Today’s News & Commentary—February 8, 2016

The January jobs report published by the Bureau of Labor Statistics on Friday has been the subject of economic forecasts over the weekend.  According to the report, nonagricultural employment rose by 151,000 and the unemployment rate fell to 4.9%, which is the first time the jobless rate has dipped below 5.0% in over eight years.  Wage growth was also notable as the average hourly earnings rate rose by 12 cents, to $25.39, an hour for all employees and by 6 cents, to $21.33, for individuals in private-sector production and nonsupervisory positions.  The New York Times reports that the wage increase might be a sign that the economy has become stable enough for workers to demand more pay. Analysts for MarketWatch, however, suggest that the “slower-than-expected” pace of hiring might be indicative of a “weakening U.S. economy” and “the possibility of recession.”  Despite mixed reviews from analysts, President Barack Obama views the statistics as a healthy sign of progress, reports the Times.  “After reaching 10 percent in 2009,” he told reporters in Washington at a White House briefing, “the unemployment rate has now fallen to 4.9 percent . . . Americans are working.”

Union members of 769 United Steelworkers working at refineries in California and Washington State have settled with their employer, Tesoro Corp., for $8.08 million, reports Reuters.  The payout will compensate employees for bonuses denied while the workers were on strike in 2015.  After non-striking employees received bonuses in March of 2015, those workers who participated in the strike filed complaints with the National Labor Relations Board (NLRB) for retaliation and unlawful modification of their contract. Under the settlement, 100 percent of the bonuses that employees were eligible for last March will be meted out.

Another prominent settlement is the anticipated $3.1 million that the City of Chicago plans to dole out to pinch a class-action lawsuit filed by the Department of Justice in U.S. District Court last Friday.  According to the Chicago Tribune, the DOJ filed the lawsuit on behalf of two men who alleged that the Chicago Police Department used a 10-year residency requirement to discriminate against foreign-born applicants.  In addition to monetary compensation, the lawsuit also demands that the Police Department change its hiring policies to ensure that the residency requirement does not become a “pass/fail screening device.”  The Tribune reports that the city could approve the settlement as early as this Wednesday.

Weekend News & Commentary — February 6–7, 2016

On Thursday, the West Virginia State House narrowly passed a right-to-work bill, according to Lydia DePillis at the Washington Post.  Although Democratic Governor Earl Ray Tomblin is expected to veto the bill, it passed by a vote of 54-46, and overriding Tomblin’s veto requires only a simple majority vote.  West Virginia has a strong labor legacy, with a once-powerful coal union numbering 800,000 in the state, but that number has now dwindled to less than 10,000.  This vote means that it is just a matter of time before West Virginia becomes the country’s 26th right-to-work state.

The Seventh Circuit allowed a white construction worker, Terry Deets, to take his race discrimination claim to trial, according to JDSupra Business Advisor.  Deets alleges that his employer, defendant contractor Massman, Traylor, Alberici (“MTA”), engaged in race-based discrimination, firing him in order to fulfill federally mandated requirements of employing minorities and women.  The Seventh Circuit’s ruling reverses the Southern District of Illinois summary judgment in favor of MTA, crediting Deets’s allegations of direct evidence of discrimination and sufficient circumstantial evidence of discrimination.  You can read the Seventh Circuit’s opinion in Deets v. Massman Construction Company here.

Last month, Walmart closed 154 stores in the U.S., and Lydia DePillis at the Washington Post describes the effects those closings have on small towns in America.  In many low-income towns, Walmart was a beacon of modernity and affordability, an essential employer, and a much-needed food source, improving the lifestyles of the town’s residents.  And the ripple effects are potentially great; from neighboring businesses and gas stations, to local food banks Walmart supports and school districts benefitting from Walmart’s taxes.  Walmart explains it is closing the stores with low financial performance, or within close proximity of other Walmarts.  As the Washington Post explains, most of the Walmart closures are in locations in the southeast, and most in relatively lower-income, less dense populations.

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If the Supreme Court is Going to Start Overturning Precedent …

In Friedrichs v. California Teachers Association, the plaintiffs are asking the Court to overrule a 39 year-old precedent that is itself based on earlier precedents.  At the oral argument, Justice Breyer raised concerns about the potential for instability if the Court starts overruling its precedents, but Justices Scalia, Kennedy, Alito, and Roberts gave no indication that they were troubled by the prospect of overturning long-settled law.  If the Court is willing to reconsider the labor and employment cases it has previously decided, I have a long list.  But, because the issue has been in the news so much lately, let me start with Circuit City Stores v. Adams. If you’re wondering why so many workers have lost the right to sue their employers, but instead must submit disputes to private arbitration, Circuit City provides the answer.

Circuit City was a 2001 case where the Supreme Court held that the Federal Arbitration Act (“FAA”) applies to virtually all employment contracts despite the fact that the Act excludes from its coverage “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The Court’s decision in Circuit City has ushered in an era where employers routinely impose mandatory arbitration agreements banning class actions.  As Shannon Liss-Riordan, the lawyer who recently settled a large case on behalf of Lyft drivers, explained to this blog, “without a class action, employees have little hope of bringing to an end widespread employment practices that they believe violate the law.”

Circuit City was a five to four decision, with two powerful dissents by Justices Stevens and Souter. The FAA was enacted by Congress in 1925 at a time when the Supreme Court took a narrow view of Congress’s power to “regulate commerce … among the several States.”  The Court had previously struck down laws regulating conditions in factories on the grounds that “commerce” was limited to transportation of persons and property.  Thus, when Congress excluded the employment contracts of “seaman, railroad employees, or any other class of workers engaged in foreign or interstate commerce” from the coverage of the FAA, it appeared to be excluding all employment contracts that it had power to regulate.  As Justice Stevens pointed out, the legislative history did not contain any evidence that the proponents of the FAA intended it to apply to employment contracts.  For those interested, Professor Matthew Finkin wrote a 1996 law review article that discusses the legislative history in great detail.

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Today’s News & Commentary — February 5, 2016

The New York Times highlights some recent endorsements picked up by Bernie Sanders. Although Sanders remains significantly behind Hillary Clinton in terms of big national union endorsements, on Thursday, he was able to obtain the support of the International Brotherhood of Electrical Workers Local 357.  The union, which is based in Las Vegas, is currently working to get its 4,000 members registered to vote and encouraging them to support Sanders.  Today, former NAACP president Benjamin T. Jealous is expected to appear in New Hampshire to publically endorse Sanders.

The Wall Street Journal reports that the number of Americans applying for first-time unemployment benefits rose 8,000 last week to a seasonally-adjusted 285,000.  In fact, claims have increased in 3 of the last 4 weeks, perhaps signalling a slow in the rate of expansion in the labor market.  Although jobless claims are usually a pretty good proxy for layoffs/new hires, the Department of Labor will be releasing more detailed information about January employment figures today.

A judge in Kentucky has struck down various right-to-work ordinances passed by more than a dozen Kentucky county governments, according to Politico.  The opinion invalidates local laws that freed non-union employees from the requirement of paying union dues to unions that bargain on their behalf.  Agreeing with the nine unions who sued to block the ordinances, the judge wrote that although the NLRA allows any “state or territory” to establish right-to-work laws, it does not permit such laws at the local level.

Finally, the New York Times brings to the forefront the NFL’s recent announcement that, in an effort to increase diversity in its upper leadership, the league plans to require that at least one woman be interviewed for any executive position openings.  Currently, women hold about 30% of the total positions at the league headquarters and 25% of the executive positions.

California Federal Court Follows NLRB’s D.R. Horton Decision

A federal district court in California recently denied an employer’s motion to compel individual arbitration in a wage-and-hour putative class action brought by a former employee.  Totten v. Kellogg Brown & Root, LLC, ED CV 14-1766 (Jan. 22, 2016).  Relying primarily on the National Labor Relations Board’s decision in In re D. R. Horton, Inc., Judge Dolly M. Gee found that a class action waiver contained in an arbitration agreement violated employees’ substantive right to engage in protected concerted activity under the National Labor Relations Act (NLRA).  This ruling breaks with a pattern of federal courts (and the California Supreme Court) refusing to follow Horton.

KBR hired David Totten on January 16, 2012.  During the new hire orientation, Totten signed KBR’s Dispute Resolution Program as a condition of employment.  The Agreement required employees to arbitrate all claims against KBR and prohibited employees from pursuing “any Dispute on a class action, collective action, or consolidated basis.”  After KBR terminated Totten’s employment in June 2014, Totten brought suit, alleging class and representative claims for numerous violations of state and federal wage-and-hour regulations.

After first holding that the Agreement was procedurally and, in part, substantively unconscionable, Judge Gee proceeded to analyze the class action waiver.  She noted that employees “have the right to . . . engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection” under Section 7 of the NLRA, while Section 8(a)(1) declares that employers engage in an unfair labor practice when they interfere with, employees’ exercise of their Section 7 rights.  The Judge emphasized the definitional scope of “concerted activity,” noting that an individual acting alone can engage in concerted activity “when she acts on behalf of the workforce” and that concerted activity “encompasses concerted legal action.”

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Today’s News & Commentary — February 4, 2016

For all of the talk about Donald Trump wooing union voters, the Iowa caucuses indicate that the real fight for union votes is still — at least for now — between Democratic presidential candidates Hillary Clinton and Bernie Sanders. And the first round in that fight appears to have gone to Clinton. POLITICO reports that “[u]nion households favored Clinton 52-43 over . . . Sanders.” Although these numbers suggest that “labor endorsements and aggressive union campaigning are bearing fruit for Clinton,” Sanders still clearly “enjoys significant grass-roots support among rank-and-file unionists.” And regardless of who union members tended to vote for, Monday’s caucuses reflect the continuing influence of organized labor on the presidential race: “Twenty-one percent of all caucus-goers belonged to a union,” and “[a]bout 12 percent of all Iowans are union members.”

While unions’ popularity and influence may be on the decline, one area in which that has not been true is professional sports. Case in point: the U.S. Women’s National Soccer Team, which is currently embroiled in a labor dispute with soccer’s national governing body over the team’s expired collective bargaining agreement. The New York Times notes that U.S. Soccer “is seeking to have a court rule that the terms of the agreement . . . remain valid” under a memorandum of understanding that was agreed to in March 2013 but is set to expire at the end of this year. The move comes after Richard Nichols, executive director of the players’ union, “informed U.S. Soccer that the union considered the updated memorandum of understanding invalid as a C.B.A.” Nichols had further suggested “that if a new agreement was not in place in 60 days — by Feb. 24 — the old one would end and the players would no longer be bound by its no-strike clause.” Although the team is coming off its recent triumph in the 2015 Women’s World Cup, its players have also taken a vocal stand against what it considers to be sub-par artificial playing surfaces — surfaces that the women’s team often plays on, whereas the men’s team typically plays on grass fields.

On the same day that President Obama visited a U.S. mosque for the first time as president, a company in Wisconsin announced that it had fired seven Muslim factory workers and that fourteen of their colleagues had resigned due to changes in the company’s policy on prayer breaks. The New York Daily News reports that Ariens Company, which manufactures snowblowers and lawnmowers and previously employed over fifty Somali immigrants, had recently revoked its policy of allowing “two extra five-minute pray breaks per day.” The company attributes its change in policy to “unscheduled breaks in production” that resulted in large portions of its factory workforce taking breaks to pray. “We pray by the time,” said one worker in explaining why he and his Muslim colleagues could not just pray during “scheduled lulls in the workday” as the company requested. The Council of American-Islamic Relations has asked the company to “find common ground with the workers out of ‘respect for constitutionally-protected religious rights and for the legitimate needs of both employees and employers.'”

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Gig News: Union Files NLRB Petition to Represent Uber Drivers in New York

POLITICO New York reports that the International Brotherhood of Electrical Workers, Local 1430 filed a formal petition with the National Labor Relations Board to represent 600 Uber drivers who serve New York City’s LaGuardia Airport.  The NLRB case number is 29-RC-168855.  The filing of the petition is believed to be the first formal attempt to organize Uber drivers in New York, and comes in the midst of mounting dissatisfaction and protest by Uber drivers in New York and elsewhere.  In filing the petition, the IBEW claims that the Uber drivers are employees under the National Labor Relations Act.

The IBEW checked off that 30% or more of the drivers in the proposed bargaining unit wish to be represented by the union, and said the 600 drivers include “all full time and regular part time taxicab drivers employed by Uber” working from LaGuardia.  In seeking to be recognized as the drivers’ bargaining representative, the IBEW calls for a representation election at LaGuardia this month.  More from POLITICO New York:

Jordan El-Hag, the Armonk union’s business manager and attorney, said that drivers serving Laguardia make an appropriate unit because “they’re somewhat structured under hubs at Uber.”

“There are regulars that go to work at that location,” he said. “That’s based on the initial information we gathered.”

He said the board would probably have to hold hearings to determine whether the Laguardia unit was appropriate, and that he expects Uber to challenge the filing.

The story also notes opposition by Uber, which disputes that it employs the drivers, and the New York Taxi Workers Alliance, which organized this week’s protests and claims that it already has organized 5,000 New York drivers and would also seek to represent them.

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