Archive for the ‘Union’ Category

Joint Employer Status and the NLRB

Late last month, NLRB General Counsel Richard Griffin announced that he has authorized issuance of Unfair Labor Practice Complaints based on 43 of the 181 pending charges against McDonald’s, USA, LLC and various of its franchises, in which the Board will allege that the company and its franchisees are joint employers. This decision goes against decades of decisions and case law and could potentially be devastating to the franchise system as we know it. If upheld, the determination would bring McDonald’s (with its deep pockets) to the bargaining table in connection with a wide variety of employment related claims. The financial strength of McDonald’s would make forming a union more attractive to workers. McDonald’s, and other franchise chains, may also have to step up its policing of franchises and spend more time and money monitoring stores to prevent labor infractions.

This announcement comes as the NLRB, in an unrelated case involving Browning-Ferris Industries of California, is reviewing its standard for determining when businesses should be considered joint employers. Traditionally, to establish joint employer status, there must be a right to control. Both legally separate employers must have direction or ability to co-determine the hiring, termination, wages, hours or any other essential terms and conditions of employment. In the Browning-Ferris Industries case, the Teamsters sought to represent a bargaining unit of employees who it claimed were jointly employed by BFI and its staffing agency. The Regional Director, however, determined that the company and the staffing agency were not joint employers with respect to workers at one of the company owned recycling facilities because BFI did not exert sufficient control over the agency workers. The Teamsters sought review of this decision, which was granted by the NLRB, finding this as their opportunity to expand the test for establishing joint employer status. In a very unusual move, General Counsel Griffin filed an amicus brief urging the Board to adopt a new broader standard.

What this means for all businesses: This potential new standard for determining joint employer status may leave more employers liable for alleged labor law violations and potentially force more companies to come to the bargaining table. This possible new standard will affect every business that subcontracts or outsources any function. It seems that it may become futile to try to avoid joint employer status and, instead, companies need to investigate business practices to make sure that any other company they are in business with is doing everything as close to 100% correct as possible. In the alternative, companies may need to explore the option of eliminating the use of certain contractors completely.  At a minimum, the company should be sure to include a strong indemnification provision to hold the individual contractors or suppliers responsible for any liability suffered as a result of their noncompliance with legal responsibilities. Of course any such indemnification will be meaningful only if the other party has the financial resources to back it up.

This article is authored by attorney Lori L. Buntman and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice.  Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

 

Tags: , , , , , , , , ,
Posted in NLRB, NLRB, Union | No Comments »

READY OR NOT – HERE THEY COME

Many of you may have attended 4th of July parties with fireworks as we celebrated our country’s birthday. While we want fireworks at a 4th of July party, you do not want them on your jobsite. But your friends in organized labor may have other ideas. At the dawn of the Obama administration in January 2009, we expected a significant push by organized labor to leverage its success in the 2008 elections to try to regain lost ground in terms of private sector union membership. Instead, the focus turned to healthcare and a number of issues that prevented the passage of laws like the Employee Free Choice Act that would have dramatically simplified union organizing. President Obama also made a mess through his recess appointments to the National Labor Relations Board which, as of the writing, are before the Supreme Court with three lower courts having held them to be unconstitutional.

Now, however, contractors need to be aware of the fact that the stars are aligned in such a way that you should expect to see some type of union activity on your jobsites over the next several months. The NLRB is fully staffed with the most pro-union majority in its history. It is aggressively moving forward to give unions additional weapons to use on jobsites such as bannering, street theater and the ever popular large inflatable rat. The NLRB has also given unions almost complete control over the scope of the bargaining unit they can try to organize. It is expected that the Department of Labor will soon try to restrict the access of employers to effective legal representation in dealing with these types of issues. Since all of these administrative actions could be reversed with the election of a pro-business candidate in 2016, organized labor is ready to try to put the remaining days of the Obama administration to good use.

NOW is the time for you to learn about the variety of tactics unions might employ, where and how they might be utilized and what you can do to prepare for them. On Tuesday July 15, 2014 from 7:00am – 8:30am I will be presenting an interactive seminar on this topic. This session is designed for field superintendents, project managers and company executives. Don’t be caught unprepared!

 

Tags: , , , , , , ,
Posted in bannering, Construction, Construction Contracts, NLRB, NLRB, Union | No Comments »

For those of you wondering, it is not okay to push a union official down the stairs of your jobsite trailer, which is precisely what a superintendent working for an Arizona building contractor did.  In the matter of Norquay Construction, Inc., the National Labor Relations Board held that such an assault interfered with the protection afforded to unions under the National Labor Relations Act (“NLRA”), which protection covers action taken in furtherance of enforcing or protecting area labor rights.  As a result of such interference, the National Labor Relations Board held the contractor liable to the assaulted union agent for lost pay and medical expenses resulting from the superintendent’s assault. 

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

Tags: , , , , , , , , , , , , , , , , , , , , , ,
Posted in Construction, Union | No Comments »

In IBEW Local Union No. 102 v. Quality Electric & Data, Inc. the Third Circuit (a federal appellate court) recently held that a union became the exclusive bargaining representative for all of the electrical contractor’s employees by virtue of the electrical contractor entering into an 8(f) pre-hire agreement with the union, even though the electrical contractor’s employees did not authorize the union as their 9(a) representative.  Accordingly the employer was required to make pension contributions for all of its employees, not just for its employees who were union members or who worked on union jobsites.

In so ruling, the court explained that an 8(f) pre-hire agreement, which is unique to the construction industry, binds an employer to a collective bargaining agreement in relatively the same manner as a 9(a) agreement whereby employees authorize a union to be their representative.  Hoping that other construction contractors can learn from the electrical contractor’s mistakes, I have included a brief overview of the case below.

Several years ago, a union representative met with the electrical contractor and insisted that the electrical contractor use union labor on one of its jobsites.  The electrical contractor agreed and signed up with the union.  The union presented the electrical contractor with several documents known as “Letters of Assent.”  By signing the letters, the electrical contractor agreed to be bound by the union’s Collective Bargaining Agreement (“CBA”).  Accordingly, the Letters of Assent constituted 8(f) pre-hire agreements under the applicable statute.

The union’s CBA required employers to contribute to workers’ pension benefits by making contributions into a fund designated by the union.  The electrical contractor claims that the union representative told him that the Letters of Assent only bound the electrical contractor to the CBA for its union employees and employees who worked on union jobsites.  Thus, the electrical contractor claimed that it was under the impression that it did not have to make contributions to the fund for its employees who were non-union members or who worked on non-union projects.

Thereafter, the electrical contractor sporadically used union labor and worked on union projects.  When it did, the electrical contractor made contributions to the fund as required by the CBA.  During this time, the electrical contractor also employed non-union workers who did not work on union jobsites.  The electrical contractor made no contributions to the union’s fund for these employees.

As the result of a compliance audit of the union’s fund, the union discovered that the electrical contractor owed $201,424.40 for delinquent pension contributions to the fund.  The delinquency was accounted for by the fact that the electrical contractor was not making contributions for its non-union workers who did not work on union jobsites.  The union took the position that per the CBA the electrical contractor was supposed to make contributions for such individuals.  The electrical contractor took the position that because the union never became the exclusive bargaining representative of all its employees, via the employees authorizing the union to serve as their 9(a) representative, the electrical contractor was not required to contribute to the fund for all of its employees.

Although the court found that the electrical contractor was correct in asserting that an 8(f) agreement could not convert into a 9(a) agreement, absent a majority election, it noted that an 8(f) pre-hire agreement binds and employer to a collective bargaining agreement in relatively the same manner as a 9(a) agreement.  According to the court, the only true difference between an 8(f) agreement and a 9(a) agreement is that a 9(a) agreement requires an employer to bargain with the union after the agreement expires, whereas when an 8(f) agreement expires, the employer can walk away.

Because the CBA clearly required the electrical contractor to make pension contributions for all of its employees working within the union’s jurisdiction, the court held that it must interpret and enforce the unambiguous terms of the agreement.  Specifically, the CBA required the employer to contribute funds for “each employee under the jurisdiction of the agreement.”  Accordingly, the electrical contractor could not escape the CBA’s plain meaning that it was required to make pension contributions to funds for all its employees performing work within the union’s trade and territory.

Lesson for Contractors:  When entering into Collective Bargaining Agreements read the terms carefully and do not rely upon any verbal assurances that conflict with the terms of the CBA.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

Tags: , , , , , , , , , , ,
Posted in Construction, Union | No Comments »