Earlier this week, Missouri’s Governor Eric Greitens signed legislation making Missouri the 28th state to pass Right to Work legislation. New Hampshire is considering legislation that, if passed, will be signed by its Republican governor, Chris Sununu, making it the 29th state. Right to Work is, of course, legislation permitted under the Labor Management Relations Act that prohibits unions from requiring bargaining unit employees to pay union dues or dues equivalents. Under current law, employees in states without right to work laws may be required either to join and remain members of the union representing them (paying the normal dues), or to pay the union what are called “Fair Share Fees”. These Fair Share Fees are calculated to be the union’s cost of representing employees in the bargaining unit, without inclusion of extraneous amounts included in the dues amount, such as political donations to candidates. Unions obviously prefer to have all employees contributing to their operations and political endeavors, and the number of employees opting out in non-RTW states is generally far less than the percentage opting out in RTW areas. Unions must represent all bargaining unit members fairly, even without receiving any payments from those in RTW states who chose not to pay. Employers generally support RTW efforts, since unions receive less funding and are weaker than otherwise. Employees prefer RTW since they have the choice of joining the union if they want, or staying out of it, even if there is a union present in the workplace. They can be “free-riders”—benefitting from any results of union bargaining but without paying anything to the union.

States have been the focus of RTW legislation in recent years, with Kentucky, Indiana, Michigan and Wisconsin all passing laws in the heartland. Wisconsin’s law has encountered still-pending challenges from unions on the basis that it forces unions into a position of involuntary servitude by having to represent dissenters. It survived a federal district court decision, now appealed to the U.S. Court of Appeals for the Seventh Circuit (which upheld Indiana’s RTW law), and was found unconstitutional under Wisconsin’s Constitution by a local county judge, whose decision is now on appeal at the district level.

An additional front is being opened in the RTW war. U.S. Representatives Joe Wilson (R-SC) and Steve King (R-IA) have introduced the National Right to Work Act, HR 785, which would make Right to Work the uniform law in the U.S. The law faces opposition from the labor movement, and would almost certainly encounter a filibuster in the Senate. Given the number of Democratic senators in states that have adopted RTW laws, it is likely that the House will pass the bill and send it to the Senate. This would force RTW state Democrats up for re-election in 2018 to take a position on the bill. Then, depending upon how the midterm elections turn out, the opportunity for Senate passage might increase, or passage could be foreclosed for at least another two years.

Orange Safety SignsOn January 13, 2017, the Occupational Safety and Health Administration issued Recommended Practices for Anti-Retaliation Programs, which are intended to allow employees to raise safety issues arising in the workplace without fear of retaliation. The 12-page document sets forth recommendations that apply to private and public employees protected by the more than twenty (20) whistleblower laws enforced by OSHA.

Some of the key items recommended by OSHA for an effective anti-retaliation program are:

  1. Management leadership, commitment, and accountability.
  2. System for listening to and resolving employees’ safety and compliance concerns.
  3. System for receiving and responding to reports of retaliation.
  4. Anti-retaliation training for employees and managers.
  5. Program oversight.

Further discussion of these key items may be found in the Recommended Practices. Employers should review these recommendations and the discussion surrounding them, as we anticipate that OSHA will review the items as part of any investigation or inspection.

There is much in the OSHA Guidance that is common sense, but there are several items included that employers will want to consider. They are reflected in the following quotes from the Guidance (emphasis supplied):

Employer policies must not discourage employees from reporting concerns to a government agency, delay employee reports to government, or require employees to report concerns to the employer first.

[Employers should…] Eliminate or restructure formal and informal workplace incentives that may encourage or allow retaliation or discourage reporting. Examples of incentives that may discourage reporting or encourage retaliation include rewarding employee work units with prizes for low injury rates or directly linking supervisors’ bonuses to lower reported injury rates.

Ensure that any employment agreement or policy that requires employees to keep employer information confidential does not prohibit or discourage employees from reporting or taking the steps necessary to report information reasonably related to concerns about hazards or violations of the law to any government agency. Steps that may be necessary include conferring with legal counsel, union or other worker representatives, or with medical professionals regarding the employee’s concerns. Employers should not use confidentiality or non-disclosure agreements to penalize, through lawsuits or otherwise, employees who report suspected violations of the law or take steps necessary to make such reports.

If possible, make the anti-retaliation investigation completely independent from the corporation’s legal counsel, who is obligated to protect the employer’s interests. If the employer’s legal representative is involved in conducting the investigation, fully inform the whistleblower that the investigator represents the employer’s interests and that any attorney-client privilege will only extend to the employer.”

To the degree that OSHA applies this Guidance in connection with investigations of alleged retaliation, employers should have a record that they considered and, to the degree applicable to their circumstances, adopted recommendations from it.

Small Business Owner Green Road Sign and Clouds
Small Business Owner Green Road Sign and Clouds

Within the many pages of the 21st Century Cures Act, just passed by Congress and awaiting signature by President Obama, is the Small Business Healthcare Relief Act. This creates a new health benefit plan for small employers called Qualified Small Employer Health Reimbursement Arrangements (“QSEHRA’s”). It allows employers to provide pretax reimbursement to employees who obtain health insurance for themselves, such as through Affordable Care Act exchanges. If an employee has either individual or group health coverage (such as through a spouse’s employer’s plan) that meets the ACA’s definition of Minimum Essential Coverage, it also provides for reimbursement of eligible unreimbursed medical expenses. Prior to this taking effect, the Internal Revenue Service had specifically outlawed this benefit, and provided devastating penalties for employers who tried to help out their employees in this way.

There are a few points to keep in mind. First, the employer must be a small one, defined as under the fifty employee threshold. Second, the employer can’t be offering group coverage to any of its employees. Third, only the employer can contribute, and must do so on a non-discriminatory basis. The maximum annual support is $4,950 for single coverage and $10,000 for family coverage, prorated by months of coverage. The QSEHRA premium reimbursement is only for the purchase of individual, not group coverage, and is tax free for unreimbursed medical expenses if the employee is enrolled in a plan that meets the minimum essential coverage requirements under the Affordable Care Act. Finally, QSEHRA reimbursements will not count towards the Cadillac Tax if that ever goes into effect.

This could be a welcome opportunity for small businesses to provide a significant health care benefit to their employees without the hassle of purchasing group coverage. For employees, subject to the minimum essential benefit requirements, they can purchase coverage most suitable to their own situations, rather than what is best for the employer’s entire workforce.

For a more detailed explanation of QSEHRA programs, see this White Paper.

In a development that may be of interest both to those who follow Fair Labor Standards Act (“FLSA”) developments and to those interested in mediation, the U.S. District Court of the Southern District of New York has mandated early mediation for all FLSA cases. The pilot program responds to the surge in FLSA case filings by sending cases to mediation immediately upon the appearance of the defendant.

The mediation is to be scheduled within four (4) weeks of the Court’s issuance of its standard order. Limited disclosures are required as follows:

  1. Both parties to produce any existing documents describing plaintiff’s duties and responsibilities
  2. Both parties to produce records of pay and hours worked by plaintiff
  3. Plaintiff to produce spreadsheet of alleged underpayments and other damages
  4. Defendant to produce documents describing compensation policies
  5. If claiming inability to pay, defendant to produce proof of financial condition

If the mediation is successful, the parties are then required to provide a memorandum to the Court so that it can perform its function of approving the FLSA settlement.

Some see a conflict between the voluntary process of mediation and forcing parties to participate in it. However, getting parties to agree to mediate disputes before discovery has taken place is a tough sell, especially to lawyers. In FLSA cases, the key facts are often available and material/factual issues may be limited. FLSA cases should lend themselves well to early resolution, and mandating prompt mediation with limited, but relevant, disclosures is probably well worth the investment in the pilot project. It remains to be seen if other courts will follow along.

Since 2014, Congress has maintained an appropriations rider prohibiting the Department of Justice (“DOJ”) from using funds in relation to 33 named states and territories “to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235, § 538, 128 Stat. 2130, 2217 (2014). DOJ has regarded this as preventing only efforts directed at those states, and not a bar to its prosecution of violations of federal law by individuals engaging in medical marijuana activities that would be permissible under state medical marijuana laws.

In accordance with that interpretation, DOJ brought criminal actions against a number of marijuana cultivators, processors and distributors in California and Washington. The defendants sought to have their cases dismissed and asked for an injunction against DOJ. Ten of those cases were consolidated for consideration by the United States Court of Appeals for the Ninth Circuit. The opinion, U.S. v. McIntosh, No. 15-10117 (9th Cir. Aug. 16, 2016), contained the following points:

  1. The Appeals Court had jurisdiction because the lower courts had denied injunctions sought by the defendants
  2. The defendants had standing to challenge DOJ’s allegedly improper use of funds
  3. DOJ’s interpretation of the rider was incorrect. Prosecuting individuals under the federal Controlled Substances Act, 21 U.S.C. §§ 801 et seq., for marijuana felonies would inevitably “interfere” with states’ efforts to implement their medical marijuana programs
  4. The DOJ is, however, entitled to prosecute individuals who are not acting in strict compliance with the programs of the listed states
  5. The cases should be remanded for evidentiary hearings on whether the defendants were actually acting in conformity with their states’ medical marijuana laws

For those interested in medical marijuana in Ohio, it is important to note that Ohio is not one of the listed states, so the current version of the appropriations rider does not protect Ohio or Ohio defendants. With the Ninth Circuit’s broad interpretation of the rider, it may be that passage of the rider for the 2017 fiscal year will not be as automatic as in prior years and will not be extended to additional jurisdictions.