The NLRB Bears Gifts for Employers - Just in Time for the Holidays

By Elizabeth Coonan

NLRB Rulings Shake Up Previous Standards

On December 16, the National Labor Relations Board (NLRB) issued two decisions which overrule previous standards regarding workplace confidentiality and work email usage for personal communications. We expect employers will see these as welcome changes. Read on for more good cheer.

Apogee Retail LLC d/b/a Unique Thrift Store (Case No. 27-CA-191574)

In the Apogee retail decision issued yesterday, the NLRB examined two written rules disseminated by the employer – one which required employees to “maintain confidentiality” regarding workplace investigations into illegal or unethical behavior and the other prohibiting “unauthorized discussion” of investigations or interviews with other employees. Previous guidance on this issue demanded a case-by-case determination on whether confidentiality could be required for a specific investigation (Banner Estrella Medical Center, 362 NLRB 1108 (2015)). The Banner decision was overruled by the NLRB, and going forward, the Board is adopting the facially neutral test in Boeing Co. (365 NLRB No. 154 (2017)).

This facially neutral test permits investigation-related confidentiality rules if confidentiality obligations apply for the duration of the investigation. To the extent that there is no time limit on the confidentiality provisions, then a case-by-case analysis is required of any post-investigation adverse impact on NLRA-protected conduct. In short, such investigation-related confidentiality provisions should be narrowly tailored to ensure employers can take full advantage of the new ruling.

Caesars Entertainment Corporation d/b/a Rio All-Suites Hotel and Casino (Case No. 28-CA-060841)

The issue before the NLRB in this case centered on whether employees were permitted to use email and IT resources for the purpose of engaging in personal activities protected by Section 7 of the NLRA – specifically those activities involving labor organizations, collective bargaining groups, and the like. The NLRB reviewed “decades” of board precedent and came to the conclusion that the precedent of allowing employees to utilize employer-owned equipment for non-work purposes violated the Supreme Court’s view that an employer’s organizational rights are akin to property rights. This decision returns to the standard that “employees have no statutory right” to use employer equipment, including IT resources, for Section 7 purposes. However, the NLRB did carve out an exception for the rare cases where an employer’s email system is the only means for employees to communicate with one another.  

It looks like it is time once again to start amending those handbook policies.

For more information, contact Beth Coonan and Caitlin Klingenberg at coonan@brownwinick.com and klingenberg@brownwinick.com, or another member of BrownWinick’s Employment Law Practice Group.

Waterloo Bans the Box - Other Employers Need to Think Outside It

By Ann Kendell

On a final vote November 4, 2019, the Waterloo City Council narrowly passed a city ordinance intended to help people with criminal histories find jobs by reducing the effect of the stigma of an arrest or conviction. The “Fair Chance Initiative” goes into effect on July 1, 2020. These types of measures, commonly called “ban the box” initiatives, seek to require employers to consider a candidate’s qualifications before learning of a criminal past. Waterloo is the first city in Iowa to pass an ordinance of this kind, and will join more than 150 other cities in the country in “banning the box.”

Specifically, the Waterloo ordinance prevents the city and all private employers from having a question about criminal records on job applications, while those employing 15 or more workers are not allowed to ask about criminal records until making a conditional job offer. Employers can still conduct criminal background checks and can rescind job offers for legitimate business reasons.

A violation of the ordinance may subject an employer to a fine payable to the candidate, but the ordinance does not create a private right of action – so the candidate cannot sue the employer for other monetary damages under this law. However, the employer could be subject to other state and federal employment laws that may create liability for failing to hire.

In 2012, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued enforcement guidance regarding the regarding the use of arrest or conviction records in employment decisions. The concern was using arrest or conviction records in employment decisions may have a disparate impact on race and national origin. The EEOC’s guidance referenced a case in the United States Court of Appeals for the Eighth Circuit, Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975). The Eighth Circuit is the appellate court for Iowa’s federal courts. In Green, the Eighth Circuit held that it was discriminatory under Title VII for an employer to follow “the policy of disqualifying for employment any applicant with a conviction for any crime other than a minor traffic offense." In a second appeal to the Eighth Circuit, Green v. Missouri Pacific Railroad Company, 549 F.2d 1158 (8th Cir. 1977), the Court upheld the lower court's injunction prohibiting the employer from using an applicant's conviction record as an absolute bar to employment, but allowed the employer to consider a prior criminal record as a factor in making individual hiring decisions, as long as the these three factors were taken into account: 

• The nature and gravity of the offense or conduct;
• The time that has passed since the offense or conduct and/or completion of the sentence; and
• The nature of the job held or sought.

Employers should use the "Green factors" to assess whether considering a prior criminal record to exclude a candidate is job-related for the position in question and consistent with business necessity. Therefore, even if you are not in Waterloo, Iowa, employers should still consider whether any hiring practices have a disparate impact based upon protected characteristics.

• Do advertised lifting requirements match reality or are we unnecessarily screening out women and people with disabilities? 
• Do employees need to have a high school diploma or are we unnecessarily screening out people based upon race and disability status?
• Are your hiring requirements related to the job in question and consistent with business necessity?

If you have questions about hiring practices, please contact Ann Holden Kendell or any of our Employment & Labor Law Practice Group members for more information.

Additional Information

Waterloo City Ordinance

EEOC Guidance - Arrest & Conviction Records

Another Final Rule from the DOL Regarding the FLSA – Effective January 15, 2020

By Ann Kendell

Previously, the U.S. Department of Labor released its Final Rule on September 24, 2019, updating the earnings requirements for exempt employees under the Fair Labor Standards Act ("FLSA"). Please see prior blog post: http://www.workplacewise.com/2019/09/dols-new-overtime-rule-released.html#links

Now, the DOL has published another Final Rule (on 12/16/19) that may impact how overtime is determined for non-exempt (hourly) employees. Overtime pay is at least one and one-half times the regular rate for hours worked in excess of 40 hours per workweek. What is the regular rate?  Hidden dangers abound in figuring regular rate of pay. For example, production bonuses provided at the end of the year should be included in the regular rate of pay for employees during the time frame in which the production bonus was earned, AND for all overtime hours paid – the employer needs to pay the additional overtime premium on the new rate of pay (with the production bonus factored in). What about other types of perks?

This Final Rule attempts to “provide clarity that allows employers to provide more benefits to their employees without unknown overtime consequences or litigation, and better reflect the 21st-century workplace.” The DOL confirms that employers may exclude the following from an employee’s regular rate of pay (i.e., not have to pay overtime on these benefits):

• the cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance;
• payments for unused paid leave, including paid sick leave or paid time off;
• payments of certain penalties required under state and local scheduling laws;
• reimbursed expenses including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit; and clarifies that reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”;
• certain sign-on bonuses and certain longevity bonuses;
• the cost of office coffee and snacks to employees as gifts;
• discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples) and
• contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

BUT, beware of the bonus issue. As has always been the case, simply calling a bonus “discretionary” does not actually make a bonus discretionary and excluded from the regular rate.

The Final Rule also eliminates the restriction that “call-back” pay and other payments similar to call-back pay must be “infrequent and sporadic” to be excludable from an employee’s regular rate, while still requiring that such payments must not be prearranged. The DOL also updated its regulations on “basic rate”, which is authorized under section 7(g)(3) of the FLSA as an alternative to the regular rate under specific circumstances.

If you have questions about how the new rule may impact your business, please contact Ann Holden Kendell or any of our Employment & Labor Law Practice Group members for more information.

Additional Information

DOL Announcement: https://www.dol.gov/agencies/whd/overtime/2019-regular-rate

DOL Fact Sheet: https://www.dol.gov/agencies/whd/fact-sheets/regular-rate

DOL FAQS: https://www.dol.gov/agencies/whd/overtime/2019-regular-rate/faqs

FINAL RULE: https://www.federalregister.gov/documents/2019/12/16/2019-26447/regular-rate-under-the-fair-labor-standards-act

Electronic H-1B Lottery for FY2021 Announced

By Elizabeth Coonan and Caitlin Klingenberg

In an effort to streamline processes, U. S. Citizenship and Immigration Services (USCIS) announced on December 6, 2019 that it will be implementing an electronic registration process for the lottery selection of H-1B cap subject petitions. Under the new process,

employers seeking H-1B workers will complete a registration process to determine lottery selection, prior to preparing full petition documents. The registration period will run from March 1 to 20, 2020. The timeframe associated with notification of lottery selection is unclear, but we know that candidates selected in the lottery may begin to file their petitions on April 1, 2020.

Lottery System

By way of background, among the employer-sponsored visas available, the lottery system is unique to the H-1B visa. USCIS only conducts a lottery to determine which petitions will be granted if more petitions are received than the number of visas permitted under the statutory cap.  Currently, the cap is set to allow 65,000 beneficiaries through the general category and another 20,000 for individuals holding advanced degrees (i.e., masters or doctorate degrees). With approximately 200,000 petitions having been filed last year for a total of 85,000 slots, we can expect a lottery again this year.  

New Registration Tool

The new online registration process only requires basic information about the company and each requested worker, such as name and address of the company, contact information for an authorized signatory of the company, and name, degree level, and passport information of the beneficiary. USCIS is imposing a fee of $10/registration. USCIS has also indicated the possibility of suspending the registration for technical difficulties if their system crashes.  

Implications and Considerations

While the new registration system will undoubtedly result in cost savings for employers, it is critical to evaluate the employee’s qualifications in conjunction with the legal standards before committing to sponsorship. BrownWinick immigration attorneys Elizabeth Coonan and Caitlin Klingenberg stand ready and able to help you navigate the process. Contact us at coonan@brownwinick.com and klingenberg@brownwinick.com.