Second Appeals Court Strikes NLRB Union Poster Rule

The U.S. Circuit Court of Appeals for the Fourth Circuit rejected a National Labor Relations Board (NLRB) rule requiring most companies to post a notice informing employees of their union rights. The court held that the posting requirement is unenforceable. This is the second federal appellate court to invalidate the requirement in the past two months.

The controversial poster rule required most private-sector employers to put up an NLRB-created workplace poster entitled, “Employee Rights Under the National Labor Relations Act.” The poster generally informs employees of their rights to organize a union, bargain collectively through representatives chosen by the employees and make efforts to improve the terms and conditions of their employment.

The posting requirement was initially scheduled for implementation in November of 2011. That deadline was first delayed until April 30, 2012, and then put on hold indefinitely pending the outcome of legal challenges.

This challenge was brought by the U.S. Chamber of Commerce and the local South Carolina Chamber of Commerce. The Fourth Circuit’s decision directly questions the NLRB’s rulemaking authority.

The case is Chamber of Commerce v. National Labor Relations Board, 12-01757, U.S. Court of Appeals for the Fourth Circuit.

No Power to Require a Poster

The Fourth Circuit ruled that there was nothing in the National Labor Relations Act (NLRA) that gave the NLRB power to require the posting of notices. Although Congress gave other agencies, such as the Department of Labor, the explicit power to require notices, it never granted the NLRB power to do so.

“Had Congress intended to grant the NLRB the power to require the posting of employee rights notices, it could have amended the NLRA to do so,” U.S. Circuit Judge Allyson Duncan wrote for the Fourth Circuit.

No “Carte Blanche” Authority

The Fourth Circuit also ruled that the NLRB’s powers are limited to reacting to unfair labor practices and conducting representation elections upon request — the NLRB does not have proactive rulemaking powers.

“We agree with the district court that the rulemaking function provided for in the NLRA, by its express terms, only empowers the board to carry out its statutorily defined reactive roles in addressing unfair labor practice charges and conducting representation elections upon request,” the Fourth Circuit said. “Indeed, there is no function or responsibility of the board not predicated upon the filing of an unfair labor practice charge or a representation petition.”

The U.S. Chamber of Commerce’s Chief Counsel for Regulatory Litigation, Rachel Brand, told Thomson Reuters that the U.S. Chamber was pleased with the result and the court’s reasoning.

“The board has a reactive authority, not a carte blanche regulatory authority,” Brand said.

D.C. Circuit Rejected Poster on Free Speech Grounds

Last month, the D.C. Circuit also struck down the poster rule. The D.C. Circuit reasoned that the rule violated free speech rights. Judge Raymond Randolph noted that federal law protects “the rights of employers (and unions) not to speak” and that the poster rule was “compelled speech.”

The D.C. Circuit did not reach the issue of the NLRB’s rulemaking authority.

The NLRB has statutory jurisdiction over private sector employers whose activity in interstate commerce exceeds a minimal level.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

DWC Updates Status of SB 863 Emergency Regulations

In 2012, the state Legislature passed workers’ compensation reform legislation (SB 863), which was ultimately signed into law by Governor Brown.

On January 1, 2013, six sets of emergency regulations that implement SB 863 became effective. Those regulations remain in effect until July 2, 2013, and then expire unless the Division of Workers’ Compensation (DWC) files a certificate of compliance with the Office of Administrative Law (OAL) by 5 p.m. on July 1, 2013, or requests a re-adoption of the emergency regulations.

The DWC issued notices of emergency re-adoptions and requests for re-adoption for all six sets of emergency regulations:

• Supplemental job displacement benefit vouchers
• Interpreter services
• Qualified medical evaluator regulations
• Independent medical review; independent bill review; and lien filing fee regulations

If granted, the regulations will remain in effect until Oct. 1, 2013, unless another 90-day re-adoption is requested. The DWC prepared a timeline of the SB 863 regulatory process, which also includes links to the regulations.

CalChamber will continue to keep you informed as information is released by DWC and other state agencies regarding the ongoing regulatory process.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Big Week for Small Business

This week (June 17 to June 21, 2013) is National Small Business Week. The United States has 28 million small businesses. Every year since 1963, the president of the United States has issued a proclamation announcing small business week. 

The president’s proclamation states: “Small businesses have always been the backbone of our economy, and we know that the success of America’s small businesses is critical to growing our economy and increasing our nation’s global competitiveness.”

According to the U.S. Small Business Administration (SBA), more than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year. The SBA scheduled a series of events celebrating this week – all of which can be watched online at at www.sba.gov/smallbusinessweek. 

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Small businesses may benefit from the HR Handbook for California Employers. Our California-specific handbook’s Q&A format helps you quickly grasp key issues related to important HR areas, such as hiring, benefits, compensation, workplace safety and termination.

This guide to California employment laws is designed to help you develop solid HR practices and also offers required and recommended forms. It is ideal for smaller businesses and staff new to HR.

Just Six “Job Killer” Bills Remain Alive

In April 2013, the California Chamber of Commerce identified 37 total “job killer” bills. In June, CalChamber announced that only six job killer bills remained active – four Senate bills and two Assembly bills remain active. 

Although one can never really be sure that “job killer” legislation has been completely stopped until the end-of-session gavel comes down in September, we have seen a good dose of legislative responsiveness to CalChamber’s arguments on “job killers.”

Inactive Employment Related Job Killers
These employment related job killers are no longer active in this legislative session:

• SB 761 (DeSaulnier; D-Concord) Paid Family Leave Protection — Would have created a new burden on small businesses and additional opportunities for frivolous litigation by transforming the paid family leave program, which is used as a wage replacement for an employee who is taking a separate leave of absence, into an additional paid protected leave.
• SB 626 (Beall; D-San Jose) — Would have severely undercut the workers’ compensation reform deal agreed to by labor unions and employers. The bill proposed dramatic cost increases for California employers and would have left them worse off than before the reforms of last year were enacted. 
• AB 5 (Ammiano; D-San Francisco) Increased Exposure to Frivolous Litigation — Would have imposed costly and unreasonable mandates on employers that could have jeopardized the health and safety of others by creating a new protected classification of employees and customers who are or are perceived to be homeless, low income, suffering from a mental disability, or physical disability, and establishing a private right of action for such individuals that includes statutory damages, punitive damages, and attorney’s fees.
• AB 1138 (Chau; D-Alhambra) Massive Exposure to Civil Penalties and Liability — Would have inappropriately increased civil cases and civil penalties on employers by permitting civil action against those employers who fail to conspicuously post a list of every employee covered under an employer’s workers’ compensation insurance policy and to retain this list for five years. 

Active Employment Related Job Killers
Several employment related bills are among the six active job killer bills:

• AB 10 (Alejo; D-Salinas) Automatic Minimum Wage Increase — Unfairly increases California employers’ cost of doing business by raising the minimum wage $1.25 over the next three years and thereafter indexing the minimum wage based on inflation, which fails to take into account the current economic status of the state or other fees and costs employers are required to pay. AB 10 is scheduled for a policy hearing in Senate Industrial Relations Committee on June 26th.
• AB 880 (Gomez; D-Los Angeles) ­— Would require the state’s largest employers to pay a penalty for each worker who opts to enroll in the state’s MediCal program. The bill impacts a wide range of industries, including large non profits, all of which would be hit hard with new significant financial penalties related to health care coverage for their workforce. Because of the urgency clause, AB 880 remains active on the Assembly Floor.
• SB 404 (Jackson; D-Santa Barbara) Expansion of Discrimination Litigation — Makes it virtually impossible for employers to manage their employees and exposes them to a higher risk of litigation by expanding the Fair Employment and Housing Act to include a protected classification for any person who is, perceived, or associated with an individual that provides medical or supervisor care to a family member.

One employment-related bill, SB 556, is no longer considered a job killer, but CalChamber is still opposed to the bill. Prior to the amendments, SB 556 would have unfairly imposed liability on any contracting entity for the damages caused by the contractor or contractor’s employees, including wage and hour violations, penalties, fines, and willful misconduct, solely on the basis that the contractor or its employees wore a uniform similar to that of the contracting entity or drove a vehicle with the contracting entity’s logo.

Other Active Employment Related Bills
A handful of employment-related bills are still active, and these bills would have a significant impact on employers:

• AB 263 (Hernandez; D-West Covina) Unfair Immigration Practices ­—This bill seeks to preclude employers from engaging in unfair immigration practices, which is defined to mean requesting more information than necessary to complete an I-9 form, utilizing the E-Verify system to check employment eligibility when not required by law, threatening to file a false police report, or threatening to contact immigration authorities, by permanently revoking all business licenses if there are four instances of unfair immigration practices. 
• AB 729 (Hernandez; D-West Covina): Union-Agent Evidentiary Privilege —This bill seeks to create a new evidentiary privilege to preclude any evidence being offered regarding the confidential communications between a union representative and an employee when the union agent is acting within his/her representational capacity. 
• AB 1383 (Asm. Committee) Local Police Powers — This bill would allow localities to impose more stringent labor standards than those currently required in the Labor Code. Essentially, this bill opens up the entire Labor Code to local authorities for purposes of imposing higher standards and penalties. Currently, only such items as minimum wage are subject to a higher rate under local police powers. 
• SB 400 (Jackson; D-Santa Barbara) Victims of Domestic Violence — This bill precludes employers from knowingly discriminating against employees who are victims of domestic violence, stalking, and harassment, and also imposes a duty to accommodate employees who are victims of such crimes. The bill also creates a private right of action with the opportunity for employee-only attorney’s fees, thereby creating an avenue for potential frivolous litigation. 
• SB 691 (Hancock; D-Berkeley) Dramatically Increases Pollution Penalties — Dramatically increases existing strict-liability penalties for nuisance-based, non-vehicular air-quality violations, and expands applicability of those penalties to a wide range of businesses previously not subject to the penalties without adequately defining what types and levels of pollution would trigger those penalties.

Jennifer Barrera, CalChamber Policy Advocate

Unpaid “Black Swan” Interns Entitled to Wages

An Oscar-winning movie was the backdrop for a recent federal court decision that serves as a strong caution for employers. A federal court ruled that two unpaid production interns on the set of the movie “Black Swan” actually “worked as paid employees” and were misclassified as unpaid interns.

The complaint was filed by Eric Glatt and Alex Footman, and alleged violations of federal and New York wage and hour laws. “Fox Searchlight’s unpaid interns are a crucial labor force on its productions, functioning as production assistants and bookkeepers and performing secretarial and janitorial work,” the interns stated in their complaint. Fox Searchlight “has been able to reduce its film production costs by employing a steady stream of unpaid interns.”

The court ruled that the workers were not bona fide interns, but actually employees performing the same types of tasks that paid production assistants performed. The court looked at a variety of factors to find that the workers were not interns:

• There was no internship experience structured to benefit them. Although the two production workers received some benefits, such as resume listings, job references and an understanding of how a production office works, these benefits were the same as any other employee would obtain and were not the result of an internship intentionally structured for their benefit  
• The workers did not receive any formal training or education during the internship
• The workers performed basic administrative tasks that would have been performed by regular employees, such as filing, taking lunch orders, removing garbage and running errands

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Do you have unpaid “interns” working for you this summer? HRCalifornia subscribers can turn to the HR Library’s Interns page and this easy to follow Q&A for guidance. Not a subscriber? Start a Free Trial now.

“Job Killer” Bill Increases Discrimination Litigation, Imposes New Penalties

A California Chamber of Commerce-opposed “job killer” bill that requires the state’s largest employers to pay a penalty for each worker who opts to enroll in the state’s Medi-Cal program will be considered by the Assembly this week.

AB 880 (Gomez; D-Los Angeles) increases health care costs and increases discrimination litigation by assessing large employers a penalty if any of their employees who work as little as eight hours per week enroll in California’s Medi-Cal program.

The bill also expands the Labor Code to include a protected classification for any person who is enrolled in California’s Medi-Cal program or in the California Health Benefit Exchange. Because of the urgency clause, AB 880 remains active on the Assembly Floor.

The bill affects a wide range of industries, including large nonprofits, all of which would be hit hard with new significant financial penalties related to health care coverage for their workforce.

Visit CalChamber.com for complete coverage.

2014 Health Savings Accounts and Flexible Spending Limits Announced

Health Savings Accounts (HSA) are pre-tax accounts available to individuals who are covered under a high-deductible health plan. Eligible individuals can accumulate money, tax-free, in HSAs to pay for qualified medical expenses in the face of rising health insurance costs.

The IRS announced higher limits for HSA contributions for 2014. To participate in an HSA, the policyholder must, among other requirements, be enrolled in an HSA-qualified high-deductible health plan with a minimum annual deductible.

For calendar year 2014, a high deductible health plan is defined as a health plan with an annual deductible that is not less than $1,250 for self-only coverage or $2,500 for family coverage. This is unchanged from 2013. However, the maximum annual out-of-pocket expenses (deductibles, co-payments and other amounts — but not premiums) have increased. 

For 2014, the maximum out-of pocket amounts cannot exceed $6,350 for self-only coverage or $12,700 for family coverage — a change from the 2013 out-of-pocket maximums of $6,250 (self-only) and $12,500 (family).

The annual maximum HSA contribution for 2014 is:

• $3,300 for individuals with self-only coverage (an increase of $50 from 2013)
• $6,550 for family coverage (an increase of $100 from 2013)

For more information, visit the IRS website. 

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

CalChamber Helps Explain Federal Health Care Law

The CalChamber has produced and helped distribute a series of videos to explain important aspects of the federal Affordable Care Act (ACA) for businesses, particularly smaller operations. Even as health care plans gear up to begin enrolling people this fall to be covered in 2014; many questions remain about how the law will work.

The third video we produced (in cooperation with The California Endowment) explains how Covered California, the state’s online insurance marketplace, will work.

Business-specific provisions of the ACA are explained at HealthLawGuideforBusiness.org, a website developed by The California Endowment with support from business partners, including the CalChamber.

Webinars
We also are planning a webinar series to explain key employer provisions of the federal law. First up is the “Strategies for Employer Compliance Under the Affordable Care Act” webinar, set for Thursday, June 20. The CalChamber will moderate a 90-minute presentation by experts from Groom Law Group, a Washington, D.C.-based firm. The webinars are free to CalChamber members.

The second webinar is scheduled for August 1; Moss Adams LLP will discuss the ACA’s tax implications. Finally, the third webinar is scheduled for August 15; Wells Fargo Benefits has partnered with CalChamber to discuss employee benefits related to the ACA.

Too Hot To Handle

Many parts of California are already baking in a pre-summer heat wave, and it’s probably going to get worse since summer is set to “officially” start on June 21.

In mid-May, the Los Angeles Times reported that temperatures in some parts of Southern California shattered longstanding records: 105 degrees in Lake Elisnore, breaking a record that stood since 1927; 103 degrees in Burbank, breaking a 1976 record; and 100 degrees in Campo, breaking a 1984 record.

Flash forward to early June, and Northern California is getting a taste. The forecast is anywhere from 106 degrees to 110 degrees for the coming weekend in Sacramento, which would be record-breaking temperatures according to some news outlets. Even higher temperatures are predicted for Redding.

For those employers with outdoor workers, high temperatures are of particular concern. Heat illness is a serious problem for employees who work outside.  Heat illness can be fatal. California employers must comply with state heat illness regulations and standards.

California’s stringent heat illness standard applies to all outdoor places of employment. Special high-heat procedures apply to certain industries:

• Agriculture
• Construction
• Landscaping
• Oil and gas extraction 
• Transportation or delivery of agricultural products, construction materials or other heavy materials

Employers in these specified industries must implement high-heat procedures when the temperature equals or exceeds 95 degrees Fahrenheit. The California Code of Regulations (CCR), Title 8, section 3395, “Heat Illness Prevention,” contains the high-heat procedures and the heat illness standards.

At the beginning of April, Cal/OSHA launched its 2013 Heat Illness Prevention Program to educate workers and employers on the dangers associated with heat exposure at outdoor worksites.

The program’s goal is to prevent heat illness throughout California through greater compliance with the state’s workplace safety regulations. Cal/OSHA will conduct heat illness prevention training throughout the year.

Shane Peterson, HRWatchdog Blog Editor

In addition, HRCalifornia’s HR Library offers extensive content on heat illness prevention, including forms and checklists to help employers make their workplaces compliant.

U.S. Supreme Court to Review NLRB Recess Appointments

The U.S. Supreme Court will review President Obama’s “recess” appointments to the National Labor Relations Board (NLRB) during its conference on June 20, according to the Court’s docket. The case is National Labor Relations Board v. Noel Canning (docket 12-1281).

This case is important because it calls into question several key opinions issued by the NLRB during the time period in question.

In January, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the U.S. Senate was still in session when President Obama made the three appointments to the NLRB. 

The court ruled that President Obama’s “recess” appointments to the NLRB were “constitutionally invalid” because the U.S. Senate was not actually in recess at the time. The case was appealed to the U.S. Supreme Court by the NLRB.

The following questions are before the Court:

• Whether the president’s recess-appointment power may be exercised during a recess that occurs within a session of the U.S. Senate or is instead limited to recesses that occur between enumerated sessions of the U.S. Senate
• Whether the president’s recess-appointment power may be exercised to fill vacancies that exist during a recess, or is instead limited to vacancies that first arose during that recess

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Skilled Talent Shortage Continues in the U.S.

Almost 40 percent of U.S. employers continue to have difficulty finding skilled talent and filling vacancies, according to the eighth annual Talent Shortage Survey from ManpowerGroup.

ManpowerGroup is one of the world’s largest recruiting companies and released the Talent Shortage Survey earlier this year. ManpowerGroup surveyed nearly 40,000 employers in 42 countries, including more than 1,000 U.S employers.

In some good news, the percentage of U.S. employers reporting difficulty finding people with the right skills did decrease significantly from last year:

• 2013: 39 percent
• 2012: 49 percent

U.S. employers still report more difficulty finding skilled talent than their global counterparts, 35 percent of which report difficulty finding talent.

Employers in the U.S. report that skilled trades are still the most difficult to fill, and results from the survey show the following as the top 10 hardest jobs to fill:

1. Skilled trades
2. Sales representatives
3. Drivers
4. IT staff
5. Accounting and finance staff
6. Engineers
7. Technicians
8. Management/executives
9. Mechanics
10. Teachers

Finally, U.S. employers reported several reasons for having trouble filling open positions:

• 48 percent said candidates lack technical competencies/hard skills
• 33 percent said candidates lack workplace competencies/soft skills
• 32 percent said the problem is a lack of or no available candidates

Employers said they used a variety of approaches to dealing with difficulties in finding talent and filling key positions:

• Expanding training and development for existing staff (23 percent)
• Recruiting more from untapped talent pools (20 percent)
• Appointing people who may lack skills but have growth potential

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

Identifying the best candidates to hire is a challenge for any employer. Interested in learning more about creating a solid recruiting and hiring process? Check out how HRCalifornia can help you.

Prepared To Implement Health Care Reform?

It’s decision time. Key components to the Patient Protection and Affordable Care Act (PPACA) take effect January 1, 2014, and the new rules are complicated.

Do you keep health insurance coverage the same or reduce benefits to contain costs? How do you meet compliance requirements without risking costly penalties or impacting your ability to attract employees? Let the experts be your guide before you decide.

June 20 marks the first of CalChamber’s PPACA compliance webinars featuring top experts. On that date, special guest presenters Brigen Winters and Tamara Killion of Groom Law Group in Washington, D.C., will verify and clarify key employer provisions as you prepare to implement health care reform.

Moderated by CalChamber, the 90-minute webinars are free to CalChamber members and $99 each for nonmembers — while seats are available. Can’t make the live event? Request the recorded version.

Webinar: Strategies for Employer Compliance Under the Affordable Care Act
Date: Thursday, June 20, 2013
Time: 10 a.m. – 11:30 a.m. PT
Cost: FREE to CalChamber members; $99 for nonmembers 

Slated for August are two more webinars on PPACA compliance with presenters from Moss Adams and Wells Fargo Insurance Services.

EEOC Offers Guidance on Specific Disabilities in the Workplace

The federal Equal Employment Opportunity Commission recently issued revised “Q&A” documents addressing how the Americans with Disabilities Act (ADA) applies to applicants and employees with four specific disabilities:

• Cancer
• Diabetes
• Epilepsy
• Intellectual disabilities

The documents are part of the EEOC’s “Disability Discrimination, the Question and Answer Series.”

The revised Q&A’s reflect changes to the definition of disability made by the Americans with Disabilities Act Amendments Act of 2008 (ADAAA). The ADAAA made it easier for an individual who brings an ADA claim to establish a disability. Under the ADAAA, the definition of “disability” will be construed in favor of broad coverage.

The revised Q&A documents cover topics such as what types of reasonable accommodations an employee with a specific disability might need. The documents provide specific examples. For instance, the guidance on cancer states that some employees with cancer may need one or more of the following accommodations:

• Leave for doctors' appointments and/or to seek or recuperate from treatment
• Periodic breaks or a private area to rest or to take medication
• Modified work schedule or shift change

California employers are reminded that state disability protections under the Fair Employment and Housing Act may be broader in some areas than federal law. At the end of 2012, California amended its disability regulations.

Gail Cecchettini Whaley, CalChamber Employment Law Counsel/Content

HRCalifornia subscribers can get detailed information on the amended disability regulations. Not a subscriber? Start a free trial now.

CalChamber customers can also get an expanded discussion of the disability regulations and their impact on state law in the 2013 California Labor Law Digest.