Author Archives: Holland & Hart

March 6, 2012

Court Upholds NLRB Notice-Posting Requirement, Strikes Down Automatic Sanctions for Failure to Post

The U.S. District Court for the District of Columbia issued a highly anticipated ruling last Friday, broadly upholding the National Labor Relations Board's (NLRB's) right to issue a rule requiring most private employers to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a notice. The ruling struck down automatic sanctions for failure to post the required notice, but did not altogether eliminate the possibility that failure to post might constitute an unfair labor practice (ULP) under the NLRA. Absent further Board postponement in light of a likely appeal, or a contrary ruling from a second district court still considering the matter, the notice-posting requirement will go into effect on April 30, 2012.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters "in conspicuous places" advising employees of their rights under the NLRA. Employers who customarily communicate with employees regarding personnel matters using an intranet or internet site were further required to post the notice prominently on that site. As originally written, the rule provided that failure to post would be deemed an ULP under Section 8(a)(1) of the Act. It further permitted the Board to automatically toll (or stay) the six-month statute of limitations for all ULP actions-not just those arising out of a failure to post-where employers had failed to post the required notice.

In late 2011, the NLRB's final rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule's original November 14, 2011, effective date was initially postponed to January 31, 2012, and then postponed again to April 30, 2012.

Last Friday, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued her ruling in one of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. March 2, 2012). The judge rejected the plaintiffs' contention that the NLRB had exceeded its authority in promulgating the notice-posting requirement. Finding that Congress had not "unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act," she upheld the notice-posting requirement as a valid exercise of the Board's authority under the deferential standard of review applicable to administrative rulemaking.

Despite upholding the notice-posting requirement, Judge Jackson found that the NLRB had also exceeded its authority in automatically deeming all failures to post to be ULPs under the Act. Because Section 8(a)(1) only prohibited employers from "interfer[ing]" with rights guaranteed by the Act, it only prohibited employers from "getting in the way - from doing something that impedes or hampers an employee's exercise of the rights guaranteed by [Section 7] of the statute." The automatic sanction of an ULP for any employer who failed to post would not distinguish between situations in which an employer's failure was intended to or did exert influence over employees' organizational efforts, and those in which an employer merely declined or failed to post the required notice. As such, the judge found that the automatic sanction of an ULP was inconsistent with the Act's plain meaning.

Critically, Judge Jackson noted that her decision did not "prevent the Board from finding that a failure to post constitutes an unfair labor practice in any individual case brought before it." As such, the Board may still determine that any particular failure to post constitutes an ULP, at least assuming it makes specific findings that the failure actually interfered with an employee's exercise of his or her rights.

For similar reasons, Judge Jackson struck down the rule's provision permitting the Board to automatically stay the statute of limitations in any ULP action where the employer had failed to post the required notice. The judge found that the Act provided an unambiguous six-month statute of limitations, and that the rule effectively supplanted this limitations period for a broad class of employers regardless of particular circumstances. Again, she nonetheless observed that, under a well-established common law doctrine, her decision did not "prevent the Board from considering an employer's failure to post the employee rights notice in evaluating a plaintiff's equitable tolling defense in an individual case before it."

Judge Jackson's March 2nd ruling is, for the most part, disappointing for employers. It upholds the notice-posting requirement that will go into effect on April 30th absent further Board postponement, or a contrary ruling in the second pending lawsuit, Chamber of Commerce v. NLRB, D.S.C., No. 11-cv-2516. It further permits the NLRB to find individual failures to post to be ULPs under the Act, at least given appropriate factual findings. Finally, the judge's statute of limitations ruling may expose employers to stale ULP charges where employees succeed in showing that they were unaware of their rights under the NLRA due to an employer's failure to post.

The plaintiffs in National Association of Manufacturers have already vowed to appeal Judge Jackson's ruling. Pending any eventual reversal by the U.S. Court of Appeals for the District of Columbia Circuit, or any contrary ruling by the U.S. District Court for the District of South Carolina, employers are now presumptively required to comply with the rule's notice-posting requirement by April 30th. Employers will consequently need to weigh the possible costs of posting an arguably pro-union poster against the likelihood that Judge Jackson's ruling may eventually be reversed, and additionally consider that failure to post the notice could-but will no longer automatically-result in an ULP or other adverse sanction. For more information or advice on compliance, please contact Bradford J. Williams of Holland & Hart's Labor & Employment Practice Group at (303) 295-8121 or bjwilliams@hollandhart.com.

March 5, 2012

Court Upholds NLRB Notice-Posting Requirement, Strikes Down Automatic Sanctions for Failure to Post

By Bradford J. Williams

The U.S. District Court for the District of Columbia issued a highly anticipated ruling last Friday, broadly upholding the National Labor Relations Board’s (NLRB’s) right to issue a rule requiring most private employers to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a notice. The ruling struck down automatic sanctions for failure to post the required notice, but did not altogether eliminate the possibility that failure to post might constitute an unfair labor practice (ULP) under the Act. Absent further Board postponement in light of a likely appeal, or a contrary ruling from a second district court still considering the matter, the notice-posting requirement will go into effect on April 30, 2012.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters “in conspicuous places” advising employees of their rights under the NLRA. Employers who customarily communicate with employees regarding personnel matters using an intranet or internet site were further required to post the notice prominently on that site. As originally written, the rule provided that failure to post would be deemed an ULP under Section 8(a)(1) of the Act. It further permitted the Board to automatically toll (or stay) the six-month statute of limitations for all ULP actions—not just those arising out of a failure to post—where employers had failed to post the required notice.

In late 2011, the NLRB’s final rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule’s original November 14, 2011, effective date was initially postponed to January 31, 2012, and then postponed again to April 30, 2012.

Last Friday, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued her ruling in one of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. March 2, 2012). The judge rejected the plaintiffs’ contention that the NLRB had exceeded its authority in promulgating the notice-posting requirement. Finding that Congress had not “unambiguously intended to preclude the Board from promulgating a rule that requires employers to post a notice informing employees of their rights under the Act,” she upheld the notice-posting requirement as a valid exercise of the Board’s authority under the deferential standard of review applicable to administrative rulemaking.

Despite upholding the notice-posting requirement, Judge Jackson found that the NLRB had nonetheless exceeded its authority in automatically deeming all failures to post to be ULPs under the Act. Because Section 8(a)(1) only prohibited employers from “interfer[ing]” with rights guaranteed by the Act, it only prohibited employers from “getting in the way – from doing something that impedes or hampers an employee’s exercise of the rights guaranteed by [Section 7] of the statute.” The automatic sanction of an ULP for any employer who failed to post would not distinguish between situations in which an employer’s failure was intended to or did exert influence over employees’ organizational efforts, and those in which an employer merely declined or failed to post the required notice. As such, the judge found that the automatic sanction of an ULP was inconsistent with the Act’s plain meaning.

Critically, Judge Jackson noted that her decision did not “prevent[] the Board from finding that a failure to post constitutes an unfair labor practice in any individual case brought before it.” As such, the Board may still determine that any particular failure to post constitutes an ULP, at least assuming it makes specific findings that the failure actually interfered with an employee’s exercise of his or her rights.

For similar reasons, Judge Jackson struck down the rule’s provision permitting the Board to automatically stay the statute of limitations in any ULP action where the employer had failed to post the required notice. The judge found that the Act provided an unambiguous six-month statute of limitations, and that the rule effectively supplanted this limitations period for a broad class of employers regardless of particular circumstances. Again, she nonetheless observed that, under a well-established common law doctrine, her decision did not “prevent the Board from considering an employer’s failure to post the employee rights notice in evaluating a plaintiff’s equitable tolling defense in an individual case before it.”

Judge Jackson’s March 2nd ruling is broadly disappointing for employers. It upholds the notice-posting requirement that will go into effect on April 30th absent further Board postponement, or a contrary ruling in the second pending lawsuit, Chamber of Commerce v. NLRB, D.S.C., No. 11-cv-2516. It further permits the NLRB to find individual failures to post to be ULPs under the Act, at least given appropriate factual findings. Finally, the judge’s statute of limitations ruling may expose employers to stale ULP charges where employees succeed in showing that they were unaware of their rights under the NLRA due to an employer’s failure to post.

The plaintiffs in National Association of Manufacturers have already vowed to appeal Judge Jackson’s ruling. Pending any eventual reversal by the U.S. Court of Appeals for the District of Columbia, or any contrary ruling by the U.S. District Court for the District of South Carolina, employers should prepare now to comply with the rule’s notice-posting requirement before April 30th. For more information or questions, please contact Bradford J. Williams of Holland & Hart’s Labor & Employment Practice Group at (303) 295-8121 or bjwilliams@hollandhart.com.

February 23, 2012

EEOC’s New Strategic Plan

Wow! The U.S. Equal Employment Opportunity Commission approved a new strategic plan on February 22, 2012.

In summary, the four-year strategic plan, adopted by a 4-1 vote, will focus on efforts to stop and remedy unlawful employment discrimination as a core mission. Commissioner Constance Barker noted that the plan’s focus will emphasize enforcement and litigation rather than education and outreach, which she believed was contrary to the EEOC’s legislative focus.

Perhaps the most dangerous component of the new plan will be the EEOC objective to increase the number of systemic discrimination cases it handles. These cases are focused on pattern or practice, policy, or class cases where the alleged discrimination has a broad impact on an industry. Systemic cases are also exceedingly expensive to defend. The EEOC will work over the next months to create the framework to “inform, justify and support the quantitative and qualitative performance measures throughout the plan.”

Fasten your seatbelts, it's going to be a bumpy night!

You can find the announcement at: http://www.eeoc.gov/eeoc/newsroom/release/2-22-12.cfm

For more information, contact Steven M. Gutierrez.

February 1, 2012

EEOC Releases 2011 Charge Statistics

The EEOC has released statistics relating to charges filed with the agency in 2011. A complete table, including prior years, is available here. The total number of charges remains nearly unchanged from 2010 to 2011. Also significant is the fact that disability related charges remained steady from 2010 at 25,742 for 2011. This is compared to the roughly 25% increase in disability charges from 2009 to 2010.

January 9, 2012

New Year’s Resolution: Be Prepared For 2012 W-2 Reporting Of Cost Of Employee Group Health Coverage

1/9/2012

The IRS has issued a New Year's gift in the form of new and improved guidance for employers preparing to gather 2012 data on the cost of employer-sponsored group health coverage for its employees. Most employers will be required to report the cost of group health plan coverage on 2012 Forms W-2 to be issued in January of 2013. Employers may choose to provide this information on a voluntary basis for 2011 reporting. There are some exemptions from this reporting requirement, most notably for employers filing fewer than 250 Forms W-2 in the previous year.

Now is the time to ensure that payroll systems are properly coded to gather the correct information for reporting. This new guidance, IRS Notice 2012-9 (which supersedes IRS Notice 2011-28) clarifies a few points with revisions to Q&As in the previous notice and the addition of new Q&As. Employers should carefully review Notice 2012-9 for information on who must comply, how to comply and clarification of the details of reporting on Form W-2.

Highlights of What's New

An employer is required to report the cost of an employee's group medical coverage on Form W-2. Revised Q&A-19 clarifies that this W-2 reporting requirement does not apply to the cost of coverage under a health flexible spending arrangement if contributions come only from employee salary reduction elections. Revised Q&A-20 clarifies that if a dental or vision plan satisfies the requirements for being excepted benefits for purposes of HIPAA, then its costs are not required to be included in the reported amount.

Eight new Q&As (#32 through 39) were added in Notice 2012-9. The new Q&As provide, among other things, guidance regarding the cost of coverage for wellness programs, employee assistance programs and on-site medical clinics; guidance for reporting the cost of coverage for a payroll period that includes December 31 but continues into the next year; and guidance regarding inclusion of the cost of coverage for a hospital indemnity or other fixed indemnity insurance, or the cost of coverage for a specific disease.

The new guidance should help resolve a few issues, but as is often the case, it might not answer all of your questions. Please contact any member of Holland & Hart's Benefits Law Group for questions regarding this, or any other benefits issue. Happy New Year!

November 28, 2011

Holland & Hart’s Labor & Employment Group Receives 2011-12 U.S. News – Best Lawyers “Best Law Firms”® Rankings

I am very proud of this, so I had to post.

Holland & Hart's Labor & Employment Group is proud to announce that, among the top-rated Holland & Hart practices for 2011-12, we received the following "Best Law Firms"® Rankings:

National Ranking – Tier 2 – Employment Law – Management
National Ranking – Tier 2 – Labor Law – Management
Metropolitan Ranking for Billings, MT – Tier 1 – Employment Law – Management
Metropolitan Ranking for Billings, MT – Tier 1 – Labor Law – Management
Metropolitan Ranking for Billings, MT – Tier 1 – Litigation – Labor & Employment
Metropolitan Ranking for Cheyenne, WY – Tier 1 – Employment Law – Management
Metropolitan Ranking for Cheyenne, WY – Tier 1 – Labor Law – Management
Metropolitan Ranking for Colorado – Tier 1 – Employment Law – Management
Metropolitan Ranking for Colorado – Tier 1 – Labor Law – Management
Metropolitan Ranking for Colorado – Tier 1 – Litigation – Labor & Employment
Metropolitan Ranking for Utah – Tier 1 – Employment Law – Management
Metropolitan Ranking for Utah – Tier 1 – Litigation – Labor & Employment
Metropolitan Ranking for Idaho – Tier 2 – Litigation – Labor & Employment
Metropolitan Ranking for Utah – Tier 2 – Labor Law – Management

Holland & Hart LLP is listed among the top 20 firms in the nation based on number of first-tier metropolitan rankings by U.S.News & World Report and Best Lawyers®, one of the oldest and most respected peer-review publications in the legal profession.

Nearly 10,000 firms nationwide received rankings in the second year of "Best Law Firms." A complete list of Holland & Hart's rankings for 2011-12 can be found here.

October 6, 2011

NLRB Postpones Posting Rule

Good news. The NLRB (National Labor Relations Board) has postponed the effective date on the private business posting rule that informs workers about their right to form a union. The Board indicated on Wednesday that there has been too much confusion over which business are covered under the rule. For a good summary of the posting rule from my partner Jeff Johnson click on this link: http://www.hollandhart.com/newsitem.cfm?ID=1873

For more information, feel free to reach out.

Steven M. Gutierrez

September 19, 2011

Employee Misclassification

Secretary of Labor Hilda L. Solis announced at a ceremony on September 19, 2011 that DOL's Wage and Hour Division, IRS, and agency leaders from Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah, and Washington signed memoranda of understanding to improve efforts to combat the business practice of misclassifying employees in order to avoid providing employment protections, i.e. paying payroll taxes, workers' compensation expenses, and other benefits.

The memoranda of understanding will enable the federal Labor Department to share information and coordinate law enforcement with the IRS and participating states to level the playing field for law-abiding employers and to ensure that employees receive the protections to which they are entitled under federal and state law. The agreements are intended to send a coordinated message that DOL and the IRS have a new partnership.

See http://www.dol.gov/opa/media/press/whd/WHD20111373.htm

September 5, 2011

NLRB Issues Final Notice Posting Rule

by Jeff Johnson

The National Labor Relations Board (NLRB) has issued a final rule requiring most private employers to notify employees of their rights under the National Labor Relations Act (NLRA) by posting a notice. The rule will take effect November 14, 2011, which is 75 days after August 30, 2011, when the rule is scheduled to be published in the Federal Register.

The 11-by-17 inch notice is similar in content and design to the notice of NLRA rights that must be posted by federal contractors under the Department of Labor's rule. Copies of the notice will be available on the NLRB website (www.nlrb.gov) and from NLRB regional offices by November 1.

The notice must be physically posted at the workplace, just as with other postings of employee rights under other federal labor laws. In addition, the employer must post the notice on its internet or intranet site if personnel rules and policies are customarily posted there. Employers are not required to distribute the posting by email, Twitter, or other electronic means.

The NLRB will make translated versions of the notice available, and must be posted where at least 20% of the employees are not proficient in English and speak another language.

Employers who fail to post the notice commit an unfair labor practice under Section 8(a)(1) of the NLRA, and may face tolling of the NLRA's six-month statute of limitations for filing an unfair labor practice charge. There are no recordkeeping or reporting requirements under the NLRB's rule, and the NLRB does not have the authority to fine an employer for failing to comply with the notice posting requirement.

The posting requirement applies to all private employers (including labor unions) who are subject to the NLRA, which includes all but the very smallest employers who are not engaged in interstate commerce. Agricultural, railroad, and airline employers are not covered by the NLRA, and, in response to comments received after the proposed rule was announced, the U.S. Postal Service is exempted from the rule.

The final rule, which the NLRB adopted by a 3-1 vote (Member Brian E. Hayes (R) dissenting) is substantially similar to the proposed rule published in December 2010. In response to comments, the NLRB dropped proposed requirements for emailing and color printing of the notice, and added language to the notice describing the right of employees under the NLRA to refrain from engaging in statutorily-protected activity.

For more information or questions, contact Jeffrey T. Johnson of Holland & Hart's Labor & Employment Practice Group, 303-295-8019, jjohnson@hollandhart.com

July 21, 2011

Rehab and One Month of Sobriety Not Enough to be Considered Safe

By Jude Biggs

We all know all too well that illegal drug use and alcoholism cause terrific problems in the workplace, for the addict employee, co-employees and the business. We know that addiction is a medical problem that can sometimes be treated with success. Balancing the needs of the business and hope for the employee’s recovery can be tricky to say the least.

A recent case from the Tenth Circuit, which interprets the ADA for Colorado employers, illustrates the difficult balancing that occurs under the law. The ADA does not protect current illegal drug users, but it provides a safe harbor for those who have successfully completed a drug rehabilitation program (or otherwise rehabilitated successfully) and are “currently” or no longer engaging in the use of illegal drugs. But what does it mean to be “currently” free of illegal drugs? Read on to understand how to deal with employees who have used illegal drugs in the recent past.

Background

Peter Mauerhan worked as a sales representative for Wagner Corporation from 1994 until June 2005. In 2004, Mr. Mauerhan voluntarily entered an outpatient drug rehabilitation program, which met evenings and did not affect his work schedule. Wagner knew he was in the program.

On June 20, 2005, Wagner asked Mr. Mauerhan to take a drug test; he admitted he would test positive (for cocaine and THC/marijuana) but submitted to the test anyway. After testing positive, he was fired for violating Wagner’s drug policy, but was told he could return to Wagner if he could get clean. On July 6, 2005 he entered an inpatient program, which he completed on August 4, 2005. His rehabilitation counselor reported his prognosis at discharge as “guarded.”

The day after being discharged, Mr. Mauerhan asked to return to work at Wagner. He was told he could return, but not at the same level of compensation or with the same accounts he had served before. Mr. Mauerhan refused the changed terms. In later proceedings, Mr. Mauerhan asserted he remained drug free since completing the drug treatment program in July 2005.

In October 2005, he filed a charge of discrimination, asserting that he had been discriminated against on the basis of his status as a drug addict, and later filed a lawsuit asserting the same thing. Wagner asked the court to dismiss the case, arguing that Mr. Mauerhan was a current drug user within the meaning of the ADA at the time he had asked to be rehired. The Company also argued that even if Mr. Mauerhan had a protected disability at that time, the Company’s offer to reinstate him proved it had not discriminated against him. The district court dismissed the case, concluding that Mr. Mauerhan was not protected by the ADA as he was a “current” drug user at the time he reapplied for work.

How Long Must Someone Be Clean to be Considered a Former Drug User?

The Mauerhan case is an important one, as it is the first time the Tenth Circuit has provided guidance on how to determine the difference between a current or former drug user. Although the status of being an alcoholic or illegal drug user may merit ADA protection, the ADA and its implementing rules say that an employee or job applicant is not a “qualified individual with a disability” if he or she “is currently engaging in the illegal use of drugs” when the employer acts on the basis of such use. But the ADA also creates a safe harbor for those who are not currently engaging in the illegal use of drugs, by protecting employees who (1) have successfully completed a supervised drug rehabilitation program and are no longer engaging in the illegal use of drugs, or have otherwise been rehabilitated successfully and are no longer engaging in such use; (2) are participating in a supervised rehabilitation program and are no longer engaging in such use; or (3) are erroneously regarded as engaging in such use, but are not engaging in such use.

The Tenth Circuit admitted it was defining for the first time the scope of what “currently engaging” means. The district court had concluded Mr. Mauerhan failed to qualify for ADA protection when he reapplied for work, as he had abstained from illegal drugs for only one month; one month was, in the district court’s view, too short to be considered “not engaging in illegal drug use.”

The Tenth Circuit agreed with Mr. Mauerhan that one month of sobriety was not insufficient per se under the ADA, but agreed with Wagner that Mr. Mauerhan did not qualify for the safe harbor protections of the ADA. In so ruling, the Tenth Circuit acknowledged that no sister circuit courts used a bright-line rule for when an individual is no longer “currently” using drugs. Some courts require an employee to have refrained from drug use for a “significant” period of time. Others say the drug use must be sufficiently recent to justify the employer’s recent belief that the drug abuse remains an ongoing problem. Another circuit defines “currently” to mean a periodic or ongoing activity that has not permanently ended. The legislative history of the ADA also indicates a rule establishing a firm cutoff for protection is not appropriate.

As a result, the Tenth Circuit concluded that an employee is not protected under the ADA solely based on the number of days or weeks that have passed since the employee last illegally used drugs. Instead, it adopted the Fifth Circuit’s test that an individual is currently engaging in the illegal use of drugs if “the drug use was sufficiently recent to justify the employer’s reasonable belief that the drug abuse remained an ongoing problem.” Mere participation in a rehab program is not enough, although it helps bring the drug user closer to being protected. Rather, the individual must also be no longer engaging in drug use for a sufficient period of time that the drug use is no longer an ongoing problem. The court explained that, when an individual has not permanently ended his or her use of drugs, the drug use invariably is an ongoing problem. Certainly the longer employees refrain from drug use, the more likely they are to be protected under the ADA. Nonetheless, each case must be decided on its own basis, based on a variety of factors, such as the severity of the employee’s addiction, relapse rates for whatever drugs were used, the level of responsibility entrusted to the employee, the employer’s applicable job and performance requirements, the level of competence ordinarily required to adequately perform the job, and the employee’s past performance record. All of these factors assist the employer (and a court if a lawsuit develops) in determining whether it can reasonably conclude the employee’s substance abuse prohibits the employee from performing the essential job duties. As a result, the Tenth Circuit affirmed the district court’s dismissal of Mr. Maueghan’s claims. Mauerhan v. Wagner Corp., Nos. 09-4179 & 4185 (10th Cir. April 19, 2011).

Applying the Lessons of Maughan to Your Workplace

The Maueghan case gives employers some confidence that employees who have been recently released from a rehab program probably will not be considered former drug users entitled to the protections of the ADA. The more time that goes by, the more likely the employee will be thought of as a “former” user. However, don’t forget that other laws or approaches can come into play. For instance, although the Maueghan case did not involve a claim under the FMLA, remember the FMLA regards drug addiction as a serious medical condition for which an employer should allow medical leave and a right to return to work (under certain circumstances). In addition, remember that nothing in the ADA prevents an employer from disciplining or terminating an employee for drug-related misconduct. Given how complicated these situations can be, reach out to your attorney if in doubt, before making a move. It may save you a lot of headaches – and perhaps a hangover – in the long run.

For more information on this case or arbitration law in general, please contact Jude Biggs at jbiggs@hollandhart.com.

This article is posted with permission from Colorado Employment Law Letter, which is published by M. Lee Smith Publishers LLC. For more information, go to www.hrhero.com.