Daily News & Com­men­tary — June 21, 2017

Yesterday, Travis Kalanick resigned from his post as chief executive at Uber following a series of scandals concerning the company’s workplace culture and legal problems.  Earlier on Tuesday, a group of investors insisted Kalanick step down in a joint letter.  Kalanick will continue to serve on Uber’s board.  Read more here.

The White House announced that President Trump will nominate Marvin Kaplan to the National Labor Relations Board.  Kaplan currently serves as independent counsel at the Occupational Safety and Health Review Commission.  Previously, he served as counsel on the Republican staff of the House Committee on Education and the Workforce.  With two vacancies at the Board and Democrats controlling two of the three filled seats, this announcement puts President Trump on the path to creating a Republican majority at the NLRB.  A Republican controlled Board could rollback many Obama era decisions.  President Trump will also nominate Patrick Pizzella to fill the role of Deputy Secretary at the Department of Labor.  

In international news, the New York Times reported that Laurent Berger, the leader of the French Democratic Confederation of Labor, might be willing to work with the French government to update the country’s labor code.  Berger suggests that President Emmanuel Macron’s victory may provide an opportunity for reform.  Macron has championed “flexible security,” an economic model originating in Denmark.  The system aims to foster agreement between management and labor and reduce unemployment.  While some of Macron’s proposed reforms are likely to face stiff opposition from unions, Berger’s belief that “‘in a globalized world, the economy must be able to adjust” provides hope for the reform effort.  Read more here.     Continue reading

Solicitor General Reverses Position in Murphy Oil

This post is part of OnLabor’s continuing analysis of National Labor Relations Board v. Murphy Oil USA.

Despite previously submitting a petition for writ of certiorari for the National Labor Relations Board, the Solicitor General’s office has reversed its position in the consolidated cases of Murphy Oil USA, Epic Systems, and Ernst & Young and urges that the Supreme Court find that class action waivers are enforceable.  In an amicus brief submitted to the Court on Friday, the Solicitor General’s office explained that it has rethought its support for the Board after the election of President Trump.  The Solicitor General’s office writes:

“We do not believe that the Board in its prior unfair-labor-practice proceedings, or the government’s certiorari petition in Murphy Oil, gave adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the FAA.  More specifically, the Board’s view that the phrase “other concerted activities” in 29 U.S.C. 157 encompasses participation in collective or class litigation may reflect a permissible interpretation of that language, such that an employer might commit an unfair labor practice by discharging employees who initiated or joined such suits in accordance with other provisions of law.  It does not follow, however, that Section 157 expands the range of circumstances in which such litigation can go forward, by allowing employees who validly waived their collective-litigation rights under the FLSA to escape the consequences of that choice.  The Board’s approach fails to respect the FAA’s directive that arbitration agreements should be enforced unless they run afoul of arbitration-neutral rules of contract validity.”

This reading of the two statutes is a sharp departure from the government’s position in its petition for writ of certiorari where the Solicitor General argued:

“the ability to engage in concerted activities under the NLRA is not a mere procedural means for vindicating some other statutory right. It is, as the Board has concluded, ‘the core substantive right protected by the NLRA and is the foundation on which the Act and Federal labor policy rest….This Court has never held that arbitration agreements may waive such substantive rights or be given effect in contravention of the statutes that create and protect those rights.”

Again, the full amicus brief is available here.

Opening Brief Filed in Murphy Oil

This post is part of OnLabor’s continuing analysis of National Labor Relations Board v. Murphy Oil USA.

On Friday, counsel for the petitioners in National Labor Relations Board v. Murphy Oil USA and Epic Systems Corporation v. Jacob Lewis filed their opening merits brief before the Supreme Court.

Petitioners argue that “[i]n cases involving the interaction of two federal statutes, the first objective is to harmonize the competing provisions, if at all possible,” and the Federal Arbitration Act and National Labor Relations Act “can indeed co-exist.”  The petitioners contend that:

“The FAA unambiguously mandates enforcement of class waivers in arbitration agreements, and the NLRA contains no ‘clearly expressed congressional intention to the contrary.’ [citing Morton v. Mancari, 417 U.S. 535, 551 (1974)].  So the Court should do what it has done in prior cases involving the FAA and other federal statutes: construe the other statute in a way that harmonizes it with the FAA.”

This reading of the FAA and NLRA would result in the enforcement of class arbitration waiver provisions.  Petitioners further argue that the National Labor Relations Board’s view that the NLRA contains a “clearly expressed congressional intention to the contrary” is “not entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).”

Alternatively, the petitioners maintain that “[e]ven if the two statutes could not be reconciled, the class waivers should still be enforced.”

Again, the full brief is available here.

Today’s News & Commentary — June 7, 2017

The Supreme Court has been asked to reconsider whether arrangements requiring non-union employees in the public sector to pay fair share or agency fees violate the First Amendment of the Constitution.  Yesterday, Mark Janus, an Illinois state employee, petitioned the Supreme Court to review the Seventh Circuit’s decision in Janus v. AFSME and consider overturning the Court’s precedent in Abood v. Detroit Board of Education.  This petition comes just one year after the Court was asked to consider its precedent in Abood in Friedrichs v. California Teachers Association but split 4-4 following Justice Scalia’s death.  A decision overturning Abood could weaken unions financially and politically.  Read more here.

Bloomberg reports that Uber terminated more than 20 employees following an investigation by the law firm Perkins Coie into reports of harassment and discrimination at the ride-sharing company.  Perkins Coie was hired along with the D.C. firm Covington & Burling to examine Uber’s workplace culture.  Perkins Coie examined 215 workplace claims but did not act in response to 100 of these human resource complaints.  Read more here.

Lyft also made the news this week.  The ride-sharing company announced a deal with NuTonomy Inc.  The two companies will work together to test self-driving cars in Boston.  Lyft has also partnered with Waymo and General Motors Co. in the race to put self-driving cars on the road.  Read more here.

The New York Times reports that the Trump Administration has moved to undercut several workplace safety initiatives.  These actions signal a shift in the direction of the Occupational Safety and Health Administration (OSHA) even though President Trump has yet to put forth a nominee to lead OSHA.  The Trump Administration has suggested changes to the beryllium rule, which was updated under the Obama Administration.  These changes might exclude some important industries from coverage.  The Trump Administration has also delayed enforcement of the silica rule and a rule mandating that employers report their violations so that they may be made publicly available online.  Furthermore, Trump’s budget indicates the Administration’s suspicion of workplace safety programs by proposing getting rid of the Chemical Safety Board and cutting a grant program which educates workers with limited English proficiency on safety hazards in especially dangerous industries.  

The Sixth Circuit Holds that Class Arbitration Waivers Are Prohibited Under the NLRA

This post is part of OnLabor’s continuing analysis of National Labor Relations Board v. Murphy Oil USA.

Bloomberg BNA reports that in National Labor Relations Board v. Alternative Entertainment, Inc., the U.S. Court of Appeals for the Sixth Circuit joins the Seventh and Ninth Circuits in upholding the NLRB’s position and finding that the National Labor Relations Act (NLRA) prevents employers from requiring their employees to pursue workplace-related claims individually.  In contrast, the Fifth and Eighth Circuits’ reading of the Federal Arbitration Act allows class arbitration waiver provisions to be held enforceable despite the NLRB’s claim that this kind of arbitration provision violates Section 7 of the NLRA.

This decision comes two weeks before opening briefs are due in the consolidated case of Murphy Oil, Epic Systems, and Ernst and Young before the Supreme Court.  In the consolidated case, the Supreme Court will be asked to resolve the circuit split.

Today’s News & Commentary — May 24, 2017

President Trump released his budget yesterday, and it proposed sharp reductions in spending for entitlement programs.  The budget also included a cut of 19.8 percent in funding for the Department of Labor.  Despite decreases in funding to the Department, the budget includes a proposal for a paid family leave program, which would allow states to grant six weeks of paid maternity and paternity leave.  The program would be funded through changes to unemployment insurance.  Although the New York Times reports that President Trump’s budget “stands absolutely no chance of being enacted by Congress,” the article notes that congressional Republicans might “seize the moment to impose some austerity of their own without going nearly as far as [Mick Mulvaney, director of the Office of Management and Budget] or Mr. Trump would like.”

Yesterday, Uber announced that it made a mistake calculating its drivers’ commissions in New York.  The company based payments to drivers on fares after taxes were taken out instead of basing drivers’ pay on fares before taxes were deducted.  Last year, the New York Taxi Workers Alliance filed a suit alleging that the company had been taking taxes out of workers’ pay even though the drivers’ contracts with Uber only allow the company to take its 25 percent cut out of payments to drivers.  The New York Times suggests that the mistake impacted tens of thousands of drivers and these inappropriate deductions could amount to more than $200 million.  Read more here.

Politico reported that Secretary of Labor Alexander Acosta will not delay the partial implementation date of the fiduciary rule scheduled for June 9th.  In an op-ed in the Wall Street Journal, Acosta stated that the Department has “found no principled legal basis to change the June 9 date while [it] seek[s] public input.  Respect for the rule of law leads [the Department] to the conclusion that this date cannot be postponed.”  However, the Department of Labor has pledged to review the rule despite the initial implementation date going forward as planned.  Politico predicts that given the length  of the rulemaking process the rule’s second implementation date will also remain in place.

The Wall Street Journal published an article reporting on the Fight for $15’s success in achieving its goal of a $15  minimum wage despite its inability to achieve its other goal, unionization of the workers involved in the campaign.  California, New York, and numerous cities are all on the path to a $15 minimum wage.  The article explores the SEIU’s strategy in funding the Fight for $15.  The union has put more than $16 million into regional organizing and public relations, even though the campaign has not translated into increased union membership and dues.  Despite the questions raised by the Wall Street Journal, SEIU president Mary Kay Henry says that the Fight for $15 is an important part of the union’s agenda, stating that the Fight for $15 “makes ‘the labor movement understand that you can make a bold demand.’”

Today’s News & Commentary—May 11, 2017

The New York Times reports that Canada’s technology sector may benefit from the Trump Administration’s efforts to restrict immigration and immigration’s increased centrality in the American political debate.  After the travel ban was announced, Canada received an increase in temporary and student visa requests.  While not enough time has elapsed to determine whether the “Trump effect” has staying power, early signs indicate that fields, such as artificial intelligence, will benefit by attracting foreign workers.  The Atlantic suggests Canada is well-positioned to capitalize on these developments.  The country has publicly welcomed immigrants and invested in its technology sector.  Read more here.

Uber is piloting a personal injury insurance program for drivers in eight states.  The insurance program will be funded by a mix of increased fares for customers and a fee for drivers who opt-in.   Customers will pay five cents more a mile in these states, and drivers will contribute 3.75 cents per mile.  Maximum benefits will equal $1 million for medical expenses, $150,000 in survivor benefits, and wage replacement of fifty percent of a driver’s weekly earnings.  However, Uber has not escaped criticism by instituting this program.  Commenting on this development, Rebecca Smith, the deputy director of the National Employment Law Project, objected to the optional nature of the program and stated that “[i]f Uber valued its workers, it would simply pay its workers’ compensation premiums and cover all of them.”

In other gig economy news, the New Yorker published a piece on liberals embrace of the gig economy.  Nathan Heller details the connections between Democratic political operatives and companies, such as Airbnb and Uber.  While showing that the gig economy is a source of wealth for some, the article highlights evidence suggesting that those who benefit the most from the gig economy are not the same people who benefited from the service industries being disrupted.  Describing the findings of Boston College Sociology Professor Juliet B. Schor, Heller observes,

“[i]nstead of simply driving wealth down, it seemed, the gigging model was helping divert traditional service-worker earnings into more privileged pockets—causing what Schor calls a ‘crowding out’ of people dependent on such work.  That distillation-coil effect, drawing wealth slowly upward, is largely invisible.”

In light of these effects, Heller asks what can be done to make the gig economy viable over the long-term.  Read more here.

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