Author Archives: John M. Hament

Jimmy John’s Takes on Disloyal Employees and the NLRB and Wins

Doling out a refreshing victory, the U.S. Court of Appeals for the Eighth Circuit sided with Jimmy John’s in a protected, concerted activity case brought under the National Labor Relations Act (“NLRA”). On July 3, the full en banc court reversed an earlier decision of a three-member panel of the court that had affirmed a National Labor Relations Board (“NLRB”) ruling for the employees. Unless appealed to the Supreme Court, this decision brings to an end a torturous legal saga lasting over six years.

This case was set in motion in October 2010 when an Industrial Workers of the World (IWW)-affiliated union lost a union election to represent Jimmy John’s employees at ten franchised stores in the Minneapolis-St. Paul area, owned and operated by MikLin Enterprises. After the unsuccessful election, several union supporters continued to pressure the franchisee’s management to adopt workplace policy changes, including the adoption of paid sick leave. The disgruntled sandwich-makers claimed that current attendance policies forced them to work while sick.

The dispute escalated when six of these employees placed posters in and around the restaurants, calling attention to their claims. The posters featured two identical side-by-side pictures of a Jimmy John’s sandwich. One was labeled as being made by a “sick” employee and the other by a “healthy” employee. The caption below the picture read “Can’t tell the difference?” and was accompanied by a message criticizing the employer’s attendance policies. The employer terminated the six employees responsible for these posters.

The employees challenged their terminations claiming that the employer’s actions were in retaliation for concerted protected activity under the NLRA. Both the NLRB and the three-member panel of the Eighth Circuit agreed. However, the full panel of the Eighth Circuit ruled that the terminations were lawful. Specifically, it found that the claims about food safety were false and misleading and therefore, sufficiently “disloyal” to place the actions of the six employees outside of the protections of the NLRA.

The decision is heartening for employers, as many recent NLRB decisions have been overly protective of worker actions that were calculated to harm a company’s reputation.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

The Right-to-Work Movement Gains Momentum

On January 7, 2017, Kentucky became the 27th right-to-work state. Right-to-work laws make it illegal for unions or employers to compel workers to join a union and pay dues as a condition of employment. Florida was one of the first states with a right-to-work law pursuant to a constitutional provision passed in the 1940s. In Florida, and other right-to-work states, even if a worker is included within a bargaining unit of a unionized workplace and legally represented by the union, the employee still has an individual choice on whether to join the union and pay dues. Unions, of course, do not care for such laws or those states that adopt them.

Right-to-work initiatives have picked up steam in recent years with Indiana becoming the 23rd right-to-work state in 2012, followed by Michigan, Wisconsin, West Virginia, and now Kentucky. As a consequence of Republican victories in November 2016 it is anticipated that more states will climb on the right-to-work bandwagon —such laws are pending in Illinois, Missouri, New Hampshire and New Jersey. The driver for the expansion of right-to-work legislation is economics. Although right-to-work laws do not a bar unionization, industry and business typically view right-to-work states as more favorable economically, believing that there is a better opportunity to avoid unionization and the constraints that typically accompany union contracts.

A recent highly controversial issue associated with right-to-work is whether a political subdivision of a state, such as a county or municipality, may enact its own right-to-work law in the absence of state legislation.  A federal appellate court, the 6th Circuit Court of Appeals, just ruled that political subdivisions  of a state are legally permitted to enact their own right-to-work laws. On the other hand, a federal trial court in the Northern District of Illinois (part of the federal 7th  Circuit Court of Appeals ) recently ruled the other way.  It is likely this issue will eventually be addressed and resolved by the U.S. Supreme Court that will hopefully establish a uniform rule on this issue.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

Florida and Several of Its Cities will Ride the 2017 Wave of Minimum Wage Hikes

During the course of 2017, 21 states including Florida, plus the District of Columbia (D.C.), are increasing their minimum wage rates for nonexempt employees. Florida, along with 18 other states, increased its minimum wage as of January 1, 2017. As discussed here, Florida increased its minimum wage to $8.10. Maryland, Oregon and D.C. are set to raise their respective minimum rates in July 2017.

Several cities in Florida are also set to raise minimum wages above Florida’s minimum wage. For example, as of October 1, 2017, the City of West Palm Beach’s minimum wage rises by $1.00 per hour to a new minimum of $14.25, and then to $15 in fiscal year 2018-2019. On January 1, 2018, the City of Miami Beach’s minimum wage is set to increase to $10.31 and ultimately to $13.31 over a four-year cycle. There are other cities in Florida that either have approved or are also contemplating similar increases.

This is an important juncture for Florida employers, especially those who employ low-wage workers affected by the new minimum wage changes, to carefully audit their pay practices to ensure legal compliance. In addition to federal, state and even local minimum wage laws, many Florida counties and cities (for example Miami-Dade, West Palm Beach, and St. Petersburg) have wage theft ordinances designed to protect employees wages. Employee claims alleging violations of local, state, or federal wage and hour laws can be costly and significantly affect a company’s bottom line. Despite minimum wage increases at the state and local level, the federal minimum wage has remained stagnant at $7.25 per hour since 2009. Employers should be aware that where several different minimum wages may apply, the employer must pay the higher wage rate.

2.2% of Florida wage earners, or approximately 187,000 employees, are expected to receive pay raises due to the state minimum wage adjustment. About 4.4 million employees are expected to benefit from state minimum wage increases nationwide.

The states’ minimum wage increases and resultant minimums vary quite dramatically when compared on a national scale. At the low-end, for example, is Florida’s five cents ($0.05) per hour increase which raises the state minimum wage from $8.05 to $8.10. This matches the five cent increase in Alaska (to $9.80), in Ohio (to $8.15 ) and in Missouri (to $7.70). By contrast, at the high-end of the spectrum is Arizona with a $1.95 per hour increase to a new minimum wage rate of $10.00, followed by Maine with a $1.50 per hour increase to a new minimum of $9.00, Washington state with a $1.53 per hour increase to a new minimum of $11, and Massachusetts with a $1.00 per hour increase to a new minimum of $11 per hour.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

The Clock Is Ticking…Private Sector Employers Face June 30 Deadline to Avoid New Reporting Requirements

The Department of Labor recently issued a rule imposing new reporting requirements on private sector employers who engage attorneys or consultants to persuade employees concerning the right to organize and collectively bargain. Employers who have entered into an agreement for labor relations services before July 1, 2016 are exempt from the reporting requirement, even if the need for services arises after July 1.

The prior “persuader” rule requires both employers and labor relations consultants (including attorneys) to report to the DOL only when they engage in persuasive communications directly with employees regarding the right to organize a union or bargain collectively. The rule’s long-standing “advice exemption” has generally exempted consultants and attorneys from the reporting requirements when they have simply provided “behind the scenes” guidance to employers (e.g., drafting speeches and letters directed to employees by management to dissuade employees from unionizing).

In the new rule, which takes effect July 1, 2016, the DOL narrows the “advice exemption” by broadening the reporting requirements to include activities undertaken by a consultant or attorney, even when there is no direct contact or communication with employees, where the object of the activity is to persuade employees concerning the right to organize and collectively bargain.

The new DOL rule has triggered numerous legal challenges throughout the country by employers and business associations. One of the principal objections is that the new reporting requirements essentially eviscerate the attorney-client privilege between the employer and its labor relations attorney.

Contact any of our labor and employment attorneys to discuss this time-sensitive issue.

John M. Hament
jhament@williamsparker.com
(941) 552-2555

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557