Summary of Final Rule
After receiving over 7,000 comments, the NLRB by a 3-1 vote (with Member Brian  Hayes dissenting) issued the Final Rule initially to go into effect on November  14, 2011. The NLRB later postponed the  effective date until January 31, 2012.
The poster provides a comprehensive list of employee rights under the Act,  including the right to act together to improve wages and working conditions; to  form, join and assist a union; to bargain collectively with their employer  through chosen representatives; and to refrain from engaging in any of these  activities. It also provides examples of  unlawful employer and union conduct and instructs employees how to contact the  NLRB with questions or complaints.
The notice must measure 11 x 17 inches and be posted in all locations where  employee notices typically are posted, including on a company’s intranet or  internet site if the company customarily posts personnel rules and policies on  its intranet or internet. Although the  rule has no record-keeping or reporting requirements, the NLRB may treat any  failure to post the notice as an independent unfair labor practice. Under certain circumstances, failure to post  may extend the six-month statute of limitations generally applicable to other  unfair labor practice charges.
Each NLRB regional office will provide a copy of the poster free of charge, or  employers may print it directly from http://www.nlrb.gov/poster. The NLRB will also make available foreign  language versions of the notice, which are required at workplaces where at  least 20% of employees are not English-proficient.
Federal contractors that already need to post the similar U.S. Department of  Labor notice pursuant to Executive Order 13496 will be deemed to be in  compliance with the NLRB’s Final Rule.

Union Perspective
The NLRB’s Final Rule requiring posting is a common sense approach to ensuring  that employees are aware of their rights under the NLRA, and is a reasonable  exercise of the Board’s express statutory authority to promulgate regulations  that carry out the Act. As is noted in the  Final Rule, multiple studies have concluded that employees are largely unaware  of the rights afforded to them by the NLRA. 76 FR 54006 (Aug. 30, 2011). Long ago, the DOL concluded that “the posting  of notices…in establishments where covered employees are employed is a  necessary adjunct to proper enforcement of the statutory provisions”  (referencing the FLSA posting requirements).  14 FR 7516 (Dec. 16, 1949).
Because the NLRA is enforceable only through charges filed  by individuals and organizations, the Board must rely on an informed workplace  to properly enforce protections provided by the Act. Further, the NLRB has no authority to monitor  a workplace to determine compliance, nor may it initiate enforcement of the Act  unless and until a charge is filed.  Simply put, if employees are unaware of their rights, the Act cannot be  enforced.
Finally, it should be noted that the Final Rule simply requires posting a piece  of paper on a wall. In their workplaces,  employers are presently required to post information pertaining to a host of  statutory employee rights: OSHA, FMLA,  EEOC, FLSA, etc. Compliance with the Final  Rule is hardly burdensome; it is unlikely to take more than two minutes to  print the notice from the NLRB’s website (for free) and tack it up next to  other employee notices.

Management Perspective
The NLRB’s Final Rule is improper and unnecessary. The arguments against it are well-articulated  in the lawsuits filed against the NLRB in September by the United States  Chamber of Commerce, National Association of Manufacturers, and National Right  to Work Legal Defense and Education Foundation.  See Chamber of Comm. of the U.S. of Am. v. NLRB, 2:11-cv-02516-DCN  (D.S.C.); National Ass’n of Mfgs. v. NLRB, 1:11-cv-01629-ABJ (D.D.C.); National  Right to Work Legal Defense and Education Fdn. v. NLRB, Case No.  1:11-cv-01683-ABJ (D.D.C.).

In sum, the Final Rule improperly:

• exceeds the NLRB’s authority.  Nothing in the statutory text gives the NLRB the authority to require  employers to post a notice of NLRA rights.
• violates the First Amendment. The poster constitutes compelled employer  speech, and the First Amendment protects a private employer’s right not to  speak. The rule is further contrary to  employer’s speech rights under Section 8(c) of the NLRA, 29 U.S.C. § 158(c).
• may make an employer’s failure to post an unfair labor  practice charge and toll the statute of limitations.
• Nothing in the statutory text gives the NLRB  the authority to create or to extend the statute of limitations period beyond  that stated in Section 10(b) of the NLRA, 29 U.S.C. § 160(b).
• is arbitrary and capricious under the Administrative  Procedure Act. The NLRB failed to  consider contrary evidence or legal and economic policy considerations or to  articulate a rationale basis for not addressing that evidence or those  considerations. Among those  considerations the NLRB did not properly address are unionized employees’  rights in right-to-work states. The NLRB  further relied on insufficient empirical data, anecdotal, and outdated,  localized studies in adopting the rule.
• fails to complete a full regulatory flexibility analysis. The NLRB’s analysis was incomplete and understated  economic impact on small entities.

Notably, the House Appropriations Committee has proposed a rider to the NLRB’s  2012 budget that, if passed, would prohibit the NLRB from allocating any  portion of its budget toward enforcement of the rule.

Sharon Block is the deputy secretary for congressional affairs at the U.S. Department of Labor. Block previously served as senior labor and employment counsel for the Senate Health, Education, Labor and Pensions Committee from 2006 to 2009. Prior to that experience, Bloch worked as a senior attorney to former NLRB Chairman Robert Battista and as an attorney in the NLRB’s appellate court branch.

Richard Griffin is the general counsel for the International Union of Operating Engineers and serves on the board of directors for the AFL-CIO Lawyers Coordinating Committee. Griffin has held several positions with the IUOE, beginning in 1983 as assistant house counsel. From 1981 to 1983, Griffin served as counsel to NLRB board members.

Bloch and Griffin’s nominations join that of labor lawyer Terence Flynn, a Republican whom Obama nominated to the NLRB in January 2011 and whose appointment had not been acted on by the Senate.

Absent these recess appointments, the NLRB would have lost its three-member quorum and been unable to render any decisions or promulgate rules.

These appointments surely will antagonize Republicans and the business community, both of whom have recently battled the NLRB over a variety of issues.  Recess appointments are not subject to Senate review and they provide President Obama with an opportunity to pacify his labor constituency without the nasty political fight that certainly would have resulted during the confirmation process. Senate Republicans and the business community will undoubtedly seek to challenge the recess appointments.

From the informal discussion letter:

Under the ADA, a qualification standard, test, or other selection criterion, such as a high school diploma requirement, that screens out an individual or a class of individuals on the basis of a disability must be job related for the position in question and consistent with business necessity. A qualification standard is job related and consistent with business necessity if it accurately measures the ability to perform the job’s essential functions (i.e. its fundamental duties). Even where a challenged qualification standard, test, or other selection criterion is job related and consistent with business necessity, if it screens out an individual on the basis of disability, an employer must also demonstrate that the standard or criterion cannot be met, and the job cannot be performed, with a reasonable accommodation. See 42 U.S.C. § 12112(b)(6); 29 C.F.R. §§ 1630.10, 1630.15(b) and (c); 29 C.F.R. pt. 1630, app §§ 1630.10, 1630.15(b) and (c).

Thus, if an employer adopts a high school diploma requirement for a job, and that requirement “screens out” an individual who is unable to graduate because of a learning disability that meets the ADA’s definition of “disability,” the employer may not apply the standard unless it can demonstrate that the diploma requirement is job related and consistent with business necessity. The employer will not be able to make this showing, for example, if the functions in question can easily be performed by someone who does not have a diploma.

However, there will obviously be a large pool of jobs that meet the “consistent with business necessity” requirement such as jobs as doctors, pharmacists, nurses, etc.

No other changes in the rule, or in the form or content of the notice, will be made, the NLRB stated.

According to the NLRB, the posting date was delayed in order to allow for enhanced education and outreach to employers, particularly those who operate small- and medium-sized businesses. The decision followed queries from businesses and trade organizations indicating uncertainty about which businesses fall under the NLRB’s jurisdiction.

Most private sector employers will be required to post the 11-by-17-inch notice of employee rights under the National Labor Relations Act (NLRA). The requirement applies to most private employers who are subject to the NLRA. Workplaces with or without union representation are included. There are some narrow exceptions, however, particularly for employers with small gross annual business volume.

But… wait a moment. 

Way back in February 2010, I advised employers to scrutinize their classifications of workers because of a significant effort being made by the Obama administration to regulate and enforce such classifications.  At the time, the IRS had added 200 IRS investigators to increase business audits.  Additionally, the Department of Labor had budgeted for 250 new wage and hour investigators.  The clear rhetoric from these agencies at the time was that they each were an enforcement body focused on identifying and punishing employers who have misclassified workers.

In April 2010, I discussed then new legislation, entitled the Employee Misclassification Prevention Act (“EMPA”) (H.R. 5107 and S. 3254), which was being proposed by Democrats in both the Senate and House of Representatives aimed at targeting misclassification of workers.  The legislation sought to amend the Fair Labor Standards Act (FLSA) to: (1) significantly increase recordkeeping burdens regarding independent contractor relationships; (2) provide for increase penalties against employers who have misclassified workers; (3) foster the exchange of information among government agencies and departments, directing the DOL to perform targeted audits focusing on employers in industries that frequently misclassify employees and allows the DOL and the IRS to refer incidents of misclassification to each other; and finally, the legislation sought to mandate that the results of state auditing and investigative procedures be reported to the DOL and IRS with respect to indentifying employers that may have excluded employees from unemployment compensation coverage.

Again, in September 2010, more legislation was proposed by the Democratic leadership, and I discussed the The Fair Playing Field Act of 2010 (S. 3786, H. 6128), which sought to address employer misclassification of employees as independent contractors and close a so-called “loophole” under the current tax regime.  This legislation sought to reduce the ability of employers to utilize a safe-harbor provision in the IRS tax code and provide a contractor with documentation responsibility regarding the classification and tax liability.  The Obama administration promptly embraced and promoted the legislation.

Then, in January 2011, the DOL considered proposed regulations that would require an employer, before classifying a worker as an independent contractor, to perform a written analysis of the reasons for that classification, to be disclosed to the worker. The employer then would have to retain records of its written analysis and make it available in the event of an audit.

Thus, based on the aforementioned enforcement history by the Obama administration regarding independent contractors, I felt compelled on April 2011 to draft an article to provide some tips regarding the classification of workers as independent contractors.

Now, employers are given an opportunity to voluntarily reclassify independent contractors and minimize the potential tax liability with the IRS.  An enticing olive branch is apparently extended in a purported and uncharacteristic effort to assist employers in correcting classification issues.  However, pardon my skepticism, but the track record of this administration is anything but business friendly.  I recommend employers be VERY CAUTIOUS about the IRS program.  The IRS of today communicates much differently with other agencies within the states and Obama administration.  For example, as recently as September 19, 2011, the IRS entered into an agreement with the DOL and eleven (11) states to share information pertaining to worker misclassification.  I strongly suspect that companies choosing to voluntarily reclassify under the program and take the incentives offered by the IRS will be subject to DOL scrutiny for backwages for the individual workers involved and penalties as well.  The DOL may also assert that the employer deprived employees of required benefits based upon the misclassification.  Moreover, there may potentially be significant liability to the state agencies for circumventing workers’ compensation or unemployment compensation tax liability.

[A]ny action that demonstrates conscious disregard of an employer’s interests and is found to be a deliberate disregard or violation of reasonable standards of behavior, and may include activities that did not occur at the workplace or during working hours.

Under the new definition, misconduct is extended to activities that occur during an employee’s personal time outside of the workplace. Additionally, it should be easier for employers to prove misconduct by reducing the standard from “willful and wanton disregard” of an employer’s interests, to “conscious disregard of an employer’s interest.”

The definition of misconduct also includes (1) chronic absenteeism or tardiness; (2) willful and deliberate violation of a state standard or regulation which would jeopardize the employer’s Florida license or certification; and (3) violation of an employer’s rules under certain circumstances.

While the revision to the definition of misconduct is a critical piece of which employers should be aware, the new law includes several other provisions primarily focused on what the claimant is required to accomplish in order to obtain benefits.  For instance, under the new law Claimants are now required to search for work by contacting at least five potential employers weekly and to provide records of such contact on-line during their bi-weekly certification of benefits. Also significant, severance pay is now considered disqualifying income if the amount of severance received per week is equal to or greater than the Claimant’s weekly benefit amount. Finally, effective January 1, 2012, the duration of benefits for new claims will be adjusted from the current maximum of 26 weeks to a range of 12 to 23 weeks, “based upon the average unemployment rate in Florida for the third calendar quarter of the previous year.”

The notice must be posted at “conspicuous places…readily seen by employees, including all places where notices to employees…are customarily posted,” any employer that “customarily communicates” via intranet or internet with its employees as to “personnel rules or policies” must display an exact copy of the Notice on such site(s), or a link to the NLRB’s web site which reads, “Employee Rights under the National Labor Relations Act.”

The notice generally advises employees about unions, but it also alerts employees with regard to protected concerted activities such as complaining about the terms and conditions of their employment.  The final rule states that a failure to post the notice may be evidence of anti-union motivation in any NLRB proceeding
where motive as an issue and would likely extend the limitations period for filing an unfair labor practice charge.

The benefits of embracing social networking are clear.  Social networking sites can provide your business with new avenues to market themselves and brand their products and services.  Additionally, businesses can enhance existing business relationships and develop new customer relationships. Also significant, social networking can also help to foster internal networking among your employees, improve applicant screening, and monitor employee conduct that may reflect positively or negatively on the company. Employers need to discover ways to use social media outlets as tools, instead of treating them merely as threats.  Clearly, as many emerging social media experts are loudly declaring, businesses that are better able to position themselves to reap the benefits of both existing structures and new developments in social networking will be the leading organizations in the future.

The Internet, however, has long provided a ready and willing forum for disgruntled individuals to voice complaints and launch verbal attacks with immediacy. The ease with which a person can take action within a social networking environment can often result in impulsive and ill-advised content that is posted with impunity and made available to the general public for immediate consumption.  Part of the issue is that the sense of community found within a person’s network leads to the common misperception that the Internet is beyond the reach of traditional mores and existing rules.

The resulting behavior can have vast legal implications, including discrimination lawsuits, defamation claims, disclosure of the company’s confidential information and trade secrets, and damage to the company’s reputation. Moreover, courts are increasingly finding that content on social media sites is discoverable in litigation, which imposes additional burdens and costs on employers, especially those who do not already have mechanisms in place to address employee use of social media.

But regulating your employees’ social media content raises a number of significant hurdles: monitoring can be time-consuming, regulation of off-hours conduct is fraught with concerns related to personal privacy, and the availability of social media applications on mobile devices renders “site blocking” generally futile. Additionally, employers must recognize situations in which the employees’ activity – while, perhaps distasteful – may constitute protected activity under the National Labor Relations Act, or whistleblower or retaliation statutes.

Hence, it is critical that your employees be given guidance through a clear social media policy that delineates what conduct is acceptable, what conduct is prohibited and exactly what the latter means in terms of disciplinary consequences.  And like all disciplinary policies in the workplace, employee education and consistent enforcement are critical.  While some businesses may find it necessary to prohibit employees’ use of social media outlets altogether, companies that can derive benefits from appropriate use should consider adopting policies that accommodate their employees’ use of social networking accounts, while still discouraging inappropriate use that may harm the company. For example, an employer may find a clear prohibition on harassing, defamatory, or illicit content coupled with different access policies for on-the-job social media use versus off-the-job use creates a more flexible and positive environment for its employees.

For companies that operate in industries that necessitate social media use by employees, a more open policy – with restrictions imposed only on inappropriate content – would be favored in order to further the company’s goals. In concert with promulgating a policy, employers are well advised to train their employees in not only the terms of the policy, but also the rationales and company goals underlying the policy.  Regardless of how restrictive you with to be regarding employees’ use of social networking, a clear, understandable, written policy is fast becoming a business necessity. By crafting a company-specific policy and educating your workforce regarding its purposes and practical implications, your company can capitalize on the advantages offered by social media while avoiding its pitfalls.

The NLRB issued a statement and Fact Sheet and Summary indicating that its proposal would eliminate “unnecessary barriers,” reduce litigation and consolidate the review of challenges.  The proposed rule will force elections “in 10 to 21 days after the filing” of a petition to create a union.  According to the NLRB, the median time for a union currently is 38 days from the petition to the vote.  In his lone dissent, Brian Hayes, the NLRB’s only Republican member, stated that deadlines that tight will “effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.”

Unions have sought NLRB action to speed elections since losing their fight in Congress for “card-check” legislation. The measure, backed by Obama, would have let workers form a union without an election if a
majority of employees signed cards backing the move. While companies now can permit the card- check procedure, most demand elections.

The NLRB issued its proposal a day after the U.S. Labor Department proposed requiring companies to make more detailed disclosures about consultants hired to help counter union organizing. Currently, employers have to provide that information only if the consultants contact employees directly.