Category Archives: Uncategorized

Wisconsin’s Right to Work Law Upheld

By: Thomas W. Mackenzie and Kristofor L. Hanson

In a decision issued September 19, 2017, the Wisconsin Court of Appeals upheld as constitutional Wisconsin’s so-called “Right to Work” law (Act 1), which outlawed mandatory union membership as a condition of employment.

Prior to the law becoming effective on March 11, 2015, the International Association of Machinists District 10, the United Steelworkers District 2, and the Wisconsin AFL-CIO filed an action in Dane County challenging the constitutionality of Act 1.  The Unions’ theory was that because unions are required to fairly represent all employees covered by a collective bargaining agreement, a law prohibiting unions from receiving just compensation for those services constitutes an unlawful “taking” under the Wisconsin constitution.  Dane County Circuit Court Judge C. William Foust agreed with the Unions, concluding that requiring Unions to represent non-members without compensation constituted a “taking” and threatened the Unions’ “very economic viability.”

The State Attorney General’s Office appealed Judge Foust’s decision to the Wisconsin Court of Appeals. The Court of Appeals reversed Judge Foust’s decision, concluding that Unions have no constitutional entitlement to the fees of non-members.  The Court found that Act 1 did not preclude Unions from receiving just compensation for the services provided to non-members; it merely precluded the Union from collecting those fees from the non-members themselves.  In other words, Unions will have to look to other sources (e.g. union members) to fund the duty of fair representation owed to members and non-members alike.

The Court’s decision is not surprising.  Wisconsin became the 25th state with a “Right to Work” statute.  That number has climbed to 28 states since Wisconsin’s enactment of the law.  These provisions have withstood similar constitutional challenges in other forums.  The Unions have the right to appeal to the Wisconsin Supreme Court but, given the current composition of that Court, success will be hard to find.

To view the Court of Appeals decision clicks here.

 

DOL WITHDRAWS JOINT EMPLOYER AND INDEPENDENT CONTRACTOR GUIDANCE

By:  Samantha J. Wood

On Wednesday, June 7, 2017 the U.S. Department of Labor (“DOL”) withdrew its 2015 and 2016 informal guidance letters regarding independent contractors and joint employment, which had been issued by the prior administration.

The DOL’s first guidance letter, which was issued in July 2015 and reiterated the DOL’s focus on misclassification of employees as independent contractors, was borne out of a concern that too many employers were misclassifying workers to avoid certain labor costs. In this guidance, the DOL narrowly interpreted the definition of independent contractor, focusing on the economic dependence of the worker, and downplaying the traditionally-used control test. The DOL stated that employers should consider and weigh the following factors: (1) the extent to which the work performed is an integral part of the employer’s business; (2) the worker’s opportunity for profit or loss depending on his/her managerial skill; (3) the extent of the relative investments of the employer and the worker; (4) whether the work performed requires special skills and initiative; (5) the permanency of the relationship; and (6) the degree of control exercised or retained by the employer. Minimizing the control factor, the DOL stated that all of the factors should be considered and weighed together in each case, and that no one factor, such as the control factor, should be given undue weight. The DOL advised employers that under this analysis most workers should be classified as employees rather than independent contractors.

The DOL’s second guidance letter, issued in January 2016, took an expansive view in determining joint employment under the Fair Labor Standards Act (FLSA). The DOL differentiated between “horizontal” and “vertical” joint employment, and provided guidance on analyzing each type. The DOL stated that in determining whether horizontal joint employment exists (which analyzes whether two employers are sufficiently related and benefit from an employee’s work), employers should consider factors such as: (1) ownership of the employers; (2) overlapping officers, directors and managers; (3) shared control over operations; and (4) shared supervisory authority of employees. In determining whether vertical joint employment exists (which analyzes the employee’s relationship with the indirect employer and the intermediary employer), employers should consider the “economic dependence” between the employee and the two employers.

The DOL’s withdrawal of its July 2015 and January 2016 guidance letters signifies that, under the new administration, the DOL intends to take a more business-friendly approach in analyzing employer-employee relationships. However, the DOL has stated that the withdrawal of the two guidance letters “does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.” While the DOL may return to the traditional control tests under both the independent contractor and joint employment analyses, the full implication of the DOL’s withdrawals is unclear. Accordingly, until the DOL issues further guidance, employers should continue to consider all relevant factors in determining whether a worker is an employee or an independent contractor and in determining whether a joint employment relationship exists.

If you have questions about this material, please contact Samantha J. Wood by email at swood@lindner-marsack.com, or any other attorney you have been working with here at Lindner & Marsack, S.C.

Register Now! Annual Compliance/Best Practices Update

Registration and a continental breakfast will be served beginning at 7:30 a.m.  Click here to register.

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

THE SUPREME COURT DENIES ERISA PLAN’S RIGHT TO REIMBURSEMENT

February 10, 2016

By: Jenna K. Leslie

On January 20, 2016, the U.S. Supreme Court decided that a self-funded ERISA plan could not seek reimbursement for health insurance benefits from a participant who prevailed in a lawsuit against a third party if the settlement or award had been spent or comingled into the participant’s general assets.

In Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, Montanile was a participant of a self-funded group health plan. The plan paid Montanile’s medical expenses following a motor vehicle accident. Montanile signed a reimbursement agreement confirming his obligation to reimburse the plan from any third party recovery.

After negotiating a $500,000 settlement, the participant’s attorney attempted to contact the plan with an offer. The offer gave the plan 14 days to respond. When the plan did not respond, Montanile’s attorney released the settlement funds to him.

Six months later, the plan sued Montanile seeking repayment of their lien for the payment of medical expenses on his behalf. The plan asked the District Court to enforce an equitable lien on any settlement funds or any other property in the Montanile’s possession. Montanile argued that because the settlement funds had been spent or comingled with other assets, enforcing a lien against his general assets was not “equitable relief” which the plan could pursue.

The U.S. Supreme Court agreed, ruling that a self-funded ERISA plan could not make a claim against a participant’s general assets. The Court emphasized that the plan’s remedy was limited to equitable relief under ERISA, which does not include recovery against a participant’s general assets. The plan could only recover from identifiable settlement funds within the participant’s possession and control.

The Montanile decision is significant for employers who sponsor self-funded ERISA plans because it demonstrates the difficulty of plans to recover payments. Employers should review the language of their ERISA plans to ensure that the plans allow them to recover reimbursement of medical expenses. Employers should insist the participant sign a reimbursement agreement, which includes specific language regarding the participant’s obligation to obtain the written consent of the plan before the release of any settlement funds. In addition, the plan’s administrative staff should be trained and monitored to assure their timely response to any notice of a settlement or its distribution.

If you have questions about this material, please contact Jenna K. Leslie by email at jleslie@lindner-marsack.com or any other attorney with whom you have been working here at Lindner & Marsack, S.C.

2015 Kids’ Chance of Wisconsin Golf Outing

PLEASE JOIN US FOR
THE 3RD ANNUAL KIDS’ CHANCE OF WISCONSIN
GOLF OUTING 

Lindner & Marsack’s worker’s compensation defense practice is well recognized as an industry leader in providing work injury defense services to many of Wisconsin’s largest employers and insurance carriers.

Doug Feldman heads the Firm’s highly regarded work injury defense team and is a founding Board Member and current President of Kids’ Chance of Wisconsin. Kids’ Chance is a non-profit organization that provides scholarships to children of seriously injured workers in Wisconsin.

Kids’ Chance of Wisconsin’s 3rd annual charity golf outing will be held on Friday August 21, 2015 at the Oaks Golf Course. Funds raised at the event will directly support the Kids’ Chance mission of providing financial support, in the form of scholarships, to children of parents who have been seriously injured at work.

If you are interested in attending or sponsoring this event, click here for more information, Kids’ Chance of Wisconsin – Golf Outing.

Lindner & Marsack owes much of its success to its good friends and clients in Wisconsin and is proud to be able to support this worthy endeavor and give back to the community in such a meaningful way. We hope you will consider sponsoring a hole or joining us for this entertaining event.

 

Understanding How the New NLRB Election Rules Affect Your Organization

By:  Jonathan T. Swain

Beginning April 14, 2015, the new NLRB election rules will take effect.  They promise to have a profound effect upon an NLRB election process that has remained relatively unchanged for the last 75 years.

If unions are able to take advantage of these new rules, which are designed to expedite the election process, they may be able to engineer the first successful resurgence in organizing in our time.  Those who say organized labor is on its last legs may be proven right, but these new rules are designed to give union organizing a renewed spring to its step.

If these new rules are designed to make union organizing easier, are there steps that employers can take to increase their odds of remaining union-free?  The answer is yes!  Here’s how:

It’s all about the calendars

Under the old rules employers had about six (6) weeks (39 days on average) from petition to vote to respond to an organizing effort.  Since employers enjoy broad free speech rights to lawfully discuss the issue of unionization during this time, the facts are that once fully informed of what it means to be in a union, how bargaining really works, the costs of union membership and loss of their workplace independence, employees often rejected the union’s solicitations.  Since unions and the NLRB can’t silence free speech with new laws or regulations, the one thing they can do is limit its opportunity.

Therefore, the new regulations seek to shorten the time from petition to election, to a two (2) to three (3) week period, instead of the current six (6) weeks.

This will act to substantially limit the opportunity for the traditional employer communications, including factual handouts, informational meetings, questions and answers and a review of the union’s record.

What do the new rules provide for?

  • Expedited pre-election hearings.
  • Pre-hearing employer position statements in which the employer waives any issues not raised one day before the hearing.
  • Delaying voter eligibility questions until after the vote.
  • Expanded employee information provided to unions, including employee email addresses and phone numbers, if known.
  • Greater NLRB control over the place, date and time of the election.

What can a proactive employer do?

As we know, if a union can get at least thirty percent (30%) of the employees to sign authorization cards [it almost always waits until it has over sixty percent (60%)] it can petition for an election. The key is to act now to make a union unnecessary to your employees, while at the same time taking advance steps to prepare for a drive should it come.

What to do?

  1. Review your handbooks, rules, policies and overall employee relations approach. Are they lawful, fair and understandable? Do employees have an outlet for complaints and problem-solving? Will your rules and policies pass muster with the NLRB?
  2. Train, train, train. The best defense against employee dissatisfaction is well trained supervisors and managers. If they are good managers and leaders of people, employees will follow, as will organizational success.
  3. Vulnerability assessment. Review not only policies and managers, but how employees view your organization on a variety of fronts, such as wages, benefits, communications and the like. Employees want to feel a part of their organization.
  4. Action plan. Just as you have a disaster response plan for fires, severe weather or civil unrest, have one for the union drive. Be ready to respond immediately and have a broader plan ready to put into action. Be sure to have it preapproved by labor counsel.  The old motto of “be prepared” certainly applies and the employers that take it to heart will continue to be in the best position possible to avoid a union’s efforts to organize its employees.

The old motto of “be prepared” certainly applies and the employers that take it to heart will continue to be in the best position possible to avoid a union’s efforts to organize its employees.

 

 

WHY NOEL CANNING MATTERS

By:  Thomas W. Mackenzie

Last Thursday’s decision by the U.S. Supreme Court invalidating three of President Barack Obama’s recess appointments to the National Labor Relations Board throws into question hundreds of Board decisions issued between the recess appointments made in January, 2012 and July, 2013 when the current five member Board was lawfully confirmed by the Senate. The impact of this decision is three fold.

First, the current composition of the NLRB, three Democrats and two Republicans, will now have to revisit and issue new decisions on hundreds of cases that were decided by the invalidated recess-appointed NLRB which existed for eighteen months. The term of Democrat Nancy Schiffer is due to expire on December 16. Her departure could set up a two to two split between the NLRB’s Republican and Democratic members and create a significant hurdle for the changes envisioned by the Obama administration’s commitment to organized labor. If the Republicans win control of the Senate in the upcoming November elections, they could vote against confirming a new Board member, making significant change unlikely for the balance of President Obama’s term unless that change occurs in the next six months.

Second, the Supreme Court’s decision will likely result in significant delay for employers with cases currently waiting for decision by the Board. The NLRB will have to prioritize its goals and objectives over the next six months. Lindner & Marsack is currently representing employers with cases pending decision before the NLRB. If those cases do not fit the profile which the Democratically controlled majority deem to be a priority, delay into 2015 and beyond is likely. Assuming the Republicans regain control of the Senate, such delay may not be unwelcomed.

Third, logic tells you that the three Democratic Board members, all of whom represented organized labor as practicing lawyers, will likely rubberstamp the decisions of the invalidated Board members. However, sometimes logic falls when confronted by human behavior. It is fair game to question whether the new NLRB can resist the opportunity to put its own fingerprints on some of the prominent decisions that were issued by the invalidated Board. These cases would include the Gannett Co., Inc. decision, which overturned 50 years of precedent and held that employers must continue to maintain dues checkoff provisions requiring the automatic deduction of union dues from employee paychecks even after a collective bargaining agreement has expired. Piedmont Gardens overturned a rule dating back to 1978 that protected the confidentiality of witness statements taken during an employer’s internal investigation into alleged employee wrongdoing. The invalidated NLRB ruled that a blanket exception from releasing these statements to the union upon request no longer existed and instead the employer was required to conduct a balancing test that precluded giving witnesses a guarantee of confidentiality. In Banner Health, the invalidated Board found that an employer violated the law by maintaining a policy prohibiting employees from discussing ongoing investigations into potential misconduct including sexual harassment allegations. This decision, which affects all employers whether unionized or not, again precludes employers from giving a commitment of confidentiality in its investigation. Finally, it is unlikely that the current Board will refrain from casting its own view on the social media cases decided by the invalidated Board. These include the Costco decision (company’s prohibition on disparaging the employer or its employees on social media was unlawful) and Hispanics United of Buffalo (terminations of five employees who responded on Facebook to a coworker’s criticism of their job performance were deemed to be unlawful).

The grand promises by the Obama administration to organized labor have not been fulfilled. “Card check,” whereby an employer could have been obligated to recognize a union as the authorized representative of its employees without a secret ballot election, is dead. Moreover, almost six years into the Obama presidency organized labor has yet to see changes designed to speed up the election process or to provide enhanced access to the company’s email system for union organizing purposes. Although it is not inconceivable that the current NLRB will attempt to fulfill some of these commitments, the Supreme Court’s decision has made that objective more difficult.

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.