Today’s News & Commentary — June 29, 2018
In Chicago, the U.S. District Court for the Northern District of Illinois ruled in favor of sandwich franchise Jimmy John’s, who argued that the company cannot be liable for the FLSA violations of its individual restaurants. Jimmy John’s may control mayonnaise dispensing techniques and proper fridge organization for each restaurant, but this type of control over employee tasks does not signal control over restaurant management. As the Chicago Tribune observes, this ruling is consistent with the NLRB’s shift from the broader joint employment standard of the Obama era to the more stringent test espoused in Hy-Brand. (The Hy-Brand decision was later vacated on ethical grounds.) In May, the NLRB announced that it intended to initiate notice-and-comment rulemaking (a departure from the Board’s traditional, and somewhat anomalous, procedure for rule-making through case-by-case adjudication) in order to “fully consider all views on what the joint-employer standard ought to be.” According to Senators Elizabeth Warren (D-Mass.), Kristen Gillibrand (D-NY), and Bernie Sanders (I-Vt.), “such an action . . . appeases corporate interests desperately seeking to escape liability.” The Jimmy John’s employees who alleged that they were misclassified as overtime exempt brought suit in July 2014. Jimmy John’s has about 2,600 “nearly identical” locations and over $2.5 billion in sales.
Sen. Sanders announced yesterday that he will host an unusual town hall on July 16: he has invited the CEOs of Amazon, Walmart, McDonald’s, and Disney to face “their very own workers [who] are struggling to put food on the table.” In letter invitations to the four bosses, he describes workers who choose between eating and paying rent, who suffer in poor working conditions, and who face grim prospects for advancement.
Boeing Co. is continuing to resist the unionization of a segment of its workers in a South Carolina plant. Earlier this week, the world’s largest aerospace company filed with the NLRB a request to vacate an NLRB regional director’s decision that “flight readiness technicians and inspectors” constituted a valid bargaining unit under the NLRA. According to Boeing, this decision is “plainly incorrect” under the NLRB’s “community-of-interest” test for assessing appropriate voting units, and it authorizes “artificially gerrymandered subsets of the workforces.” The work unit in question voted on May 31 for union representation by the International Association of Machinists.
The NFL has fined outgoing Carolina Panthers owner Jerry Richardson $2.75 million for inappropriate behavior and workplace misconduct. Former U.S. Attorney Mary Jo White led an independent investigation into multiple accusations of sexual harrassment and use of racial slurs, all of which she substantiated. While the NFL has been under scrutiny for pervasive mistreatment of workers – cheerleaders, especially – this investigation concluded that Richardson, alone, engaged in wrongful conduct. Richardson, 81, founded the Panthers franchise in 1993. He recently sold the team for a record-breaking $2.2 billion to hedge fund manager David Tepper.
Justice Kennedy will depart the Court having voted this term “with the conservative block [sic]” on Epic Systems Corp v. Lewis and Janus v. AFSCME, and years prior on NLRB v. Noel Canning (2014) and Wall Mart v. Dukes (2011), Bloomberg columnists remind us. He also leaves a Court waiting to hear at least four employment and labor cases, including two on arbitration. A swing voter whose “lasting impact in the employment law arena will be seen as generally conservative and pro-employer,” Kennedy is not likely to be replaced by a pro-worker, anti-arbitration justice. But his “open mind” on social issues will be missed by advocates, especially those fighting for the LGBTQ community’s workplace and anti-discrimination rights.
Next term’s cases include: Lamp Plus, Inc. v. Valera (when employment contracts are silent on class arbitration, should they be construed in favor of the workers who wish to proceed as a class?); New Prime, Inc. v. Oliveira (must interstate truck drivers arbitrate all federal wage-and-hour claims, and should the court or an arbitrator determine if the FAA’s transportation worker exemption applies to the drivers’ employment contracts?); Mount Lemmon Fire District v. Guido (does the Age Discrimination in Employment Act apply to all “political subdivisions of a state,” regardless of size?); and, BNSF Railway v. Loos (is a railroad’s payment to an employee for lost time from work taxable under the Railroad Retirement Tax Act?). Cert petitions still pending before the Court include two that address the circuit split on whether Title VII’s prohibition on sex discrimination protects against discrimination based on sexual orientation.
Following Wednesday’s Janus decision, Governor of Illinois Bruce Rauner (R) almost immediately announced that the state will stop withholding fair-share fees from the 10 percent of public sector workers who are not members of the union. The unions, which have counted as members 90% of the state’s 75,000 public workers, expect to see some drop off in numbers now that the dues and/or fees will not be deducted from everyone’s paychecks. The Peoria Star Journal calls upon unions to make themselves valuable to potential detractors, as well as to the general taxpayer public, who are responsible for $130 billion of unfunded pension liability.
Pending House approval, the United States Senate has planned to compensate all of its interns, the New York Times reports. $5 million, or, about $50,000 per Senate office, has been allocated for intern compensation – a move designed to adjust for a startling racial and socioeconomic homogeneity among the intern classes, and, likely by consequence, the staffers. Past studies have found that 93 percent of the Senate’s top staff members are white. More than half of Republican senators already compensate their interns, while less than one third of Democrats offer any payment. Under the Congressional Accountability Act, interns are specifically exempted from the minimum wage and other benefits available to other government workers.