Section 274A (b) of the Immigration and Nationality Act (INA), codified in 8 U.S.C. § 1324a (b))

Its purpose is to document that each new employee is authorized to work in the United States

The forms are not filed with the government

I-9 Form Audits

US Immigration and Customs Enforcement (ICE) issued Notices of Inspection to 652 businesses nationwide on July 1, 2009

In a single day, ICE issued more notices than in all of the previous year (503 notices in 2008)

It has been reported that the audits signal a focus on building criminal cases against employers

Information Requested in an Audit

The information requested may include:

Original I-9s

Employee information (names of current and terminated employees, hire and termination dates, social security numbers and dates of birth)

Payroll data (wage and hour reports and tax statements)

Copy of I-9 policy (retention and destruction policies)

Name of persons responsible for completing the forms

Information about your business (date of establishment, form of business, state of incorporation and revenue)

Department and job titles of employees

Unemployment insurance reports

Penalties for Substantive Violations

Range from $110 to $1,100 per violation

In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations. (See INA §274A(e)(5) (8 U.S.C. 1324a (e)(5)))

Appoint a point person to develop and implement a compliance plan

Immigration compliance may be done by several people in different departments

Conduct internal audits

Make it an agenda item before an ICE officer is at your door

Consistently apply the rule

Make every employee complete the form; not doing so could open an employer up to discrimination charges

Provide training to employees

Laws and requirements change

Compliance Plans and Best Employment Practices

Public Access File Audits

Employers must keep a Public Access File (PAF) for each H-1B employee (20 CFR 655.760)

The employer must make certain documents available in its PAF for public examination at the employer's principal place of business in the U.S. or at the employee’s place of employment

PAF Requirement

Establishes that the employer has complied with the wage requirement of the H-1B Labor Condition Application (LCA) procedures

Protect the employer in cases of a complaint being made against the employer or in case of a DOL audit

Investigations and Audits

Investigations are conducted by the Wage and Hour Division (WHD) of the US Department of Labor

Can be triggered by a complaint filed by an “aggrieved party”

alleging violations of the LCA

Stem from credible information from a source other than an “aggrieved party”

If the WHD has reason to believe that a violation has occurred

Fines and Penalties

“Nonwillful Violators”

Fines up to $1,000 per violation

Prohibition on filing any immigrant/nonimmigrant petition or LCA

for one year

“Willful Violators”

$5,000 to $35,000 per violation

Prohibition on filing any immigrant/nonimmigrant petition or LCA

for three years

Fail to meet LCA condition or misrepresent information

Designate a point person

Develop and implement a compliance plan

Conduct internal audits

Provide training to employees

Compliance Plans and Best Employment Practices

H-1B Site Visits

Conducted by United States Customs & Immigration Services (USCIS) Office of Fraud Detention and National Security (FDNS)

FDNS was created in 2004 to detect and combat immigration benefit fraud

FDNS has commenced an assessment of the H-1B program

H-1B Site Visits

For the most part the visits have been unannounced

Employer can request for its attorney to be present, but FDNS will not typically reschedule a visit for the attorney to be present

Information Requested in Site Visit

Usually verify information in a specific petition

Usually request to speak with person signing the Form I-129, or if that person is unavailable, a representative from human resources department

May review company’s tax returns, wage reports, and other information to verify that employer is a bona fide business

May take photographs of facilities

Likely interview beneficiary and other employees

Best Employment Practices

Retain complete copies of all I-129 petitions and supporting documentation in a confidential file maintained by a designated company official

Contact counsel

Request name, title and contact information of investigator

If counsel cannot be present, have a witness attend all employee interviews

Make a copy of all documents provided

Wage & Hour Law

Do You Have To Pay Them At All?

Volunteers

Student Interns

Do You Have To Pay Them As Employees?

Independent Contractors

Do You Have To Keep Track Of Hours And Pay Overtime?

Exempt Employees

Do You Have To Pay Minimum Wage?

Tip Credit

What Is “Working Time”?

Remote Access and The Beginning of the Work Day

Comp Time

Other Forms Of Compensation

Commissions

Bonuses

Can I Do Anything About All These Whiners?

Retaliation Claims

See Appendix B for additional information

The Obama Board

Major Shake Up At NLRB The Obama Board

Wilma B. Liebman, Chair

Term Expires: August 27, 2011

Peter C. Schaumber

Term Expires: August 27, 2010

Craig Becker

Recess Appointment

Mark Gaston Pearce

Recess Appointment

Brian Hayes

Nominated…stalled.

Recent Cases Subject To Possible Reversal

A number of recent Board decisions are likely to be reversed:

Effects of an employer's voluntary recognition of a union following neutrality-card check agreements, and pre-

recognition bargaining of contract terms for card check recognition (Dana-Metaldyne, Dana Corporation, Shaw's Supermarkets);

Whether an employer may voluntarily recognize a union where the employer has hired a core group of employees, but is not yet engaged in normal business operations (Elmhurst Care Ctr.);

Use of e-mail by employees at work for purposes of union organizing (The Register Guard);

Supervisory status and supervisory solicitation of union support

(Oakwood Healthcare, Harborside Healthcare);

Representation (Weingarten rights) of non-union employees at disciplinary interviews (IBM corp.);

Employee status of graduate school teaching assistants and disabled workers in rehabilitative "Facilities (Brown University, Brevard Achievement Center);

Expanding the use of extraordinary remedies, such as Gissel bargaining orders bypassing representation elections to remedy egregious unfair labor practices making a fair election impossible (Abramson; Hialeah Hospital,. Register Guard,• First Legal Support Services LLC; Internet Stevensville);

Presumption as to the length of the back pay period for union salts on construction projects, and legal standards and burdens of proof for determining whether salts are bona fide applicants for employment (Oil Capitol; Toering Electric);

Standards for determining whether a bargaining unit is appropriate consisting of employees of one employer and employees of that employer and another employer (Oakwood Care Center);

Lawfulness of employer ride-alongs

where employer officials accompany truck drivers in order to campaign against a union (Frito-Lay);

Whether a reasonably based but unsuccessful lawsuit filed with a

retaliatory purpose against a union in defense of a corporate campaign is a violation of the National Labor Relations Act (BE&K);

Reasonableness of a discriminatee's

efforts to mitigate damages (Grosvenor Resort; St. George Warehouse);

Whether an employer may withdraw recognition from a union and repudiate its Collective Bargaining agreement, following the employer's acquisition of a non-union business and consolidation of union and non-union workforces of equal size (Nott Co.); and

Whether a contract provision requiring an employer to recognize a union at newly-organized stores is a mandatory or permissive subject of bargaining absent proof that it vitally affects the terms and conditions of employment of current bargaining unit employees (Supervalu, Inc.)

Employee Free Choice Act

Does two (2) make a Quorum?

Supreme Court Argument

The Americans with Disabilities Act Amendment’s Act (the ADAAA) and Regulations –

Getting to the Merits

Signed by President George W. Bush on September 25, 2008.

Effective January 1, 2009.

ADA Amendment Act of 2008

ADAAA – Getting to the Merits

The ADAAA resulted from the belief of Congress that the courts were construing the ADA too narrowly and, therefore, making it difficult for disabled employees to maintain actions to remedy perceived disabilities.

Necessary Proof in an ADA Case

• Generally, to win an ADA case, a plaintiff must prove:

The employer is subject to the ADA;

The plaintiff suffers from a “disability”;

The plaintiff is a “qualified individual,”

i.e. can perform the essential functions of the job either with or without reasonable accommodation;

The plaintiff suffered an adverse employment action “because of”

his or her disability.

What did the ADAAA do?

Expands the definition of “disability.”

Makes it easier for employees to prove discrimination.

Explicitly rejects strict standards used by the U.S. Supreme Court and other courts to determine if an employee is “disabled.”

EEOC Regulations

The ADAAA authorized the EEOC to publish regulations to implement its provisions.

Proposed regulations published in September 2009.

Regulations not yet final.

Proposed Regulations -

explain the ADAAA and give an idea as to the EEOC’s thinking.

ADA Definition of “Disability” Retained by ADAAA

The three part ADA definition of “disability”

is retained by the ADAAA.

A physical or mental impairment that substantially limits one or more major life activities;

A record of such impairment; or

Being regarded as having such an impairment.

Compare – Connecticut Law

"Physically Disabled" refers to any individual who has any chronic physical handicap, infirmity or impairment, whether congenital or resulting from bodily injury, organic processes or changes from illness, including, but not limited to, epilepsy, deafness or hearing impairment or reliance on a wheelchair or other remedial appliance or device

Requires courts to construe the ADA broadly, in ways that are favorable to the disabled.

Rejects the strict, narrow definition of certain terms within these definitions previously established.

Expansion of the Term Occurs in Two Major Ways

General Rule of Construction

• The ADAAA specifically instructs courts that:

“The definition of disability in this chapter shall be construed in favor of broad coverage of individuals under this chapter, to the maximum extent permitted by the terms of this chapter.”

Definitions Expanded

Substantially limits

Major life activities

“Regarded as”

having such an impairment.

“Substantially Limits”

Congress criticized the narrow interpretation of substantially limits utilized by the courts.

In particular, court decisions which said that an individual must have an impairment which “prevents or severely restricts”

an individual

in activities of central importance to daily life.

Proposed EEOC Regulation

Substantially Limits—(1) In General. An impairment is a disability within the meaning of this section if it “substantially limits”

the ability of an individual to

perform a major life activity as compared to most people in the general population. An impairment need not prevent, or significantly or severely restrict, the individual from performing a major life activity in order to be considered a disability.

Caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.

Proposed EEOC regulations would add sitting, reaching and interacting with others.

“Major Life Activities”

in General

Includes, but is not limited to, functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.

EEOC regulations would add special sense organs and skin, genitourinary, cardiovascular, hemic, lymphatic and musculo skeletal.

– Bodily Functions

- Working

Proposed EEOC regulations would provide that a person is substantially limited in the major life activity of working if the impairment substantially limits an individual’s ability to perform the type of work at issue.

“Regarded As”

Disabled

An employee must only show that a prohibited action was taken as a result of an actual or perceived impairment.

The individual is not required to show that the perceived impairment limits performance of a major life activity.

Individuals “regarded as”

having both a transitory (six months or less per the proposed regulations) and minor impairment.

Employers do not have to accommodate persons “regarded as”

disabled.

“Regarded As” Does Not Include

Symptom control by medicine, equipment, hearing aids, and adaptive or learned behaviors is irrelevant.

Sole exception for ordinary eyeglasses or contact lenses.

Courts May No Longer Consider Corrective Measures

What it All Means

• This means that it will be more difficult to resolve cases at an early time by showing that the individual is not covered by the statute.

• Consequently, more cases will reach the “merits”

of the case, that is, was there

discrimination on the basis of disability.

What Can an Employer Do?

Avoid Generalizations.

Always avoid generalizations about whether disabled persons can perform any particular job.

The ADA requires that an employer consider the abilities of a particular applicant or employee and the particular requirements of a job when making employment decisions.

• Maintain Job Descriptions.

A qualified person must be able to perform the essential functions of the job with or without a reasonable accommodation. All positions should have a job description which sets forth the essential functions and any physical or other requirements.

Provide a reasonable accommodation where necessary.

It is discrimination under the ADA not to make a reasonable accommodation to the known mental or physical limitations of a qualified individual with a disability unless the employer can show that the accommodation would impose an undue hardship on the operation of its business.

Engage in an interactive process with the employee or applicant.

Management should consult with the individual to determine limitations, identify potential accommodations, determine the individual’s preferences, etc., and implement the accommodation that is most appropriate for the employer and employee.

Provide some basic training to management and supervisors in the requirements of the ADA.

Try to get everyone to buy-in to the need to look beyond disabilities, focus on the abilities of the individual and the requirements of the job, and the need for a reasonable accommodation in certain circumstances.

Maintain policies to provide a resource for supervisors and managers

Revise policies to reflect new definitions and broader standards.

Re-emphasize need to be thorough and careful when addressing disability claims and requests.

Connecticut Law Prohibition of Discrimination

Sec. 46a-60. (Formerly Sec. 31-126). Discriminatory employment practices prohibited. (a) It shall be a discriminatory practice in violation of this section:

(1) For an employer, by the employer or the employer's agent, except in the case of a bona fide occupational qualification or need, to refuse to hire or employ or to bar or to discharge from employment any individual or to discriminate against such individual in compensation or in

terms, conditions or privileges of employment because of the individual's race, color, religious creed, age, sex, marital status, national origin, ancestry, present or past history of mental disability, mental retardation, learning disability or physical disability, including, but not limited to, blindness;

Connecticut Definition of Physically Disabled

"Physically Disabled" refers to any individual who has any chronic physical handicap, infirmity or impairment, whether congenital or resulting from bodily injury, organic processes or changes from illness, including, but not limited to, epilepsy, deafness or hearing impairment or reliance on a wheelchair or other remedial appliance or device;

Connecticut Definition of Learning Disability

"Learning disability" refers to an individual who exhibits a severe discrepancy between educational performance and measured intellectual ability and who exhibits a disorder in one or more of the basic psychological processes involved in understanding or in using language, spoken or written, which may manifest itself in a diminished ability to listen, speak, read, write, spell or to do mathematical calculations

Connecticut Definition of Mental Disability

"Mental disability" refers to an individual who has a record of, or is regarded as having one or more mental disorders, as defined in the most recent edition of the American Psychiatric Association's "Diagnostic and Statistical Manual of Mental Disorders."

See Appendix C for additional information

See Appendix D for information from attorney Barry Waters on “How to Conduct a

Workplace Investigation”

TheThe

Obama Board

Michael C. Harrington, Esq.

Employee Free Choice Act

An Overview of Existing Certification Process

Collection of authorization cards by the union

Demand for recognition

Filing of an RC Petition

National Labor Relations Board (NLRB) processing of the petition

The Campaign

The Election

Post-Election proceedings

Collection of Authorization Cards

Collection of authorization cards is central to a union’s organizational effort

Cards may be used to demand recognition (requires cards from over 50% of employees in unit)

Cards are used to make the required “showing of interest”

if a petition is filed (requires only 30%)

Demand for Recognition

If the union obtains cards from more than 50% of the employees in the unit it may demand recognition

This may be done by mail offering to prove majority status through a card check

May be done in person with cards being presented to show majority status

The employer has two options:

Agree to recognize the union

Refuse to recognize the union

An employer has the right to refuse to recognize the union. Refusal will usually result in a petition being filed by the union.

Demand for Recognition: Employer Response

Filing of an RC Petition

An RC Petition is filed with the NLRB. It contains the following information:

Name of labor organization

States the number of employees in unit

Alleges support by more than 30%

Describes the unit

States dates of demand for and denial of recognition

NLRB Process: Initial Notice

The filing of the Petition commences the formal NLRB certification process

NLRB sends (faxes) petition to employer;

Sends a commerce questionnaire; and

Issues a notice of a hearing.

NLRB Process: Issues

• There are four issues to address:

Does the NLRB have jurisdiction?

Is there the requisite showing of interest (this is an administrative determination)?

Is the petitioner a bona fide labor organization?

Is the unit an “appropriate unit?”

NLRB Process: Resolution of Issues

• Issues may be resolved in one of two ways:

By agreement between the employer and union; or

By the Regional Director after a hearing.

• If the employer contests NLRB jurisdiction, whether the union is a bona fide labor organization, or the appropriateness of the unit the employer is entitled to a hearing.

NLRB Process: The Hearing

• The employer may contest the appropriateness of the unit:

Employer may argue:

Other groups should be added.

Groups should be deleted.

Unit includes supervisors.

After the hearing and filing of briefs the Regional Director will issue a decision

Dismissing the petition (not likely)

Directing an election

If an election is directed, an attempt is made to have the election within 45 days of the filing of the petition.

NLRB Process: Regional Director Decision

The Campaign

When directing the election the Regional Director will require the employer to provide the union with the names and addresses of the employees in the unit.

Both the employer and the union may conduct a campaign to win employees over to their point of view –

union or no union.

The Election

Election is by secret ballot.

Conducted by a NLRB agent.

At the Employer’s premises (except in unusual situations).

The NLRB secret ballot election allows an employee to make his/her choice privately in a government run election where no one will know how the employee voted.

Post Election Proceedings

Resolution of any challenges to ballots

Objection to the Election and/or objection to conduct affecting the results of the election.

Unionization•

Union membership = 7.4% in 2006

58% eligible workers would join a union if they could.

In 2006, 94.2% of all initial elections were conducted within 56 days of filing of petition.

Median time of election : 39 days

Unions are winning over 50% of secret ballot elections.

Major Provisions

Eliminate secret ballot elections

Impose interest arbitration

Increase penalties

Eliminate Secret Ballot Elections

Certification of Union based upon Cards

Concerns About “Card Check”

Solicitation in public.

No secret ballot.

Historically, unions lose 10% of card signers when secret ballot is conducted.

First Contract . . . Binding Arbitration.

Must begin bargaining within 10 days of receiving written request.

After 90 days, may request mediation.

After 30 days, may be submitted to binding arbitration.

Arbitration decision binding for up to 2 years.

Concerns About Binding Arbitration

Standards “in accordance with regulations as may be prescribed.”

NLRB must

seek injunction against an employer whenever there is reason to believe that employees have been discriminated against during organizing campaign or bargaining first contract

Increase Remedies / Penalties

(continued)

backpay for discrimination during organizing campaign or bargaining first contract.

Penalties up to $20,000/violation for willful/repeated violation of employees’

rights

during organizing campaign/bargaining first contract.

What To Do Now

Review Employee Handbook

Non-Solicitation

E-Mail Policies

Be Clear As to Who Are Supervisors

Competitive in Market

Morale

Currently, 4 of 5 members:•

Wilma B. Liebman

Peter Schaumber

Craig Becker

Mark Gaston Pearce

* Brian Hayes

-Nomination stalled.

National Labor Relation Board

Possible Changes in Board Law¹Top Prospects for Reversal

Dana /Metaldyne

351 NLRB 434 (2007)

ISSUE: Application of the Board’s "recognition-bar" doctrine, under which, according to this doctrine, an employer’s voluntary recognition of a union, in good faith and based on a

demonstrated majority status, immediately bars an election petition filed by an employee or a rival union for a “reasonable period of time.”

A collective bargaining agreement executed during this insulated period generally thereafter bars Board elections for up to 3 years of the new contract’s term.

HOLDING: The Majority modified the Board’s recognition-bar doctrine and held that no recognition bar will be imposed after a card-based recognition unless (1) employees in the bargaining unit receive notice of the recognition and of their right, within 45 days of the notice, to file a decertification petition or to support the filing of a petition by a rival union, and (2)

45 days pass from the date of notice without the filing of a valid petition. If a valid petition supported by 30 percent or more of the unit employees is filed within 45 days of the notice, the petition will be processed. The requisite showing of interest in support of a petition may include employee signatures obtained before as well as after the recognition. These principles govern regardless of whether a card-check and/or neutrality agreement preceded the union’s recognition.

U.S. Chamber of Commerce (Sept. 2009)

Oakwood Healthcare Center, Inc.

348 NLRB 686 (2006)

ISSUE: In light of the Supreme Court’s decision in NLRB v. Kentucky River Community Care,44

the Board reexamined its position on determining “supervisory status”

under the National Labor Relations Act's section 2(11) statutory exclusion for supervisors.

Section 2(11) defines “supervisor”

any individual having the authority, in the interest of the employer, to hire, transfer,

suspend, lay off, recall, promote, discharge, assign, reward, or

discipline other

employees, or responsibly to direct them, or to adjust their grievances, or effectively to

recommend such action, if in connection with the foregoing the exercise of such authority

is not of a merely routine or clerical nature, but requires the use of independent judgment.

Pursuant to this definition, individuals are statutory supervisors if: (1) they hold the authority to engage in any 1 of the 12 supervisory functions (e.g., “assign”

and “responsibly to direct”) listed in Section 2(11); (2) their “exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment;”

and (3) their authority is held “in the interest of the employer.”

HOLDING: The Majority found that the Employer adduced evidence sufficient

to establish that certain of its permanent charge nurses are supervisors based on their delegated authority to

Oil Capitol Sheet Metal, Inc.

349 NLRB 1348 (2007)

ISSUE: Whether the Board's rebuttable presumption that the back pay period should continue indefinitely from the date of the discrimination until a valid offer of reinstatement has been made should apply where the discriminatee

is a union organizer or “salt.”

HOLDING: The Majority held that the back pay presumption does not apply where the discriminatee

is a salt and that the General Counsel cannot rely on this presumption to meet his burden of proving the reasonableness of a back pay period claimed for a salt/discriminateee.

Palms Hotel & Casino

344 NLRB 351(2005)

ISSUE: Whether the employer’s work rule contained in its employee policy manual prohibiting employees from engaging in "conduct which is or has the effect of being injurious, offensive, threatening, intimidating, coercing, or interfering with" other employees or patrons, violates Section 8(a)(1) ofthe

HOLDING: While finding other employer violations of Section 7 rights, the

Majority held that an employer's policy manual that promulgated and maintained a rule prohibiting employees from engaging in “conduct which is or has the effect of being injurious, offensive, threatening, intimidating, coercing, or interfering with”

other employees or patrons, did not violate Section 8(a)(1) of the Act. The Board held that it must give the challenged rule a"reasonable

reading" and not read the rule in isolation or simply presume improper interference with employee rights. Thus, since the challenged rule in this case was not promulgated in response to union organizing and does not specifically address Section 7 activities, it was not a violation of Section 8(a)(1).

Shaw's Supermarkets

350 NLRB 585 (2007)

ISSUE: The precise issue presented here, which seems to be an issue of first impression, is whether an employer may rely on evidence of actual loss of majority support

to withdraw recognition from a union after the third year of a contract of longer duration. Thus the issue pits conflicting labor policies and competing Section 7 rights: employee free choice versus contract

stability.

HOLDING: The employer and the union had a 5-year contract covering about 1600 full-time and regular part-time employees at 12 of the employer’s stores. Following the employees filing a decertification petition, and based on over 900 signatures on a petition from the employees stating that they no longer wanted to be represented by the union, the employer withdrew recognition.

The Majority held that the employer lawfully withdrew recognition from the union based on evidence that the union had actually lost the support of a majority of the bargaining unit employees. Before it withdrew recognition from the union, the employer was in possession of verified information indicating actual loss of majority support sufficient to meet the Levitz standard.

Also, the Board held, that while it is true that the employer could have awaited the outcome of the decertification election, the ready availability of blocking charges—which, indeed, were filed here—and the delay attendant upon their resolution rendered this course of action problematic where a union has actually lost majority support. “Continuing to recognize and deal with such a union is as deleterious to employee rights as failing to recognize a union that enjoys majority support.”

Toering Electric Company

351 NLRB 225 (2007)

ISSUE: The legal standard and burden of proving an unlawful Section 8(a)(3) refusal to hire or consider for hiring a “salt”

applicant for employment.

HOLDING: First, the Majority defined an applicant entitled to statutory protection against hiring discrimination as someone genuinely interested in seeking to establish an employment relationship with the employer. Second, the Majority imposed on the General Counsel the burden of proving that an alleged discriminatee

meets this definition.

The Register Guard

351 NLRB 1110 (2007)

ISSUE: Employees’

use of their employer’s e-mail system for Section 7 purposes. First, whether the Employer violated Section 8(a)(1) by maintaining a policy prohibiting the use of e-mail for all non-job-

related solicitations. Second, whether the Employer violated Section 8(a)(1) by discriminatorily enforcing that policy against union-related e-mails while allowing some personal e-mails, and Section 8(a)(3) and (1) by disciplining an employee for sending union-related emails. Finally, whether the Employer violated Section 8(a)(5) and (1) by insisting on an allegedly illegal bargaining proposal that would prohibit the use of e-mail for union business.

HOLDING: The Employer's employees had no statutory right to use the Employer's e-mail system for Section 7 purposes, and therefore the Employer's policy prohibiting employee use of the system for non -

job-related solicitations did not violate Section 8(a)(1).

With respect to the Employer's alleged discriminatory enforcement of the e-mail policy, the Majority modified the Board’s approach in discriminatory enforcement cases to clarify that discrimination under the Act means drawing a distinction along Section 7 lines, in other words, unlawful discrimination consists of disparate treatment of “communications of a similar character based on their union or other Section-7 protected status.”63

Finally, the Employer did not insist on its bargaining proposal prohibiting the use of e-mail for “union business.”

Therefore, the Majority dismissed the allegation that the Respondent insisted on an illegal subject in violation of Section 8(a)(5) and (1).

Harborside Healthcare, Inc.

343 NLRB 906 (2004)

ISSUE: Under what circumstances the pro-union activity of a supervisor will constitute objectionable conduct so as to warrant a new election.

HOLDING: On remand from the Sixth Circuit, the Board restated its legal standard for determining when supervisory pro-union activity is objectionable conduct in that it interferes with employees' freedom of choice so as to materially affect the election outcome and held that supervisory solicitations of union authorization card are inherently coercive absent mitigating circumstances.

IBM Corp.

341 NLRB 1288 (2004)

ISSUE: Whether employees who are not represented by a union have a protected statutory right to have a coworker present during investigatory interviews.

HOLDING: The Majority decision overruled Epilepsy Foundation and returned to earlier Board precedent holding that the so-called Weingarten right does not extend to a workplace where, as here, the employees are not represented by a union.

Oakwood Care Center

343 NLRB 659 (2004)

ISSUE: A petitioned for unit included both employees who are solely employed by employer, and employees who are jointly employed by employer and a personnel staffing agency.

HOLDING: It overruled the Board’s decision in Sturgis and held that multiemployer units may be appropriate only with the consent of the parties.

Brown University

342 NLRB 483 (2004)

ISSUE: Whether student graduate school teaching assistants for whom supervised teaching or research is an integral part of their academic development must be treated as “employees”

for purposes of unionization and collective bargaining protections under section

2(3) of the NLRA.

HOLDING: Tthe

Board reversed the its previous decision in New York University,91

and held that graduate student assistants are primarily students and not statutory employees.

Brevard Achievement Center

342 NLRB 982 (2004)

ISSUE: Whether disabled janitorial employees of a private sector rehabilitation center who perform the same services for the center's clients as non-disabled employees but whose work is primarily rehabilitative in

nature are protected as statutory “employees”

under the National Labor Relations Act.

HOLDING: The Board majority held that the individuals in question are not

statutory employees under the Act.

BE & K Construction Co.

351 NLRB 451 (2007)

ISSUE: Whether a party that files a reasonably based but ultimately unsuccessful lawsuit that is filed for a retaliatory reasons constitutes a violation of the NLRA.

HOLDING: The majority determined that completed suits that are reasonably

based but ultimately unsuccessful do not violate the Act.

Delta Brands, Inc.

344 NLRB 252 (2005)

ISSUE: Whether an unlawful rule in the Employee Policy Manual disseminated shortly before a union representation election that restricted workplace solicitation was sufficient to set aside the election results.

HOLDING: Consistent with its decision in Safeway, Inc., 100 the mere maintenance of an arguably overbroad rule will not be the basis for overturning an election

where an incumbent union is in a position to advise employees of their rights.

The majority found that the union failed to meet its burden of proving that (1) the policy manual that contained the unlawful rule was actually given to multiple employees during the critical period of union organizing; (2) the employer actually enforced the rule or called the attention of employees to it; and (3) the employees were, in fact, influenced in voting or deterred by

the rule from engaging in Section 7 activity.

Crown Bolt

343 NLRB 776 (2004)

ISSUE: Standards for determining whether an unlawful threat to close a plant to one employee is disseminated to the entire workforce.

HOLDING: The majority overturned Springs Industries and earlier Board precedent which had created a rebuttable presumption of dissemination throughout the workforce

of an employer's unlawful threat to close the plant if the union prevailed in a representation election, and that to rebut the presumption the employer was required to prove non-dissemination among employees.

LeMoyne-Owen College

345 NLRB 1123 (2005)

ISSUE: Whether faculty members are covered employees or managerial employees excluded from coverage under the NLRA and by the U.S. Supreme Court's decision

in Yeshiva University.103

HOLDING: The majority held that the faculty at LeMoyne-Owen College are managerial employees excluded from coverage under the NLRA.

Jones Plastic and Engineering Co.

351 NLRB 61 (2007)

ISSUE: Whether employees hired on an at-will basis may be found to be permanent replacements for striking employees.

HOLDING: The majority held that the employer lawfully declined to reinstate former economic strikers because it had hired permanent replacements for them.

In this case, the replacements were required to sign a statement

stating that they were permanent replacements, but that they could be “terminated ... at any time, with or without cause.”

The statement then stated, “I further understand that my employment may be terminated as a result of a strike settlement agreement ... or by order [of] the National Labor Relations Board.”

Alladin Gaming, LLC

345 NLRB 585 (2005)

ISSUE: Whether the employer engaged in unlawful surveillance when supervisors observed employees talking about union matters while in the employee dining room and interrupted those employees to provide the employer’s perspective.

HOLDING: The managers’

interruption of employees engaged in Section 7 rights, where employees on company property were discussing the union and seeking signatures on union authorization cards and managers briefly interjected company's views on unionization, was not a violation of Section 8(a)(1) as unlawful surveillance. The majority held that surveillance is only unlawful where it is out of the ordinary thereby making it coercive. Indicia of coerciveness include the length of the surveillance, the distance from employees while observing them, and whether there was other

coercive behavior during the observation.

Elmhurst Care Center

345 NLRB 1176 (2005)

ISSUE: Whether voluntary recognition of a Union is premature, and therefore unlawful in violation of Sections 8(a)(1), (2), and (3) and 8(b)(1)(A) and (2) of the Act, where the Employer has not: (1) employed a substantial and representative complement of its projected workforce, and was not (2) engaged in its normal business operations.

HOLDING: The majority held that the Respondent Employer extended, and the

Respondent Union Local 300S accepted, recognition prematurely. Recognition was extended

and accepted before the employer was engaged in normal business operations.

An employer may grant a union voluntary recognition if the union

presents evidence of majority support in an appropriate unit. However, a grant of recognition when the union does not have majority support is unlawful because it violates the principle of majority rule, embedded in Section 9 of the Act.

Supervalu, Inc.

351 NLRB 948 (2007)

ISSUE: Whether an “additional stores”

clause, in which the Employer recognizes the Union as the sole and exclusive bargaining representative for all employees in the

retail stores presently operated by the Employer or of employees in stores which may be operated by the Employer in the future, concerns a mandatory or merely a permissive subject of bargaining.

HOLDING: The Board held that the “additional stores”

clause concerned a permissive subject of bargaining, and thus, the Respondent Employer's actions did not violate the Act.

Scope of Protected Activity

Holling Press, Inc.

343 NLRB 301(2004)

ISSUE: Whether an employee was engaged in activity protected by the Act

when she solicited a coworker to be a witness in support of her sexual harassment claim filed with a State agency.

HOLDING: For an employee’s actions to be protected Section 7 activity, the General Counsel must show that an employee’s actions are (1) concerted and (2) for mutual aid or protection. The Board found that although the employee’s attempts to solicit another coworker to accompany her to the State Agency in support of her sexual harassment claim was indeed concerted it was not engaged in for mutual aid or protection. The Board made that determination finding that the employee pursued the sexual harassment claim for purely personal benefit and not for the benefit of other employees.

Waters of Orchard Park

341 NLRB 642 (2004)

ISSUE: Whether two nursing home employees were engaged in protected, concerted activity when they called the New York State Department of Health Patient Care Hotline to report excessive heat in the Respondent’s nursing home.

HOLDING: The Majority found that although the employees’

action in making the call was concerted (as there were two employees involved in the call), it was not protected as it did not relate to a term or condition of their employment. The Majority found that because the employees made the call to the hotline to express their concern about the effect the heat was having on patients, as opposed to employees, the activity was not for mutual aid or protection of employees and therefore not protected. As stated another way in a concurring opinion by Member Meisburg, the NLRA “is not a general whistleblower’s statute. Absent an intent to improve wages, hours, or working conditions, concerted activity of the type in this case cannot be deemed ‘mutual aid and protection.’”

Five Star Transportation, Inc.

349 NLRB 42 (2007)

ISSUE: Whether a successor contractor providing school bus transportation lawfully refused to hire certain drivers of the predecessor contractor who sent letters in an effort to persuade the School District to award the contract to the predecessor.

HOLDING: The Majority held that the successor contractor did not violate the Act by refusing to hire certain drivers. Although the Majority acknowledged that all of the drivers engaged in concerted activity by preparing and submitting individual letters to the school committee, the Majority concluded the letters were not sufficiently related to terms and conditions of employment to constitute protected activity.

AmcastAutomotive of Indiana, Inc.

348 NLRB 836 (2006)

ISSUE: Whether the employer violated 8(a)(3) of the Act when it terminated an employee for using a Company computer to search the internet to investigate the truth

of rumors that the Company was selling a portion of its business.

HOLDING: The Majority held that the employer did not violate the Act when

it discharged the employee. The Majority found that the internet activity was too attenuated

from employees’

working conditions to be protected, noting that the “mere possibility of a future sale was too speculative and remote...”

Gissel / Special Remedies

Abramson

345 NLRB 171(2005)

ISSUE: Whether the employer's conduct before and after the election warranted a Gissel bargaining order (ordering bargaining even though the Union has not won in a NLRB-

conducted election because the employer’s conduct has prevented the possibility of ensuring a fair election).

HOLDING: The Majority upheld ALJ findings with regard to several unfair labor practice violations that the employer committed during the course of the Union organizing campaign, including threats of plant closure, as well as loss of

jobs and benefits should employees choose union representation.

The Majority found that because the threats were disseminated to

a minority of the employees (at most 35 out of 80 employees) a Gissel bargaining order was unwarranted and the Board’s traditional remedies, including a rerun election, would suffice.

Hialeah Hospital

343 NLRB 391(2004)

ISSUE: Whether the union’s objections to election regarding various unfair labor practices that the employer committed after learning that the union filed a petition for election with the NLRB warrant a Gissel bargaining order.

HOLDING: The Majority upheld the ALJ finding of a violation with regard to several of the Union’s objections, including the following: (a) threats made at a mandatory meeting of employees of unspecified reprisals for engaging in union activity; (b) promises of job promotions to employees who stop supporting the union; (c) stricter enforcement of workplace rules; (d) removing employee benefits (i.e. removal of shower head and ping pong table from employee lounge); (e) various threats; (f) surveillance; and, (g) a retaliatory discharge. The Majority reversed the ALJ, however, with respect to his recommended remedy of a Gissel bargaining order. The Majority determined that the Board’s traditional remedies, including a rerun election and reinstatement of the unlawfully discharged employee were sufficient and that the employer’s violations were not as serious or as pervasive as they would need to impose a bargaining order, which should be reserved for those cases where the possibility of erasing the effects of unfair labor practices is slight.

The Register Guard

344 NLRB 1142 (2005)

ISSUE: Whether a Gissel bargaining order is warranted where an employer engages in violative

activity including (a) granting wage increases, (b) soliciting employees’

grievances and promising to remedy them, (c) and soliciting employees to withdraw the Union authorizations.

HOLDING: The Majority held that the three 8(a)(1) violations did not fall

into either category of violation that the Board has found to warrant a Gissel bargaining order (i.e. either (1) exceptional cases, which are marked by ULPs

that are so outrageous and pervasive that a fair election could

not be run; or, (2) less extraordinary cases, which are marked by less pervasive violations but which still have a tendency to impede the election process).

Intermet Stevensville

350 NLRB 1349 (2007)

ISSUE: Whether the employer’s violations so tainted the workplace atmosphere that the possibility of a fair rerun election was slight and a bargaining order was warranted.

HOLDING: The Majority held that imposition of bargaining order was not warranted where the “hallmark”

violations—threatening plant closure and loss of employment if the union won the election—did not impact a significant portion of the bargaining unit and therefore did not warrant a bargaining order. The Majority further found that there was no evidence that the two employees who were affected by the hallmark violations disseminated news of these unfair labor practices to other employees.

Washington Fruit & Produce Co.

343 NLRB 1215 (2004)

ISSUE: Whether the election results should be set aside on the basis of

the union’s objection to the election regarding inaccurate address information on the Excelsior list.

Woods Quality Cabinetry Co.

340 NLRB 1355 (2003)

ISSUE: Whether an election should be set aside and new election directed where the sample ballot and notice of election erroneously indicated that the union was affiliated with the AFL-CIO.

HOLDING: The Majority found that the erroneous designations on the notices and ballots would reasonably tend to interfere with the election process because unit employees would incorrectly assume that they were joining the AFL-CIO. The Board found that this mistaken belief was material in several respects, including (1) calling into question the employer’s credibility where it had indicated to employees that the union was not affiliated with the AFL-CIO; and, (2) giving employees a false impression that the union would receive the assistance of a much larger union. Consequently, the Majority directed a new election with corrected notices and ballots

First Legal Support Services, LLC

342 NLRB 350 (2004)

ISSUE: Whether the employer’s numerous 8(a)(1) and (3) violations committed during a union organizing campaign warranted a bargaining order and other special remedies.

HOLDING: The Majority affirmed the ALJ’s

rulings that the employer did in fact commit numerous unfair labor practices during the union organizing campaign.

The Majority upheld the ALJ’s

recommendation for standard remedies and rejected the General Counsel’s and Union’s exceptions which asserted that the appropriate remedy should include, among other things, a Gissel bargaining order.

The Board determined that a bargaining order was not warranted because the GC failed to establish that the union enjoyed majority support. The Board also rejected the GC request for other special remedies because the GC failed to carry its burden that traditional remedies would not sufficiently remedy the unfair labor practices.

Partial Lockout

Bunting Bearings Corp.

343 NLRB 479 (2004)

ISSUE: Whether the Employer violated Section 8(a)(3) of the Act by implementing a partial lockout that was limited to nonprobationary

employees following an impasse in negotiations.

HOLDING: The Majority held that the lockout was lawful following a legal impasse in negotiations. The Majority concluded that the Employer lawfully exerted economic pressure on the union following the lawful impasse by limiting the lockout to nonprobationary

employees whom the Employer believed to be its only employees covered by the terms of the CBA.

Midwest Generation, EME, LLC

343 NLRB 69 (2004)

ISSUE: Whether the Employer violated 8(a)(1) and (3) of the Act by locking out and / or refusing to reinstate those employees who were on strike at the time of the Union’s unconditional offer to return to work, while not locking out or refusing to reinstate workers, who, prior to the Union’s unconditional offer to return to work, had already ceased participating in the strike and had already made their own unconditional offers to return to work.

HOLDING: The Majority held that the employer did not violate the Act by locking out and refusing to reinstate only those workers who stuck with the strike until the

end when the Union made an unconditional offer on their behalf to return to work

Mitigation of Damages

Grosvenor Resort

350 NLRB 1197 (2007)

ISSUE: Whether the ALJ properly awarded full back pay to certain alleged discriminatees

who (a) delayed their initial job search until several weeks after discharge; (b) voluntarily quit interim work; or (c) performed a limited search for work.

HOLDING: The Majority held that the unlawfully terminated discriminatees

failed to make sufficiently reasonable efforts to secure interim work to be entitled to full

backpay. The Board denied full back pay to employees whose efforts fell in to the following categories:

Searches commenced more than two weeks after unlawful discharge—absent circumstances justifying a longer delay, employees whose search commenced more

than two weeks after discharge will have backpay

tolled until the reasonable search began (the mere fact that employees engaged in picketing subsequent to discharge does not relieve them of this responsibility);

Quitting interim employment—employee who quit after incident where coworker embarrassed her in front of customers, was denied backpay

for time after she quit the job and remained unemployed. The Board noted that when a discriminatee

voluntarily quits interim employment the burden shifts to the General Counsel to show that the quit was reasonable.

Inadequate searches for interim work-

one application in a two month span inadequate;

three applications in a three month span inadequate;

7 weeks in between applications is insufficient;

Working for family member which amounts to nothing more than a hobby found inadequate; and

Securing work soon after discharge but not starting that work for several weeks inadequate.

Information Requests

American Polystrene Corp.

341 NLRB 508 (2004)

ISSUE: Whether the employer claimed a present inability to pay the union’s bargaining demands during collective-bargaining negotiations and whether the employer subsequently violated Section 8(a)(5) of the Act by refusing to furnish the union with requested financial information.

HOLDING: The Majority held that the employer had no duty to provide the requested financial information because, even assuming it did claim an inability to pay, the employer effectively retracted any such claim simultaneously with its denial of the union’s information request the very next day.

Surveillance

Anheuser-Busch, Inc.

351 NLRB 644 (2007)

ISSUE: Whether the Board should grant a make-whole remedy to employees who were disciplined for misconduct (loitering in an unauthorized area of the employer’s facility where they used illegal drugs and urinating off of the employer’s roof) that the employer observed by means of cameras installed

without prior notification or bargaining with the Union.

HOLDING: The Majority held that despite the fact that the employer violated 8(a)(1) and (5) by failing to give the union notice and opportunity to bargain regarding the installation of the cameras, the remedy was limited to the 8(a)(5) failure to bargain and did not include a make-whole remedy for the employees engaged in the misconduct.

Discharge

Sacramento Recycling and Transfer Station

345 NLRB 564 (2005)

ISSUE: Whether the General Counsel established as part of his prima facie case with respect to five discharged employees that the employer had knowledge of the employees’

union activity or sentiments based solely on its knowledge of employees’

attempts to unionize a predecessor employer.

Music Express East

340 NLRB 1063 (2003)

ISSUE: Whether the General Counsel established as part of his prima facie case with respect to a single discharge that the employer had knowledge of the employee’s union activities or support based on conversations the employee had with a low level, part-time supervisor who himself was union supporter.

HOLDING: The Majority held that the employer did not violate 8(a)(3) of the Act regarding the discharge as the General Counsel failed to establish employer knowledge of

the individual’s union activity or support and, therefore failed to establish an element of a prima

facie case pursuant to the Board’s decision in Wright Line.

Caribe Ford

348 NLRB 1108 (2006)

ISSUE: Whether the General Counsel established as part of his prima facie case with respect to a single discharge that the employer had knowledge of the employee’s union activities or support based on the timing of the discharge soon after the employee engaged in open union activity.

HOLDING: The Majority held that the General Counsel failed to establish a

prima facie case that the employer violated 8(a)(3) of the Act when it discharged an employee. Specifically, the Majority found that the GC failed to demonstrate the employer had knowledge of the employee’s union activity.

Quietflex Manufacturing Company

344 NLRB 1055 (2005)

ISSUE: Whether the employer lawfully discharged 83 employees, who were peacefully engaged in a 12 hour work stoppage, for refusing to vacate the employer’s parking lot where: 1) the employer requested that employees either return to work or vacate the parking lot area; 2) the employer offered to meet with employees to discuss their issues; and, 3) the employer warned employees that a refusal to move could lead to termination.

HOLDING: The Majority held that the employer lawfully terminated the employees. The Board recognized that where employees engage in lawful on-site work stoppages, it is required to weigh certain factors to determine if the work stoppage has lost protection of

the Act. The factors the Board weighs include the following: (1) the reason for the work stoppage; (2)

whether the stoppage was peaceful; (3) whether the work stoppage interfered with production or deprived

the employer access to its facility; (4) whether employees had adequate opportunity to present their grievances to management; (5) whether employees were given any warning that they must leave the premises or face discharge; (6) the duration of the work stoppage; (7) whether employees were represented or had an established grievance procedure; (8) whether employees remained on the premises beyond

their shift; (9) whether employees attempted to seize the employer’s property; and (10) the reason for which the employees were ultimately discharged. Although the Majority found that the employees had engaged in a peaceful work stoppage, it concluded that after the employer (1) made repeated requests that the employees return to work or move off of the employer’s facility, (2) offered to meet with the group to discuss their issues, and (3) warned the employees that their refusal to return to work or move off the property could lead to termination the employees’

work stoppage became unprotected after they remained in the parking for 12 hours.

Union Paraphernalia

W San Diego

348 NLRB 372 (2006)

ISSUE: Whether the Employer violated 8(a)(1) of the Act when it prohibited its employee from wearing a union button while at work.

HOLDING: The Majority held that the employer did not violate the Act by prohibiting its employee from wearing the union button in public areas. In so holding, the Board recognized the precedent set forth in Republic Aviation Corp., v. NLRB,121

that employees have a right to wear union insignia. However, the

Majority also recognized that an employer may lawfully restrict the wearing of union insignia where special circumstances exist which warrant a restriction. In this

case, the Hotel articulated its interest in providing its guests with a unique atmosphere and ambience. In that regard, the Hotel maintained a policy on attire that prohibited all non-business uniform adornments, and required its in-room delivery personnel to wear black t-shirts, black slacks, and a black apron.

The Majority also held that the employer violated the Act by refusing to allow its employee from wearing a union button in non-public areas of the Hotel.

Leiser Construction, LLC

349 NLRB 413 (2007)

ISSUE: Whether the Employer violated the Act by prohibiting its employee from wearing a union sticker depicting someone or something urinating on a rat that was designated as “non union.”

HOLDING: The Majority held that the employer did not violate the Act by prohibiting its employee from wearing the union sticker. In so holding, the Majority first relied on Board precedent (e.g. Southwestern Bell Telephone Co.122) which recognizes an employer’s right to restrict the display of insignia that is vulgar and obscene.

The Majority next noted that the employer’s prohibition was narrowly tailored to prohibit only the rat sticker, and not the numerous other union-related stickers on his hard hat that were not obscene or vulgar.

Interrogation

Winkle Bus Co.

347 NLRB No. 108

ISSUE: Whether in the context of an organizing campaign it is unlawful for a supervisor to ask an employee whether he wanted to wait for years for a raise like employees of another employer that was the subject of a ULP hearing involving refusal to bargain allegations.

HOLDING: The Majority held that the supervisor’s question did not constitute an unlawful statement of futility as it simply identified one of the possible consequences of unionization (i.e. that bargaining could take time before employees would receive any raises).

The Majority found that the supervisor’s statement in this case did not rise to the level of an unlawful threat of futility (e.g. where an employer states or implies that it will ensure nonunion status by unlawful means.) In so finding, the Majority distinguished the statement at issue in this case from unlawful threats that negotiations “would start from zero”

and that employees would not receive scheduled wage increases.

Medieval Knights, LLC

350 NLRB 194 (2007)

ISSUE: Whether or not statements made by a labor consultant, hired by the employer during a union organizing campaign, are lawful where the consultant informs employees that all negotiations are different and that employers could hypothetically give in to lesser items to show good faith bargaining while not agreeing to a full agreement thereby lawfully stalling

negotiations.

HOLDING: The Majority held that the statements are lawful as the labor consultant’s remarks involved hypothetical bargaining parties and there was no evidence that the consultant threatened or suggested that the employer would engage in the bargaining he described. In reaching its holding the Majority also considered the fact that the consultant stated that all negotiations are different and that negotiations could take weeks, months, or more than a year. The Majority concluded that the consultant’s statements lawfully pointed out to employees the possible pitfalls the bargaining process.

George L. Mee Memorial Hospital

348 NLRB 327 (2006)

ISSUE: Whether the employer unlawfully interrogated employees about pro

union statements attributed to them in fliers that were openly circulated to employees at the employer’s facility.

HOLDING: The Majority held, among other things, that the questioning did not constitute unlawful interrogation as the employees were open and active union supporters who articulated their sentiments in fliers that were circulated throughout the facility.

Longs Drug Stores California, Inc.

347 NLRB No. 45 (2006)

ISSUE: Whether the employer engaged in objectionable conduct when its leadmen

engaged in conversation with one another near the election polls regarding,

for example, the likelihood that the union would lose the election.

HOLDING: The Majority held, among other things, that the comments of the leadmen

did not constitute objectionable conduct as they were engaged in conversation with one another and not with the voters as was the case in Milchem, Inc.123

the seminal case on the issue of employer misconduct in the polling area. In so holding, the Majority did not pass on the agency status of the leadmen.

Frito Lay, Inc.

341 NLRB S1 S (2004)

ISSUE: Whether the Employer's use of “ride-alongs”

(nonunion truck drivers from Frito Lay facilities and company managers and supervisors) to communicate with the unit employees prior to a union representation election is objectionable conduct.

HOLDING: The Board held that Frito Lay's use of ride-alongs

was not coercive.

An employer's use of ride-alongs

to communicate with its employees during an election campaign is only objectionable if, under all of the circumstances, the use of ride-alongs

interferes with the employees’

right to freely choose a bargaining representative.

In deciding whether an employer's use of ride-alongs

amounts to objectionable conduct, relevant factors include: (1) whether the use and conduct of ride-alongs

is reasonably tailored to meet the employer’s need to communicate with its employees in light of the availability and effectiveness of alternate means of communication; (2) the atmosphere prevalent during the ride-alongs

and the tenor of the conversation between the drivers and the employer’s representatives; (3) whether the employer effectively permitted the employees to decline ride-alongs; (4) the frequency of the ride-alongs, both during and prior to the election campaign; (5) the positions held by the ride-along guests; (6) whether the ride-alongs

were scheduled in a discriminatory manner; and (7) whether the ride-alongs

took place in a context otherwise free of objectionable conduct.

Work Rules

Tradesmen International

338 NLRB 460 (2002)

ISSUE: Whether the following employer rules would reasonably tend to chill employees in the exercise of Section 7 activity: (1) prohibition of disloyal, disruptive, competitive or damaging conduct; (2) prohibition of slanderous or detrimental statements; and, (3) requirement that employees represent the employer in a positive manner.

HOLDING: The Majority held that the rules did not violate the Act. In so holding, the Majority acknowledged that the Board’s analysis in Lafayette Park,127 is controlling. In that case, the Board held that rules similar to the ones at issue here were lawful because

they served a legitimate business interest and reasonable employees would not construe such rules as intended to proscribe Section 7 Activity.

Martin Luther Memorial Home, Inc.

343 NLRB 646 (2004)

ISSUE: Whether the employer’s rules prohibiting “abusive and profane”

language would reasonably tend to chill employees in the exercise of their Section 7 activity.

HOLDING: The Majority held that the rule prohibiting abusive and profane language is lawful. In so holding, the Majority recognized that where, as here, a rule does not on its face restrict Section 7 activity, it will be found violative

only if (1) employees would reasonably construe the language to

prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 activity.

The Majority also determined that the rule was lawful because an

employer has a right to maintain a civil and decent workplace and to maintain rules that promote an atmosphere free of all types of harassment.

Guardsmark, LLC

344 NLRB 809 (2005)

ISSUE: Whether the employer’s rule prohibiting its employees who provide security services from fraternizing with coworkers or employees of clients would reasonably tend to chill employees in the exercise of their Section 7 activity.

HOLDING: The Majority held that the rule did not violate the Act. The Majority considered the rule in the context of other rules the employer maintained prohibiting dating and becoming overly friendly with the client’s employees and coworkers. In the context of those other rules, the Majority determined that employees would reasonably understand the rule to prohibit “personal entanglements”

and not to prohibit activity protected by the Act.

The Majority also acknowledged that the non fraternization rule is particularly reasonable with regard to security guards and is “designed to provide safeguards so that security will not be compromised by interpersonal relationships ...”

Strike Notice for Health Care Institutions (Section 8(g))

Alexandria Clinic, P.A.

339 NLRB 1262 (2003)

ISSUE: Whether the employer violated the Act by discharging its nursing

employees because of a failure to comply with the requirements of Section 8(g) when there was a

four hour delay in the start of an economic strike at a healthcare center.

HOLDING: The Majority held that the employer did not violate the Act by discharging the nursing employees on the grounds that the strike at the clinic started four hours after the time set forth in the union’s 10-day notice to the employer.

Other Withdrawal of Recognition

Nott Company

345 NLRB 396 (2005)

ISSUE: Whether, as a matter of law, the Union was entitled to a conclusive presumption of majority status through the term of its contract where the employer merged its unionized 14-employee business with a non-union 14-employee business.

HOLDING: Applying accretion principles, the majority concluded that the Respondent lawfully withdrew recognition from the Union because the Union lost majority status once the two companies were merged. Given that the previously represented employees are no longer a majority of the new overall unit, the majority decided there is no bargaining obligation in the unit and accordingly, as the General Counsel and the Charging Party acknowledge, the unilateral changes that occurred were not unlawful because the Union no longer had Section 9(a) status.

Because the Respondent consolidated or integrated an equal number of union and unrepresented employees in one group, the unrepresented employees could not be

accreted into the bargaining unit, the Union automatically lost its majority status, and the Respondent's withdrawal of recognition did not violate the Act.

Contract-bar principles are inapplicable essentially because this is an unfair labor practice proceeding and the contract-bar doctrine is limited to representation proceedings.

Important Cases Presently Pending Before the Board

Dana Corporation and UAW131

7-CA-46965, 7-CA-47078, 7-CA-47079,

7-CB-14083, 7-CB-14119, 7-CB-14120 (April 11, 2005)

ISSUE: Whether pre-recognition bargaining between employers and unions that do not represent a majority of employees as part of a voluntary recognition agreement provides unlawful support to the union in violation of section 8(a)(2) of the NLRA. Whether the Letter of Agreement entered into between Dana and the UAW constitutes an unlawful pre-recognition contract in violation of the Act under Board precedent in Majestic Weaving.132

HOLDING: The Administrative Law Judge dismissed the Complaint distinguishing Majestic Weaving on the basis that the Letter of Intent was not a collective bargaining agreement.

SIGNIFICANCE: If the Board affirms the ALJ's

decision dismissing the Complaint against Dana and the UAW for pre-recognition bargaining, it will open the door for other forms of

pre-recognition negotiations the results of which will be to show unrepresented employees in advance what the terms and conditions of their collective bargaining agreement will be. It will likely

encourage more voluntary recognition agreements based on employer neutrality and card check.

New York New York Hotel & Casino

28-CA-14519 (July 25, 2001)

ISSUE: Whether New York Hotel & Casino (“Casino”

or “Owner”) may prohibit off-duty employees of Ark Las Vegas Restaurant Corporation (“Ark”) from engaging in consumer handbilling

activities in the porte-

cochere on the Owner’s property and in the areas in front of the Ark restaurant that are located on the Casino’s premises.

HOLDING: The NLRB issued its initial decision in this matter in 2001.139 In that initial decision, the Board held that since the off duty employees of Ark were engaged

in lawful handbilling

of customers in non-work areas of the Casino’s property, the Casino violated section 8(a)(1) of the Act by prohibiting Ark’s off duty employees from engaging in that activity.140

In reaching that decision, the Board distinguished this case, involving the handbilling

activity of off duty Ark employees from cases involving “individuals who do not work regularly and exclusively on the employer’s property, such nonemployee union organizers”

who “may be treated as trespassers, and are entitled to access to the premises only if they have no reasonable non-trespassory

means to communicate their message.”

STATUS: On appeal the D.C. Circuit Court of Appeals denied enforcement of the Board’s orders stating that the underlying decisions upon which the orders were

based “leave a number of questions... unanswered.”142 The Court remanded the matter to the Board with instructions

to answer the following specific questions:

Without more, does the fact that [Ark’s] employees work on the [Casino’s] premises give [Ark] employees Republic Aviation rights throughout all of the non-work areas of the hotel and casino?

Or, are the [Ark] employees invitees of some sort but with rights inferior to those of the [Casino’s] employees?

Or should [Ark’s] employees be considered the same as nonemployees when they distribute literature on the [Casino’s] premises outside [Ark’s] leasehold?

Does it matter that [Ark’s] employees here had returned to the Casino after their shifts had ended and thus might be considered guests of the Casino?

Is it of any consequence that [Ark’s] employees were communicating, not to other [Ark] employees, but to guests and customers of the [Casino]?

The Board accepted Briefs and heard oral argument on these issues in November 2007.

These matters are still pending before the Board.

Southwest Regional Council of Carpenters (Carignan Construction Co.)

NLRB ALJ, 31-CC-2113 (Feb. 18,2004)

ISSUE: The legality under Section 8(b)(4)(ii)(B) of the Act of displaying large stationary banners announcing a“labor

dispute”

at a neutral employer’s worksite.

HOLDING: In Carignan Construction Co., the United Brotherhood of Carpenters displayed large signs at the property of neutral employers who subcontracted work to non-union contractors with whom the unions admittedly had primary labor disputes. The banners in Carignan measured as large as 20 x 4 feet, and displayed the words “labor dispute”

and stated “shame on”

the neutral employers. The General Counsel took the position that the bannering

constituted unlawful signal picketing or fraudulent speech. The Carpenters took the position that the conduct was protected free speech, and did not constitute unlawful picketing.

The ALJ agreed with the Carpenters in Carignan that the bannering

was neither picketing nor its functional equivalent. ALJ Kennedy concluded that the bannering

was more akin to lawful billboard advertising, and fell within the publicity proviso to Section 8(b)(4) of the Act. The ALJ dismissed the underlying unfair labor practice charges.

Local Union No.1827, United Brotherhood of Carpenters and Joiners of America (Eliason & Knuth of Arizona, Inc.)

2003 WL 21206515, 2003 NLRB LEXIS 256 (May 9, 2003)

ISSUE: Whether the activity of various local unions violated 8(b)(4)(ii)(B) of the Act when the Unions engaged in a campaign of secondary activity whereby they displayed large banners at the sites of secondary employers carrying the message “SHAME ON [NEUTRAL PERSON]”

and “LABOR DISPUTE”.

HOLDING: The ALJ held that the bannering

was sufficiently akin to picketing to constitute unlawful secondary activity in violation of 8(b)(4)(ii)(B) of the Act.

Recent Board Decisions

QUESTIONS?

Louis B. Todisco

Michael C. Markowicz

What Laws Apply?

Absences from Work:

What Laws Apply

Interaction of various laws governing employee absences:

Workers’

Compensation Law

Americans with Disabilities Act (ADA)

Federal Family Medical Leave Act (FMLA)

Connecticut Federal Family Medical Leave Act (CT FMLA)

Responding to Employee Requests to Leave

Guide to Intersection of Various Laws and Employer’s Policies

Framework of Questions the Employer Should Ask

Employees Who Don’t Work

Work Related Injuries and Light Duty Work

Must an employer provide light duty work?

Connecticut Workers’ Compensation law: must provide light duty work “if available”

an employee who has suffered a work-related injury.

No requirement to create

light duty work where none exists.

Light Duty Work (continued)

Requirement only applies when:

Employee has suffered a compensable injury;

That injury disables the employee from performing his or her customary or most recent work;

Employee is subject to medical or treatment or rehabilitation.

Requirement Does Not

Apply When:

The injured employee is a part-time employee;

Treatment is discontinued at the advice of a physician or the employee has reached maximum level of rehabilitation;

No light duty work is available.

Connecticut FMLA statute:

Employee returning from FMLA leave is entitled to light duty work if:

Medically unable to perform original job; and

Light duty work is available.

Federal FMLA law:

No requirement to provide light duty work.

Employee may

accept light duty work voluntarily, but such work does not count as FMLA leave.

Americans with Disabilities Act (ADA):

Federal, non-discrimination statute protecting disabled individual

all injured employees

Under the ADA “disability”

means:

A person with a physical or mental impairment that substantially limits the person in one or more major life activities;

A person with a record of such impairment; or

A person who is regarded as having such an impairment.

Reasonable Accommodations:

Modifications to work environment;

Modifications to work facilities;

Restructuring marginal job functions;

Altering when or how an essential function is performed;

Part time or modified work schedules; and

Reassignment to a vacant position.

ADA does not require creation of light duty position.

Employee must perform essential functions of job.

May require changes outlined in reasonable accommodations.

FMLA Overview and Recent Amendments

Distinct Federal and State FMLA statutes.

Key differences regarding eligibility and rights under each statute.

Provide leaves of absence for medical and family reasons.

Coverage and General Requirements

Federal FMLA:

50 or more employees for each working day during 20 or more calendar workweeks in the preceding calendar year.

Coverage and General Requirements

Connecticut FMLA:

75 or more employees.

Does not include municipalities, boards of education, or private or parochial schools.

Eligibility

Federal FMLA:

Employed for at least 12 months

Worked at least 1250 hours during 12-month period immediately preceding the commencement of leave

Employed at a worksite with 50 or more employees within 75 miles.

Eligibility

Connecticut FMLA:

Employed for at least 12 months; and

Worked at least 1,000 hours in 12-month period preceding first day of leave

Amount of Leave

Federal FMLA:

12 workweeks of leave in any 12 month period.

Connecticut FMLA:

16 workweeks of leave in any 24 month period.

Types of Leave

Birth of a child

Adoption of a child or placement for foster care

A serious health condition (of the employee or an immediate family member)

Military Family Leave

Birth or Adoption

Leave for birth of a child must be within one year following birth.

Connecticut permits leave where required because of impending birth.

Federal law would allow only if medically required.

Leave may also be taken to arrange for the adoption of a child or placement in foster care.

Serious Health Condition of a Family Member

Spouse, son, daughter or parent of the employee.

Note: state law defines parent more broadly and includes in-law.

Note: state law would apply to same-sex marriages, but federal would not.

Serious Health Condition

An illness, injury, impairment, or physical or mental condition that involves:

inpatient care in a hospital, hospice, or residential medical care facility; or

continuing treatment by a health care provider.

For an employee to take leave due to a "serious health condition" suffered by the employee, the employee must demonstrate that the condition renders the employee "unable to perform the functions of his or her position.

Military Family Leave

• Federal FMLA:

Military Caregiver Leave

Qualifying Exigency Leave

• Connecticut FMLA:

Military Caregiver Leave Only.

Help families of members of National Guard and Reserves manage affairs while member is on active duty in support of a contingency operation.

Military Caregiver Leave

Up to 26 workweeks in any single 12 month period.

To care for a family member who is a covered servicemember suffering from a serious illness or injury.

Military Caregiver Leave (continued)

Family Member: spouse, son, daughter, parent or next of kin (nearest blood relative).

Covered servicemember: current member of the Armed Services undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness.

Now includes a veteran who was a member of the Armed Forces at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.

Military Caregiver Leave (continued)

Serious illness or injury: incurred in line of duty and render unfit to perform duties.

12 month period always calculated from first day of leave.

Is concurrent with, not additional to, other FMLA leave.

Short-notice deployment

Military events and related activities

Childcare and school activities

Financial and legal arrangements

Counseling

Rest and recuperation

Post-deployment activities

Additional activities not encompassed above, but agreed to by employer and employee

Clarify

Employers may provide FMLA designation notice immediately after receiving sufficient information to designate the leave as FMLA qualifying –

Employer may act when

employee refuses to submit necessary paperwork.

Proposed FMLA Regulation: Employer Notice Obligations

• Clarify: Employee must inform Employer:

Condition renders employee/family member unable to work;

Anticipated duration; and

Whether employee/family member intends to visit a healthcare provider.

• Absent unusual circumstances, an employee is to follow employer’s usual and customary call-in procedures for reporting an absence.

New FMLA Regulation: Employee Notice

Clarify: An Employee’s failure to respond to question to determine FMLA eligibility may result in denial of leave.

New FMLA Regulation: Employee Notice

Employer’s health care provider, HR professional, leave administrator, or management official (but not

the employee’s

direct supervisor) may contact Employee’s physician to seek clarification and authentication of medical certifications.

New FMLA Regulation: Employer Contact with Physician

New FMLA Regulation: Fitness for Duty Certification

Old Regulation

Certification must only be a simple statement that Employee is able to resume work.

New Regulation

Employer may require health care provider to certify that Employee can perform essential job functions. (Be clear –

what are the essential job functions.)

New FMLA Regulation: Fitness for Duty Certification

If employer deems medical certification to be incomplete/insufficient, employer must specify in writing what information is lacking, and give employee 7 calendar days to cure deficiency.

Fitness for Duty Certification

Uniformly applied policies.

Certification may specifically address employee’s ability to perform essential job functions.

Where reasonable job safety concerns exist, employer may require certification when employee takes intermittent leave.

Responding to Requests for Leave

• What laws apply?

Workers’

compensation law

Federal FMLA

State FMLA

Responding to Requests for Leave

Apply each statute individually.

Don’t forget your own policies and/or collective bargaining agreements!

Questions

Which statutes apply to the employer?

Which statutes protect the particular employee?

Does the employee have a qualifying condition?

What are the employer’s obligations under the statutes?

Questions

What are the employer’s obligations at the conclusion of leave?

Is the employer required to permit a modified or part-time schedule for the employee?

Is the employer required to maintain health insurance?

What are the employer’s obligations in the case of employee use of drugs or alcohol?

See Appendix E for more information

Health Care Reform and other Benefits Issues 2010 and Beyond

I. Health Care Reform

Health Care Reform Early Effective Dates

Special tax credit equal to up to 35 % of premiums paid in 2010 by eligible small business owners (25% for tax exempts)

Increases to 50%-35% in 2014

Maximum credit to employers with 10 or less FT EEs paying average wages of $25,000 or less

Reduced credit if >25, average wages of $50,000 or less

By 6/23/10 reinsurance for employer- provided retiree health coverage to retirees

over 55 but ineligible for Medicare

reimburses 80% of claims between $15,000 and $90,000 (indexed).

ends 1/1/2014 or when $5 billion funding runs out.

plans must apply and be approved by HHS.

In 2010 Medicare beneficiaries in prescription drug plans (Part D) receive a one-time payment of $250 when they reach the coverage gap (the doughnut hole).

Beginning 2011, discounts will apply for drugs purchased

while in the

doughnut hole.

Plan Years beginning after 9/23/2010

If dependents are covered, plan must offer coverage to adult children to age 26, married or unmarried.

Connecticut has a similar but not identical law applicable to insured plans.

Income tax exclusion for coverage extended for adult children who have not turned 27 by end of year.

Until 2014, existing (grandfather) plans may require that adult child not have an offer of coverage from an employer in order to be eligible.

Plan Years after 9/23/10 (continued)

No pre-existing condition limits for children up to age 19

No lifetime limits

No pre-auth for emergency room visit or ob-gyn

No cost-sharing allowed for preventive coverage (unless grandfathered)

No rescission of group health coverage except for fraud or misrepresentation

Nondiscrimination rules applicable to self-insured plans will apply to insured as well (unless grandfathered)

No pre-tax reimbursement for non-prescribed OTC drugs through FSAs, HRAs, and HSAs: taxable years after 12/31/2010

FSA contribution limit $2,500 (indexed): taxable years after 12/31/2012

No waiting period > 90 days 1/1/2014

No annual limits 1/1/2014 (but regulatory limits set earlier)

No pre-existing condition limits for adults 1/1/2014

Plan Impact 2011-2017

Plan Impact 2011-2017 (continued)

Beginning 1/1/2014, 20% incentive cap for wellness programs increases to 30% of premiums

Employers with more than 200 employees will be required to automatically enroll EEs in health plan

effective date unclear

Taxable years after 12/31/17: excise tax on high cost (“Cadillac”) plans

Employer Impact 3/23/2012

Health insurance issuers, group health plans, and sponsors and administrators of self-insured plans must provide a benefits summary of no more than four pages, 12-point type, presented in a culturally and linguistically appropriate manner

Willful failure to provide: $1,000 fine per failure

Regulations by March 23, 2011

Employer Impact 3/1/2013

Must provide written notice to all employees explaining:

the Exchange

premium tax credit and cost-sharing subsidies (if Employer’s plan pays less than 60% of

costs of benefits)

(if no free choice voucher) that EE may lose the employer contribution toward coverage if EE elects coverage through the Exchange

Free Rider Penalty 1/1/2014 Employers with at least 50 FTEs

Employers need not offer health insurance coverage to FT EEs but . . . if even one EE receives a subsidy or tax credit for insurance through an exchange will pay a penalty of $2,000 per employee per year (penalty waived for first 30 EEs)

Penalty is nondeductible by employer

Free Rider Penalty 1/1/2014 Employers with at least 50 FTEs

Employers who do

offer coverage to FT EEs but . . . one EE receives a subsidy or tax credit for insurance

through an exchange will pay a penalty of $3,000 per EE receiving tax credit

Penalty can’t exceed the penalty that would apply if employer offered no insurance

Employers who give “free-choice vouchers”

pay no free-rider penalties on those employees who receive vouchers.

Free Choice Vouchers 1/1/2014

Employers offering health coverage must provide an employee with a voucher to obtain insurance through the state exchange if

the EE earns < 400 percent of federal poverty level and

the EE’s premiums are between 8 and 9.5% of EE’s household income

Voucher amount = what employer would have contributed for health insurance coverage

If voucher amount > EE’s cost through the Exchange, EE keeps remainder

Insurance Exchanges

1/1/2014 Individuals comparison shop for coverage through Health

Insurance Exchanges

Small businesses will be able to purchase coverage through Small Business Health Options Programs (SHOPs).

New Taxes

Effective for distributions after 12/31/10, excise tax for nonqualified HSA withdrawals increases

from 10% to 20%

3.8% tax on unearned income with respect those with income over $200,000 ($250,000 for joint filers) beginning 2013

Medicare payroll tax increase of 0.9% (employee portion) on wages over $200,000 single ($250,000 joint filers) beginning 2013

40% excise tax on Cadillac plans beginning 2018

New Taxes

(continued)

Beginning 2013, elimination of the employer’s deduction for the amount of the Medicare Part D retiree drug subsidy (i.e., employer’s allowable deduction for retiree prescription drug expenses must be reduced by the amount of the tax-free subsidy payment received)

10% excise tax on indoor tanning services beginning 7/1/2010; various fees on pharmaceutical and medical device manufacturers, and health insurers

New Taxes

(continued)

Individuals without health insurance face penalties beginning 2014

Employers to report value of coverage provided on W-2 beginning 2011

Income threshold for claiming itemized deduction for medical expenses increases from 7.5% to 10% beginning 2013

II. The HITECH Act

Title XIII of ARRA

Effective February 17, 2010

Impact of HITECH on Group Health Plans

The HITECH Act increases the obligations of group health plans and their business associates to:

Determine whether a “breach”

of “unsecured” PHI has occurred

Notify affected individuals without unreasonable delay after discovery

What Is A Breach?

The acquisition, access, use or disclosure of PHI…that poses a significant risk of financial, reputational, or other harm to the individual

Encrypted or properly destroyed PHI is not “unsecured”

and therefore no breach

What You Want in Revised BAAs

Now that you have to give notice of breach:

You want a commitment by your business associate to indemnify you against all costs you incur as a result of a breach by the BAA or a member of its workforce.

This includes the staffing for or cost of notification letters, calls, advertising, public relations, staff overtime, etc.

III. Mental Health Parity and Addiction Equity Act of 2008

MHPAEA REGULATIONS

MHPAEA Regulations

Expands Mental Health Parity Act of 1996 (MHPA) which mandated parity of certain lifetime and annual dollar limits for mental health benefits and medical/ surgical benefits.

Generally effective for plan years beginning after October

3, 2009; newly issued regulations apply for

plan years beginning on or after July

1, 2010 (January

1, 2011 for

calendar year plans).

What Does the MHPAEA Govern?

Does not apply to small employers (generally, fewer than 50 employees); also does not apply if certain cost exemption standards are met (although that may only be claimed for alternating plan years).

Does not apply to employers who do not offer mental health or substance use benefits (difficult to meet this exemption).

MHPAEA Restrictions

Does not apply to individual insurance plans.

Civil penalties of up to $100 per day can be imposed for failure to comply.

Cannot avoid rules by creating separate plans.

MHPAEA Parity in Medical Management

Prohibits financial requirements and quantitative treatment limits for mental health and substance use disorder benefits that are more restrictive than the “predominant”

financial requirement or quantitative treatment limit that applies to all or “substantially all”

medical and surgical

benefits.

MHPAEA Financial Requirements

Deductibles

Co-payments

Co-insurance

Out-of-pocket maximums

MHPAEA Quantitative Treatment Limits

Limits on benefits based upon the frequency of treatment

Limits on number of visits

Limits on days of coverage

Limits on days in a waiting period

Other similar limits

MHPAEA Framework for Parity Comparison

If Plan provides mental health or substance use disorder benefits in any of the following six classifications, mental health and substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided:

◦ inpatient, network

◦ outpatient, in-network

◦ emergency care

inpatient, out-of-network

outpatient,

out-of-network

prescription drugs

MHPAEA Parity Comparison

(continued)

“Substantially all”

includes the financial requirement or quantitative treatment limitation which applies to at least 2/3 of all medical/surgical benefits in a classification.

Parity rules apply separately to each classification and separately for each type of financial requirement or quantitative treatment limitation.

Plans cannot apply a more restrictive financial requirement or quantitative treatment limit than this predominant level on any mental health or substance use disorder benefit within each classification.

MHPAEA

A financial requirement or quantitative treatment limitation is considered “predominant”

if it applies to more than one-half of

the medical/surgical benefits subject to the financial requirement or quantitative treatment limit in that classification.

Example: Plan applies a co-payment to all in-network benefits and a separate, higher co-payment to all out-of-network benefits. Mental health/substance use disorder and medical/surgical benefits are treated the same within each classification. That meets requirements.

Example: A higher co-payment is required for the services of a mental health specialist than for an internist. This is not permitted.

MHPAEA Separate Deductibles Prohibited

Plan cannot have separate deductibles, out-of-pocket limits or other cumulative financial requirements or treatment limits for medical/surgical, mental health and substance use disorder benefits.

This is true even if they are less for mental health and substance use disorder benefits.

Example: Plan imposes an annual $300 deductible on medical/surgical benefits and a separate annual $100 deductible on mental health and substance use disorder benefits. The separate annual deductible on mental health and substance use disorder benefits violates MHPAEA (even though it is smaller than the deductible for medical/surgical benefits).

MHPAEA Non-quantitative Treatment Limits

Plan may not impose a non-quantitative treatment limitation with respect to mental health or substance use disorder benefits in any classification unless factors used in applying such limitation to mental health or substance use disorder benefits in the classification are comparable to, and are applied no more stringently than, such factors in applying the limitation with respect to medical/surgical benefits.

MHPAEA Illustrative List

Medical management standards limiting or excluding benefits based upon medical necessity

Formulary design for prescription drugs•

Standards for provider admission to network

Methods for determining usual, customary and reasonable charges

Step therapy protocols•

Exclusions based upon failure to complete a course of treatment

Preauthorization requirements and penalties

MHPAEA

Example: Plan requires a participant to exhaust counseling sessions with an EAP before he or she can receive mental health or substance abuse benefits. This would violate MHPAEA if there are no comparable requirements on coverage of medical/surgical benefits.

MHPAEA Steps for Plan Sponsors to Take

Evaluate the six classifications to determine what medical and surgical benefits are predominant for all or substantially all medical and surgical benefits and what quantitative treatment limitations exist, and consider appropriate plan design changes

Review plans with separate deductible or out-of-pocket limits for medical, mental health or substance use disorder benefits

Review medical management techniques to be sure they are comparable across all benefits

EAPs and substance abuse protocols should be examined in particular.

IV. GINA

Health plans can’t use genetic information (GI) for eligibility, coverage, premium-setting, or as pre-

existing condition.

A healthcare risk assessment coupled with premium discounts, credits or additional care cannot include questions regarding the manifestations of a genetic disease or disorder of family members. Questions relating to or that might elicit genetic information should be stripped out of risk assessments.

Can’t require genetic testing or “genetic information”, e.g., family medical history and genetic tests unless

Coverage of a claim depends on presence of known genetic risk (e.g., testing for Huntington’s chorea)

Employer posting requirement, see http://www.dol.gov/ofccp/regs/compliance/posters/p

df/eeopost.pdf

GINA Employment

Employers may not discriminate based on GI

If an individual’s condition could be diagnosed by a health care professional without genetic testing, that is not “based on GI”

V. The COBRA Subsidy Now

Extension

What is the Subsidy?

Employer pays 65% of premiums; reimbursed through payroll tax credit or refund.

Participant (or someone other than employer) must pay 35%.

Subsidy ends the earliest of:

fifteen (15) months after it begins, or

when participant becomes eligible for other health coverage, or

when COBRA coverage otherwise terminates, e.g., for employee’s failure to pay the

(reduced)

premium.

Eligible for Subsidy

Involuntary termination between 9/1/2008 and 3/31/2010 (further extensions likely) such as:

lay-off period with a right of recall or a temporary furlough period

resignation as result of a material change in the geographic location of employment

termination in return for severance if employer indicates that, after the offer period, some remaining workers will be terminated

reduction in hours leading to loss of benefits –

NEW!!!

employer acts to terminate individual on disability

Ineligible for Subsidy

Resignation

Retirement

Employee-initiated strike (as opposed to a lockout)

Employer shuts down, and there is no longer a plan –

no COBRA, no subsidy

Termination for gross misconduct –

COBRA ineligible, therefore no subsidy

Extension

NEW: If loss of benefits is due to a reduction in hours that occurs between September 1, 2008, and March 31, 2010, and the employee is involuntarily terminated on or after March 2, 2010.

The COBRA period for these individuals is based on the date of the reduction in hours, not the involuntary termination.

Individual does not have to retroactively elect COBRA –

may merely pay for prospective coverage.

New election opportunity for these individuals if they did not elect or discontinued COBRA. Notification required with 60-

day period following involuntary termination.

VI. Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA)

CHIPRA

Employers that provide health benefits to employees in any of the 40 states with Medicaid or CHIP premium-assistance programs must notify individuals about availability.

Model notice published February 4, 2010 at http://www.dol.gov/ebsa/pdf/chipmodelnotice.pdf

Employer maintains plan in all states in which it provides medical care to employees or their dependents, regardless of the employer’s location.

Notice must be given by first day of plan year beginning after 2/4/10.

VII. Excise Tax Reporting

Excise Tax Reporting

Effective January

1, 2010, employers that fail to comply with COBRA, HIPAA, GINA, Mental Health Parity, Michelle’s law, and other federal group health plan mandates have to file an excise tax return.

Form 8928 to be used for this purpose (only available currently in draft form).

Amount is generally $100 per individual for each day of noncompliance.

Self-reporting not required if responsible party did not know of the failure despite the exercise of reasonable diligence or when the

failure is due to reasonable cause and is promptly corrected.

Excise tax reporting also required if the comparable employer contribution rules are not satisfied for HSAs (amount generally 35% of total contributions for all employees).

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