Employment, Labor & Benefits Update

Transcription

1 Employment, Labor & Benefits Update April 16, 2012 TOPIC OVERVIEW You are invited Breaking News Hits as April 30 Looms For Non-Union Companies... 1 You are invited. On May 2, starting at 9:00 a.m., Alan M. Kaplan will be presenting a complimentary seminar entitled The Legal Foundation of a Job: At Will, Offer Letters and Employment Agreements A Critical Guide to the Basics at the offices of Illinois worknet, 723 W. Algonquin Road, Arlington Heights, IL. For information and to register, please visit 2 or contact Fumiko Tokuyoshi at (312) California Expands Written Notice Requirements for Employees... 2 Construction Company Found Liable For Delinquent Contributions... 3 Masuda Funai On the Go... 4 Breaking News Hits as April 30 Looms For Non-Union Companies By Alan M. Kaplan On Friday, April 13, 2012, the federal court in South Carolina put in doubt the requirement to post a poster by April 30, informing employees of their right to organize unions. Judge David C. Norton interpreted the underlying National Labor Relations Act and found that the NLRB s rule was not a proper exercise of its rulemaking authority. He wrote that the NLRB could not presume that Congress gave it the power to require employers to post the notice. However, contrary to this decision, the federal district court in the District of Columbia upheld the NLRB s rule, requiring companies to post the notice. The ultimate decision will be made on appeal. This decision took place as companies face other regulations becoming effective on April 30. The NLRB s new procedural rules will lower the number of days for an election to as little as days. This is half the time that companies have usually had to campaign against the union by telling its employees information about unions as well as the advantages and disadvantages of unionization. Companies with just 2 employees may face a union election in which the NLRB may certify the union as the employees exclusive collective bargaining representative. Unions are not just for manufacturing and construction workers. Service sector unions are increasingly representing service employees, including office workers. Masuda Funai s Employment, Labor & Benefits Update is provided as a free service of the firm regarding legal developments. It is not a substitute for legal counseling and may constitute advertising material Masuda, Funai, Eifert & Mitchell, Ltd. All rights reserved.

2 We advise companies in South Carolina not to post the poster. Other companies should comply with the NLRB s posting rule, especially because there is a conflict between the federal district courts. If the NLRB sues a company that has not posted the poster, the failure to post the poster may be used by a judge as evidence of an unfair labor practice. In addition, many companies have already posted the poster, because they have purchased new laminated posters sold by various companies and chambers of commerce which have included the new poster during the pendency of these lawsuits. Companies are asking us the following questions: Does my company have to post the notice? Yes, for non-retail companies, your company probably sells or purchases goods and services over $50,000/year across state lines. What if I don t post the notice? Failure to post will be used by the NLRB as evidence of antiunion feelings and can hurt the company s arguments if sued by an employee after he is terminated. The NLRB may find that the failure to post is a separate unfair labor practice. Where and how do I post the notice? The company must post the notice conspicuously and electronically under certain circumstances. Companies have a number of options to consider when determining how to post the poster. Do I have to post the poster in a foreign language? Maybe. The NLRB has printed the poster in Japanese, Spanish and 24 other languages. A company must post the notice if at least 20% of the employees are not proficient in English. What steps should my company take because of the poster and the new procedural rules? It is time to use the company s Union Vulnerability Toolkit. A manager s meeting should include a discussion of the company s vulnerability to union organizing. A vulnerability analysis is not lengthy or complicated but involves asking a series of specifically targeted questions of managers and supervisors. Some companies are posting a counter-poster, sending letters to the employees, and adding policies to its employee handbooks. However, companies have to consider the consequences of these actions before implementing them. Most importantly, companies are training its supervisors about how to respond to questions raised by employees who will read the new poster. Supervisors should not be afraid to talk with employees about unions and only certain types of comments are unlawful. Companies should not take a neutral position but have the right to express their opinions and facts about unions and the effects of unionization on the company and the employees. To learn more about what actions your company should and should not take, please contact your relationship attorney. California Expands Written Notice Requirements for Employees By Asa W. Markel Starting in 2013, all employers who employ commission employees within the state will be required to provide written notice to each employee of the basis for computing that employee s commission. By enacting AB 1396, the California Legislature seeks to resurrect a 1963 law that was struck down by a federal judge over twelve years ago. California s Labor Code has required out-of-state employers to provide written notices to commission employees of the basis for computing their commissions for nearly fifty years. However, in Lett v. Paymentech, Inc., 81 F. Supp.2d 992 (N.D. Cal. 1999), a federal district court struck down the law as treating out-of-state employers differently from California-based employers. California s new law will apply the same written notice requirement to resident and non-resident employers Masuda, Funai, Eifert & Mitchell, Ltd. All rights reserved. 2

3 Most employers in California are already aware that AB 469, the Wage Theft Prevention Act, requires that most non-exempt employees be given written notification of the computation of their wages (as well as of the true legal identity of their employer) upon their hiring, from January 1, In the event that an employee s compensation is changed, a written notice of that change will also be required. California s Division of Labor Standards and Enforcement (DLSE) has promised an optional form for statutory wage notices, however, the proposed form has gone through several revisions. Additionally, California lawyers have noticed several problems with the proposed form, including its requirement that an employer specify whether the employment agreement is written or oral, since California is an at-will employment state and most labor contracts, to the extent that they exist separately from California s Labor Code requirements, are a mixture of written and oral agreements. Consequently, many California employers are being advised to have their lawyers modify the proposed DLSE forms. Written notices for employees are not unheard of, particularly outside of the United States. In the United Kingdom, an employee has a right to a written statement of his or her scope of work under the Employment Rights Act Similarly, Japan s 2007 Labor Contract Act requires the contents of employment contracts to be confirmed in writing whenever possible. While California s new employee notice statutes do not go so far as to require a written contract of employment in all cases, for commission and non-exempt employees, their employers will now be required to confirm the basis of computing their compensation in writing. Businesses employing workers in California should be careful to comply with that state s new employee notice requirements. Attorneys with Masuda Funai s Employment, Labor & Benefits practice group can help employers comply with California s written notice requirements. Construction Company Found Liable For Delinquent Contributions By Frank J. Del Barto Recently, the U.S. District Court for the Northern District of Illinois found a construction company liable for delinquent contributions, liquidated damages, interest and reasonable attorney s fees. The Plaintiffs Trustees of the Chicago Regional Council of Carpenters Pension Fund, the Chicago Regional Council of Carpenters Welfare Fund and the Chicago Regional Council of Carpenters Apprentice and Trainee Program Fund (collectively Trust Funds ) filed an action under ERISA seeking to collect the delinquent contributions and other damages pursuant to the terms of the collective bargaining agreement entered into with the defendant McGreal Construction Company ( McGreal ). Beginning in July 1985, McGreal had entered into an agreement with the union binding itself to several collective bargaining agreements. These agreements required McGreal to pay to the Trust Funds contributions for covered work and dues that were withheld from each covered employee s wages. These agreements also provided that if McGreal failed to pay the contributions in a timely manner (on or before the 15th day of the month), the company would be held liable for the unpaid contributions, reasonable attorney s fees and liquidated damages in the amount of 1.5% per month on the accounts receivable balance. In filing their claim under ERISA, the Trust Funds alleged that for the period May 2009 through March 2011, McGreal sporadically failed to make contributions on or before the 15th day of the month, resulting in McGreal owing the Trust Funds liquidated damages of approximately $11, And, for the period November 2010 through March 2011, the Trust Funds alleged McGreal owed delinquent contributions. In total, the Trust Funds were seeking approximately $35,301.00, exclusive of attorney s fees Masuda, Funai, Eifert & Mitchell, Ltd. All rights reserved. 3

4 In granting summary judgment in favor of the Trust Funds, the Court quickly dismissed McGreal s three arguments. First, McGreal argued that the complaint failed to state a claim for delinquent contributions for the period November 2012 through March 2011 because the Trust Funds did not expressly allege that McGreal failed to pay the contributions. The Court found that the allegations and the prayer for relief were sufficient to state a claim. Second, McGreal argued that the Trust Funds could not assert a claim for unpaid contributions under the welfare trust fund agreement because the trustees denied McGreal s employees benefits beginning in As a result, McGreal maintained that the trustees denial of benefits to its employees terminated its obligations to pay contributions under the welfare trust agreement. However, because McGreal failed to cite to any legal authority for this proposition, the Court dismissed this argument. Finally, McGreal argued that the Trust Funds had no right to liquidated damages for the period May 2009 through October 2010 because McGreal actually paid those contributions. However, the Court found that McGreal missed the point. The Trust Funds were not disputing whether the contributions were made, but whether they were made on a timely basis. When entering into collective bargaining agreements, it is important to understand the terms, conditions, obligations and potential remedies of the parties. Based on our experience with several small business clients, we often find that the client has entered into the collective bargaining agreement without fully understanding its terms and without a legal review. Because these agreements can impose various remedies (liquidated damages, interest and reasonable attorney s fees), we recommend that all agreements be reviewed prior to execution. Masuda Funai On the Go The incoming President of the Illinois State Bar Association has appointed Alan M. Kaplan a member of the Construction Law Section Council. On Thursday, April 26, 2012, Nancy E. Sasamoto will present Identifying Employment Status: Employees vs. Independent Contractors and At-Will Employees as part of the Illinois State Bar Association s seminar on employment law. On Tuesday, March 13, 2012, Frank J. Del Barto presented Qualified Plan Correction Programs: Correcting with the Internal Revenue Service and Department of Labor as part of the Chicago Bar Association s annual spring seminar. Frank is the incoming Chair of the Chicago Bar Association s Employee Benefits Committee, having served as the Vice Chair for the bar year. For more information about this or any other employment law topic, please contact Alan Kaplan, Chair of the Employment, Labor & Benefits Group, at or via at akaplan@masudafunai.com Masuda, Funai, Eifert & Mitchell, Ltd. All rights reserved. 4

5 About the Employment, Labor & Benefits Group Masuda Funai s Employment, Labor & Benefits Group provides expertise in all aspects of employment, labor and benefits law. Our attorneys represent management in everything from day-today counseling to drafting, negotiations, litigation in federal and state courts, executive and employment agreements, mergers and acquisitions, reorganizations, benefits and compensation plans, OSHA issues, union campaigns, collective bargaining, unlawful picketing and trust fund contribution matters. Our attorneys regularly conduct employment audits, present in-house supervisory training programs and seminars and publish articles and newsletters to help keep our clients up to date about the ever-changing world of employment, labor and benefits law. About Masuda Funai Masuda Funai is a full-service law firm representing international and domestic companies operating and investing in the United States. Our 45 attorneys located in Chicago, Schaumburg and Los Angeles counsel clients in every aspect of business, including establishing, acquiring, and financing operations; ownership, development and leasing of real estate; transfer of overseas employees to the U.S.; employment, labor, and benefits counseling and dispute resolution; intellectual property, copyright and trademark; business litigation; creditors' rights and business risk management; structuring the distribution and sale of products and services throughout the U.S.; and estate planning and administration. CHICAGO 203 North LaSalle Street Suite 2500 Chicago, Illinois TEL FAX LOS ANGELES South Vermont Avenue Suite 420 Torrance, California TEL FAX SCHAUMBURG 1475 East Woodfield Road Suite 800 Schaumburg, Illinois TEL FAX Masuda, Funai, Eifert & Mitchell, Ltd. All rights reserved. 5