Category Archives: Court Decisions & Legislation

TEXAS COURT ISSUES NATIONWIDE INJUNCTION, BARRING THE DEPARTMENT OF LABOR’S PERSUADER RULE

By: Thomas W. Mackenzie

Yesterday (November 16, 2016), the U.S. District Court for the Northern District of Texas issued a permanent injunction barring enforcement of the U.S. Department of Labor’s “Persuader Advice Exemption Rule.”  As we have reported in previous E-Alerts, this rule would have required employers and their attorneys to report expenditures incurred in resisting union organizing efforts.  Historically, reporting was only required when a law firm engaged in active persuader activity such as giving a speech to the employer’s employees in a union organizing drive.  Under the new rules, an attorney would be required to report if he or she engaged in speech writing, letter drafting or supervisor training. The rule was unquestionably designed to discourage law firms from representing employers in union organizing campaigns.

In arguing that the law was unlawful, the plaintiffs claimed, in part, that the reporting requirements invaded the attorney-client privilege.  The Texas judge issued a preliminary injunction on June 27, 2016.  The injunction was made permanent by the decision issued yesterday.  The decision will unquestionably be appealed.  However, it is unlikely that a decision at the appellate level will be issued before President Elect Trump takes office and a new Secretary of Labor is appointed.

The new requirement was challenged in multiple court cases by business groups and, in a case currently pending in Minnesota, by the Worklaw Network, an association of management-side labor and employment law firms of which Lindner & Marsack is the Wisconsin representative.

Although it is impossible these days to predict anything with certainty, the so-called “Persuader Rule” would appear to be in critical condition and unlikely to be enforced in the foreseeable future, if ever.

NLRB Expands Appropriate Bargaining Unit to Include Temporary Workers

In a 3-1 decision issued this week, the National Labor Relations Board (“Board”) reversed current precedent that prohibited the inclusion of temporary employees along with permanent, or “solely employed,” employees in a bargaining unit absent employer consent, as it returned to the previous standard under M.B. Sturgis, Inc., 331 NLRB 1298 (2000), where no such consent was required.

In its July 11, 2016 decision, Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board expressly overruled the 2004 decision of Oakwood Care Center, 343 NLRB 659 (2004), which had held that the National Labor Relations Act (“NLRA”) did not authorize the Board to direct elections in units encompassing employees of more than one employer, i.e. a company’s employees and other employees placed at the company via a staffing agency.  The Oakwood Board further held that combining such employees would lead to significant conflicts among the various employers and among groups of employees.

With the Miller & Anderson decision, the Board reversed course again, holding that the terms “employer” and “employer unit,” as used within Section 9(b) of the NLRA, were sufficiently broad to encompass temporary employees performing work for another employer.  The Board also reasoned that the Sturgis standard better effectuated the purposes of the NLRA.

Going forward, the Board will apply the traditional “community of interest” factors when determining if a bargaining unit is appropriate.  The Board will determine whether the temporary employees and solely employed employees have the same or substantially similar interests as to wages, hours or other working conditions.

While the Board described its decision as a return to Sturgis, the landscape has changed since 2004, when Sturgis was last the standard.  Last year, the Board issued the highly contentious Browning-Ferris decision, which overruled two other long-standing joint-employer decisions.

Under Browning-Ferris, the Board greatly expanded the joint-employment standard by abandoning the requirement that an employer exercise “direct and immediate” control over an employee’s terms and conditions of employment and instead including relationships where an employer merely exercised “indirect” control or even where an employer has simply reserved the authority to exercise control.   Thus, between 2000 and 2004, when Sturgis was the standard, the law was much clearer as to when a joint-employer relationship existed.  Now those waters are far murkier, and employers will have to navigate them to make best judgments as to whether a joint-employer relationship exists and, if so, whether a group of temporary employees and solely employed employees have sufficient interests in common in order to create an appropriate bargaining unit.

Employers and other amici cautioned that a return to Sturgis would create confusion and hinder meaningful bargaining.  We will see whether those concerns bear out.

WISCONSIN RIGHT TO WORK LAW REINSTATED

District 3 of the Wisconsin Court of Appeals issued a decision yesterday, May 24, reinstating Wisconsin’s right to work law pending appeal of a Dane County Circuit Court Judge’s decision finding the law to be unconstitutional.  The Court of Appeals held that the Circuit Court erred in not granting a stay pending the appeal of the decision.

The decision means that unions and employers are again unquestionably prohibited from entering into agreements requiring union membership as a condition of employment.  Wisconsin was the 25th state to enact a so-called right to work statute.  Under the law, as contracts expire, are extended or are amended after March 11, 2015, the parties are precluded from maintaining or agreeing to contract language requiring employees to be members of a union.

It is anticipated the case will find its way to the Wisconsin Supreme Court.  Given that Court’s 5 to 2 conservative majority, we expect the law will ultimately be upheld.

 

STATUS OF RIGHT TO WORK LAW

By: Thomas W. Mackenzie

We issued an E-Alert on April 13 addressing Right to Work. Since then, a number of clients have asked for further clarity on the status of Wisconsin’s Right to Work law following the issuance of the Dane County decision.

On April 8, 2016, a Dane County Circuit Court judge found unconstitutional the 2015 statute making Wisconsin the 25th Right to Work state.  The law, which took effect on March 11, 2015, prohibited an employer and union to agree in a collective bargaining agreement that employees must be union members.  The trial judge found that because federal law requires unions to represent all employees – union members or not – it is an unlawful taking of property to deny the union fair compensation in the form of union dues for the services the union provides to employees who would choose not to be union members.

The Wisconsin Attorney General (“AG”) appealed the decision to the Wisconsin Court of Appeals late last week. The trial court judge denied the AG’s request for a “stay” pending the appeal.  We here at Lindner & Marsack anticipate that the AG will seek and likely be granted a “stay” from the Court of Appeals.  We also join most experts in predicting that the Dane County court decision will be reversed on appeal.

In the interim, however, employers and employees are left in a quandary in how to proceed. In assessing the issue, employers fall into one of three camps.  If your contract has not expired since the law’s passage in March, 2015 – your union security provision remains lawful.  As your contract expires, you should seek legal counsel on how to approach the issue.  Pending final resolution, unions will resist any argument that mandatory union membership is illegal in Wisconsin.

If your contract already expired and you eliminated all forms of union security from your contract, you need to do nothing. You have no language requiring union membership and your employees are free to choose to be members or refrain from union membership.

If, however, you fall in the third camp and you agreed to so called “snap-back” language that nullified your former union security clause only to the extent prohibited by law, the Dane County decision has put you in a legal gray area. Until the circuit court decision is “stayed” or reversed, you will need a strategy.

First, start with your “snap-back” language and determine whether the union has a claim that the union security clause has been “reactivated.” Second, wait and see how your union reacts.  Some unions may elect not to push the issue until the judicial dust settles.  Third, if your union insists on compliance with the union security which would mean the employer could be required to terminate an employee who fails to meet his or her dues obligation, the failure to terminate could trigger a grievance or an unfair labor practice charge.  Delaying the matter while the grievance or NLRB charge is processed is one option.  There are strong legal arguments that the Dane County decision only applies in Dane County and only applies to the Machinists (IAM), Steelworkers and the AFL-CIO, the plaintiffs in that case.  The other option is to tell your reluctant union member employees that they should keep current on dues while the matter is resolved through the courts.  If the non-members elect to satisfy the asserted dues obligation they might want to pay the union directly rather than using payroll deduction (so called dues checkoff).  Signing a union dues authorization card would obligate the employer to deduct dues for up to a one year period, even if the Dane County decision is reversed.

Again, the issue is put on hold if the Court of Appeals or Wisconsin Supreme Court issues a “stay.” Likewise, it goes away altogether if the Court of Appeals or Wisconsin Supreme Court reverses the Circuit Court.  These are likely outcomes, but until they occur, some unions may push the issue and force some hard choices while the matter plays out in the courts.

If you have questions about anything in this e-alert, feel free to call Tom Mackenzie or any other Lindner & Marsack attorney at 414-273-3910.

 

Amendments to the Wisconsin Worker’s Compensation Act Effective March 2, 2016!

By: Chelsie D. Springstead

The much-anticipated changes to the Wisconsin Worker’s Compensation Act were signed by Governor Walker on February 29, 2016 and went into effect yesterday – March 2, 2016! Please see the Act 180 Statutory Language and Act 180 Plain Language Summary of the bill which is now in effect.   I have summarized a few of the major changes below:

  • Maximum weekly PPD rate for injury dates of 3/2/16 to 12/31/16 are increased to $342, and for injury dates of 1/1/17 or later are increased to $362
  • Reduce the statute of limitations for traumatic injuries with a date of injury of March 2, 2016 or later from 12 years to 6 years (please note that the statute of limitations for occupational injuries remains unchanged)
  • Allow apportionment of permanent partial disability for traumatic injuries based on causation (does not apply to occupational injuries). Practitioners (both treating doctors and IME doctors) shall address the issue of causation of the permanency to include a determination of the percentage of permanent disability caused by the work event and the percentage attributable to other factors
  • Minimum PPD ratings will be reviewed and updated every 8 years by a medical advisory committee
  • Eliminate indemnity and death benefits to workers who violate an employer’s drug and alcohol policy if the use of the drugs/alcohol are shown to be the cause of the injury
  • Allow the employer/carrier to deny temporary disability benefits if a worker is brought back to work on light duty while in a healing period and they are subsequently fired due to misconduct or substantial fault (please note that ‘misconduct’ and ‘substantial fault’ are defined in the Unemployment Compensation Act, Wis. Stat. Sec. 108.04)
  • Allow prospective orders for vocational retraining

The Lindner & Marsack Worker’s Compensation Defense Team is presenting more information on this topic at our upcoming half-day Spring Symposium being held on Thursday, March 10, 2016. Please see the 2016 Spring Symposium Invitation flyer for more information on this complimentary seminar. Register today!

Additionally, our Worker’s Compensation Defense Team is offering individualized training for employers and insurance carriers regarding the statutory changes and how they will affect your day-to-day handling of claims. Please contact us for more information or to schedule training.

SAVE THE DATE FOR OUR ANNUAL COMPLIANCE/BEST PRACTICES SEMINAR!

Please mark your calendar for Lindner & Marsack, S.C.’s Annual Compliance/Best Practices Seminar!

WHEN:         April 14, 2016

8:00 a.m. – 12:00 p.m.

WHERE:       Sheraton Milwaukee Brookfield Hotel

375 South Moorland Road

Brookfield, WI

This FREE half-day event will address current topics in labor, employment, benefits & worker’s compensation law and provide employers across industries with practical and creative solutions for addressing their toughest workplace legal challenges.

SESSION TOPICS INCLUDE: 

  • Labor Law Update: Including Recent NLRB Decisions, Right to Work and Collective Bargaining Trends
  • 2016 Employment Law Update
  • FMLA Update – A Best Practices Review
  • The Use of Temporary Workers in 2016 – A Panel Discussion
  • Update on Proposed Wisconsin Worker Compensation Act Reform
  • Winning Strategies in Defending Worker Compensation Cases – How to Avoid Early Mistakes in Investigating Claims

Watch your inbox as well as our Facebook, LinkedIn and Twitter pages for more detailed information about session topics and a link to register for this free seminar.

Lindner & Marsack Successfully Represents Local School District in Federal Court

As labor and employment attorneys, we often sound like broken records in counselling our clients on the importance of documenting the performance deficiencies of poor performing employees. It cannot be overstated how compelling strong and contemporaneous documentation can be to demonstrate the actual reason an employer disciplines, demotes or terminates an employee who is not performing to the employer’s legitimate expectations. A recent lawsuit filed by a former African American principal at the Oak Creek-Franklin Joint School District provides another vivid illustration.

The plaintiff was a previous principal at one of the elementary schools within the school district. Following her removal from her position, she filed a lawsuit in U.S. Court for the Eastern District of Wisconsin claiming that her removal from the district was motivated by her race, as well as in retaliation for her opposing discrimination in the workplace and raising concerns that she claimed were protected by the free speech guarantees of the First Amendment. While the federal district judge dismissed her race discrimination claim prior to trial, her claims of unlawful retaliation under both Title VII and the First Amendment were tried to a jury earlier this week.

At trial, Oyvind Wistrom represented the school district. Using the district’s detailed and contemporaneous documentation of the performance concerns, we were able to successfully show the jury that her complaints of discrimination and protected speech were not the reasons for the principal’s removal. We showed that her removal would have occurred regardless of her complaints and protected speech. After more than two days of testimony, it took the jury less than one hour to determine that the school district was justified in taking the steps it took to remove the principal. The successful defense of this case could not have happened without the testimony of several key district employees and the presence of clear and contemporaneous performance documentation by the school district.

With Same-Sex Marriage Permissible In Many States, Plan Sponsors Should Clarify the Rights Of Affected Children

By: Alan M. Levy and John E. Murray

Two years ago, in United States v. Windsor, the U.S. Supreme Court held that the Defense of Marriage Act (“DOMA”) is unconstitutional in its requirement that “marriage” be defined as restricted to heterosexual couples.  After that, regulations were issued which treated same-sex married couples as entitled to the same federal benefits and rights as opposite-sex couples, such as joint tax returns, classification of dependents for health and retirement benefits governed by federal law, and FMLA rights.  Now, either by legislation or judicial determination, 37 states and the District of Columbia permit the same treatment as the federal rule.

Recently, several ramifications of these rules have become apparent.  For example, if a health plan covers dependents of employees, the child of an employee’s same-sex marriage is a dependent.  Similarly, an employee’s same-sex spouse is entitled to a survivor pension, which includes both payment upon the employee’s death and the requirement of the spouse’s written agreement if the employee declines joint and survivor benefits to maximize the retirement benefit during his/her own lifetime.

Some plans may be able to provide these spousal and dependent benefits under their present language.  Others may require amendments to plan documents and summary plan descriptions.  While some issues about same-sex marriage are scheduled for Supreme Court consideration this term, that case will not affect the federal rules which limit the application of DOMA to ERISA plans.

Plan administrators and fiduciaries are encouraged to review their programs and make all necessary modifications to comply with these rules.  If there are any questions about the rules, existing benefit documents, or practices, please contact Alan Levy or John Murray here at Lindner & Marsack, S.C.  We will be happy to assist you in this activity.

Supreme Court Alters Pregnancy Accommodation Requirements for Employers

By Kristofor L. Hanson

The U.S. Supreme Court on March 25, 2015, issued a decision that alters the landscape for employers under the Pregnancy Discrimination Act (“PDA”).  In the decision, the Court held that employers are now required to assess their ability to accommodate a pregnant employee’s restrictions in a manner consistent with efforts to accommodate other employees under similar restrictions.

The case, Young v. UPS, Inc., No. 12-1226 (March 25, 2015), involved a pregnant UPS employee, Peggy Young, whose pregnancy restricted her lifting to 20 pounds, then again to 10 pounds, as her pregnancy progressed.  Her job required her to lift items as heavy as 70 pounds and to assist in moving packages weighing up to 150 pounds.  UPS had a policy that called for light duty assignments for employees injured on the job, employees with suffering from conditions that qualified as disabilities under the Americans with Disabilities Act, and for those employees who had lost their Department of Transportation license.  Young sought an accommodation similar to those the company had provided for employees with similar restrictions.  UPS said that she was not entitled to an accommodation because pregnancy did not fall within one of the three categories for which it provided accommodations.

The District Court dismissed Young’s case, determining that UPS’s decision complied with the PDA, because Young could not demonstrate that she was “similarly situated” to employees in the three categories for whom UPS provided accommodations: 1) she was not injured on the job; 2) she was not legally restricted from working like those who lost or had suspended their DOT certifications; and 3) she was not disabled under the law.  The 4th Circuit Court of Appeals upheld the District Court’s decision and stated that Young more closely resembled “an employee who injury his back while picking up his infant child or . . . an employee whose lifting limitation arose from her off-the-job work as a volunteer firefighter,” neither of whom would qualify for an accommodation under UPS’s policy.

Young presented facts that showed that UPS was able to accommodate other employees who had lifting restrictions similar to hers.  She also presented evidence that other employees had indicated they were willing to assist her with lifting and moving packages.  In addition, a shop steward testified that UPS had no issues with accommodating employees except when a pregnancy situation arose.

The PDA provides, in relevant part, that employers must treat “women affected by pregnancy . . . the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work.”  The Supreme Court’s analysis determined that this language is intended to provide pregnant women with accommodations provided to other employees who are similarly limited in their work.  Because Young provided evidence that other employees with similar restrictions were regularly accommodated by UPS, the Supreme Court overturned the lower courts and remanded the case.  The District Court will now analyze whether Young presented sufficient evidence to move her case beyond summary judgment under the new standard articulated by the Supreme Court.

The decision places an onus on employers to treat a pregnant employee as they treat other employees who have restrictions similar to the pregnant employee.  Previously, employers were not required to do that.  Rather, employers could limit accommodations as UPS did.  Employers must now analyze pregnant employees’ restrictions on a case-by-case basis to determine whether they are offering accommodations to other employees with like restrictions.  If they are, employers should do the same for pregnant employees.  As the Supreme Court asked, “[W]hen the employer accommodated so many, could it not accommodate pregnant women as well?”  According to the Supreme Court, the answer to that question could very well be, “Yes.”

If you have questions about this material, please contact Kristofor Hanson by email at khanson@lindner-marsack.com or by phone at (414) 273-3910, or any other attorney you have been working with here at Lindner & Marsack, S.C.

Restrictive Covenant Reform Proposed for Wisconsin

On March 5, 2015, Senate Bill 69 (bill) was introduced by Senator Paul Farrow (R-Pewaukee). If passed by the Wisconsin legislature and signed by the Governor, the bill would eliminate the current version of Wisconsin’s restrictive covenant law, Wis. Stat. § 103.465. The statute applies to agreements with employee such as non-competition, non-solicitation and non-disclosure agreements. In its place, the bill would establish a new pro-enforcement stance toward restrictive covenants. Wisconsin has consistently rated among the weakest restrictive covenant enforcement states for some time; by contrast, Illinois is routinely rated among the top pro-enforcement states. The bill would place Wisconsin among the states with the best enforcement statutes, likely in front of Illinois. Specifically, the bill:

  • Clarifies existing Wisconsin law by defining the legitimate business interests that justify a restrictive covenant to include a business’s trade secrets, confidential information, its relationships with existing and prospective customers, its customer, patient, or client goodwill associated with a specific geographic location, and unique, extraordinary, or specialized training provided by business as a result of the employment relationship, among other things.
  • Clarifies that “valid consideration” for a restrictive covenant includes the continuation of an employment relationship.
  • Provides greater clarity regarding the enforceable duration of a restrictive covenant.
  • Authorizes a court to modify an overly broad and otherwise unenforceable restrictive covenant to the extent reasonably necessary to protect an established legitimate business interest. Wisconsin courts do not currently have that right, for the most part, once it finds that a restrictive covenant is overbroad. Under the bill, a court is invited to tailor a reasonable restriction under the facts presented even where the restrictive covenant is overbroad.
  • If the bill is passed by the legislature and signed by the Governor, it would first apply to any restrictive covenant that a business enters into, extends, modifies or renews following the effective date. It would not impact existing restrictive covenants. Accordingly, businesses in the process of updating or rolling out new restrictive covenants for their employees may want to reconsider in light of this bill. Restrictive covenants that are signed between now and the effective date of the new law, if passed, will be considered by Wisconsin courts under the existing law which treats such covenants more harshly than the proposed new law.

Watch for future E*Alerts as this important legislation affecting Wisconsin businesses progresses. If you have questions about the restrictive covenant bills, please contact Daniel Finerty at 414-226-4807, or any other Lindner & Marsack attorney at 414-273-3910.