News

Federal Judge Rules Evidence in Coal Ash Workers’ Case Enough for Trial

A federal judge has ruled that lawsuits filed by Kingston coal ash spill cleanup workers will be allowed to go to trial, Knoxnews reports. The lawsuits claim that the coal ash is killing them, and that the contractor that hired them lied about the safety of the cleanup sites and denied them protective gear. Chief U.S. District Judge Tom Varlan shot down a bid by the contractor, Jacobs Engineering, to have the lawsuits tossed out without trial, finding that there was enough evidence to warrant a trial. “The evidence proffered of plaintiffs’ collective, significant exposure to fly ash is legion,” Varlan wrote in his ruling. A trial is set to begin on Oct. 16.
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Appeals Court Finds Jeremy Durham Has Standing to Sue for Benefits

The 6th Circuit Court of Appeals has ruled that former Tennessee legislator Jeremy Durham, who was expelled from the House of Representatives two years ago, has standing to sue the state over health insurance and pension benefits he claims he is owed, The Nashville Post reports. Last year, the federal District Court ruled differently, saying Durham had no right to sue the Commissioner of Finance and Administration, the Director of Legislative Administration Connie Ridley and Treasurer David Lillard because they did not cause Durham to be expelled. The new ruling states Durham has standing “because his injury that he seeks to remedy is fairly traceable to the administrators’ conduct.”
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Roane County Man Latest Death Related to Kingston Coal Ash Cleanup

A Roane County man who spent two years working to clean up the Kingston Coal Ash Spill died last month, the latest in a series of deaths related the cleanup effort, Knoxnews reports. Harry Hemingway worked under Jacobs Engineering, who assured some 900 workers that the ash was so safe they could eat a pound of it a day. He died of multiple myeloma, a blood cancer linked to coal ash.
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NLRB General Counsel’s Office Recommends Ending Union Email Rule

According to a brief filed Friday, the National Labor Relations Board general counsel’s office has recommended the reversal of the 2014 Obama-era decision that allowed employees to organize unionization using employer email systems, Bloomberg BNA reports. The brief asserts that employers should be able to restrict email use in a nondiscriminatory manner and that allowing union organization through employer email leads to lower workplace productivity and compromises in digital security. The general counsel’s recommendation aligns with the opinion of the U.S. Chamber of Commerce and other business groups. The NLRB is considering revising its email rule and has invited public input on the issue; all interested parties may file a brief by the new, extended deadline of Oct. 5.

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7th Circuit to Rule on Obesity ADA Protections Case

The U.S. Court of Appeals for the Seventh District faces a challenging case surrounding whether severely obese workers without an underlying medical condition should be protected from job discrimination under the Americans with Disabilities Act, Bloomberg BNA reports. A former Chicago Transit Authority bus driver, Mark Richardson, alleges that the CTA violated the ADA after they regarded him as disabled due to his severe obesity and fired him, though Richardson claims he is still able to work as a bus driver. The Equal Employment Opportunity Commission does consider severe obesity alone to be a physical impairment protected under the ADA and has a case pending before the Ninth Circuit arguing just that; however, in previous years, the 8th, 2nd and 6th Circuits have ruled the opposite way. The Obesity Action Coalition, AARP and other groups have filed friend of the court briefs with the 7th Circuit in support of Richardson. The ruling of the court will affect Illinois, Indiana and Wisconsin employers.

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After ‘Janus’ Ruling, Mandatory Bar Dues Under Fire

Citing the recent U.S. Supreme Court decision striking down union “fair share” fees, two Oregon lawyers filed a federal lawsuit that’s a First Amendment challenge to mandatory bar dues, Law.com reports. The suit claims the state bar engages in political and ideological activities with which his clients disagree. They are asking the U.S. District Court for the District of Oregon to issue an injunction prohibiting the collection of compulsory fees and award damages for fees already paid. 
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Lawsuit Alleges Memphis VA Fired Doctor Over Breast Cancer Diagnosis

A former doctor at the Department of Veterans Affairs medical center in Memphis is suing the hospital, claiming she was fired from her job for requesting accommodation to undergo treatment for breast cancer, The Commercial Appeal reports. Dr. Clara Finch Cruz is also alleging that she was discriminated against for her ethnicity. Finch Cruz was told to step down from a leadership position in January 2017 after she disclosed her illness and requested a reduced schedule in order to receive radiation treatment. When she refused, the chief of staff said he would “remove her.” She was moved to another position and later terminated in March.
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Volunteers Needed for YMCA Model United Nations and Youth in Government Programs

The Tennessee Bar Association's Public Education Committee is partnering with the YMCA to help mentor future lawyers in the Model United Nations and Youth in Government programs. The programs are designed to allow students ages 11-19 to experience the processes of government in a hands-on way. Model United Nations conferences occur in the Fall and Youth in Government conferences happen in the Spring. The YMCA is always in need of volunteers to help our young lawyers argue their cases well and to help our youth justices deliberate wisely. The Public Education Committee seeks volunteers for programs all across the state. Volunteers are welcome help serve for one, two or three days during the conferences. Each conference runs a similar program, just with different students from across Tennessee attending each weekend. For more information about the program, please visit the YMCA's website or contact Elise Dugger

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Federal Judge Rules Against Trump Efforts to Rollback Federal Worker Protections

U.S. District Judge Ketanji Brown Jackson ruled that President Trump “exceeded his authority” when he issued executive orders rolling back certain protections for federal workers in an attempt to “promote more efficient” government, The Associated Press reports. Jackson ruled that key provisions of three orders “undermine federal employees’ right to bargain collectively.” The orders directed departments to engage in tougher negotiations over collective bargaining agreements, curtail lobbying or pursue grievances on taxpayer-funded union time, and streamline the amount of time needed to terminate a federal worker.
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States Reconsider Workplace Confidentiality Agreements in the #MeToo Era

In response to the #MeToo movement, at least 16 states have introduced bills to restrict the usage of non-disclosure agreements in workplace sexual harassment cases, with six states – including Tennessee – successfully approving such measures, The Associated Press reports. The intent of the new policies is to prevent abusive men in power from being allowed to stay on and abuse more employees. Legal experts say that it’s yet to be seen what effect these laws will have in the workplace.
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Grainger County Slaughterhouse Subject to ICE Raid Fined $41K

The owner of the Grainger County slaughterhouse who was subject to a massive immigration raid in April has been fined more than $41,000 for dirty, unsafe working conditions, Knoxnews reports. After the raid, inspectors found 27 violations, 23 of them deemed “serious.” The owner, James Brantley, agreed last week to plead guilty to federal charges of tax evasion and hiring unauthorized workers. Court records show Brantley dodged nearly $1.3 million in federal payroll taxes over the past decade.
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Former Toys ‘R’ Us Employees Seek Severance From Lenders

Two worker advocacy groups are seeking additional severance funds from lenders that financed this year’s bankruptcy and liquidation of the toy store chain Toys “R” Us, Bloomberg reports. The lending companies, Angelo Gordon & Co. LP and Solus Alternative Asset Management, have responded with no intention of providing additional funds after already ensuring employees received full payment for the 60-day period following a WARN notice pursuant to the Worker Adjustment and Retraining Notification Act. Two of the three firms that purchased the company a decade ago in a leveraged buyout have agreed to contribute to help meet the $75 million needed to pay for 33,000 employee severances.  

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East Tennessee Meatpacking Plant Owner Admits Tax Evasion

The owner of the East Tennessee Southeastern Provision meatpacking plant, James Brantley, agreed to plead guilty to federal charges of tax evasion, wire fraud and employing unauthorized immigrants, the Knoxville News Sentinel reports. In April, I.C.E. agents and I.R.S. investigators conducted the nation’s largest single immigration crackdown in more than 10 years at the plant; they rounded up 97 people on illegal entry charges. This action sparked statewide protests and unsuccessful attempts to toughen punishments for employers who knowingly hire undocumented workers. Brantley’s hiring of undocumented workers allowed him to pocket millions of dollars by ignoring safety regulations, violating federal wage and hour laws and avoiding unemployment and workers’ comp premiums. He will enter a formal plea in court on Sept. 12.

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2018 Health Law Primer and Forum

Tennessee remains at the forefront of the health care industry, so it’s only fitting that we host the nation’s preeminent health law forum. This must-see, must-do event for Tennessee health law lawyers features timely programming designed to up your game and keep you on top of trends in the field. Topics for this year include new issues in health care as related to transgender and immigrant patients, the opioid crisis, fraud and abuse developments/enforcement, legislative updates and much much more. This year’s keynote speaker Chief Counsel to the Inspector General Gregory Demske will also detail priorities and enforcement efforts for the U.S. Department of Health and Human Services Office of the Inspector General. Don’t sleep on this opportunity to learn from seasoned practitioners while networking with top players in the field. Here are the key details:
 
Health Law Primer (introductory program)
When: Wednesday, Oct. 10
Where: Embassy Suites Hotel, 820 Crescent Centre Drive, Franklin
 
Health Law Forum
When:  Thursday, Oct. 11 – Friday, Oct. 12
Where: Embassy Suites Hotel, 820 Crescent Centre Drive, Franklin
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New Vandy Faculty Member to Launch Legal Clinic for At-Risk Teens

Cara Suvall has joined the faculty at Vanderbilt Law, where she will launch a new legal clinic to provide civil legal representation to teens and young adults at risk for criminal involvement in areas of education, housing and employment. The Youth Opportunity Clinic will open in spring 2019. “The Youth Opportunity Clinic will address an important gap in legal services for youth between the ages of 16 to 25, and I’m extremely pleased that Cara Suvall is joining our faculty to launch and direct this clinic,” Dean Guthrie said.
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TDEC Seeks Transactional Attorney for General Law Team in Nashville

This Tennessee Department of Energy and Conservation (TDEC) is seeking a transactional attorney to join its General Law Team in Nashville. The successful candidate will serve as a member of the General Law Team in the Office of General Counsel and will report directly to the General Law Team Leader. The attorneys on the General Law Team include five experienced attorneys who represent TDEC by providing representation relative to real property transactions, procurement, employment law, liability claims, law enforcement, fiscal administration, hospitality operations, public records and legislative matters.

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Put TBA UPS to Work

Have you enrolled in TBA’s UPS account for members? Visit UPS's TBA page and save up to 34 percent on UPS’s broad portfolio. Shipping services include next day air, international, ground and express.
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Law Office Management Tips on Shipping

If your law office uses shipping services, your TBA membership team can help you compare those costs to TBA’s UPS member benefit. Your firm office manager can work directly with TBA staff and UPS services to enroll or transfer shipping accounts. Members can save up to 34 percent on UPS’s broad portfolio of shipping services, including next day air, international, ground and express.
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Murfreesboro City Employee Forced to Resign Over Use of CBD

A Murfreesboro Parks and Recreation Department was forced to resign after testing positive for cannabinoids due to CBD-containing products she uses to treat her anxiety, the Daily News Journal reports. Even though CBD products — derived from the hemp plant — are legal in Tennessee, they contained a trace amount of THC in the capsules she was taking, violating the city’s regulations to be a Drug-Free Workplace. Though hemp-derived CBD oil has minimal amounts of THC, standard drug tests can’t tell the difference between hemp products and marijuana.

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Chattanooga Women Sue Uber Over Driver’s Sexual Misconduct

Two women have filed suit against Uber, claiming that a Chattanooga driver sexually assaulted one of them and exposed himself to the other, Chattanoogan.com reports. John Kyle Lane was eventually indicted by the Hamilton County Grand Jury, charged with sexual battery in connection with a July 22, 2017, incident and another incident 15 days later. The lawsuit said Uber "acted with deliberate disregard for the safety of the public" in allowing Lane to continue as one of its drivers. 
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The Truth (and Payment of Back Wages) Will Set You Free

The U.S. Department of Labor (“DOL”) has launched a new program to get employers to fess up to their wage and hour mistakes under the Fair Labor Standards Act (“FLSA”). The pilot program, referred to as the Payroll Audit Independent Determination (“PAID”), was launched on April 3, 2018 and will run for a trial period of six months. The program aims to (1) resolve wage and hour claims more expeditiously and without litigation, (2) further employer compliance with the FLSA’s wage and hour obligations, and (3) promote the prompt payment of any owed back wages to employees. 

But, why would any company voluntarily and proactively inform the DOL of a wage and hour violation? The DOL is not so naïve that it expects employers to confess to FLSA sins simply for the sake of being honest. Rather, the DOL recognizes that to get employers to speak the truth – money talks. That is, in return for the employer’s honesty (and payment of any back wages owed to employees), it will not require the payment of liquidated damages or civil monetary penalties that might otherwise be available with the filing of a lawsuit.

The PAID program, however, cannot be used to avoid pending litigation or ongoing DOL investigations concerning the same compensation practices that the employer seeks to redress through the PAID program. Nor are employers eligible if (1) a court has found that the employer has violated FLSA the same minimum wage and/or overtime requirements at issue in the PAID proposal or (2) its employees have made complaints regarding the compensation practices that the employer seeks to resolve through the PAID program. 

Employers who are eligible and interested in partaking in this arrangement must complete a three-step process:

Step 1: Check Yourself.

This step requires that the employer audit its own wage and hour practices for non-compliance. Employers may want to engage counsel to keep the results protected by the attorney/client privilege or work-product doctrine. If there are any wage and hour violations, then employers and their counsel can consider whether to proceed to Step 2 or to resolve the violation through another an alternative method.

Step 2: Confess.

If violations are discovered during the audit, the employer must contact the Wage and Hour Division of the DOL to discuss the issues. At this stage, the employer also must submit a list of employees affected, payroll and time records for the affected employees during the time frame at issue, back wage calculations, and an explanation of the scope of potential violations to include in a potential release. The employer also must certify that it has reviewed the PAID program’s terms and conditions, that it meets the eligibility criteria to participate in the program, and that it has corrected the compensation practices to comply with the FLSA (and also provide documents showing compliance).          

Step 3: Pay Up.

If the DOL accepts the employer into PAID, the Wage and Hour Division will provide the employer with a proposed scope of the release of liability for potential violations and will issue a summary of unpaid wages. After receiving the summary of wages, employers must then pay all back wages due by the end of the next full period and provide proof of payment to the Wage and Hour Division. If an employer pays back wages to its employees prior participating in PAID, and without the supervision of the Wage and Hour Division, it will not be accepted into the program.

Pros and Cons to PAID

The obvious “pro” to participating in PAID is avoiding litigation and the threat of liquidated damages. Also, if an employer already has discovered a violation and wants to rectify the situation by paying back wages, by participating in PAID it can receive a release of the violation. On the other hand, because private out of-of-court settlements do not result in a waiver of employees’ rights to sue under the FLSA, if the employer corrects the payment without the Wage and Hour Division’s supervision, then the employer cannot secure a release of the violation. But, while PAID may be an option for employers who fear that they may have a wage and hour violation lurking at their worksites, there are, of course, risks with pursuing this program. 

First, there is no precedent. As a result, employers and their attorneys have no examples to look to in assessing whether to participate in this program and how it plays out for similarly-situated employers. 

Second, prior to reaching Step 3, there is a waiting period, in which the Wage and Hour Division evaluates the information submitted by the employer and whether it will accept the employer into the PAID program. Yes – the DOL can decline an employer’s request to participate in the program and the employer must confess to its wage and hour violations beforethe DOL actually accepts the employer into the program. As such, employers should be confident in their eligibility to participate in the program before disclosing any non-compliance issues to the DOL.

However, employers can take some comfort in the fact that the Wage and Hour Division states that, if it denies an employer’s request to participate in PAID, the employer’s request will notserve as a basis for a future investigation, unless it has reason to believe that employees’ health or safety is at risk (e.g., child labor violations). 

If the Wage and Hour Division discovers additional minimum wage or overtime violations while reviewing the employer’s records which fall outside the scope of the employer’s proposal, it will “ordinarily” attempt to resolve them as part of the audit. The Wage and Hour Division does not provide any guidance on what circumstances would fall outside of “ordinary.”

Third, and importantly, employees are not required to participate in PAID. That is, employees can either opt to accept the payments offered or may reject them and retain all of their rights (including their right to pursue litigation and seek liquidated damages). Of course, employers are prohibited from retaliating against an employee for refusing to participate in the program. If the employee does accept the payment of back wages, the release secured through the payment of back wages is limited to the violation identified in the employer’s proposal.

Fourth, and lastly, participation in PAID does not provide for a release of state law violations. Some states have signaled that they will not recognize the PAID program as absolving employers from their state law sins. As such, if an employer discovers a violation that is covered by the FLSA and a state wage and hour law, the employer may still be vulnerable to litigation filed under applicable state laws.

Again, the PAID program is available to employers through September 2018. Following the pilot phase, the DOL will evaluate the effectiveness of, participation in, and results of the program, after which it will decide whether to continue the program, modify it, or scrap it altogether. With the available six-month window of redemption, employers should consult with counsel (1) if they are aware of a potential wage and hour violation or (2) have not conducted a recent audit of its wage and hour practices. While PAID may not provide the best option for relief for all employers, honesty may be the policy for others. 


Bradford Harvey is a member of Miller & Martin at its Chattanooga office. Brad received his J.D., Order of the Coif, from Vanderbilt University School of Law in 1995. He concentrates his practice in labor and employment law and class and collective action defense. Brad may be reached at 423-785-8210 or brad.harvey@millermartin.com.

Megan Welton is an associate of Miller & Martin at its Chattanooga office. She focuses her area of practice on Labor & Employment law. Megan received her J.D. from University of Memphis Cecil C. Humphreys School of Law in 2015. She may be reached at 423-785-4326 or megan.welton@millermartin.com.


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National Labor Relations Board General Counsel Issues Guidance on Handbook Rules Post-Boeing

On June 6, 2018, Peter Robb, the National Labor Relations Board (“NLRB” or “Board”) General Counsel issued GC 18-04 entitled “Guidance on Handbook Rules Post-Boeing[i](“Guidance”) to provide “general guidance for Regions regarding the placement of various types of [employer] rules into the three categories set out in Boeing, and regarding the Section 7 interests, business justifications, and other considerations that Regions should take into account” in presenting arguments to the Board regarding the illegality of certain handbook rules. [ii]

By way of background, former General Counsel Richard F. Griffin, Jr., on March 18, 2015, issued GC15-04 “Report of the General Counsel Concerning Employer Rules”[iii] which “offer[ed] guidance on [Griffin’s]views of this evolving area of labor law, with the hope that it will help employers to review their handbooks and other rules, and conform them, if necessary, to ensure that they are lawful.”[iv] The views expressed in GC 15-04 were based on the Board’s decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)(“Lutheran Heritage”), that held ‘the mere maintenance of a work rule may violate Section 8(a)(1) of the Act if the rule has a chilling effect on employees' Section 7 activity.”[v]GC 15-04 was withdrawn by General Counsel Robb on 12/1/2017shortly after he was confirmed by the U.S. Senate. 

The “Boeing” Standard

InThe Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017) (“Boeing”), the NLRB overruled its decision in Lutheran Heritageand changed the standard for evaluating the legality of “the maintenance of facially neutral rules.”[vi]The Board in Boeingestablished a “standard that focuse[s] on the balance between the rule’s negative impact on employees’ ability to exercise their Section 7 rights and the rule’s connection to employers’ right to maintain discipline and productivity in their workplace”. It also placed employer rules into three categories: (1) Rules that are Generally Lawful to Maintain; (2) Rules Warranting Individualized Scrutiny; and (3) Rules that are Unlawful to Maintain.[vii]

Categories of Employer Rules under Boeing:

Category 1 Rules

The Guidance first discusses employer rules that fall within Category 1 which are generally lawful “because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of rights guaranteed by the Act, or because the potential adverse impact on protected rights is outweighed by the business justifications associated with the rule.”[viii]However, “the applicationof a facially neutral rule against employees engaged in protected concerted activity is still unlawful.”[ix]

The Guidance lists categories of employer rules (with multiple examples under each) that fall within Category 1 including: “Civility Rules;” “No-Photography Rules and No-Recording Rules;” “Rules Against Insubordination, Non-cooperation, or On-the-job Conduct that Adversely Affects Operations;” “Disruptive Behavior Rules;”“Rules Protecting Confidential, Proprietary, and Customer Information or Documents;” “Rules against Defamation or Misrepresentation;” “Rules against Using Employer Logos or Intellectual Property;” “Rules Requiring Authorization to Speak for Company;” and “Rules Banning Disloyalty, Nepotism, or Self-Enrichment.”[x]

 Category 2 Rules

In contrast to Category 1 employer rules, Category 2 Rules “must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.”[xi]The Guidance notes that “context” must be considered and “such rules should be viewed as they would by employees who interpret work rules as they apply to the everydayness of their job.” [xii]Other factors to be considered “include the placement of the rule among other rules, the kinds of examples provided, and the type and character of the workplace” and whether the “rule has actually caused employees to refrain from Section 7 activity is a useful interpretive tool.” [xiii]The Guidance sets out some possible examples of rules that may fall in Category 2 contrasting them with Category 1 rules:[xiv]

•       Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment … and do not restrict membership in, or voting for, a union….;

•       Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information… or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions…);

•       Rules regarding disparagement or criticism of the employer(as opposed to civility rules regarding disparagement of employees...);

•       Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark…);

•       Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf…);

•       Rules banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work… or rules specifically banning participation in outside organizations…); and

•       Rules against making false or inaccurate statements (as opposed to rules against making defamatory statements…).

 Category 3 Rules

The Guidance next addresses employer rules in Category 3 which are “generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule.”[xv]Examples of rules that the Board has found to fall within Category 3 include “Confidentiality Rules Specifically Regarding Wages, Benefits, or Working Conditions” and “Rules Against Joining Outside Organizations or Voting on Matters Concerning Employer.”[xvi]

Take Away

The NLRB’s decision in Boeingmarks a dramatic shift from Board’s prior standard in Lutheran Heritage that regularly invalidated the maintenance of facially neutral employer rules as violative of the National Labor Relations Act. However, Employers and their counsel should consult the Guidance as it is a helpful resource to use in assessing the legality of existing facially neutral work rules under the new Boeing standard.


J. Gregory Grisham is a Partner in the Nashville and Memphis Offices of Ford Harrison, LLP and focuses his practice on the representation of employers in all aspects of labor and employment law. He received his JD, with honors, from the University of Memphis, Cecil C. Humphreys School of Law in 1989. Greg may be reached at ggrisham@fordharrison.com or 615-574-6707.

Joshua J. Sudbury is a senior associate at Ford Harrison, LLP in its Nashville office, where he concentrates his practice on representing management in a variety of labor and employment matters. He received his J.D. at University of Memphis School of Law in 2009. Josh may be reached at jsudbury@fordharrison.com or 615-574-6705


[i]

[ii]Id at 1. 

[iii]

[iv]Id. at 2.

[v]Id

[vi]Guidance, at 1-2.

[vii]Id.at 1-2, 16, 18.

[viii]Id. at 2.

[ix]Id.

[x]Id. at 2-16.

[xi]Id.at 16.

[xii]Id.at 16-17.

[xiii]Id.at 17.

[xiv]Id.at 17-18.

[xv]Id. at 18. 

[xvi]Id.at 18-21.

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Epic Systems Corp. v. Lewis: Supreme Court Approves Class Action Waivers In Employment Arbitration Agreements

On May 21, 2018, the U.S. Supreme Court ruled in Epic Systems Corp. v. Lewis[i] that arbitration agreements requiring an employee to arbitrate disputes against an employer individually (as opposed to class or collective actions), are enforceable under the Federal Arbitration Act (FAA)[ii] and do not violate the National Labor Relations Act (NLRA).[iii] The 5-4 decision resolves a circuit split and affirms the validity of class and collective action waivers in employment arbitration agreements. 

Background

The opinion resolved three consolidated appeals: Epic Systems Corp. v. Lewis from the U.S. Court of Appeals for the Seventh Circuit,[iv] Ernst & Young LLP v. Morris[v] from the Ninth Circuit, and National Labor Relations Board v. Murphy Oil USA from the Fifth Circuit.[vi]

The three cases are factually similar. Generally, each case involved an employee who had entered into an arbitration agreement with the employer in which the employee agreed to resolve disputes in individual arbitration, and later sought to pursue a class or collective action against the employer in court. The employers in each case moved to compel individual arbitration pursuant to the terms of the agreements. The circuits split on whether the agreements requiring individual arbitration violate Section 7 of the NLRA by prohibiting an employee’s right to participate in “concerted activities.”[vii]

When the Supreme Court granted certiorari in the three appeals, it was anticipated the Court would provide guidance on the interplay between the FAA, which mandates the enforcement of arbitration agreements, and the NLRA’s Section 7 protections.

The Supreme Court’s Opinion

Writing for the majority, Justice Gorsuch posed the question before the Court as follows: “Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?”[viii] The Court responded that “as a matter of law the answer is clear.”[ix] The Court held arbitration agreements providing for individualized proceedings are enforceable under the FAA, and nothing in the NLRA suggests otherwise. Justice Gorsuch was joined in the majority opinion by Justices Roberts, Kennedy, Thomas and Alito. 

The Court began its analysis by explaining the history of the FAA, which was enacted by Congress “in response to a perception that courts were unduly hostile to arbitration.”[x] Through the FAA, Congress manifested a “liberal federal policy favoring arbitration” and not only instructed courts to enforce arbitration agreements, but “also specifically directed them to respect and enforce the parties’ chosen arbitration procedures” – including terms providing for “individualized rather than class or collective action procedures.”[xi]

Moreover, the Court concluded that the FAA can be read harmoniously with the NLRA, and nothing in the NLRA trumps the FAA’s mandate that arbitration agreements be enforced. The Court reasoned that the NLRA focuses on the right to “organize unions and bargain collectively” but “does not express approval or disapproval of arbitration,” nor does the NLRA “mention class or collective action procedures.”[xii] Accordingly, the NLRA “does not even hint at a wish to displace the [FAA] – let alone accomplish that much clearly and manifestly, as our precedents demand.”[xiii] Nor did the Court detect Congressional intent for the NLRA to trump the FAA: “It’s more than a little doubtful that Congress would have tucked into the mousehole of Section 7’s catchall term [“other concerted activities”] an elephant that tramples the work done by [the FAA], flattens the parties’ contracted-for dispute resolution procedures; and seats the [National Labor Relations] Board as supreme superintendent of claims arising under a statute that it doesn’t even administer.”[xiv] Finally, the Court declined to give deference to the conclusion of the National Labor Relations Board (NLRB) that the NLRA supersedes the FAA.

The Court concluded by stating that policy discussions regarding class actions and individual arbitration “are questions constitutionally entrusted not to the courts to decide but to the policymakers in the political branches.” While it is the role of Congress to make such policies, the “law is clear,” and “[b]ecause [the Court] can easily read Congress’s statutes to work in harmony, that is where our duty lies.”[xv] Accordingly, the Court affirmed the judgment in Murphy Oil, and reversed and remanded the judgments in Epic Systems and Ernst & Young for further proceedings consistent with its opinion. 

Justice Ginsburg wrote the dissenting opinion, which was joined by Justices Breyer, Sotomayor and Kagan. Calling the majority opinion “egregiously wrong,”[xvi] the dissent conducts a lengthy examination of the history and significance of the NLRA. The dissenting opinion asserts that class and collective actions fall within the NLRA’s definition of “other concerted activities”[xvii] and concludes any limitation on those rights should be held unenforceable in arbitration agreements.

Take-Aways

Epic Systemsprovides employees and employers with clarity regarding class and collective action waivers in employment arbitration agreements. The NLRB issued a statement that it “respects the Court’s decision, which clearly establishes that arbitration agreements providing for individualized proceedings and waiving the right to participate in class or collective actions, are lawful and enforceable.”[xviii]


Any views or positions in this post are the author’s alone, and do not necessarily represent the views or position of Dollar General.

Melanie Siemens is a Senior Employment Attorney at Dollar General Corporation. Ms. Siemens graduated from Vanderbilt University and the Louis D. Brandeis School of Law at the University of Louisville (JD, 2008). She may be reached at msiemens@dollargeneral.com.


[i]          138 S. Ct. 1612 (2018)

[ii]          9 U.S.C. §§ 1 et seq.

[iii]         29 U.S.C. §§ 151–169

[iv]         823 F.3d 1147 (7th Cir. 2016)

[v]          834 F.3d 975 (9th Cir. 2016) 

[vi]         808 F.3d 1013 (5th Cir. 2015)

[vii]        Specifically, Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively . . ., and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U. S. C. §157.

[viii]        138 S. Ct. at 1619

[ix]         Id.

[x]          Id. at 1621

[xi]         Id.

[xii]        Id. at 1624

[xiii]        Id.

[xiv]             Id. at 1627

[xv]              Id. at 1634

[xvi]        Id. at 1633

[xvii]       29 U. S. C. §157

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Janus v. AFSCME Council 31: The Supreme Court Overrules State Decision-Making in Public Unions

In a term full of paradigm-shifting 5-4 decisions, the U.S. Supreme Court issued its latest example on June 27 in Janus v. AFSCME Council 31,[1] overturning Abood v. Detroit Board of Education,[2]which has shaped public labor unions for 41 years. 

Both Abood and Janus concern the exclusive representative designation of state employee unions. Under Abood, states were permitted (but not required) to designate a state employee union of sufficient size the “exclusive representative” of all state employees, including non-members. These unions were given the exclusive right to bargain with the state on behalf of all state employees. In Abood, the Court determined that, in order to compensate the union for advocating on behalf of all employees, non-union members could be (but did not have to be) required to pay the portion of union dues that went toward collective bargaining. However, they could not be compelled to pay the portion of dues that went toward political and ideological action. 

In Abood, the Burger Court issued an essentially unanimous, bipartisan opinion that “[o]ur province is not to judge the wisdom of Michigan’s decision to authorize the agency shop in public employment. Rather, it is to adjudicate the constitutionality of that decision.”[3] The Court determined states were in the best position to determine what kind of labor arrangement, if any, was best for its employees. The only point of contention was what impact these arrangements had on public employee’s First Amendment rights: while still concurring in judgment, Justice Powell and two other justices expressed this concern. In his majority opinion, Justice Stewart—who gave perhaps the most well-known pronouncement of First Amendment law in American history when he said of obscenity, “I know it when I see it”—drew the First-Amendment line between political and collective-bargaining expenses, holding that non-union members could be compelled to pay fees for the latter but not the former. For the last 41 years, the Abooddecision has been seen as an example of judicial restraint, with the Court carefully weighing interests to balance rights, without interfering unnecessarily with individual states’ decision-making. 

In Janus, the Roberts Court essentially called this weighing foolish,instead holding while public unions can still be designated exclusive representatives and required to undertake collective bargaining, non-union members cannot be compelled to pay for that collective bargaining. Three features of Justice Alito’s majority opinion are especially noteworthy. 

First, Justice Alito takes a sweeping view of the First Amendment. According to Justice Alito, requiring non-union members to subsidize union speech—even speech that is undertaken for the employee’s benefit—is compelled speech. In contradiction to most compelled speech jurisprudence, which generally is less concerned about compelled speech than speech suppression,[4] Justice Alito says “measures compelling speech are at least as threatening” as suppression.[5] Still, he adopts “exacting scrutiny,” a level of constitutional scrutiny below strict but above intermediate scrutiny, to evaluate the speech at issue.[6] This is a surprisingly high standard for this legal context. Mr. Janus was not speaking at all; rather, he was indirectly contributing to third-party action that was intended to benefit him (though he disagreed with it). This fits in with the Roberts Court’s pattern of, as the dissent put it, “weaponizing the First Amendment”[7]—that is, taking an increasingly broad view of what constitutes speech in order to strike down legislation.[8]  

Second, and perhaps most noteworthy, Justice Alito and the majority are remarkably willing to ignore stare decisis in overturning a 41-year-old precedent, including the decades-old legislative decisions of nearly half the states. To support this reversal, Justice Alito lists cases that criticize Abood, nearly all of which were issued by the present Court. In other words, the majority essentially argues Aboodcan be overturned because they (the same justices) have also disagreed with it before.[9]

In addition to explicitly overturning AboodJanus also casts doubt on a number of other long-standing positions, including questioning the applicability of Pickering v. Board of Education,[10] with the Court signaling first that policies that affect more than one employee’s speech rights are entitled to more scrutiny and later that Pickering may not apply at all in compelled speech cases.[11] The Court also signals its potential willingness to take a second look at areas whose firm standing could not have been questioned before Janus, perhaps most shockingly the statement towards the end of the majority opinion, “We have no occasion here to reconsider our political patronage decisions,” a phrase that nearly always begs for such an occasion.[12] In a compelling dissent, Justice Kagan pushes back on the majority’s willingness to legislate from the bench, overruling state decision-making, and seeming lack of concern for the principle of stare decisis. 

Third, and most notably for labor and employment practitioners, Justice Alito’s majority opinion sends a number of confusing signals about the future of labor law. There is a surprising argument[13] about the hardships of individual mandatory arbitration,[14] perhaps signaling weakness in the Court’s hardline arbitration stance. The Court applies the “exacting scrutiny” standard it takes from other labor cases, setting up a string of precedent applying this level of scrutiny to labor and employment cases involving questions of free speech.[15] As discussed above, the continuing viability of Pickeringmust be questioned after Janus

Finally, and perhaps most importantly of all, Janus’s has undoubtedly created a First Amendment carve-out for union membership, providing protection that vastly outstrips other First Amendment employment protections. Noting that unions often speak on political matters of public importance, Justice Alito explicitly says, “We have recognized that such speech ‘occupies the highest rung of the hierarchy of First Amendment values’ and merits ‘special protection.’”[16] This protection must go both ways, protecting both non-members and members alike. So, for example, what would courts do with a case where a pro-union plaintiff claims a state employer’s vocal “right to work” stance is compelled anti-union speech?[17] Perhaps recognizing how sweeping his language is, Justice Alito ends a footnote that begins, “[U]nder common law, collective bargaining was unlawful” with the assurance, “[W]e are not in any way questioning the foundations of modern labor law.”[18] However, it can be of slim comfort to labor representatives—the Court doth protest too much. 

Because Tennessee’s state employee association is not an exclusive representative (and not even technically a “union”), Janus’s holding does not have a direct effect. However, it follows many trend lines of the Roberts Court, lines which are likely to become trenches when, and if, Judge Brett Kavanaugh joins the Court. These include an unusual willingness to overturn well-established Supreme Court precedents, an ever-expanding view of the First Amendment, and a marked hostility toward labor rights. Still, Janus’s strong language may have unexpected benefits for labor plaintiffs, who may be able to argue that the strong protections apply forunions as well as against them.


Caraline Rickard is an associate attorney at Gilbert Russell McWherter Scott & Bobbitt, in their Franklin office. She received her law degree from Vanderbilt Law School in 2015. She concentrates her practice on labor and employment law, with other work in special education law. Caraline may be reached at 615-354-1144 or crickard@gilbertfirm.com.


[1]          585 U.S. ___ (2018), 138 S. Ct. 2448.

[2]          431 U.S. 209 (1977).

[3]          Abood, 431 U.S. at 225.

[4]          Seee.g.Johanns v. Livestock Marketing Assoc., 544 U.S. 550 (2005) (unanimously upholding mandatory contributions to advertising fund by cattle producers against First Amendment challenge) (Scalia, J.). 

[5]          Janus, 585 U.S. at ___ (slip op., at 8). 

[6]          Id. (slip op., at 10).

[7]          Id. (dissent, at 26) (Kagan, J., dissenting). 

[8]          Seee.g.Masterpiece Cakeshop, Ltd. V. Colo. Civil Rights Comm., 584 U.S. ___ (2018); Citizens United v. FEC, 558 U.S. 310 (2010).

[9]          Id. (slip op., at 33-34) (citing Knox v. SEIU, 567 U.S. 298 (2012); Harris v. Quinn, 573 U.S. ___ (2014); Citizens United v. FEC, 558 U.S. 310 (2010) (Alito, J.)).

[10]        391 U.S. 563 (1968) (establishing the private speech on public concern framework for First Amendment challenges by public employees).

[11]        Janus, 585 U.S. at ___ (slip op., at 24-25). 

[12]        Id. (slip op., at 44).

[13]        “Objecting employees also face a daunting and expensive task if they wish to challenge union chargeability determinations . . . . The Union respondent argues that challenging its chargeability determinations is not burdensome because the Union pays for the costs of arbitration, but objectors must still pay for the attorneys and experts needed to mount a serious challenge. And the attorney’s fees incurred in such a proceeding can be substantial. The Union respondent’s suggestion that an objector could obtain adequate review without even showing up at an arbitration is therefore farfetched.” Janus, 585 U.S. at ___ (slip op., at 41) (citations omitted).

[14]        The majority in Janusin identical to the majority in Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018), which upheld class action waivers in employee arbitration agreements in May.

[15]        Janus, 585 U.S. at ___ (slip op., at 10-11). 

[16]        Id. (slip op., at 31).

[17]        Justice Kagan’s dissent argues that when this time comes, “[W]e will discover that today’s majority has crafted a ‘unions only’ carve-out to our employee-speech law.” 

[18]        Janus, 585 U.S. at ___ (slip op., at 21 n. 7). 

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