The Employer's Corner

Welcome to The Employer's Corner!

On behalf of everyone at American Consulting Group, welcome to our new online journal, The Employer's Corner.  We hope you'll come back and visit often to get the latest news and observations concerning unions and labor relations, human resources, and workplace safety.  Please feel free to email us or post a comment if you would like further information on any topic addressed here.

If you haven't guessed already, ACG is a consulting firm exclusively representing employers in the areas of labor and employment.  Although we are based on the West Coast, we have a nationwide practice, with clients ranging from small family businesses to Fortune 100 corporations.  Since we've been in business for over thirty years, in California no less, we've seen almost everything under the sun.  Hopefully, the insights we'll share here will help you better understand and address the issues you face in your business.

BEWARE: THE EMPLOYEE FREE CHOICE ACT

The forthcoming election will play a major role in determining the future of labor relations in our country.  The Employee Free Choice Act (EFCA) is pending in Congress.  The bill, which was co-sponsored by Barack Obama, would make sweeping pro-union changes to the National Labor Relations Act and will change labor relations in the United States, if enacted.

If the EFCA is enacted in its current form, representative elections would be eliminated and unions would have automatic recognition/certification simply by presenting valid signed authorization cards from over 50% of the proposed bargaining unit.  Most believe that union representation in the United States would soar based on this change alone.  In Canada, where five of the ten provinces provide for card majority recognition, union membership is almost triple the rate of the United States (depending on the survey used, most estimate Canadian unionization rates at around 33% and the United States around 12%, with almost half of the United States number coming from the public sector).

The EFCA would also change the entire bargaining process.  The EFCA would require parties to meet and begin collective bargaining within ten (10) days of a certified union's request to do so.  If the parties fail to reach agreement after ninety (90) days of bargaining, either party may request mediation.  If the parties do not reach agreement within thirty (30) days of the mediation request, the collective bargaining agreement shall be determined by interest arbitration and the initial contract would be imposed for two (2) full years, without any ratification from the employees or the employer.

Finally, the EFCA increases penalties against employers without any corresponding increase for unions that violate the terms of the National Labor Relations Act.

The House of Representatives already passed the EFCA by a vote of 241 to 185.  51 Senators currently support the bill.  All Democrats have voted for the bill and were joined by Republican Senator Arlen Spector. All other Republicans, including John McCain, voted against it. Sixty (60) votes are needed for cloture to avoid filibuster of the bill.  Thus, in order for the EFCA to pass through the Senate, 9 more senators must vote for the bill.  Whether the bill passes through Congress will depend on one issue:  How many Republican Senators will be voted out of office and replaced with Democrats?

There are currently ten states where it is reasonably possible that this can happen.  Therefore, if you are interested in figuring out whether the EFCA will become a reality, besides watching the Presidential returns, you will want to keep track of the Senate races.

CALIFORNIA SICK LEAVE BILL DIES IN SENATE

California employers may be relieved to know that AB 2716, the mandatory sick leave bill, died in the Senate Appropriations Committee. This bill, which would have provided that all full and part time employees who work in California for at least seven days in a calendar year would earn mandatory sick leave, passed through the California Assembly in May, 2008. An independent study had predicted the loss of approximately 370.000 jobs within 5 years in California should this bill become law. Assemblywoman Fiona Ma has vowed to reintroduce this bill again next year.

The decision by this Committee was no doubt motivated by the Senate analysis which estimated that implementation of this bill would have cost the state nearly $900,000 next year. This amount could have ballooned to millions if the state were ordered to reimburse counties for the sick leave of those workers who provided in-home services for the aged, blind and disabled.

MOST NON-COMPETE COVENANTS ARE INVALID IN CALIFORNIA

The California Supreme Court recently confirmed that non-competition agreements are unenforceable in California. Agreements that restrict an employee’s ability to pursue similar employment after leaving a job are prohibited, even if narrowly written and leave a substantial portion of the available employment market open to the employee. Unless a non-competition agreement clearly falls under one of the following exceptions, it will be unenforceable in California:

• Trade secrets protections, which can restrict an employee’s ability to use confidential information or company-defined trade secrets;
• Sale of a business, which can restrict a seller’s ability to compete with the buyer in the geographic location where the seller had carried on his or her business.
• Dissolution of a partnership, which can define a geographic area within which one of the partners cannot conduct a similar business.

The Court reiterated the law in California that non-competition agreements are against public policy because they restrict an individual’s ability to earn a living. Further, the Court found that requiring a former employee to get a release of an invalid agreement constitutes unlawful interference with the employee’s rights.

NEW EEO-1 REPORTS ARE DUE IN 2008

Last year, the U.S. Equal Employment Opportunity 

Commission (EEOC) approved new forms and 

regulations for the EEO-1 employer report - the 

first major changes in these rules in 40 years. 

During the transition, employers were not required 

to resurvey their workers using the new EEO-1 

categories - but that's not the case for your 2008 

EEO-1 report that's due September 30, 2008.

If you have at least 100 employees (or if you're a 

federal contractor with at least 50 employees), 

you have only weeks left to gather data on your 

employees and prepare the 2008 EEO-1 report 

for your organization. With new ethnic, job, and 

racial categories on the form, resurveying your 

employees and classifying them properly can be 

much more confusing than ever before.

You may find further information regarding EEOC's 

preferred reporting method at :

http://www.eeoc.gov/eeo1survey

California's DLSE Will Immediately Follow Brinker Decision on Meal Periods and Rest Breaks

On July 25, 2008, California's Labor Commissioner, Angela Bradstreet, issued a memo to all Department of Labor Standards Enforcement staff regarding the recent California Court of Appeal decision in Brinker v. Superior Court (Hohnbaum). The Labor Commissioner specifically instructed, "All staff must follow the rulings in the Brinker decision effective immediately and the decision shall be applied to pending matters." As a result, the DLSE will apply the following rules regarding meal and rest breaks:

1.      Employers must provide meal periods by making them available, but need not ensure that they are taken. Employers, however, cannot impede, discourage or dissuade employees from taking meal periods.

2.      Employers are not required to provide a meal period for every five consecutive hours worked. There is no "rolling five-hour" meal period requirement. Instead, employers simply must make a 30-minute meal period available to an employee who is permitted to work more than five hours per day (unless a valid waiver is in place for an employee whose shift is six hours or less). If the employee takes a meal period early in his/her shift and then works an additional five hours, there is no requirement to provide the employee with a second meal period (unless the employee works more than 10 hours per day, in which case a second meal period must be made available absent a valid waiver).

3.      Employers must provide rest breaks, but need not ensure that they are taken. Employers, however, cannot impede, discourage or dissuade employees from taking rest periods. Rest periods must be authorized and permitted every four hours or major fraction thereof. "Major fraction thereof' means the time period between three and one-half hours and four hours. Therefore, if an employee works between three and one-half hours and four hours, a rest period must be provided. However, if the employee works more than four hours, a rest period must be provided only every four hours, not every three and one-half hours.

4.      Employers are not required to authorize and permit a first rest period before the first meal period. As long as employers make rest periods available to employees and strive, where practicable, to schedule them in the middle of the first four-hour work period, employers are in compliance with the Wage Orders.

Employers with pending or future meal and rest break claims before the DLSE will want to review both the Labor Commissioner's July 25 memo, as well as the Brinker decision. To review the full text of the Labor Commissioner's memo, go to: http://www.dir.ca.gov/DLSE

Immigration News - Form I-9 Has New Expiration Date; All Federal Contractors to Use E-Verify

The U.S. Citizenship and Immigration Services has released a new version of the Form I-9 with an expiration date of "06/30/09" in the upper right corner. The form has not substantively changed, but it is now the only acceptable version. In other immigration news, as a result of a new Executive Order, all federal contractors will be required to use the Department of Homeland Security's free, Internet-based E-Verify system to confirm the employment eligibility of employees who perform work on a government contract. Federal contractors will have to use E-Verify once rules implementing the Executive Order are approved later this year. You can download the new Form I-9 and access E-Verify at http://www.uscis.gov/.

High Court Voids Law Barring Use of State Funds to Fight Union Organizing

In welcome news for employers, the U.S. Supreme Court recently struck down a controversial California law that severely curtailed some employers' rights to oppose union organizing efforts. California Assembly Bill 1889, signed into law in 2000, prohibited employers that received more than $10,000 in state grants or funds from using that money to "assist, promote, or deter union organizing." Any employer that intended to oppose an organizing drive had to segregate state funds and maintain records documenting that its antiunion efforts weren't funded by state money. Under the law, the unions or the state attorney general could sue an employer that didn't comply with the prohibition on using state funds. An employer found to have used state funds for such efforts would have to return the expended state funds and pay a whopping 200 % penalty on the misused money.

Employer groups challenged A.B. 1889 in court, contending that it interfered with the National Labor Relations Act (NLRA). Then, in 2006, the Ninth Circuit Court of Appeals, which covers California, upheld the law. Now, the U.S. Supreme Court has ruled that A.B. 1889 violates the NLRA. In a 7-2 decision, the high court explained that Congress intended to leave noncoercive speech unregulated to encourage free debate on labor issues. An NLRA provision states that employers are free to express their views as long as the expression doesn't coerce employees (by threatening them or promising benefits) with respect to their organizing rights.

The Court concluded that the spending restrictions in A.B. 1889 amounted to a "targeted negative restriction on employer speech about unionization."  The Court stated, "California may not indirectly regulate [noncoercive speech about unionization] by imposing spending restrictions on the use of state funds." What's more, the law further restricted an employer's speech by placing unreasonable compliance burdens on employers to show that they had not used state funds for union advocacy. And, the massive penalties for violations of the law, even trivial ones, created an unreasonable restraint on employers' speech.

Despite this victory, employers facing union organizing efforts must still avoid saying or doing anything that could amount to an unfair labor practice. If you don't have someone with labor relations experience in-house who knows the restrictions, be sure to contact the American Consulting Group for consultation and advice on what you can and can't say during an organizing campaign.

Federal Minimum Wage About To Increase

On July 24, 2008, the federal minimum wage will increase from the current $5.85 to $6.55 per hour in the second of three planned adjustments. In July of next year, the rate will increase to $7.25 per hour. California employers are reminded the state minimum wage was increased to $8.00 per hour effective January 1, 2008. Some cities, such as San Francisco, require even greater minimum wage rates, currently $9.36 per hour for all employees who work in San Francisco.

FMLA EXPANDS TO PROTECT MILITARY FAMILY MEMBERS

On January 28, 2008, President George W. Bush signed into law the National Defense Authorization Act for Fiscal Year 2008, which expands the federal Family and Medical Leave Act (FMLA) in two important ways, both of which are intended to assist service members' families.

1.   Active Duty Leave. Eligible employees with a spouse, child, or parent who is on, or has been called to, active duty in the Armed Forces may take up to 12 weeks of unpaid leave upon experiencing a "qualifying exigency." The term qualifying exigency is yet to be defined; the Department of Labor (DOL) is expected to issue proposed regulations in the coming weeks to do that.

When the need for leave is foreseeable, the employee must provide the employer with "reasonable and practicable" notice. Also, an employer may require that a request for leave be supported by certification.

2.   Caregiver Leave. Eligible employees who are the spouse, child, parent, or "nearest blood relative" of a service member who has incurred a "serious illness or injury" while on active duty in the Armed Forces are permitted to take up to 26 weeks of unpaid leave in a single 12-month period to care for the injured service member.

A serious illness or injury is defined as one that was incurred in the line of active duty that renders the service person medically unfit to perform the duties of his/her office, grade, rank, or rating.

Here, too, an employer can request certification of the need for leave.

Note: Both active duty leave and caregiver leave can be taken on an intermittent or reduced leave basis. In addition, an employee may elect, or an employer may require the employee, to substitute accrued paid leave for either active duty or caregiver leave.

The National Defense Authorization Act was effective upon the President's signing, but it is not clear when the provisions amending the FMLA will be effective. The DOL is expected to issue clarifying regulations in the coming weeks. Until then, employers are encouraged to review and revise their family leave policies as necessary.

CalOSHA POSTING REQUIREMENT

Employers with 11 or more employees in the previous year -- except those in certain low-hazard establishments in the retail, services, finance and real estate sectors -- are required to maintain records of work-related injuries and illnesses and post the summary of their records for calendar year 2007. Additionally, employers are reminded that it is time to post the California Occupational Safety and Health Administration (Cal/OSHA) Form 300A, the summary of job-related injuries and illnesses that occurred last year. Unless you fall within one of the industries normally excused from the Occupational Safety and Health Act's recordkeeping and posting requirements, you're required to annually post Cal/OSHA Form 300A (annual summary of work related injuries) from February 1 to April 30. A list of exempt industries in the retail, services, finance, and real estate sectors is posted at:

www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=standards&P_id=12791   

The Cal/OSHA Form 300A summary must list the total number of job-related injuries and illnesses that occurred in 2007 and were logged on the Cal/OSHA 300 form. Additional information about your annual average number of employees and total hours they worked during the calendar year also is required to help the agency calculate incidence rates. Even if you had no recordable injuries or illnesses for 2007, you still must post the Cal/OSHA Form 300A, listing zeros on the total line. All summaries must be certified by a company executive. You can find a copy of the Cal/OSHA Form at OSHA's recordkeeping website at::

www.dir.ca.gov/dosh/dosh_publications/oshalog300A.pdf

The 300A form contains answers to frequently asked questions and provides other information that will help you comply with your recordkeeping obligations.

One final note: Even if you're excused from the recordkeeping requirements, all employers otherwise covered by CalOSHA compliance requirements must orally report to the nearest CalOSHA/OSHA office within eight hours of any workplace fatality, or "Serious injury or illness" e.g. any injury or illness occurring in a place of employment or in connection with any employment which requires inpatient hospitalization for a period in excess of 24 hours for other than medical observation or in which an employee suffers a loss of any member of the body or suffers any serious degree of permanent disfigurement, or for accidents involving the inpatient hospitalization of three or more employees.