Proposed Department Of Labor And National Labor Relations Board Rule Changes Will Likely Energize Labor Unions

By Thomas A. Lenz

This week proposed changes in the rules affecting labor relations have come from two federal agencies.

The Department of Labor (DOL) has, for many years, enforced the Labor Management Reporting and Disclosure Act.  That law requires reporting by unions on their financial health and business transactions.  It also requires reporting by employers and management consultants on arrangements by which management communicates to employees on labor relations issues.  The management obligations have not extended to attorney-client relationships or otherwise invaded attorney-client privilege.  The proposed regulations would expand the reporting obligations to include arrangements that employers enter into for direct or indirect communication with employees about labor issues.  The DOL will receive comments on the proposed regulations in the weeks ahead.  The debate is likely to be quite intense, particularly as questions arise on the scope of the reporting obligation and the potential invasion of attorney-client privilege.

A prior effort to expand management reporting obligations was attempted during the Clinton Administration, but it failed.  An expanded reporting obligation for management has long been a goal of the current Administration.

The day after DOL announced its proposals, the National Labor Relations Board (NLRB) announced that it would pursue changes to its representation election process.  NLRB has typically held workplace elections, for employees to decide on union representation, within 42 days of the filing of an election petition.  The 42 days period became the norm during the Clinton Administration, shortening the period that had previously existed.  There has been much speculation over what the NLRB's changes would mean for the election process.  Basic points include that the pre-election period would be shorter than 42 days and that the Labor Board would try to eliminate pre-election hearings and litigation over voter eligibility, saving such issues for a post-election review phase.  Much remains to be clarified.  The Labor Board will be receiving public comments in the weeks ahead.  Debate is already quite intense on these issues. 

Since proposed legislation to stimulate union organizing in the Employee Free Choice Act failed during the 2008-2009 period, the Labor Board's internal regulatory process has gained attention from advocates of labor law reform as the next best vehicle to promote organizing and to restore labor's reliance on the NLRB and its processes.

Debate, developments, and media attention are likely to follow through the summer.  Employers should, at minimum, stay tuned and, consider whether it is in their interest to make public comment on these issues before new rules take effect.

U.S. Supreme Court Reverses Ninth Circuit Court of Appeals And Holds Lower Court's Certification Of Class Of Approximately 1.6 Million Women Employees In Alleged Discrimination Case Was Error

By Christopher S. Andre and Scott K. Dauscher

As we previously reported here, on April 26, 2010, in Dukes v. Wal-Mart Stores, Inc., a divided Ninth Circuit Court of Appeals decided 6-5 en banc to affirm the decision of the trial court to grant class certification in a discrimination lawsuit alleging Wal-Mart Stores discriminates against its women employees. The nationwide class is reputed by the Los Angeles Daily Journal to number upward of 1.6 million women employees, which would make the class the largest class in United States history.

In 2001, the Impact Fund, a Berkley, California based organization many plaintiff's attorneys donate money to, filed on behalf of Betty Dukes and other current or former employees of Wal-Mart a lawsuit alleging Wal-Mart discriminates against its women employees regarding promotions and pay practices in violation of Title VII of the Civil Rights Act of 1964. The trial court later certified a class consisting of "all women employed by Wal-Mart at any time after December 26, 1998."

On Appeal, the Ninth Circuit Court of Appeals affirmed the trial court's grant of class certification but remanded to the trial court for further consideration the issue of whether to certify for class treatment the plaintiffs' claims for punitive damages and the issue of whether to certify an additional class or classes consisting of women who were no longer employed by Wal-Mart when the lawsuit was filed.

As we previously reported here, on December 23, 2010, only 17 days after it granted Wal-Mart's petition for review on December 6, 2010, the Supreme Court set the case for oral argument on March 29, 2011.

Today, the Supreme Court of the United States reversed the decision of the Ninth Circuit Court of Appeals and held, among other things, the trial court decision to certify a class was error because common issues of law and fact do not predominate.  Click here to download and read a copy of the decision, which we are analyzing and will comment about further soon.  In the meantime, suffice it to say today's decision is a  terrific decision for employers nationwide.

Appellate Court Afirms $187 Million Verdict Against Wal-Mart In Meal And Rest Period Case

By Christopher S. Andre and Scott K. Dauscher

MSNBC reports today that a Pennsylvania appellate court affirmed a $187.6 Million verdict against Wal-Mart Stores, Inc., in a class action lawsuit for allegedly denying hourly employees meal and rest breaks.  Although the appellate court affirmed the damages verdict, it did order the trial court to recalculate the $45.6 Million award of attorneys fees to the employees' attorneys, indicating the trial court erred by "double-counting" some factors when calculating the attorney's fees award. Click here to read the story. 

Meal and rest period cases continue to be a significant source of potential exposure for employers large and small.  Employers concerned about such potential exposure should consider consulting experienced employment law counsel about strategies for reducing potential meal and rest period liability.  Among other things, having in place appropriate written meal and rest period policies and documenting the company's adherence to those policies is often the best defense to meal and rest period claims.