2013 Employment and Labor Law Legislation

The 2012 elections are over and the Obama administration has started its second term. The U.S. House and Senate both remain relatively unchanged. The House of Representatives is still controlled by a (slightly smaller) Republican majority that stopped many pro-labor initiatives before. The U.S. Senate remains controlled by a (slightly larger) Democratic majority.  The basically unchanged makeup of these two bodies suggests that the political gridlock of the last four years is likely to continue.

However, the Obama administration’s tactics of using the Executive Branch’s regulatory powers to go around Congress, plus a possibly more aggressive attitude brought on by the President’s victory November 6th, could give new life to a number of the employment and labor bills that have languished in committee or elsewhere.

The Obama Administration and several of the leading lights in the national labor movement wasted no time in meeting after the election, at the White House November 13^th.

It is reported that the significant change in agenda this time around is that Labor is supporting the Obama administration’s fiscal policies. They include protecting social programs, raising taxes on the wealthy, reforming immigration policy and reducing gender pay inequality, instead (at this point at least) of the more narrowly focused agenda of opening up employers to easier union organizing, exemplified during the first term by such legislative actions as Card Check.

What follows is a summary of major federal and state bills and regulations that are under consideration or pending.

FEDERAL

Paycheck Fairness Act reintroduced

Senator Barbara Mikulski (D-Md.) and Representative Rosa DeLauro (D-Conn.) reintroduced in their respective chambers the Paycheck Fairness Act (S. 84 and H.R. 377), intended to shrink the pay gap between men and women. The bill has been introduced several times during the last few years, but the Senate failed to overcome the threat of a Republican filibuster, and DeLauro chose not to bring the measure to vote in May 2012 due to a lack of support.

The sponsors maintain that because women earn 77 cents for every dollar earned by a man for equal work, there must be corrective action to fix the disparity that costs both women and their families approximately $434,000 on average over the course of their careers.

Under the legislation, employers would be required to demonstrate that any disparity complained of is related to job performance and not to the gender of the employee. The legislation also would prohibit employers from retaliating against employees who communicate salary information with coworkers, and thirdly would strengthen remedies for pay discrimination by increasing compensation women can seek. This would allow them not only to seek back pay, but also punitive damages for pay discrimination.

Employee Paycheck Protection Act: (H.R. 175) stems from the recent U.S. Supreme Court case, Knox v Service Employees International Union, in which the high court ruled that public sector unions cannot compel non-members to fund the union’s political and social speech without proper notice.

Under the bill, unions would be required to provide so-called “Hudson” notices to all employees covered by a collective bargaining agreement, explaining how the fees are apportioned. Such notices would explain how the union calculated the share of such dues or fees that are for non-political costs related to collective bargaining. The bill would also make it clear that unions cannot require non-members to pay dues or fees unless the non-member has provided affirmative consent.

Fair Pay Act reintroduced

The Lilly Ledbetter Fair Pay Act (S. 168) would require employers to provide equal pay for jobs that are comparable in skill, effort, responsibility, and working conditions. The bill would also require employers to give their workers the information they need to determine when jobs are undervalued.

Three Bills Introduced to Stop the NLRB From Conducting Business

 

Senators introduced bills to curtail activities of the National Labor Relations Board in light of the Appeals Court decision holding the Board has operated without a quorum since 2012.  If passed, the bills would do the following:

 

• The Advice and Consent Restoration Act would both block the pay of any board member not confirmed by the Senate and would block the board from taking any action until these appointees are legally confirmed.
   
• NLRB Freeze Act of 2013 would stop the board from enforcing all rules, regulations and decisions issued since January 2012.
   
• Restoring Constitutional Balance of Powers Act of 2013 would prohibit the Board from enforcing or implementing decisions and regulations without a constitutionally confirmed Board or director. Under the bill, the Board would be forbidden from using funds to undertake or enforce any actions that began on January 4, 2012, the date of the recess appointments.

 

 

The Social Networking Online Protection Act (SNOPA) Reintroduced

SNOPA is intended to protect the users of social networking sites from having to divulge their personal information to employers. SNOPA also protects both employees and applicants, and those facing disciplinary action from being required to give passwords or other information used to access their online accounts.

Federal Right-to-Work Bill Introduced

On January 31, Senator Rand Paul (R-Ky) introduced legislation to amend the National Labor Relations Act to prohibit the use of union security clauses in collective bargaining agreements. Under the National Right-to-Work Act (S. 204), employers across the country could no longer condition employment on the payment of union dues or fees. The bill would also amend the Railway Labor Act to the same effect.

On March 5^th, 2013 similar legislation was introduced in the House

The Employee Free Choice Act (EFCA) - This highly controversial piece of legislation, which would have radically changed labor law if passed, was introduced in Congress in 2009 but was withdrawn in the face of a threatened filibuster by opponents of the bill. It has not been reintroduced since then.

STATE

The following information details recent employment and labor laws introduced and/or enacted in Michigan. Pending bills introduced in 2011 and 2012 have not carried over to the new state legislative session. Any legislation pending now has to be re-introduced in the 2013-2014 session and start the legislative process over again.

Michigan Republican lawmakers return to prevailing wage repeal in 2013 – The Michigan House GOP (which spearheaded the passage of Right-to-Work) announced its plan to pick up repeal of Michigan’s prevailing wage law. This was one of the first legislative priorities the state GOP set when it won control of the Michigan legislature and the governorship.

The prevailing wage law requires state-financed or sponsored projects for which a state agency, university, community college or school district is the contracting agent to pay workers a wage of at least the level of other construction workers in a given region.

It is estimated the prevailing wage law costs Michigan upwards of $250,000,000 each year. Organized labor sees this as a further attack on it.

Minimum Wage Increase – Following President Obama’s proposal to raise the federal minimum wage to $9/hour in his February 2013 State of the Union address, Michigan will again consider raising its minimum wage from $7.40/hr to $10/hr. This bill is being re-introduced. In 2012 the same bill was never reported out of committee.

Michigan Right-to-Work (RTW) – Michigan became 24^th Right-to-Work state on December 12, 2012. The law will go into effect in March of 2013.

The Right-to-Work laws:

Permit employees to engage in, or refrain from, collective bargaining activities.

Prohibit an individual from being required to engage in or refrain from certain activities (such as joining or paying dues to a labor organization) as a condition of employment.

Prescribe a $500 maximum civil fine for a violation of that prohibition, and allow a person injured by a violation to bring a civil action for damages, injunctive relief, or both.

Give the State Court of Appeals exclusive jurisdiction over an action challenging the validity of this prohibition.

Prohibit a person from forcing or attempting to force anyone to engage in or refrain from certain activities (such as joining or supporting a labor organization); and prescribe a $500 maximum civil fine for a violation.

Delete the current provision making it a misdemeanor to force someone to join a labor organization or refrain from working.

Appropriate $1.0 million to the Department of Licensing and Regulatory Affairs in fiscal year 2012-13 for implementation of the amendments

 

    Some Important Requirements of the Law

• When an employee in a collective bargaining unit opts out of union membership, the employee still receives the benefits called for under the contract, including wages and benefits, the grievance procedure, and arbitration.
   
• The union can prohibit an employee who has opted out of union membership from participating in internal union votes such as contract ratification or elections of union officers.
   
• The union cannot charge a non-union member special fees for grievances or arbitration in the private sector. The union may or may not be subject to this prohibition in the public sector.
   
• In general, employers have a duty to be truthful to employees about their rights under the law. However, employers risk being guilty of unfair labor practices if they attempt to solicit employees to leave the union.
   
• Until the passage of this law, Michigan employees working in a union company were compelled to join the union and pay membership dues under either the “closed shop” or “agency shop” classification. Under either arrangement, failure to agree to pay union dues would usually lead to termination of employment.
  
  Under RTW, dues check-offs that used to be compulsory will still be allowed but they will become voluntary. In current RTW states, dues check-offs, because they are voluntary, take on the weight of contracts between the individual and the union. One of the implications of that provision is that for a unionized employee to stop paying union dues, that employee will have to follow the de-authorization administrative requirements laid out in the check-off agreement or administered by the union. Once the employee correctly de-authorizes dues check-off, the employer will be required to stop deducting dues and remitting them to the union. Presumably, Michigan’s RTW laws will carry that same requirement.

RTW Update (March 2013): A bill to repeal Right to Work was introduced shortly after the start of the new year. This bill was shelved by Senate Republicans (who hold the majority in that House) until December 28, 2013, the last day of the legislative year. This effectively kills the legislation for this year.

Lawsuits and other disputes over the passage of Michigan’s Right to Work bills continue in Michigan courts and the legislature. Several large teacher unions (including K-12 and college/university unions) negotiated and signed long-term (8-10 years) labor agreements prior to the effective date of the Right-to-Work laws (March 28, 2013). These signed agreements will forestall individual worker rights under Right-to-Work until those contracts expire. In response, the House Education Subcommittee in the (Republican-controlled) Michigan House of Representatives has reported out a bill that would withhold up to 15% of school districts’ funding if their respective teachers’ unions sign such long-term contracts between December 10, 2012 and March 28, 2013).

Michigan Workshare Law Passed - Beginning January 1, 2013 it has been legal for Michigan employers to set up Work-Sharing programs that will help them avoid laying off employees during downturns. The programs need to be rigidly crafted to comply with the terms of the law. But they hold out the potential not only for employers to retain key employees in anticipation of better times ahead, but also to lower their future unemployment tax rates.

On June 28, 2012 Gov. Snyder signed into law P.A. 216, U.I. Shared Work Plans. Under the law, employers facing the need to cut their labor costs can set up, subject to state approval, Work Sharing programs. For example, if the employer needs to cut labor costs by 25%, the employer can set up a work-share plan under which all eligible employees would have their hours cut by 25%, and each employee would be eligible to receive a weekly unemployment benefit equal to 25% of what that employee would receive if he or she is completely laid off. The employer would set up the plan in lieu of laying off 25% of its employees, as it likely would have to do without this option.

Employers can realize potential savings in two ways. One is that if (in the language of the bill’s summary) “federal funding for the full reimbursement of costs related to benefits paid under a shared-work (program)” are available, then “half of benefits paid would be charged to the employer’s chargeable benefits account,” and “(b)enefits paid or deposits made under this provision would not be used to calculate the employer’s contribution rate.” The other is that, to the extent that full layoffs are avoided in the future as a result of the program, the state’s Unemployment Comp fund saves money and employer’s unemployment tax rate will be lower over time.

For the affected employees themselves, their 20-week yearly eligibility for unemployment benefits in the future would remain intact, because the benefits they receive would not be charged against that eligibility. However the total benefit received would count against their maximum amount of benefit available.

There are strict requirements that employers must meet in order for their work-sharing programs to be approved for benefits by the state.  They include (but are not limited to) the following:

• The employer must be up to date on its account with MESA—all reports on file, all contributions and other required payments made.
• The employer must have a positive reserve balance in its experience account.
• The employer must have paid wages for three years prior to applying for the plan.
• The potential layoffs would affect at least 15% of employees in the unit.
• The employer cannot hire into the unit, or transfer into it, additional employees after the plan starts.
• The employer cannot lay off affected employees once the plan starts, or reduce their hours more than agreed to at the start of the plan.
• If unionized, the employer must get the approval of the bargaining unit for the plan.
• The employer cannot reduce or eliminate employees’ fringe benefits during the plan.
• The hour-reduction percentage must be at least 15% but no more than 45%.

In enacting its law, Michigan becomes the 24^th state nationally to adopt work-sharing as an employee retention tool.

Michigan House of Representatives Passes Legislation Protecting Employee Social Media Passwords – House Bill 5523, signed by Governor Rick Snyder in December 2012, “prohibit[s] employers and educational institutions from requiring certain individuals to grant access to, allow observation of, or disclose information that allows access to or observation of personal internet accounts.”

This law prohibits Michigan employers and universities from asking prospective employees or students to reveal their private e-mail passwords or provide access to their social media accounts. The law is a response to the fact that some employers  required employees and applicants to release of their private social media (e.g., Facebook, Link’d In) passwords for employer scrutiny. Violating the Social Network Account Privacy Act is a misdemeanor. In August 2012 Maryland and Illinois passed similar legislation.

Unemployment Trust Fund Solvency –  Michigan was $3.2 billion in debt to the federal fund not including interest. This loan was supposed to be paid back from the solvency tax paid by employers that have a negative balance due to their employment experience. All employers pay automatic penalties imposed by the Federal government when their state is in arrears. The tax penalties increase as time goes by and until the state reimburses the Federal government. The Snyder administration initiated a corrective measure that re-finances the debt through a bond purchase. An employer assessment would pay back the bond. This would also include moving the taxable wage base for employers back to the $9,000 level previously set before year 2000. The Snyder administration made this change to its Unemployment Tax based upon the belief that Michigan could never re-pay the $3.1 billion. It is believed the bond approach would settle this debt in 8-10 years.

In December 2012, Governor Snyder signed the legislation into law.

2013 Unemployment Insurance legislative activity – During the week of March 15, 2013 the House Commerce Committee heard testimony on HB 4240 (sponsored by Rep. Ken Goike, R-Ray Township) which would disqualify an individual from receiving unemployment benefits if he or she fails, or refuses to take, a drug test as part of an application for employment, unless good cause is shown. Current law requires an individual to be “able to perform, available for, and actively seeking” suitable full-time work. The sponsor of the legislation believes that a person who cannot pass, or will not take, a drug test required for employment is not truly “available for” work and therefore should be ineligible to receive UI benefits.

Invalidation of Home Healthcare Workers’ union is now law but a federal judge blocked  implementation (HB 4003) - A bill nullifying the unionization of elements of home healthcare workers by the Service Employees International Union (SEIU) was passed and signed into law April 10^th, 2012 by Governor Snyder.

This and other legislation that seeks to reign in what some have called “union chicanery” in the public employee realm comes as the SEIU, which represents many public-sector workers in Michigan, made public a ballot drive it has launched to enshrine the right of workers to unionize in the Constitution.

This new law stopped a scheme used by unions to organize workers in certain industries without going through the traditional approach of communication with the workers to be organized and assent for union membership by open vote. Under this scheme, the newly “organized” workers’ union membership dues were then collected out of state payments to the owner operators (and the ones thereby “unionized”) for their healthcare or child-care services.

In response, the SEIU and several allied groups initiated a proposed amendment (Proposal 4) to the state constitution proposal to override HB 4003 and lock in its concession permanently. Though millions were spent by supporters of this constitutional amendment, Proposal 4 was soundly defeated. The arrangement will go away once and for all upon termination of the current SEIU collective bargaining agreement with the state in January of this year.

The “Employment Application Fairness Act” was introduced in the Michigan House on March 5. H. 4366 would prohibit employers from eliciting information on an initial application about conviction of a felony. The prohibition expressly excludes background checks or inquiries that take place after the initial application for employment is completed, or any inquiry necessary for the employer to comply with state or federal law. The bill also provides for damages upon violation. The bill was sent to the House Commerce Committee on March 6.

The “Employment Leave Uniformity Act” - On March 13, the Michigan House Commerce Committee was scheduled to take up two recently introduced bills. H. 4249, known as the “Employment Leave Uniformity Act,” provides that counties, townships, cities, and villages may not adopt or administer ordinances or policies requiring an employer to provide an employee with paid or unpaid leave that is not required by federal law. The other was H. 4240 related to applicant drug testing (see description above).

FEDERAL REGULATORY

National Labor Relations Board Recess Appointments Overturned By DC Appeals Court

On January 25, 2013 the D.C. Court of Appeals ruled that the Obama administration recess appointments of three National Labor Relations Board members were unconstitutional. Therefore, pending final resolution of this issue, there has not been a quorum on the NLRB since that date, and rulings issued by the NLRB since January 2012 are void and unenforceable.

This includes many highly controversial decisions that reverse long-held rules as well as expanded the NLRB’s purview well beyond its historical scope.

Void until final resolution of the issue are Board decisions which:

 

(1) expanded the scope of disclosure of witness statements to the union,

(2) narrowed the scope of when employers can discharge employees for offensive postings on social media sites,

(3) required employers to reimburse employees who pay higher taxes as a result of a back pay award,

(4) permitted unions to charge lobbying expenses to Beck objectors who do not pay dues but who pay an agency fee,

(5) required employers to continue dues check-off following the expiration of a collective bargaining agreement,

(6) disregarded employers' arbitration provisions,

(7) prohibited employers from requiring employees to not discuss on-going, internal investigations, and (8) added extraordinary and onerous language to board orders against employers. 

 

In addition, all of the other cases decided by the Board since January 9, 2012, are back to where they were on January 9, 2012.  (Source: CLARK HILL Labor and Employment Update 1/25/2012

This decision is under appeal to the US Supreme Court.

National Labor Relations Act Poster – POSTING NOT REQUIRED AT THIS TIME

Enacted by regulation, the National Labor Relations Board in early 2012 moved to require all employers to post a notice about employee rights to organize a union. This posting requirement is known as “Notification Of Employee Rights Under The National Labor Relations Act.”

On April 17, 2012 the D.C. (federal) Appeals Court, in response to an appeal of an adverse decision by that district’s lower federal court, issued and injunction against the NLRB posting rule. Originally scheduled for implementation April 30^th, the Court’s injunction suspends the notice requirement until an appeal is heard by the Court.

Consecutive to the judicial efforts to squash the posting requirement, a bill that would repeal the NLRB notice posting rule was introduced in the U.S. House of Representatives. The Employee Workplace Freedom Act (HR 2833) would repeal the NLRB’s final rule, published in the Federal Register on August 30, 2011, and would prohibit the Board from ever again either promulgating, or enforcing rules requiring employers to post notices relating to the NLRA. Posters are out and available at the NLRB website or through ASE.

Proposed Rule Changes Impacting Employer Union Organizing Response and Elections

On June 20 and 21 of 2011 the Department of Labor and the National Labor Relation Board proposed rules changing a decades-long interpretation and application of the National Labor Relations Board. On June 20, 2011 the Department of Labor (DOL) issued proposed regulation tightening the interpretation of “advice” under the Labor-Management Reporting and Disclosure Act (LMRDA). On June 21st, the National Labor Relations Board (NLRB) issued proposed rules that it says will “streamline” the union election process.

NLRB Quickie Election Rules

On April 30, 2012 the NLRB Quickie Election Rule was promulgated.  One of the NLRB’s primary duties under the law is to protect the free and fair secret ballot election to determine whether employees choose to be represented by a union or not. The new rules do the following: 

1. Provide an NLRB hearing officer the ability to limit the evidence that could be introduced at a representation case hearing
2. Provide the hearing officer the authority to deny a party the right to file a brief
3. Eliminate a party’s right to have the NLRB review a decision by a regional director to direct an election
4. Eliminate current language that requires an election to be conducted within 25-30 days, thereby permitting elections to be held before the 25-day period. The amended rules call for 21 days or fewer
5. Eliminate a party’s right to have the NLRB review any decisions by a regional director or an administrative law judge regarding post-election disputes
6. Prohibit pre-election appeals and consolidate all appeals to be heard only after the election takes place
7. Allow direct election appeals to the Board before an election only in  “extraordinary circumstances”

The Board believes that the proposed rule amendments would remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation; that they would simplify representation-case procedures and render them more transparent and uniform across regions; eliminate unnecessary litigation and consolidate requests for Board review of regional directors’ pre- and post-election determinations into a single, post-election request; and would allow the Board to more promptly determine if there is a question concerning representation and, if so, to resolve it by conducting a secret ballot election.

Update (March 23,2013): These rules are now in question due to the (federal) D.C. Court of Appeals ruling that the National Labor Relations Board initiated these rules without a legal quorum.

DOL LMRDA Rulemaking Proposal – Persuader Regulations

The DOL states that its new rulemaking allows for more transparency by requiring employers to disclose  whom they are using to provide advice on influencing employees in connection with union organizing and bargaining. Currently employers are only required to disclose consultants they have hired who speak directly to employees on these matters. They are not required to file reports identifying outside consultants who are only giving advice to the employer.

Under the proposed rule, employers will have to report any arrangements with consultants that issue communications on behalf of an employer designed to “directly or indirectly persuade workers concerning their rights to organize or bargain collectively.”

This proposed disclosure requirement, the Labor Department states, also includes information about “union avoidance” seminars and conferences offered to employers by lawyers and labor consultants. This is because the Labor Department states such seminars “involve reportable persuader activity.”

ASE’s position is that both rules significantly curtail employers’ rights to communicate to and inform employees about what unionization means and how it may adversely affect them. ASE is in opposition to any restrictions or the imposition of regulations that curtail the employer’s right to maintain its business free from union influence or organization.

These rules remain under review but the 2012 Regulatory Agenda schedules these rules for final publication in April 2013.