On March 14, the Department of Labor issued an opinion letter to answer the following two questions about FMLA leave:  1) may an employer delay designating leave as FMLA covered, even if the leave is for a FMLA qualifying reason, to allow the employee to exhaust paid leave first;   2) may an employer expand an employee’s FMLA leave beyond the statutory 12 week entitlement.    In the DOL’s opinion, the answer to both questions is “no.”

The situation the opinion letter addresses is quite common: an employee wants to use available paid leave before starting the clock ticking on the 12 weeks of FMLA leave. By delaying the designation of the leave as FMLA covered until after the paid leave is exhausted, the employer has effectively granted the employee additional weeks of protected leave.

I have always thought the FMLA regulations on this point are fairly clear: the employer is required to designate FMLA qualifying leave as covered by FMLA; to the extent an employee has accrued paid time off, the employer can require it to run concurrently with FMLA. This rule is a great benefit to employers in managing employee leave by ensuring that the FMLA job protected leave lasts no longer than 12 weeks, regardless of how much paid time off the employee has accrued.

Despite the seeming clarity of the regulation, the DOL issued two prior opinion letters (in 1995 and 1996), that took the position that an employer had the right, but was not required, to designate FMLA qualifying leave as FMLA covered (so long as it did not deny employees their rights under FMLA).   The Department reasoned that this permissive approach was consistent with FMLA’s provision that allows employers to extend more leave than FMLA requires.   However, in the March 14 letter, the DOL emphasized that the designation of FMLA qualifying leave as covered leave is mandatory, and the maximum number of weeks of FMLA leave to which an employee is entitled in a year is 12 (or 26 is the case of military caregiver leave).  An employer remains free to grant leave beyond the 12 week requirement, but it cannot be considered FMLA leave.    The March 14 letter expressly withdrew these prior opinion letters.

DOL may have taken a more permissive approach in the past because the practice of allowing an employee to use paid leave before starting the FMLA clock typically causes no harm to the employee.  In fact, it is usually a great benefit to the employee who gets the extra leave.   From that perspective, it’s difficult to discern what harm the Department is trying to remedy with this new opinion.

The answer may be a 2014 ruling on this subject from the Ninth Circuit, Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1246, 1244 (9th Cir. 2014).    The plaintiff in that case, Maria Escriba, sought two weeks of leave to care for her ill father in Guatamala.    She informed her supervisors of the FMLA qualifying reason for the leave, but expressly requested the time be deemed as vacation leave, so she could save FMLA leave for future use.  When Escriba failed to return to work after two weeks, she was terminated.  Escriba filed suit, alleging her termination interfered with her FMLA rights.  She claimed, based upon the regulations, the employer was required to designate her leave as FMLA leave.  Escriba argued she was not allowed to waive her FMLA rights by electing to use vacation leave before FMLA leave commenced, despite the fact that is what she specifically requested.

On appeal, the Ninth Circuit rejected Escriba’s arguments, ruling that the two weeks of vacation leave she requested were not FMLA protected, even though she was on leave for an FMLA qualifying reason.   The court held that, “an employee can affirmatively decline to use FMLA leave, even if the underlying reason for seeking the leave would have invoked FMLA protection.”   Because Escriba’s two weeks of leave was not FMLA protected, the court concluded the employer did not interfere with her FMLA rights by terminating her employment.

Escriba was a win for that particular employer, but ironically was a loss for employers generally.    What was previously a employer granted discretionary benefit (allowing exhaustion of paid leave before starting the FMLA) was transformed into an employee right (entitlement to exhaust paid leave before starting FMLA).   Once the employee has the right to determine when the FMLA clock starts, the employee potentially gains the opportunity of extra leave beyond the 12 week statutory entitlement.   The employer’s ability to effectively manage FMLA leave, granted to it by regulation, was out the window.

The DOL specifically mentioned in footnote 3 of the March 14 letter its disagreement with the holding  Escriba.   While the Department’s opinion letter is not binding authority, courts often defer to the agency’s interpretation of the law.   Perhaps the Department issued this letter as part of an effort to confine to the Ninth Circuit the transformation of an employer managed benefit into an employee entitlement.

What is the takeaway for employers?   First, if you want to protect your prerogative to manage FMLA leave, then you need to exercise it by following the DOL’s guidance in the March 14 opinion letter; namely, you should always designate as FMLA covered leave any leave that is FMLA qualifying.   If the employee has available paid leave, the two can run concurrently.     If you want to be more generous,  make it clear that additional leave is available only after FMLA leave has been exhausted, and does not necessarily come with FMLA protected rights.   Second, it may help employers reinforce the rule to supervisors and HR personnel who may not recognize the employee does not have a choice in determining when the designation of FMLA covered leave occurs.    Finally, while there is no ironclad guarantee that other circuits will follow the DOL’s opinion letter, relying on a DOL Guidance supports an employer’s good faith defense it was trying to comply with the law, even if a court later finds the conduct to violate FMLA.

There is reason to be concerned the AFSCME lawsuit challenging the recent collective bargaining amendments will undermine the legislature’s effort to reform public sector collective bargaining.  As discussed in our previous post on the new law, AFSCME Council 61, the state’s largest public employee union, filed a lawsuit to invalidate the new law on February 20, 2017, only three days (and one business day) after the law went into effect.

The target of the lawsuit is the exemption in the new law for “public safety” employees.   Any employee who is part of a bargaining unit with at least thirty percent (30%) “public safety” employees is exempt from the amendments to the law.  That means, unlike all other public employees, employees in a public safety bargaining unit have the right to bargain over benefits, working conditions, evaluation procedures, seniority, transfers, grievance procedures and a host of other subjects.   Non-public safety employees’ bargaining rights are limited to base wages.

The law defines “public safety” employee to include a sheriff’s regular deputy, a police officer of a city, members of the division of state patrol, narcotics enforcement, state fire marshal, or criminal investigation, conservation officer or park ranger, fire fighter,  and DOT enforcement officers.   Police officers not employed by a city and corrections officers are not included within the definition of “public safety” employees.

The AFSCME lawsuit includes four individual plaintiffs strategically chosen to highlight what AFSCME characterizes as the arbitrary nature of the “public safety” exclusion.   For example, one of the plaintiffs is a DOT enforcement officer, which is included within the definition of a “public safety” employee.  Yet, more than 30 percent of her bargaining unit is non-public safety, so she is not covered by the exemption.   Another plaintiff is identified as a “police officer III” employed by the state.   Even though his duties are similar to a sheriff’s deputy or city police officer, he is excluded from the definition of “public safety” employee, and thus not covered by the exemption.

The legal challenge is based upon Iowa’s version of the equal protection clause, contained Article I, section 6 of the Iowa Constitution.  That section provides: “All laws of a general nature shall have a uniform operation; the general assembly shall not grant to any citizen, or class of citizens, privileges or immunities, which, upon the same terms shall not equally belong to all citizens.”

To pass constitutional muster, laws that relate to economic issues, like the collective bargaining amendments, must satisfy what is known as the “rational basis” test.    So long as there is a rational connection between the purpose of the statute and the classifications in it, the law does not violate equal protection.   Generally, the “rational basis” test is a low bar.  A person does not have a fundamental right to public employment, nor is union membership or collective bargaining a suspect class subject to strict court scrutiny.   Therefore, even if a court disagrees with the purpose of the law or means of achieving it, they are supposed to defer to legislative judgment and not substitute its own.

But, that does not mean the courts will give this law a free pass.   The only stated reason I have seen or heard for including the public safety exemption is a political one; that is, public safety employees are viewed more favorably than other public employees, and granting them more rights will garner more support for law’s passage.    While many of us agree public safety is the most critical function of government, it does not necessarily follow that granting a certain segment of these employees favored bargaining rights promotes public safety.   The 30% bargaining unit threshold seems particularly arbitrary.    The biggest challenge facing the law’s proponents is coming up with a principled, rational reason for this classification.  Hopefully they have thought of one, and will at some point share it with the rest of us.

While there are very few Iowa Supreme Court decisions striking down legislation using the rational basis test, it is not unheard of.    The Court’s recent constitutional jurisprudence has tended to be unpredictable, especially when the issue is politically charged.   Thus, while I am not making a prediction, there is a legitimate risk the Court will rule that granting favored bargaining rights to a limited segment of public safety employees violates equal protection.  Unfortunately for the proponents of this law, it will be at least two years before that happens.  It is very possible the window of opportunity for this type of sweeping reform will have closed by then.

The 2017 Iowa legislative session has been one of the more rancorous in recent memory, driven in large part by proposed amendments to the public sector collective bargaining law.  Following all-night debates and massive protests by union supporters, the house and senate both voted on February 16 to make the most sweeping changes in the public sector collective bargaining statute since it was first enacted in the 1970s.  Governor Branstad signed the bill into law on February 17, a Friday.  Predictably, by the following Monday, the State’s largest public employee union, AFSCME Local 61, filed a lawsuit to prevent the law from going into effect.574px-Gov_Walker_Protests1_JR

In our view, the amendments are a much needed re-set of the relationship between public employees and the state agencies, municipalities, and school districts that employ them.  It’s true that the vast majority of public employees are hard-working, conscientious, and have a true spirit of public service.  Very few citizens begrudge paying competitive wages and benefits to public employees.   But, granting public employees the right to collectively bargain has, over time, unduly favored the interests of employees and unions at the expense of public employers and taxpayers.  It’s no coincidence that public employee union membership exceeds private sector membership  by more than five times (34.4 percent to 6.4 percent in 2016).

When benefits such as health insurance and pensions are taken into account, there can be little doubt public employee compensation typically exceeds the compensation of comparable private sector employees.   In some circumstances, public employees are eligible to retire in their 50s and receive their full pension benefit under the Iowa Employee Public Retirement System (IPERS).   Early retirees can sometimes “double-dip;” that is, they return to public employment while at the same time drawing a pension.    Much of the criticism of public sector compensation is based upon the fact that, while receiving generous wages, benefits, and retirement payouts, public employers have more job security and less accountability for poor performance compared to a similarly situated employee in the private sector.

Unfortunately, most of the news coverage and commentary published while the legislature debated the new law glossed over or even ignored fundamental differences between public and private sector employment that justify limiting the subjects over which public employees are allowed to bargain.  The most important difference is that the market imposes at least some check on a private sector union’s ability to bargain for economically unsustainable wages, benefits, and work rules.  Private employers have customers that won’t necessarily accept ever increasing prices or poor quality goods or services.  History is replete with examples of companies that failed or became less competitive under the weight of unsustainable collective bargaining agreements.  Public employers, on the other hand, are almost always a monopoly.   Citizens have nowhere else to go for public services, and governments can always raise taxes to pay for ever increasing wages and benefits.

Before the recently enacted changes, unions held most of the advantages in bargaining.  If the two sides could not reach an agreement on wages, insurance, and other items, the matter was submitted to binding arbitration.  Each party submitted its final offer to the arbitrator, who had to choose between them.  Among the criteria the arbitrator could rely upon in the decision was the arbitrator’s judgment whether the public employer could levy taxes and appropriate funds to pay for the wages and benefits in question.   Thus, even if a public body did not want to raise taxes to pay for the union’s proposed wage or benefit increases, an arbitrator had the effective power to impose a tax increase (or force the public body to cut services to pay for the arbitrator’s decision).

There is one other important reason public sector collective bargaining has unduly favored employee interests over those of employers.   Before it was amended, Iowa law allowed unions to demand that public employers withhold union dues from employee’s paychecks.   Public sector unions, in turn, use this dues money to support candidates running for city council, school board, or other public offices.  Over time, the unions end up negotiating contracts with the very public officials they helped elect to office.   In effect, the employee’s interests are represented on both sides of the bargaining table.

Even Franklin Roosevelt, one of history’s greatest supporters of workers’ right to collectively bargain, expressed opposition to public sector collective bargaining.   “All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service,” he wrote. “It has its distinct and insurmountable limitations when applied to public personnel management.”  He added: “[t]he very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations,”

The amendments to Iowa’s law are not perfect.   One of the gaping loopholes is the exemption for certain “public safety” employees.   The AFSCME lawsuit relies upon the public safety exemption in its constitutional challenge to the law.   We will discuss the lawsuit in a future post.  It is sufficient for now to say that its ultimate outcome is far from certain, and the loophole in the amendment may yet serve as the law’s undoing.

Image Credit from Google, Creative Commons license, Gov. Walker Protests

While “joint employment” is not a new legal concept, federal agencies such as the Department of Labor and National Labor Relations Board have aggressively sought to expand its application in recent years.

A joint employment situation typically occurs when an employer uses an independent contractor or vendor for certain services, or relies upon a staffing agency to supply workers.   The employer relying upon the vendor probably does not consider the vendor’s employees to be its employees as well.  Indeed one of the reasons to use vendors, contractors, or staffing agencies is to delegate to others certain obligations that come with having employees, such as payroll administration, wage and hour compliance, collective bargaining, or workplace safety.     But, if an employer is not careful in how it structures and administers its vendor and contractor relationships, it may unwittingly find itself saddled with legal obligations it thought had been assumed by others.

A recent opinion issued by the U.S. Court of Appeals for the Fourth Circuit (Salinas v. Commercial Interiors, Inc. , No. 15-1915, 1/25/2017) highlights this very risk.  The Fourth Circuit’s opinion purports to clarify the test for determining when a “joint employer” relationship exists under the Fair Labor Standards Act (FLSA).   While this opinion applies only in Maryland, Virginia, and North Carolina, it would not be surprising if other circuits adopted the Fourth Circuit’s new test, which in many cases will make it easier to prove the existence of joint employment.

Summary of the Case

03The plaintiffs in Salinas were employees hired by a company known as J.I. General Contractors, Inc.   J.I. worked almost exclusively on projects for another contractor, Commercial Interiors.  Commercial Interiors offered general contracting and interior finishing services, including drywall installation, carpentry, framing, and hardware installation.    The J.I. employees filed a collective action against both J.I. and Commercial, alleging they were not paid wages, including overtime wages.   The plaintiffs obtained a judgment for unpaid wages and attorneys’ fees against J.I..  But, the district court dismissed the claim against Commercial, finding Commercial had a legitimate independent contractor relationship with J.I. that was not entered into for the purpose of evading its legal wage and hour obligations.

The Court of Appeals reversed, finding the district court incorrectly ruled in Commercial’s favor on the joint employment question.  In a lengthy opinion, the Court of Appeals criticized the trial court for focusing on the legitimacy of the contractual relationship and the good faith of the parties’ intent to comply with the wage and hour laws.  But, the Court also found the existing precedent for FLSA joint employment cases, both in the Fourth and other circuits, unsatisfactory and confusing.   As such, the Court decided to “set forth our own test for determining whether two persons or entities constitute joint employers for purposes of the FLSA,”  guided by the principle that the law “must not be interpreted or applied in a narrow, grudging manner.”

The Court framed the “fundamental threshold question” in these cases as, “whether a purported joint employer shares or co-determines the essential terms and conditions of a worker’s employment.”  In answering the question whether joint employment exists, the Court of Appeals said courts should consider the following, non-exhaustive, list of factors:

  • Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to direct, control, or supervise the worker, whether by direct or indirect means;
  • Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate the power to—directly or indirectly—hire or fire the worker or modify the terms or conditions of the worker’s employment;
  • The degree of permanency and duration of the relationship between the putative joint employers;
  • Whether, through shared management or a direct or indirect ownership interest, one putative joint employer controls, is controlled by, or is under common control with the other putative joint employer;
  • Whether the work is performed on a premises owned or controlled by one or more of the putative joint employers, independently or in connection with one another; and
  • Whether, formally or as a matter of practice, the putative joint employers jointly determine, share, or allocate responsibility over functions ordinarily carried out by an employer, such as handling payroll; providing workers’ compensation insurance; paying payroll taxes; or providing the facilities, equipment, tools, or materials necessary to complete the work.

Applying the six factors to the Commercial-J.I. relationship, the Court found the following facts were important in finding that Commercial jointly employed J.I.’s employees:

  • The Plaintiffs performed nearly all of their work on Commercial job sites and for Commercial’s benefit;
  • Commercial provided the tools, materials, and equipment necessary for Plaintiffs’ work, with Plaintiffs providing only small, handheld tools;
  • On at least one occasion, Commercial rented a house near the job site for J.I. employees to stay in during a project;
  • Commercial actively supervised Plaintiffs’ work on a daily basis by having foremen walk the job site and check Plaintiffs’ progress;
  • Commercial required Plaintiffs to attend frequent meetings regarding their assigned tasks and safety protocols;
  • Commercial required Plaintiffs to sign in and out with Commercial foremen upon reporting to and leaving the job site each day;
  • Commercial foremen frequently directed Plaintiffs to redo deficient work, communicating problems to J.I. supervisors who translated the information to Plaintiffs
  • Commercial foremen told certain Plaintiffs to work additional hours or additional days;
  • Commercial communicated its staffing needs to J.I., and J.I. based Plaintiffs’ jobsite assignments on Commercial’s needs;
  • When J.I. performed certain “time and materials” work for Commercial and was paid on an hourly, rather than lump-sum, basis, Commercial told J.I. how many of its employees to send to the project and how many hours those employees were permitted to work;
  • Commercial provided Plaintiffs with stickers bearing the Commercial logo to wear on their hardhats and vests bearing Commercial logos to don while working on Commercial jobsites;
  • I. supervisors instructed Plaintiffs to tell anyone who asked that they worked for Commercial;
  • Commercial provided J.I. supervisors with Commercial-branded sweatshirts to wear while working on Commercial projects;
  • On at least one occasion, Commercial required J.I. employees to apply for employment with Commercial and directly hired those employees.

Employer Takeaways

It’s typically in the details of doing the job that the relationship get blurred between an employer’s own employees, and those of a contractor or vendor.    The company principals sign an agreement that sets forth the relationship, usually with good intentions.  But, in the effort to get the project or job done, the administration of the relationship does not comport with what it may say in the written agreement.   The following are a few reminders that should help keep the lines between the employer and contractor/vendor more clear:

  • Provide clothing or logos for your employee’s, but not the employees of a contractor/vendor;
  • Do not provide equipment or tools for the contractor/vendor’s employees;
  • You are allowed to exercise quality control over a contractor/vendor’s finished product, but do not instruct a contractor/vendor’s employees about the details of the work;
  • Communication about unsatisfactory work should be to a designated liason with the contractor/vendor, not the employees themselves;
  • Do not discipline or threaten to terminate a contractor/vendor’s employee; issues of conduct or performance of a particular employee should be addressed with the liason;
  • Contractor/vendor employees should comply with general safety protocols of the work site; but, if there are safety protocols unique to the contractor/vendor’s work (e.g., if they use certain chemicals), the contractor/vendor should enforce those rules.
  • Do not directly keep track of contractor/vendor employee hours, or direct those employees when to work, or insist they work overtime.
  • Train supervisors about these rules;
  • Closely following these rules is most important if the employer is the exclusive or nearly exclusive firm that uses the contractor/vendor; even if the contractors has many other customers, the employer should endeavor to follow these practices, but there may be more flexibility.

Image Credit from Google, Creative Commons license, Contractors Plant and Machinery.

 

We posted on November 23 about the surprising temporary injunction issued to stop the new overtime rules from going into effect on December 1.    Many employers breathed a sigh of relief, but still wondered if this injunction was only a short term reprieve that could be taken away next year.  Here are a few things that have happened since the injunction that might shed some light on the future over the new rules:

  • On December 1, the Department of Labor filed an appeal of the district court’s injunction to the U.S. Court of Appeals for the Fifth Circuit.   The court of appeals granted the DOL’s request to fast-track the appeal, which means all briefs must be submitted by January 31, 2017.  That is about 60-90 days sooner than would occur with a normal schedule.   It is likely the court will schedule an argument in February and could have a ruling soon thereafter.
  • On December 8,  President-elect Trump announced Andy Puzder as his nominee for Secretary of Labor.  Puzder is the CEO of the company that owns the Hardee’s and Carls, Jr. restaurant chains, and has been a vocal critic of the DOL’s new rules.
  • The new overtime rules are on the list of 200 regulations that many members of Congress propose eliminating during the first 100 days of the Trump administration.

Dept of LaborWhile we are not making a prediction, employers have every reason to be optimistic the new rules will at least be modified if not eliminated altogether.   It is quite possible the DOL’s appeal will never see the light of day; once Trump is sworn in as president, he can order the DOL to withdraw its appeal and stop defending the underlying litigation, which would effectively make the injunction permanent.   As noted previously, Congress may pass a law to overturn the rule.    If neither of those occur, the new Secretary of Labor could start the process to rescind or rewrite the rule.   The last option would take the longest, as it would first require the Senate to confirm the new Labor Secretary, and then he would have to start the rule-making process.    Whatever course the process takes, if you have not taken action to implement the new overtime rules, there is no reason to do so now.

On November 22, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction prohibiting the Department of Labor from implementing and enforcing the new overtime rule as scheduled on December 1, 2016.

The new rule more than doubled the minimum salary an employee needed to qualify as exempt from overtime under the so-called “white collar” or EAP exemptions (Executive, Administrative, Professional).    The existing minimum salary is $413 per week ($23,460 per year); the new rule increased the minimum to $913 per week ($47,476 per year).    Employers have been scrambling in recent weeks to decide how best to comply with the new rule: whether to increase exempt employees’ salaries to the new minimum or reclassify formerly exempt employees and pay overtime for hours worked over forty per week.    Two lawsuits were filed September 20 challenging the rule but few expected the court to actually stop the rule from going into effect.

What are the practical effects of this ruling?   Most importantly, employers do not have to give raises or re-classify your employees by December 1.   Unfortunately, for many it may be too late.   Some employers have already communicated raises or re-classifications to employees.   There is nothing in the law that prevents those changes from being reversed, but it is difficult to take back what has just been given.

For employers who have not communicated or implemented the changes, the court’s injunction provides some immediate relief.  But, there is still quite a bit of uncertainty about what will happen next.    The future of the overtime rule will be impacted not just by legal but also by political considerations.

On the legal side, it is important to remember this is a preliminary injunction.  That means the court has not entered a final ruling, and it possible (although doubtful) in the end the court will allow the rule to go into effect.     It’s also likely the DOL will appeal this ruling to the U.S. Court of Appeals for the Fifth Circuit, which could result in the decision being reversed.     Neither of those outcomes is likely to occur for many months.   But, if the injunction is dissolved and the rule goes into effect, a thorny question arises: does the preliminary injunction preclude liability under the new rule between December 1, 2016 and the date the injunction is dissolved?   Common sense tells you an employer would not be liable, but that might not prevent employee lawsuits claiming they are entitled to either unpaid overtime or additional salary.

The election of Donald Trump along with a Republican controlled Congress may result in the political branches pulling the plug on the new rule.   That could occur in several ways, some of which take longer than others.    Congress could pass and the president could sign a law repealing the new rule.    The president could direct the Department of Labor to drop an appeal of the injunction and simply let the injunction remain in place.    Finally, the DOL under a new administration could issue rule repealing the new overtime rule.    The first two actions could occur fairly soon after January 20, 2017, while the third is a much longer and more difficult process.

We will continue to monitor the rule and keep you posted.

The minimum wage has been in the news a lot lately.   Here in central Iowa, the Polk County Board of Supervisors appointed a task force to study whether to raise the minimum wage in the County over and above the federal and state law minimum wage of $7.25 per hour.   Now the task force has come back with a recommendation that Polk County increase the minimum wage to $10.75 per hour in a series of incremental steps over three years.  The proposal is to raise the minimum wage to $8.75 on April 1, 2017, followed by $1 increases on January 1, 2018 and 2019, to a total of $10.75.

While the political momentum seems to favor an increase in the Polk County minimum wage, some have raised the question whether a County in Iowa has the legal right to impose a minimum wage higher than the wage state or federal law requires.

Like many legal questions, the answer is, “it depends.”  Iowa law gives counties the power of what is known as “home rule”.  So long as a county ordinance does not conflict with the requirements of a state law, a county is free to legislate as it deems appropriate for the welfare of its citizens.  Home rule includes the right to set standards and requirements higher or more stringent that those imposed by state law, unless the state law provides otherwise.   On the surface, therefore, it seems there is nothing that would prevent a county from raising its minimum wage above the state mandated minimum.

But, looking below the surface, there could be problems.  For example, Iowa law permits tipped employees to be paid up to 40% less than state mandated minimum wage.    If Polk County were to raise the minimum without an exception for tipped employees, it would conflict with the state law, and subject it to a potential legal challenge.  In addition, Iowa law gives cities virtually the same home rule authority has counties.   Therefore, a city within Polk County could effectively opt out of the county imposed higher minimum wage by enacting its own wage ordinance.    Nor does the proposed wage increase address the practical problem of cities located in more than one county, such as West Des Moines.

Central Iowa employers will be watching this debate closely.

As we have written here many times, most private sector employers (over 90%) are not unionized and often don’t consider that their employees may have rights under the labor laws that protect them from termination, discipline, or discrimination.   

Specifically, section 7 of the National Labor Relations Act gives employees the right to engage in “protected” and “concerted” activity for the purpose of collective bargaining or other mutual aid or protection.   In other words, if employees communicate with each other about wages or working conditions, or take action to change or improve them, they cannot be terminated, disciplined, or discriminated against because of it.

Last week the NLRB launched a web site dedicated to promoting protected concerted activity.  The site promotes the agency’s efforts in recent years to litigate protected and concerned activity complaints, and specifically notes that employees have these rights even if they are not in a union.

While nothing in the web site is factually incorrect, it unfortunately is one more step in the NLRB’s march from a neutral agency that enforces the law to an advocate for the rights of employees against employers.   From mandating employer posters, trying to change election rules to favor employees (both of which have been struck down by courts) and cracking down on employer social media policies, the NLRB’s credibility as a agency that fairly enforces the law is in serious jeopardy.

Last August the National Labor Relations Board Acting General Counsel issued a report detailing the outcome of investigations into 14 cases involving employee use of social media and social media policies. 

A second report issued January 24 on the same subject underscores that social media remains a top NLRB enforcement priority.   In the preface of this most recent report, acting General Counsel Lafe Solomon writes that, “ these issues and their continued treatment by the NLRB continue to be a ‘hot topic’ among practitioners, human resource professionals, the media, and the public."

The case summaries contained in the report deal primarily with two subjects: 1) whether an employer’s social media policy is overly broad, in that it subjects employees to adverse action for activity that is protected by the NLRA; and 2) whether a particular termination of an employee because of social media postings violates an employee’s right to engage in protected and concerted activity.    I won’t go into detail here, but can only echo Jon Hyman when he describes the NLRB’s latest foray into social media as "a mess".  

Although it has been stated many times, it bears repeating because it is often forgotten: all employers, not just those with a unionized work force, are subject to the jurisdiction of the NLRB.    An employee’s involvement in social media adds one more area of inquiry before discipline or discharge of an employee.   Even though there are no lawsuits in court or jury trials for NLRA violations, being subject to a NLRB investigation is no picnic. It takes time, energy, and money to respond to these investigations. If your case goes to a hearing, potential remedies include reinstatement of the terminated employee, with back pay, and continued NLRB involvement in policing your employment policies.  

Unfortunately for employers, the social media enforcement is one of the ways the NLRB is trying to remain relevant in the face of long standing and continued declines in private sector union activity

John Irving, former general counsel of the National Labor Relations Board, published a thoughtful opinion piece last week entitled "Don’t Employer’s Deserve Free Speech?" .  The article addresses  an important, but less well publicized, aspect of the proposed Employee Free Choice Act.  That is, stiff penalties and liquidated damages for employers found guilty of unfair labor practices.   

Mr. Irving is concerned about the fine and often vague line between an employer’s expression of an opinion or argument opposing a union, which is permitted under the law, and the threat of reprisal or promise of benefit, which is not protected.   Whether or not a particular statement, for example–"unions cause people to lose jobs"– is a protected statement of opinion or an unlawful threat, may depend upon who is sitting on the National Labor Relations Board at the time the case is decided.   The problem with the proposed EFCA, according to Irving, is that the penalties for being wrong have dramatically increased.  Section 4 of the proposed law, entitled "Strengthening Enforcement", permits fines up to $20,000 for each violation, permits the recovery of liquidated damages, and makes it easier for the General Counsel to obtain an injunction ordering an employer to cease and desist making certain statements.   Small employers in particular may be silent rather than run the risk of punitive fines.