The court granted the Chamber’s summary judgment motion because the NLRB’s only Republican board member, Brian Hayes, did not participate in the decision to adopt the final rule. Looking at the differences between an abstaining and absent member, the court held that this electronic vote, where Hayes only had a few hours to weigh in on the decision and had not expressed any intent to abstain, yet was not asked about his failure to vote, meant Hayes was absent, not abstaining.  Accordingly, the court ruled the vote invalid and the rule unenforceable.

The court specifically did not decide the legality of the election process changes themselves, noting that the rule could again be adopted with a proper NLRB vote, although political impediments exist because there is a court challenge to the constitutionality of President Obama’s three recess appointments to the NLRB.

Even with the constitutionality of the appointments in question, NLRB Chairman Mark Gaston Pearce has not ruled out “moving forward” on the election procedural changes.

DOL’s investigation had found that current and former vision center managers and asset protection coordinators at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam's Club warehouses are nonexempt under the FLSA and consequently due overtime pay for hours worked beyond 40 in a week. Wal-Mart had classified these employees as exempt from the FLSA overtime requirements.

The FLSA provides that employers who violate the law are, as a general rule, liable to employees for back wages and an equal amount in liquidated damages. Accordingly, Wal-Mart agreed to pay back wages owed in the amount determined by DOL plus an equal amount in liquidated damages. The civil money penalties assessed resulted from the repeat nature of the violations. In 2007, Wal-Mart, which operates more than 3,900 establishments in the United States, had corrected its classification practices for these workers. The delay in reaching settlement was due to negotiations over the back pay issues since that time. A third-party administrator will disburse the payments to the affected employees.

Wal-Mart has paid larger settlement amounts for FLSA violations in the past.  In 2007, Wal-Mart agreed to pay $33.48 million to resolve overtime violations affecting 86,680 employees. In 2008, Wal-Mart announced that it would pay between $352 million and $640 million to settle 63 wage and hour suits pending against the company in numerous courts involving state and federal law claims for off-the-clock work, failure to provide required meal and rest breaks, and failure to pay overtime.

Exemptions from the FLSA, generally

The FLSA exempts employees in bona fide executive, administrative, professional and outside sales positions and certain computer employees from minimum wage and overtime pay requirements. To qualify for an exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. It is the specific job duties and salary that determine whether the employee is exempt, not the job title. In addition, employers are required to maintain accurate time and payroll records to show that they have paid their employees correctly.

In December, the NLRB voted 2-1 to approve new regulations that it describes as “designed to reduce unnecessary litigation in the NLRB election process.” These regulations focused on changes to NLRB procedures in representation cases, primarily in elections in which labor and management cannot agree on certain issues.

After the decision to delay the regulations, employer groups, including the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace, challenged the rule in a federal lawsuit. Simultaneously, Republicans in both houses of Congress introduced resolutions under the Congressional Review Act to block the regulations. However, last week, the Senate voted down this resolution, clearing the way for regulations to go into effect today.

In his April 26 memorandum, NLRB Acting General Counsel Lafe Solomon provided guidance to regional NLRB offices for incorporating the new regulatory procedures into current practices. The guidelines also address a controversial issue in the regulations that opponents said would not give reasonable time for employers to respond to union representation petitions. Solomon disagreed, stating that the regulations do not establish any new timelines.

“It is my sincere hope that the new Board rules and this guideline memorandum will save time and resources,” wrote Mr. Solomon. While the rules will go into effect today, the challenge from the Chamber of Commerce is still being considered by federal court, and the rules remain controversial. Although Mr. Solomon and the NLRB continue to maintain the rules will make the case procedure process more efficient, others disagree. The new rule “will allow union bosses to ambush employers,” says Sen. Mike Enzi (R-Wyo.), ranking member of the Senate HELP Committee. Adds Robin Conrad of the Chamber of Commerce, “this is nothing more than labor regulation run amok.”

As it happened, no one from the OFCCP or the Labor Dept. appeared for the hearing, so what could have been an examination of the agency’s radical proposed compensation and affirmative action regulations, became a quiet platform for those defending the ideal of pay equity and those decrying the burdensome record-keeping requirements imposed by OFCCP.  One astute Congressman noted that as all the regulations under review are not yet published, this hearing was premature.  No one noted that once the regulations are issued there is very little Congress can do!

Many who have commented on the proposed regulations were hoping the hearing would focus attention on OFCCP’s unprecedented support for ill-disguised quotas in hiring the disabled, the controversial requirement that disabled applicants self-identify during the recruiting stage of the hiring process, and the wildly under-estimated compliance burdens.  Scant mention was made of any of these, as matters of pay equity pre-dominated.

Also lost in quasi-theatrics of the Congressional hearing was the troubling shift in the federal enforcement agencies from fostering equal employment opportunities to putting “a thumb on the scale” in support of currently favored blocs – even in the absence of discrimination.  Rep. Kucinich had open praise for preferences in hiring by government contractors, apparently unconcerned with the Constitutional and other legal issues his position creates.  His position mirrors that of the absent OFCCP, which unashamedly proffers a 7% “benchmark” for hiring individuals with disabilities in all job groups and warns that the “only effective means of measuring success is the number of people hired.”  There are so many problems with that position that it is hard to know where to start. Perhaps it is best to say no more than one person’s preference is another’s loss of opportunity and today’s favored blocs may not be tomorrow’s majority.  Once an agency moves from equal opportunity to equal outcomes, it moves from a solid foundation to the shifting sands of political favor.

Those who have been in the struggle genuinely equal opportunity for a while know that the path to success is steep and rocky.  It is nonetheless a painful burden to bear when the path is made steeper and rockier by the efforts of the government whose establishing principle is equality.

The court of appeals also ordered an expedited briefing schedule, with briefing to be completed by June 29, 2012. The court set oral argument for September 2012.

A brief background:  On April 16, the Supreme Court heard oral arguments in Christopher v. SmithKline Beecham Corp., in which the Court will decide whether pharmaceutical sales representatives (PSRs) are “outside salesmen” and thus exempted from overtime-pay requirements under the Fair Labor Standards Act of 1938 (FLSA). There currently is a circuit split between the Second and Ninth Circuits on this issue—the Ninth Circuit has held PSRs to be exempt from overtime as outside sales employees, and the Second Circuit has reached the opposite result.  There’s a lot riding on this case, including whether the approximately ninety thousand people nationwide employed as PSRs, with average earnings of $93,000, must be paid overtime.   

For decades, the DOL has acquiesced to the treatment of PSRs as outside sales employees not entitled to overtime.  Under the Obama administration, without amending the regulations or issuing any formal guidance or interpretations, DOL changed its position 180 degrees: it now argues that PSR’s are entitled to overtime. 

And does the Labor Department get any respect?    In addition to requiring the Supreme Court to determine whether the work performed by the PSRs meets the definition of sales under the FLSA and its regulations, another important issued raised by the appeal is whether and to what extent the court should give deference to the DOL’s interpretations of the FLSA and its regulations.  During the oral argument,  the Labor Department’s role in interpreting the FLSA was extensively discussed.  When the attorney from the Solicitor’s General Office who represented the Labor Department, spoke, three Justices (Breyer, Kennedy and Scalia) wondered aloud how DOL could justify its interpretations.  Justice Kennedy was concerned that the DOL was engaged in interpretation by amicus brief, rather than by the appropriate means of providing guidance through notice and comment and rulemaking.  Justice Breyer was concerned that the DOL had changed direction on the status of PSRs and wanted to know if the change was approved by the Secretary of Labor (it was not).  Justice Scalia was openly skeptical of DOL’s current position and wondered whether DOL’s current position meant that the Labor Department was “guilty of malfeasance” for taking a different view for 75 years.  There also was concern expressed by the Justices as to why more guidance was not provided by DOL, including Justice Ginsburg’s inquiry about why Opinion Letters had been phased out. 

Although the Deputy Solicitor General put forth the Labor Department’s arguments as effectively as possible, a number of Justices questioned whether the DOL’s interpretations should actually be given much deference at all, in light of the Department’s 7 –plus decades of treating PSR’s as exempt, Moreover, Justice Scalia noted that the DOL had an opportunity to change its position officially in 2004, when it re-issued the exemption regulations, but apparently chose not to, thus providing further evidence of the Department’s acquiescence. 

Conclusions: Does DOL get any respect?  Not much when it does a 180 degree swing on its interpretation of the wage and hour laws and imposes retroactive liability, without providing any justification. Whether the PSRs will be found to be exempt from overtime by the Supreme Court is anyone’s guess, but we’re betting that reason will prevail and the PSRs will be exempt.

The Board promulgated its Final Rule, “Notification of Employee Rights under the National Labor Relations Act,” in the Federal Register on August 30, 2011.  The regulation requires all employers subject to the NLRA to “post notices to employees, in conspicuous places, informing them of their NLRA rights, together with Board contact information and information concerning basic enforcement procedures.” 29 CFR § 104.202(a).  The notice must be an eleven-by-seventeen-inch poster, and the language is prescribed by the regulation.  Employers who customarily communicate with their employees about personnel rules or policies using an intranet or internet site are required to also post the notice prominently on the site.

The National Association of Manufacturers case is currently on appeal to the Court of Appeals for the D.C. Circuit, and it is expected that the Board will appeal the adverse Chamber of Commerce decision to the Court of Appeals for the Fourth Circuit.  Stay tuned to find out whether there is a judicially-imposed stay of the posting requirement or a decision by the Board to postpone the effective date of the regulation pending the outcome of the litigation, or whether employers will need to comply as of April 30 everywhere but in South Carolina.

Lafe Solomon, acting General Counsel of the National Labor Relations Board (NLRB), issued further guidance on January 25 addressing social media. It specifically reviewed 14 recent cases on employee protections on social media extended by Section 7 of the National Labor Relations Act (NLRA). Although the NLRB’s views on social media are still developing, the guidance outlines some standards for employers’ social media policies that can help employers avoid unlawful practices.

Section 7 of the NLRA protects all employees’ rights, regardless of their union status, to engage in concerted activity and related communications about their wages and other terms and conditions of employment. While the NLRB has generally decided that Section 7 does not protect mere gripes expressed through social media not made in relation to group activity, employers who have blanket social media policies may be prohibiting activity protected by federal law.

In the recent cases, policies that have been rejected by the NLRB include forbidding “disparaging comments” about the company through any media and requiring employees to obtain company approval before publishing comments about the company. Terms in policies like “appropriate” or “inappropriate,” without specific examples or with limiting language, have been rejected as too broad. Finally, statements that quoted the statutory provisions of Section 7 or that issued a general disclaimer that nothing in the policy should be construed to prohibit protected rights are insufficient to save overly broad or unlawfully restrictive policies.

In addition to the new NLRB guidance, the U.S. Senate will soon debate new restrictions on employers’ use of social media in the applicant process. Sen. Richard Blumenthal (D-CT) is currently writing a bill that would prohibit employers from asking for applicants’ social media passwords. Recently, this practice has become increasingly popular, particularly with local police departments and 911 dispatchers. Blumenthal’s bill would aim to curtail this new practice, although he admits some federal and local law enforcement agencies would be excluded from the bill.

In this case, state governments may be taking the lead. Maryland recently became the first state to ban employers from requiring or requesting social media passwords, and several other states, including California, Washington, and Illinois, are in the process of passing similar legislation.

These measures are most likely the first of many attempts to clarify and update state and federal policies on social media in the workplace. This blog will continue to follow this issue to help keep employers informed of new developments as they come.

OSHA argued that all of the violations for which Volks was cited were “continuing violations” that prevent the statute of limitations from expiring until the end of the five-year document retention period required by OSHA’s regulations. Therefore, according to OSHA, all of Volks’s violations, stretching as far back as January of 2002, were still occurring on May 10, 2006 when the inspection began. The citations were issued two days shy of six months later than that date, so OSHA argued they were timely.  OSHA argued that the real statute of limitations for record-making violations is the length of the agency’s record retention period (five years) plus the limitations period provided by the statute (six months).  OSHA, however, did not cite Volks for failure to retain the required injury logs, but only for the company’s alleged failure to record the injuries in the first place.

The Occupational Safety and Health Review Commission, by a 2-1 vote, and over the vigorous dissent of the minority Commissioner, agreed with OSHA and affirmed the citations.  The employer appealed to the Court of Appeals for the District of Columbia Circuit, which unanimously reversed the Review Commission’s decision.  The court held that every single violation for which Volks was cited, namely, failures to make and review records, and every workplace injury which gave rise to those unmet recording obligations were incidents and events that occurred more than six months before the issuance of the citations and, therefore, were beyond the statute of limitations.

The court distinguished this case from other cases in which there could, in fact, be a continuing violation.  The court noted, for example, that where a company continues to subject its employees to unsafe machines or continues to send its employees into dangerous situations without appropriate training, OSHA may be able to toll the statute of limitations on a continuing violations theory since the dangers created by the violations persist.  “But the Secretary’s argument here is instead grounded on the faulty logic that the mere existence of a statutory provision authorizing her to require employers to make and keep records . . . creates a continuing obligation that expands the statute of limitations.”