by David J. Schmitt
The U.S. Environmental Protection Agency (“EPA”) recently released its“Draft FY 2014-2018 EPA Strategic Action Plan” (the “Plan”). Any parties interested in submitting comments need to do so by January 3, 2014.
- The Plan describes EPA’s five main strategic goals:
- Addressing climate change and improving air quality;
- Protecting America’s waters;
- Cleaning up communities and advancing sustainable development;
- Ensuring the safety of chemicals and preventing pollution; and
- Protecting human health and the environment by enforcing laws and assuring compliance.
The Plan also addresses four additional fundamental strategies that cut across all agency activities:
- Working toward a sustainable future;
- Working to make a visible difference in the communities;
- Launching a new era of State, tribal, local, and international partnerships; and
- Embracing EPA as a high-performing organization.
Within the Plan, each of these goals and strategies is discussed in great detail. For example, the goal of addressing climate change and improving air quality includes EPA’s priority goal to reduce greenhouse gas (“GHG”) emissions from new model vehicles and trucks by September 30, 2015. This goal would potentially result in reducing GHG emissions by 6 billion tons and reducing oil consumption by about 12 billion barrels over the lifetime of the vehicles. As another example, the goal of cleaning up communities and advancing sustainable development includes the benchmark of having 18,970 additional contaminated sites cleaned up and made available for use by 2015.
Importantly however, the Plan also confirms that EPA is envisioning far fewer enforcement activities over the next five years. Some primary examples of EPA’s reduced enforcement efforts going forward include:
- Conducting only 70,000 federal inspections and evaluations by 2018, when 105,000 such inspections and evaluations had been conducted on average per year between FY 2005 and 2009;
- Initiating only 11,600 enforcement cases by 2018, when 19,500 enforcement cases had been initiated on average per year between FY 2005 and 2009; and
- Concluding only 10,000 enforcement cases by 2018, when 19,000 enforcement cases were concluded on average per year between FY 2005 and 2009.
EPA states in its Plan that its objective is to: “Pursue vigorous civil and criminal enforcement that targets the most serious water, air, and chemical hazards in communities to achieve compliance.” EPA believes that addressing the worst polluters first in identified sectors will result in less pollution, as well as fewer enforcement actions over time.
Additionally, throughout the Plan, EPA stresses its intention to “modernize” how it functions. As the primary example, EPA envisions the use of “Next Generation Compliance” strategies and tools to improve compliance while reducing pollution.
This Next Generation Compliance includes:
- Designing regulations and permits that are easier to implement, with a goal of improved compliance and environmental outcomes;
- Using and promoting advanced emissions/pollutant detection technology so that regulated entities, the government, and the public can more easily see quantified pollutant discharges, environmental conditions, and noncompliance;
- Shifting toward electronic reporting by regulated entities so that EPA has more accurate, complete, and timely information on pollution sources, pollution, and compliance, saving time and money while improving effectiveness and public transparency;
- Expanding transparency by making the information that EPA has today more accessible, and making new information obtained from advanced emissions monitoring and electronic reporting more readily available to the public; and
- Developing and using innovative enforcement approaches (e.g., data analytics and targeting) to achieve more widespread compliance.
In discussing Next Generation Compliance EPA freely admits, “. . . [W]e are not there yet . . . it will take years to fully implement this transition.”
by Jack B. Harrison
On November 7, 2013, the United States Senate passed The Employment Non-Discrimination Act (“ENDA”) by a vote of 64-32. ENDA would amend the Civil Rights Act of 1964 to prohibit discrimination in hiring and employment based on sexual orientation or gender identity. This was the first time such legislation has passed the Senate.
As passed, the bill would prohibit employers from treating applicants or employees differently based on the individual’s actual or perceived sexual orientation or gender identity (or the gender identity or sexual orientation of those with whom the individual associates). As with charges of discrimination currently filed under Title VII, the Equal Employment Opportunity Commission (“EEOC”) would investigate charges of discrimination made under ENDA.
As passed by the Senate, ENDA applies to public and private employers and labor unions with at least 15 employees. As written, ENDA would only apply prospectively, not retroactively. In passing its version of ENDA, the Senate included a religious exemption that would specifically apply to religious institutions and entities.
At the moment, twenty-one states and the District of Columbia, along with a number of cities and municipalities, have laws that prohibit discrimination based on sexual orientation or gender identity. Additionally, many employers have voluntarily chosen to include protections for their employees against discrimination based on sexual orientation and gender identity within their own internal employment policies and procedures.
What is clear is that with the Supreme Court’s striking down a section of the Defense of Marriage Act, followed by actions by federal agencies implementing that decision, the landscape at both the federal and state level is evolving rapidly to create a workplace environment where discrimination based on sexual orientation or gender identity will be increasingly difficult to defend.
While expectations are that, with a Republican controlled House of Representatives, ENDA’s ultimate passage will not occur within the current Congress, prudent employers should take note of the rapidly evolving landscape in this area. Employers, particularly those with employees across a number of states should pay careful attention to the changes that are occurring in this area and revise their handbooks and policies to ensure that they are compliant with state and federal law. Additionally, these changes in the law in this area, at both the state and federal levels should be incorporated into all training provided for managers in the workplace.
by David J. Schmitt
Inflation hits everyone in their bank accounts on a regular basis. Just as the government periodically makes Cost-of-Living Adjustments (COLA) to Social Security and other benefits to account for inflation, so too does USEPA periodically adjust environmental civil penalties.
This is not just random cruelty by USEPA. The Federal Civil Penalties Inflation Adjustment Act of 1990 (28 USC 2461), as amended by the Debt Collection Improvement Act of 1996 (31 USC 3701), requires the agency to review and adjust civil penalties at least every four years. The purpose of the adjustment is to both maintain the deterrent effect of civil penalties and to further the policy goals of the underlying statutes.
The calculations involved include complicated analyses of the Consumer Price Index for all urban consumers (CPI-U) since the last adjustment, the raw inflation numbers, and several different rounding rules. For any true accounting wonks out there, the full calculation formula is included in the Federal Register Notice: http://www.gpo.gov/fdsys/pkg/FR-2013-11-06/pdf/2013-26648.pdf
So what is the bottom line impact of all of this?
First of all, the increased penalties will become effective on December 6, 2013.
Because of the rounding rules, a majority of environmental civil penalties remain the same. However, several individual penalties are increasing substantially and are worthy of note.
For example, the statutory maximum administrative penalty amounts that may be imposed under the Clean Air Act (CAA) §113(d)(1), 42 USC 7413(d)(1) and CAA § 205(C)(1), 42 USC 7524(c)(1) are increasing from $295,000 to $320,000.
Similarly, administrative penalties are being increased under the Emergency Planning and Community Right To Know Act (EPCRA), 42 USC 11045(b)(2) from $107,500 to $117, 500. This particular example may have an impact on those companies involved in the fracking boom taking place in eastern Ohio and neighboring states.
U.S. EPA recently confirmed that Ohio’s statutes governing the disclosure of the contents of fracking fluids, do not trump EPCRA. This means that going forward the oil and gas industry will have to file reports disclosing the contents of fracking fluids with the State Emergency Response Commission. The deadline for filing this information is now December 15, 2013. Failure to timely file the reports is one of the violations covered by the increased penalties.
Increases in administrative penalties are also slated under CERCLA (the Superfund Law), the Clean Water Act, and the Safe Drinking Water Act.
The attorneys at Cors & Bassett can answer any questions companies may have regarding any of these pending increases and how these statutes apply to you.
by David J. Schmitt
On September 17, 2013, the United States Environmental Protection Agency (“EPA”) released a draft scientific study that links all streams (including intermittent and ephemeral streams), as well as associated wetlands with larger downstream navigable waters that are currently under the agency’s jurisdiction.
The draft study titled “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence” concludes that there is ample evidence that
“All tributary streams, including perennial, intermittent, and ephemeral streams, are physically, chemically, and biologically connected to downstream rivers via channels and associated alluvial deposits where water and other materials are concentrated, mixed, transformed, and transported. Headwater streams (headwaters) are the most abundant stream type in most river networks, and supply most of the water in rivers.”
While this may seem like an esoteric ivory tower topic, it may have a large real world impact. Currently, the jurisdiction (and permitting authority) of the EPA and Army Corps of Engineers (“COE”) extends only to traditional navigable waters, wetlands adjacent to traditional navigable waters, non-navigable, but relatively permanent tributaries of navigable waters that flow year-round or have continuous flow at least three months of the year, and wetlands that directly abut such tributaries.
The EPA commented that the draft study provides the first comprehensive link between headwater streams, which are the most abundant type of streams in the U.S. and downstream navigable waters. The study, now being reviewed by the EPA Science Advisory Board, will serve as the scientific basis for a new rule developed jointly by the EPA and COE to clarify Clean Water Act jurisdiction. Based on the study’s conclusions, the EPA and COE could propose bringing all intermittent and ephemeral streams and all wetlands in flood plains and riparian areas, including those that abut intermittent and ephemeral streams, under federal protection.
If this occurs, it will dramatically enlarge EPA’s and COE’s jurisdiction and permitting authority and could lead to a large increase in the number of construction and other projects required to obtain CWA permits prior to working in these areas.
Companies in the industrial and residential construction sectors, as well as any businesses which anticipate any new construction or site modification activities in the coming years stand the greatest chance of being impacted. Cors & Bassett will continue to monitor the development of the coming proposed rule and will keep its clients abreast of the latest information.
The study itself may be found at: http://tinyurl.com/ldn73to
by David J. Schmitt
Ohio employers currently pay their workers’ compensation premiums “retrospectively.” This means that when employers write a check for their workers’ compensation premium, they are paying for the previous six months of coverage, or in “arrears.” For example, private employers paid in February 2013 for the July 1, 2012 to December 31, 2012 coverage period.
Prospective billing is an industry standard and builds upon ongoing efforts by BWC to modernize its operation. Under prospective billing, BWC would, like most insurance companies, collect employer premiums for the upcoming policy period. In other words, employers will make upfront payments to BWC for their workers’ compensation coverage.
Potential Benefits of Prospective Payment:
The BWC believes that a switch to a prospective billing system could provide the following benefits to Ohio employers:
- Opportunities for more flexible payment options (e.g., monthly, quarterly, yearly) with possible discounts for those who pay a year in advance for example.
- Ability to better anticipate budgetary impacts of workers’ compensation coverage, especially for public-taxing districts.
- Better opportunities for BWC to provide quotes online or via phone.
- Fewer costs from employers who either don’t pay premiums timely or have workers injured without coverage being mutualized among employers in good standing.
- Moving to prospective payment also increases BWC’s ability to detect employer non-compliance and fraud.
The legislature has given BWC the authority to pursue prospective billing, meaning the switch could occur as early as late 2014. Prior to switching, BWC plans to ask its Board of Directors to authorize a credit for all employers equal to the full amount of six months’ premium. This would allow employers to make their first prospective payment without worrying about also having to pay their last retrospective payment. This would equate to an estimated $900 million savings to businesses. In addition, this switch would result in rate reductions of 2 percent for private employers and 4 percent for public employers.
Cors & Bassett will continue to monitor this BWC initiative and inform employers when to expect these savings to occur
by David J. Schmitt
Companies that manufacture or retail products in California should be aware of this new California statute and associated regulations.
On October 1, 2013, the Safer Consumer Products Act took effect in California, imposing new requirements on product manufacturers, importers and even retailers and assemblers of products, regarding the components of certain consumer products. The regulations are codified in Title 22, Division 4.5, Chapter 55 of the California Code of Regulations and will be administered by the Department of Toxic Substances Control ("DTSC").
The stated purpose of the Act is to require responsible entities "to seek safer alternatives to harmful chemical ingredients in widely used products." The DTSC's first responsibility under the Act is to identify candidate chemicals, or chemicals that have been identified as harmful by California, federal and international agencies. Within 180 days, the DTSC must create a list of priority products, consisting of no more than five products to which the Act's regulations will apply. This priority products list will be updated at least once every three years. A "priority product" need not be narrowly-defined, but may be as general as a "laundry product," encompassing a variety of consumer products. The DTSC will publish its lists of priority products and candidate chemicals on its website.
When a priority product contains a candidate chemical, the chemical is deemed a chemical of concern ("CoC"). A responsible entity ("entity") – one whose consumer product contains a CoC – must notify the DTSC within 60 days to identify itself and provide a list of brands containing the subject CoC. An entity thereafter faces three alternatives: (1) stop California distribution of the consumer product; (2) remove the CoC from the product; or (3) conduct an alternative analysis to demonstrate whether there is a feasible, less harmful replacement chemical.
The Act provides for DTSC supervision over the entity's choice. The entity must, for example, notify the DTSC if it opts to stop distribution in California, if it removes the CoC from its product or if it replaces the CoC with another chemical. If the entity retains the CoC in the product, the entity must submit a preliminary analysis to the DTSC detailing the reasons for which the CoC must remain in the product in lieu of alternative chemicals.
This preliminary analysis is supplemented by a final alternative analysis, after which the DTSC determines the appropriate action. The DTSC may decide to require the entity to inform consumers that the product contains the chemical or to restrict the sale of the product. The DTSC may even prohibit distribution and sale of a product even if no alternative chemical exists.
At present, unlike Proposition 65 enforcement, citizens are not entitled to bring a private right of action, on behalf of an individual or the general public. Rather, the DTSC is responsible for the Act's enforcement. Any entity that has violated a regulation will be listed on the DTSC's Failure to Comply List on its website. A violation may also result in the DTSC's imposition of a fine or criminal penalty as determined by the Health and Safety Code. A product may be exempt from compliance, however, where the CoC is below a certain threshold, as long as the CoC is a naturally-occurring contaminant of the product. A product may also be exempt if it is made up of more than 100 subparts, as long as the product is not a children's product or clothing.
Although the Act has been criticized by some for its weak enforcement and penalty measures, it is still significant for product manufacturers and other entities who manufacture, sell and distribute their consumer products in California. These entities should remain informed of the DTSC's priority products and candidate chemicals lists. If an entity's product contains a CoC, it is the entity's responsibility to ensure compliance with the Act's provisions.
By Jack B. Harrison
On June 26, 2013, the Supreme Court issued its long-awaited decision in Windsor v. United States, No. 12-307, a case challenging the section of the Defense of Marriage Act (DOMA) under which same-sex marriages validly entered into under applicable state law were not recognized for the purposes of federal laws. The Court ruled, in a 5-4 decision, that this section of DOMA is unconstitutional. The Supreme Court first determined that those defending the law, representatives of the United States Congress, actually had standing to defend the law, this giving the Supreme Court jurisdiction to hear the case. The majority, with Justice Kennedy writing for the Court, held that the equal protection clause of the Fourteenth Amendment prohibited the federal government from refusing to recognize same-sex marriages that have been entered into validly under the law of a state. A primary basis for this decision was that states have historically defined the parameters for those marriages they consider valid. In this specific case, since New York had chosen to protect same-sex relationships by allowing same-sex couples to marry, it was a violation of equal protection for the federal government to make unequal a subset of state-sanctioned marriages.
On September 18, 2013, the Department of Labor (“DOL”) released Technical Release No. 2013-04 in order to provide guidance to employee benefit plans regarding the definition of "spouse" and "marriage" under ERISA in light of the Supreme Court's decision in Windsor. The Internal Revenue Service (”IRS”) previously issued identical guidance to taxpayers in Revenue Ruling 2013-17.
The guidance issued by both the DOL and the IRS provides the following:
- "Spouse" refers to any individuals who are lawfully married under any state law, including individuals married to a person of the same sex.
- "Marriage" includes a same-sex marriage that is legally recognized as a marriage under any state law.
- Marriages between same-sex individuals that were validly entered into in a state whose laws authorize the marriage of two individuals of the same sex will be recognized even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages.
- "Spouse" and "marriage" do not include individuals in a formal relationship recognized by a state that is not called a marriage under state law, such as domestic partnerships and civil unions.
Under the DOL analysis, the state of celebration rule, recognizing marriages that are valid in the state in which they were celebrated, regardless of the married couple’s state of domicile, provides for uniformity. The DOL reasoned that the application of this rule provides a uniform rule of recognition that can be applied by employers, plan administrators, participants and beneficiaries. According to the DOL, to adopt a rule based on the state of domicile, as opposed to the state of celebration, would create much confusion for employers who operate or have employees (or former employees) in more than one state or whose employees move to another state while entitled to benefits. The net effect of the adoption of such a rule, according to the DOL would be a substantial burden on employers, both financial and administrative.
While the DOL release does not provide an effective date or indicate whether this new guidance will apply retroactively, the DOL does make it clear that it will offer further guidance dealing with specific benefit plan issues under ERISA.
Given these continuing developments in the aftermath of the Windsor decision, prudent employers and other plan sponsors should take the following steps, in consultation with their benefits counsel and plan administrators:
- Send appropriate communications to employees about how the Windsor decision potentially impacts their benefits, describing what changes are being made to the benefit plans or policies in light of the decision;
- Review benefit plans and employee policies to determine the impact of Windsor, if any, on their plans and policies;
- Determine whether current plan eligibility rules, definitions and policies, specifically as related to the definition of spouse, need to be revised in light of Windsor and then revise applicable documents and forms, as necessary;
- Where the employer provides domestic partner/civil union partner health benefits, consider whether those benefits should be continued or revised, given that same-sex spouses will be recognized as spouses for purposes of federal law, considering carefully applicable state law requirements and risks; and
- Ensure that outside administrators, insurers and service providers are administering plans in a manner consistent with the employer's intent and the applicable legal requirements, including with respect to payroll and tax issues, in light of the decision in Windsor.
by Jack B. Harrison
It is extremely important that employers periodically review with their employment counsel their Employee Handbook to insure that it accurately sets forth the employer’s policies and goals in a clear manner so that all employees know exactly what is expected of them as employees. Clearly articulated policies and goals contained in the Employee Handbook can, at times, limit an employer’s legal liability by providing a valid defense to certain claims. Below are some of the policies that should be included in every Employee Handbook. This list is certainly not meant to be exhaustive, but is intended to provide guidance as to some important provisions that should be contained in an Employee Handbook.
Employees need to be provided with clearly articulated expectations of what conduct will or will not be tolerated in the workplace. The Discipline Policy should set forth the steps that will be followed in the event of a disciplinary action. Management personnel should be periodically trained on these steps and on the importance of documenting that all disciplinary steps have been followed.
Statement Concerning Equal Employment Opportunity (EEO)
The employer’s EEO policy should provide a clear statement of the employer’s intent to provide fair and equal treatment to all employees in all terms and conditions of employment, regardless of the employee’s race, color, sex, age, disability, religion, national origin, veteran status and/or any other status protected by applicable federal, state or local laws. Like all policies, an EEO policy should be part of the training of all management personnel and should be periodically reviewed to insure that it is consistent with any changes that might occur in the law.
Statement Regarding At-Will Employment
An Employee Handbook should contain a statement making it clear that employment is at-will, meaning that the employment may be terminated by either the employer or employee at any time, without reason or notice. This statement should also make it clear that the Employee Handbook does not create a contract for employment. Additionally, the statement should inform employees that any policies set forth in the Employee Handbook can be modified at any time by the employer.
Statement Prohibiting Harassment and Discrimination
Related to the employer’s EEO policy or statement, this statement makes it clear to all employees that discrimination, harassment and retaliation in the employer’s workplace that is based on a person’s race, color, religion, national origin, sex, age, disability, veteran status or any other classification protected by federal, state or local law is prohibited and will not be tolerated. In addition to the clearly articulated statement of the employer’s intent, this statement should include the various processes by which an employee may complain if the employee believes he or she has been the victim of harassment, discrimination or retaliation.
Statement Regarding Family and Medical Leave Act
Under federal law, where an employer employs fifty or more employees, the employer must comply with the Federal Family and Medical Leave Act. The FMLA provides eligible employees 12 weeks of unpaid leave each leave year. The FMLA requires that an employer’s Employee Handbook contain an FMLA policy statement.
Statement Regarding Confidentiality and Trade Secrets
A statement in the Employee Handbook regarding confidentiality and trade secrets should clearly state that, during the course of their employment, employees have or may have access to confidential and proprietary information and trade secrets that are the sole property of the employer. The statement should inform employees that they are required to keep this information confidential both during the course of their employment and following the termination of their employment. This statement should articulate policies and guidelines for how such information is to be managed and handled by the employees.
Statement Regarding Electronic Communications
Given that many employees make use of workplace computer systems and other company owned equipment in the context of their employment, Employee Handbooks should make it clear that the employer reserves the right to review and monitor all information that passes through their computer systems and equipment. Employees should be informed that they should have no expectation of privacy related to any communication that takes place using employer owned computers or equipment, regardless of whether the communication is business related or personal.
by Jack B. Harrison
United States Court of Appeals for the Sixth Circuit Rejects Attempts by Employers to Shorten the Limitations Period for Claims Under the Fair Labor Standards Act Through Employment Agreements
On August 6, 2013, the United States Court of Appeals for the Sixth Circuit issued a decision in Boaz v. FedEx Customer Information Services, Inc., in which the Court held that the inclusion of language in an employment agreement designed to shorten to six months the statute of limitations for bringing an employment claim did not waive the employee’s rights under the Fair Labor Standards Act (FLSA).
In Boaz, the plaintiff, Margaret Boaz, was employed by FedEx beginning in 1997. The employment agreement that Ms. Boaz signed included the following language:
To the extent the law allows an employee to bring legal action against Federal Express Corporation, I agree to bring that complaint within the time prescribed by law or 6 months from the date of the event forming the basis of my lawsuit, whichever expires first.
In April, 2009, Ms. Boaz sued FedEx under the FLSA and the Equal Pay Act, a provision of the FLSA. Ms. Boaz’s claims were based on allegations that, from January 2004 through June 2008, FedEx had paid her less than it had paid the male employee who previously held her position and who had performed the same duties. Ms. Boaz claimed that these actions by FedEx violated the Equal Pay Act. Additionally, Ms. Boaz claimed that FedEx had violated the FLSA by failing to pay her required overtime.
While Ms. Boaz’s claims under the FLSA were filed within the statute of limitations set forth in the FLSA (two years for non-willful violations and three years for willful violations), FedEx argued, in filing for summary judgment, that the six month statute of limitations contained in the employment agreement controlled. FedEx asserted that the last illegal activity alleged in Ms. Boaz’s claim was the issuance of Ms. Boaz’s June 30, 2008 paycheck. Because this occurred more than six months before Ms. Boaz filed suit, FedEx claimed that her FLSA claims were time barred under the terms of her employment agreement. The district court held that the employment agreement superseded the statutory statute of limitations and dismissed Ms. Boaz’s claims as time barred.
On appeal, the United States Court of Appeals for the Sixth Circuit reversed the decision of the district court. The Court of Appeals determined that the Supreme Court had previously held in Brooklyn Savs. Bank v. O’Neil, 324 U.S. 697, 706–10 (1945), that employees could not waive their rights under the FLSA by contract. In O’Neil, the Supreme Court had held that allowing such waivers would “nullify” the purpose of the FLSA of “achiev[ing] a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act.” Id. at 707. In its decision, the Court of Appeals rejected FedEx argument that it could contractually shorten the limitations period for FLSA claims because courts previously have allowed employers to contractually shorten the limitations period for claims under Title VII of the Civil Rights Act of 1964. The Court of Appeals rejected this argument by analogy, pointing out that the Supreme Court had already articulated the difference between claims under the FLSA and Title VII in Alexander v. Gardner-Denver Co., 415 U.S. 36, 52 (1974), as related to an employee’s waiver of rights. According to the Supreme Court, an employer does not gain a competitive advantage by requiring employees to contractually waive rights under Title VII, but does gain such a competitive advantage by requiring the waiver of rights under the FLSA, in that such a waiver may allow an employer to pay less than minimum wage to its employees.
The decision in Boaz certainly does not eliminate advantages that may be gained by the inclusion of language in employment agreements that shorten the statute of limitations for employment claims. In some cases, such as in the case of Title VII claims, such language may well be enforceable. However, Boaz does point out the limits of such language in employment agreements. Based on Boaz, prudent employers must understand that contractual language shortening the statute of limitations for employment claims is likely to be unenforceable as related to claims under the FLSA and/or the Equal Pay Act. In those cases, if the employee’s claim is brought within the statutory statute of limitations, the employer must prepare to defend the claim.
by Jack B. Harrison
On July 2, 2013, a divided panel of the United States Court of Appeals for the Sixth Circuit in GGNSC Springfield LLC, d/b/a Golden Living Center-Springfield v. NLRB, No. 12-1529 (6th Cir. July 2, 2013), held that registered nurses (“RNs”) who worked as charge nurses in a nursing home were supervisors under the National Labor Relations Act. In so holding, the Court determined that the RNs exercised sufficient independent judgment in issuing discipline to non-RN employees to be considered supervisors. The net impact of this decision was to make clear that the RNs in this case did not have the right to organize and collectively bargain.
FACTS AND PROCEDURAL BACKGROUND
The nursing home at issue in this case, Golden Living Center, is located in Springfield, Tennessee. Golden Living Center has approximately 100 employees, including 12 registered nurses (“RNs”), 10 licensed practical nurses (“LPNs”), and 46 certified nursing assistants (“CNAs”). Under the organizational structure of Golden Living Center, RNs and LPNs are considered “charge nurses,” who report directly to the Director of Nursing.
In 2011, the International Association of Machinists and Aerospace Workers, AFL-CIO filed a petition with the National Labor Relations Board (“NLRB”) seeking to represent the RNs employed by Golden Living Center in collective bargaining. Golden Living Center challenged the petition, arguing that the RNs, as charge nurses, were supervisors under the National Labor Relations Act and, thus, not allowed to unionize. In November 2011, the Regional Director of the NLRB determined that for the purposes of the Act, the RNs were not supervisors. The Regional Director, therefore, granted the petition, certified the bargaining unit, and ordered an election. Subsequently, an election was held and the RNs elected the union as their bargaining representative. However, Golden Living Center refused to recognize or to bargain with the union. As a result of this refusal to bargain, an unfair labor practice complaint was filed with the NLRB by the union. The NLRB upheld the complaint and ordered Golden Living Center to bargain. A petition for review of the NLRB decision was then filed by Golden Living Center.
COURT OF APPEALS DECISION
The first issue addressed by the Court of Appeals was whether the NLRB even had the authority to issue an order. This argument centered on the decision by the Court of Appeals of the D.C. Circuit in Noel Canning v. N.L.R.B., 705 F.3d 490 (D.C. Cir. 2013), holding that three of the Board’s five members, whom President Obama had appointed during a Congressional recess, had been appointed in violation of the Constitution because they were appointed without the advice and consent of the Senate. The Court of Appeals refused to consider this argument, asserting that “[e]rrors regarding the appointment of officers under Article II are ‘nonjurisdictional.’”
In considering the merits of the case before them, the Court of Appeals focused on whether or not the RNs, as charge nurses, had the authority to “discipline” CNAs, such that they would be considered supervisors under the Act. A majority of the panel found that the RNs in question did have disciplinary authority, such that they were supervisors. Under Golden Living Center’s discipline policy, CNAs were to receive four written warnings before being terminated. Under this disciplinary policy, RNs were given the authority to issue written memoranda in the event of misconduct by a CNA, with the written memorandum by the RN immediately triggering a written warning. A majority of the panel found that these written memoranda constituted “discipline” because they “’lay a foundation’ for future adverse employment action.” Additionally, the majority found that under the policies of Golden Living Center, the RNs exercise independent judgment when issuing discipline, in that they “can either do nothing, provide verbal counseling (and decide whether to document the counseling), or draw up a written memorandum.” In dissent, Judge Merritt strongly disagreed with the findings of the majority, arguing that the majority’s decision was simply results driven and anti-union. Judge Merritt asserted that the majority was indulging in “linguistic wordplay over the word [discipline] without even referring to or trying to understand the purpose of the statutory language at issue.”
While this decision is certainly a victory for healthcare workers and provides some guidance to employers as to what may constitute the exercise of discipline for the purposes of determining the supervisory status of an employee, the split in the decision certainly makes it clear that disagreement remains in the courts as to what constitutes “discipline” for the purposes of determining whether an employee is or is not a supervisor. However, this decision does make it clear that, at least in some situations, the exercise of discipline may include more than just suspensions and terminations. Prudent employers should continue to pay attention to the roles various employees may play within their disciplinary policies and programs and continue to monitor developments in the courts regarding these issues.