S t r a t e g i e sPREVENTIVE

EMPLOYMENT, LABOR, BENEFITS AND IMMIGRATION LAW FOR EMPLOYERS

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FEATURE COVERAGE 1 - 4

DEVELOPING LAW OF THE WORKPLACE 5 - 7

JACKSON LEWIS NEWS 8 www.jacksonlewis.com

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As many employers would agree, a carefully developed and customized employee handbook can be a valuable resource, providing important information about an organization’s history, mission, values, policies, procedures, and benefits. If administered consistently, lawful and well-written handbook policies also can be an important piece of a preventive employee relations program, providing protection against claims of discrimination or unfair treatment.

Conversely, an employee handbook can be a liability if poorly drafted and not updated to reflect changing workplace laws and regulations. Lawsuits and agency claims, employee turnover, and poor public relations are a few examples of the unintended consequences that can arise from outdated or unlawful handbook provisions, or ones that are misinterpreted or inconsistently administered by managers and supervisors.

Handbook Basics

Ideally, employee handbook and policy development and review should include the participation of top management so that the end product is not only legally compliant, but also reflects the objectives, language, and culture of the organization. Some handbook policies are essential, as, for example, an Equal Employment Opportunity statement or, for employers with at least 50 employees, a leave policy compliant with the federal Family and Medical Leave Act. Other federal, state, and local laws and regulations, such as California’s workplace harassment prevention mandate, may require written policies best contained in an employee handbook.

To ensure handbook contents meet the legal requirements in all jurisdictions where an organization has employees, a periodic and thorough review with the assistance of employment counsel is a must. Revisions should be made where necessary and changes communicated throughout the organization. This is easily accomplished where the employee handbook is posted or distributed in electronic format.

EmployEE Handbooks: “Where does it say that?”

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EDITORIAL BOARD Roger S. Kaplan Mei Fung So Margaret R. Bryant This bulletin is published for clients of the firm to inform them of labor and employment devel-

opments. Space limitations prevent exhaustive treatment of matters highlighted. We will be pleased to provide additional details upon request and discuss with clients the effect

of these matters on their specific situations. | Copyright: © 2015 Jackson Lewis P.C. Reproduction in whole or in part by any means whatsoever is strictly prohibited without the

advance written permission of Jackson Lewis. | This Bulletin may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

PREVENTIVE STRATEGIES | Second Quarter 2015 Jackson Lewis P.c.

The NLRB is policing

employee handbooks

and other employer

policies for language it

believes “chills”

the rights of nonunion

employees to engage

in protected concerted

activity under

the NLRA.

Employee handbooks generally are not intended to be contractually binding. In some jurisdictions, however, courts have found that employee handbooks constitute an implied employment contract that can unintentionally alter the at-will employment status of workers. Handbook language that suggests an enforceable promise relating to the terms and conditions of employment, such as job permanence, candidacy for promotion, or entitlement to benefits, may be construed as binding on the employer. Thus, language stating or implying a specific duration of employment, promise of advancement, or guarantee of job security should be avoided.

An enforceable disclaimer — specifically stating that the handbook does not create any such obligations — is a vital defense against such claims. Upon beginning employment, employees should be required to sign a statement acknowledging they have received a copy of the handbook, read its provisions, and understand that it does not create any binding obligations on behalf of the employer with regard to the terms and conditions of employment. The signed acknowledgement should be retained as part of each employee’s personnel file and should be updated with each subsequent revision.

Special Handbook Concerns

In line with its focus on the rights of nonunion employees, the National Labor Relations Board has issued a new guidance to assist employers in reviewing internal personnel policies, including employee handbooks, to ensure compliance with the National Labor Relations Act. Nonunion employees comprise a large majority of the nation’s workforce, and the NLRB has been policing employee handbooks and other employer policies that it believes “chill” the rights of unrepresented employees to engage in protected concerted activity under the NLRA. A number of recent NLRB decisions have involved the lawfulness of workplace rules and policies, and the Labor Board’s Office of the General Counsel issued the March 2015 guidance to further clarify the

agency’s view. Memorandum GC 15-04.NLRB General Counsel Richard Griffin

Jr., in his report to the NLRB regional directors, said he hopes the guidance “will be of assistance to labor law practitioners and human resource professionals.” The guidance provides numerous examples of policies that have been the subject of litigation over their lawfulness under the NLRA. Reviewing the guidance should assist labor practitioners and human resource professionals to draft lawful policy language, determine whether existing policies pass muster, and, if not, how they should be modified.

Under the NLRB’s decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), “the mere maintenance of a work rule” may violate the NLRA if the rule “has a chilling effect on employees’ Section 7 activity.” Section 7 of the NLRA gives employ-ees the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

General Counsel Griffin, in citing the Lutheran Heritage Village-Livonia decision, explains in the guidance that even if a work rule does not explicitly prohibit such activity, it still will be found unlawful if “employees would reasonably construe the rule’s language to prohibit Section 7 activity.” Determining what language employees would “reasonably construe” as prohibiting Section 7 activity is the challenge. While the Memorandum addresses the need for clarity on workplace policies and handbooks, it offers examples that use similar language found to be lawful in one instance, but unlawful in another, often citing “context” to distinguish them.

In the guidance, the General Counsel reviews categories of workplace rules and policies, including ones relating to:

n confidential information;

n employee misconduct;

n employee communications with third parties;

n use of logos, copyrights and trademarks;

n use of photography and recording devices;

Jackson Lewis P.c. PREVENTIVE STRATEGIES | Second Quarter 2015

n restrictions on employees leaving work; and

n conflicts of interest.

In discussing confidentiality rules, for example, the guidance cites the following language as unlawful:

n Do not discuss “customer or employee information” outside of work, including “phone numbers and addresses,” as it uses an unlawful overly broad reference to “employee information.”

Conversely, the guidance offers the following language as lawful:

n “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [the employer] is cause for disciplinary action, including termination.”

Another category of policies discussed in the guidance concerns employee conduct rules, a frequent topic in employee handbooks. Examples of some typical handbook language that may be considered unlawful are:

n Be respectful to the company, other employees, customers, partners, and competitors.

n Do not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the company, or the company’s competitors.

n Be respectful of others and the company.

n No defamatory, libelous, slanderous, or discriminatory comments about the company, its customers or competitors, its employees, or management.

General Counsel Griffin describes these rules as “unlawfully overbroad since employees reasonably would construe them to ban protect-ed criticism or protests regarding their supervi-sors, management or the employer in general.”

In contrast, lawful conduct rules, according to the guidance, include:

n No rudeness or unprofessional behavior toward a customer or anyone in contact with the company.

n Employees will not be discourteous or disrespectful to a customer or any member of the public while in the course and scope of company business.

n Being insubordinate, threatening, intimidating, disrespectful, or assaulting a manager or supervisor, co-worker, customer, or vendor will result in discipline.

“Although a ban on being ‘disrespectful’ to management, by itself, would ordinarily be found to unlawfully chill Section 7 criticism of the employer, the term here is contained in a larger provision that is clearly focused on seri-ous misconduct, like insubordination, threats and assault,” according to the Memorandum. “Viewed in that context, we concluded that employees would not reasonably believe this rule to ban protected criticism.”

3

Policy and handbook

language always must

be viewed in context

and in light of the

employer’s practices,

other policies, and

procedures.

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One example provided in the General Counsel’s Memorandum illustrates seemingly contradictory outcomes about the lawfulness of employer rules on the use of cameras by employees. As an illustration of unlawful language, the guidance cites the following:

“Taking unauthorized pictures or video on company property is prohibited.”

Conversely, an example of lawful language is:

“No cameras are to be allowed in the store or parking lot without prior approval from the corporate office.”

While the two rules seem to convey the same message, the guidance instructs that the former rule could be read to prohibit all employee use of cameras, including attempts to document health and safety violations. This would infringe on employees’ statutory rights, the General Counsel concludes. The latter rule, on the other hand, was located in an employee manual following a separate rule regarding how to deal with reporters. In that context, the General Counsel reasons, employees would read the rule as prohibiting “news cameras” rather than employees’ own cameras. Without the context, one would be hard pressed to distinguish one as unlawful and the other lawful.

Context May Be Critical in Determining Lawfulness

4

PREVENTIVE STRATEGIES | Second Quarter 2015 Jackson Lewis P.c.

In the Memorandum, the General Counsel describes a number of policies the NLRB found unlawful in a case involving a large franchise food operation. The policies were included in the Memorandum after they were revised and approved pursuant to an informal, bi-lateral settlement agreement between the Board and the employer. While providing useful insight into what the NLRB General Counsel’s office considers a priority in issuing complaints, the Memorandum should not be relied upon as a source of pre-approved language, even with regard to the policies that were approved in the informal Board settlement agreement with the food franchise. Policy and handbook language always must be viewed in context and in light of the employer’s practices, other policies, and procedures.

The “Report of the General Counsel Concerning Employer Rules” is available at http://www.nlrb.gov/reports-guidance/general-counsel-memos. A more detailed analysis of the Memorandum of the NLRB General Counsel is available at www.jacksonlewis.com. Questions may be directed to the Jackson Lewis Labor and Preventive Practices group, or the attorney with whom you regularly work.

The National Labor Relations Board’s “quickie election rules,” designed to shorten the timeline for NLRB elections and minimize pre-election litigation, have been effective since April 14, 2015. While the validity of the rule continues to be litigated, it is anticipated that union organizing efforts, which have languished for years, will receive a boost from the new election rules.

According to the Board, the purpose of the rule is to “simplify representation-case procedures, codify best practices, and make them more transparent and uniform across [NLRB] regions.” Under the rule, NLRB Regional Directors are instructed to schedule elections “at the earliest date practicable” after a petition is filed. This may shorten the election timeline from 42 days currently to as little as 14 days.

The NLRB’s General Counsel has issued a 36-page “Guidance for Representation Case Rule Implementation,” available at www.nlrb.gov. Additionally, the Board’s website contains a number of forms required for processing representation cases under the new rules. Also

published on www.nlrb.gov is “NLRB Representation Case-Procedures Fact Sheet,” which summarizes the purpose, history, procedural details and changes, including a table showing a side-by-side comparison of the old and new procedural rules.

At a recent public meeting with the NLRB Regional Director for Region 6 in Pittsburgh, a gathering of labor law practitioners and interested parties from both management and labor expressed concerns about the new election rules. Both sides were troubled by the complexity of the forms that the Board requires the parties to use and the abbreviated timeframes they must adhere to once a representation petition has been filed (e.g., scheduling the pre-election hearing for eight days from the date of service of the notice of hearing, and the filing of the employer’s statement of position, due by noon of the business day before the hearing, to include the list of prospective voters, their job classifications, shifts, and work locations).

The new election rules both restrict regional directors from varying from the new requirements appreciably and encourage

Representatives from

both management and

labor have expressed

concerns regarding

the complexity of

the required forms

and the abbreviated

timeframes mandated

by the NLRB’s new

election rules.

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Quickie election Rules aRe alive and, Well …

5

Jackson Lewis P.c. PREVENTIVE STRATEGIES | Second Quarter 2015

regional directors to defer issues that previously would have been determined at a pre-election hearing. In most cases, questions concerning eligibility to vote and inclusion of employees in the petitioned-for unit will not be litigated at the pre-election hearing. While oral arguments will be permitted at the pre-election hearing, the filing of written briefs is likely to be allowed only infrequently.

In light of the new representation case election rules, the Jackson Lewis Labor and Preventive Practices group has developed a series of steps employer should take in advance of union organizing under the new election rules:

1) Develop a strategic, company-wide labor relations plan. Key executives and general counsel should review the organization’s options so that company officials can make strategic decisions in light of the new rule and other recent NLRB actions.

2) Train managers/supervisors before the rules are implemented. Topics for such training should include revised NLRB election procedures, their impact on your organization, the employer’s position on unionization, the significance of authorization cards, early warning signs of union activity, and what and when your organization may communicate lawfully with employees regarding union drives and signing union cards. Every individual who meets the definition of a ‘supervisor’ under the National Labor Relations Act should be trained.

3) Eliminate issues immediately. Conduct a legal and human resource vulnerability assessment to identify, address, and eliminate legitimate workplace issues now.

4) Conduct critical bargaining unit and supervisory status analyses. In its attempt to minimize pre-election litigation, the Board’s new rules foster uncertainty as to the bargaining unit, voter eligibility and the supervisory status of individuals who may communicate lawfully on an employer’s behalf. Clarification is essential.

5) Develop a representation case litigation plan. The employer will be required

to file a position statement concerning unit issues and other matters within days of the NLRB petition being filed. Organizations must think strategically now and prepare information in advance.

6) Communicate with employees about the new NLRB rules and their effect. Address your organization’s labor relations phi-losophy in new hire orientation and an employee handbook. Consider regular messaging consistent with the organiza-tion’s labor relations approach.

7) Prepare a “break the glass kit.” Have a company-specific “don’t sign the card” letter and other communications and handouts drafted so that they are ready to be finalized quickly in the event of union activity.

8) Identify and train a rapid response team. Consider having a designated team that is prepared and ready to act in the event of union activity. These core members of management would have in-depth knowledge about what the employer can and cannot say or do. The team can communicate quickly and effectively with employees on key issues.

The Jackson Lewis Labor and Preventive Practices group has published updates and analyses of the NLRB’s new election rules, as well as a free webinar, Here Comes the “Quickie Election Rule” – Again! Additionally, Jackson Lewis is holding seminars around the country to educate employers about the new rules and provide suggested management strategies. For more information, go to NLRB’s “Quickie Election” Rules Effective Today, at www.jacksonlewis.com.

The NLRB has published Representation Case Rules Effective April 14, 2015 on its website, www.nlrb.gov, containing links to the final rule, the General Counsel’s memorandum, the various petition forms required to be filed, FAQs, and other important dates and information. The links include a PowerPoint presentation on the changes in the representation case rules.

Questions

concerning voter

eligibility and

bargaining unit

inclusion will likely

not be litigated before

an election.

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6

PREVENTIVE STRATEGIES | Second Quarter 2015 Jackson Lewis P.c.

couRt challenges, While still Pending, Fail to PRevent Rule imPlementation

As reported in the 1st Quarter 2015 Preventive Strategies, two pending lawsuits seek to nullify the new NLRB election rules. One case seeks a declaratory judgment and injunction against enforcement of the National Labor Relations Board’s new “quickie election” rule. On January 13, 2015, the Associated Builders and Contractors of Texas, Inc., Associated Builders and Contractors, Inc., Central Texas Chapter, and National Federation of Independent Business/Texas filed a complaint against the NLRB in the United States District Court for the Western District of Texas at Austin. The suit asserts the new rule violates the National Labor Relations Act, the Administrative Procedures Act, or both. Associated Builders and Contractors of Texas, Inc., v. NLRB, Case No. 1:15-cv-00026.

A similar challenge was filed on January 5, 2015, by the U.S. Chamber of Commerce, the National Association of Manufacturers,

and other business organizations in the United States District Court for the District of Columbia District. The Chamber’s suit alleges the rule violates the NLRA and the APA, as well as employers’ free speech and due process constitutional rights, among other things. The plaintiffs allege that “the new Rule makes sweeping changes and pre-election and post-election procedures that depart from the plain language and legislative history of the Act and exceed the Board’s statutory authority.” U. S. Chamber of Commerce v. NLRB, No. 1:15-cv-9.

Although the new NLRB election rules have gone into effect, both lawsuits are still pending. It is unclear whether a federal district court decision in either case in favor of the plaintiffs would compel the Labor Board to suspend the rules nationwide. Jackson Lewis will continue to monitor and report on these developments.

change in laboR boaRd’s email access Rule aWaits FuRtheR claRiFication

In December 2014, the National Labor Relations Board reversed its prior holding concerning the permissible use of an employer’s email system by employees for union and other protected concerted activities under the National Labor Relations Act. In its 2007 decision in Register Guard, 315 NRB 1110, the Board found that employers may prohibit employees from using employer-provided email for activities protected under Section 7 of the NLRA, as long as the prohibition is not applied in a discriminatory manner.

In Purple Communications, Inc., 361 NLRB No. 126 (Dec. 2014), the Labor Board now has held that, absent “special circum-stances” justifying specific restrictions, fed-eral labor law requires employers to permit employees who have been provided access to their employer’s email system to use that sys-tem for union and other protected communi-cations on non-working time. The employer’s rule in Purple Communications did not grant such access explicitly. Instead of finding the rule violated the Act, the NLRB sent the case

back to an Administrative Law Judge to permit the employer to present evidence of special circumstances justifying the rule’s access restrictions. Subsequently, the employer declined to argue that special cir-cumstances existed to justify restrictions in its policy, removing the opportunity for a ruling on the meaning of “special circum-stances” in this case. In March, an Admin-istrative Law Judge found the company’s policy violated section 8(a)(1) under the Board’s new standard. The case is expected to be before the NLRB again shortly.

The Board’s ruling in Purple Communications addresses the requirements for showing special circumstances by saying the employer must articulate the specific business interest at issue and show how the interest supports the restriction on the use of email during nonworking time. Additional guidance in the form of an ALJ’s decision on what constitutes “special circumstances” in the email policy context will have to wait for the next email case to reach the Board.

It is unclear

whether a federal

district court

decision in favor of

the plaintiffs would

compel the Labor

Board to suspend

the election rules

nationwide.

of the WorkplaceD e v e l o p i n g L a w

Absent “special

circum stances”

justifying specific

restrictions, the NLRB

says employers must

permit employees to

use company email

sys tems for union

and other protected

communi cations on

non-working time.

Jackson Lewis P.c. PREVENTIVE STRATEGIES | Second Quarter 2015

7of the WorkplaceD e v e l o p i n g L a w

The EEOC has prepared a Fact Sheet for Small Business: The EEOC’s Notice of Proposed Rulemaking on the ADA and Employee Wellness Programs, available at www.eeoc.gov. The Fact Sheet provides examples to illustrate some provisions of the proposed rule, such as the accommodation that would be offered to employees with disabilities to enable them to participate in the wellness program. In addition, the Commission has prepared ten Questions and Answers about the proposed rule and how it would change the EEOC’s ADA regulations and interpretive guidance as they relate to employee health programs. The Qs & As are available at www.eeoc.gov.

The Jackson Lewis Disability, Leave and Health Management group has developed the Wellness Programs Resource Center to help employers stay abreast of emerging legal developments affecting wellness programs. A number of laws and government regulatory agencies impact employer wellness programs in addition to the ADA and HIPAA, such as the Genetic Information Non-Discrimination Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Equal Pay Act, ERISA, and the Affordable Care Act. The Center provides information, analysis, and links concerning these and other resources.

To access the Center, go to the Disability, Leave and Health Management practice page at www.jacksonlewis.com.

The U.S. Equal Employment Opportunity Commission has released its Notice of Proposed Rulemaking (NPRM) on how Title I of the Americans with Disabilities Act applies to employer wellness programs that are part of group health plans. The NPRM was published on April 20, 2015, in the Federal Register as Amendments to Regulations Under the Americans With Disabilities Act and is open for public comments until June 19, 2015.

In the NPRM, the EEOC acknowledges that guidance is needed on how wellness programs offered as part of an employer’s group health plan can comply with the ADA consistent with provisions governing such programs in the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act.

Although the ADA limits the circumstances in which employers may ask employees about their health or require them to undergo medical examinations, it allows such inquiries and examinations if they are voluntary and part of an employee health program. The proposed rule would amend the EEOC’s ADA Title I regulations to provide guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that include disability-related inquiries or medical examinations. Related interpretive guidance would be changed also.

The proposed rule would require that if an employee health program seeks information about employee health or medical examinations, the program must be reasonably likely to promote health or prevent disease. Wellness programs may not be used to discriminate based on disability, employees may not be required to participate in a wellness program, and they may not be denied health coverage or disciplined if they refuse to participate.

Consistent with limits that HIPAA imposes, the proposed rule would allow companies to offer incentives of up to 30 percent of the total cost of employee-only coverage in connection with a wellness pro-

gram. Since the ADA provides important safeguards to employees to protect against discrimination based on disability, medical information collected as part of a wellness program would be disclosed to employ-ers only in aggregate form that does not reveal the employee’s identity and must be kept confidential in accordance with ADA requirements.

The proposed rule states that employers may not interfere with employees’ ADA rights, including threats, intimidation, or coercion for refusing to participate in a wellness program or for failing to achieve certain health outcomes. Additionally, individuals with disabilities must be provided with reasonable accommodations that allow them to participate in wellness programs and to earn whatever incentive the employer offers. Under the proposed rule, employers would provide employees with a notice describing what medical information will be collected, with whom it will be shared, how it will be used, and the means by which it will be kept confidential.

eeoc issues PRoPosed amendments to ada Regulations on WoRkPlace Wellness PRogRams

The proposed rule

would amend

the ADA Title I

regulations to provide

guidance on the

use of incentives to

encourage employee

participation in

wellness programs

that include

disability-related

inquiries or medical

examinations.

New Publication Offers Strategic Guidance, Preventive Measures for Preventing and Defending Class Actions

Jackson Lewis is pleased to announce the publication of its inaugural

Class Action Trends Report. “In-house counsel are contending with

significantly larger and more costly employment related class action

matters every day,” said Jackson Lewis Chairman Vincent A. Cino. “Class

and collective actions are big business and present a significant potential

liability for employers.”

The Class Action Trends Report (available at www.jacksonlewis.com) draws on the Firm’s experience defending employment law class

actions of all types and offers strategic guidance, tactical tips and preventive measures for

decreasing the likelihood of and defending potential claims.

Jackson Lewis Opens 55th Office in Salt Lake City

We are pleased to announce the Firm’s expansion of its Mountain States presence with the opening of an office in Salt Lake City, Utah. Shareholder Conrad “Shawn” Kee, formerly

resident in Jackson Lewis’ Denver and Stamford, CT offices, has relocated to the new office.

Jackson Lewis Opens New Hawai‘i-Based Firm – Expands Services Available to Hawai‘i Employers and Existing

Clients Doing Business in Hawai‘i

We are pleased to announce the opening of the Hawai‘i-based Jackson Lewis P.C., a Law Corporation. This new Honolulu firm will facilitate access to the national firm’s vast resources for local Hawai‘i clients and existing national clients who have operations in Hawai‘i.

The new firm is home to Hawai‘i lawyers Andrew L. Pepper and Wayne S. Yoshigai, both of whom are outstanding attorneys with extensive experience representing and defending employers doing business throughout the state of Hawai‘i.

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