Employment Law This Week October 1, 2018: SCOTUS October Term, NLRB’s Shifting Priorities, Uber Wins Ruling, NYS Sexual Harassment Laws
This Employment Law This Week Monthly Rundown features a recap of the most important news from September 2018.
1. SCOTUS October Term Begins with Eight Justices
September was a busy month in employment law, the highlight of which was the contentious confirmation hearings on Brett Kavanaugh’s nomination to the U.S. Supreme Court. With the outcome of Kavanaugh’s confirmation still uncertain, the Supreme Court’s term begins today with a flashback to 2016: eight justices and a 4-4 ideological split with no clear majority. A tie decision leaves the lower-court ruling in place. The #MeToo movement has had an undeniable impact on the process, as the once nearly certain confirmation of Judge Kavanaugh was derailed by allegations of past sexual assaults and misconduct. It’s an important reminder for employers that allegations alone can create major problems for a company without the right processes in advance. Here’s Jennifer Gefsky with more:
“I think if the #MeToo movement taught us one thing, it's that employers face significant liability and risk in the event that allegations are made against any employee or supervisor or the highest-level executive at the company. And sometimes those claims are insurmountable for a company, and they don't survive. Now, that case is rare, but it certainly has happened. But even in the case where the company does survive, [those claims] can do significant damage, not just in terms of money but in terms of reputation. And in that way it makes it very difficult for companies to hire new talent and to create that great culture that every company wants.”
2. NLRB Action Signals Shifting Priorities
The National Labor Relations Board (“NLRB” or “Board”), with its Republican majority, has continued to undo the legacy of the Obama-era Board. The NLRB is taking steps to replace the Browning-Ferris joint-employment test with a more employer-friendly one. The agency will also likely overrule its decision in Purple Communications that established the right of employees to use employer email for organizing and other union activity. On joint employment, the Board published a proposed rule that would restore the "direct and immediate control" standard that was in place for 30 years, prior to Browning-Ferris. As Steve Swirsky explains, this is the Board’s second attempt to reject Browning-Ferris:
“The Board, in December 2017, in a case called Hy-Brand Industrial, sought to overrule Browning-Ferris and to adopt a standard very similar to the one in the proposed rule. In February 2018, the Board essentially reversed itself and set aside the decision in Hy-Brand and reinstated Browning-Ferris because it found that there was a conflict of interest or a significant potential conflict of interest on the part of one of the Board members who had participated in Hy-Brand. That Board member is still a member of the Board, and he is one of the Board members who voted to publish the proposed rule. I think it's reasonable to foresee that the labor movement and other advocacy groups may attempt to challenge his participation in the rulemaking, as well, on the basis of a conflict of interest."
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In addition, last month, the NLRB General Counsel urged the Board to reverse Purple Communications, which could spur action soon. Legislation has been introduced in Congress to both expedite and undercut the NLRB positions so that the November midterms could have an impact on the outcomes. On top of that, over the objection of many in the business community, President Trump nominated Mark Pearce, a Democrat first nominated by President Obama, for another five-year term in one of the two seats reserved for the party not in the White House. All this illustrates just how difficult it is to turn the ship in a different direction when it comes to the NLRB, where the policy impact of presidential elections is sometimes not felt until years later.
3. Uber Drivers Head to Arbitration
Here is big news from the gig economy. The Ninth Circuit has decertified a gigantic class of Uber drivers. Several named plaintiffs sought to form a class of hundreds of thousands drivers to challenge the company’s classification of them as independent contractors. Reversing a lower court’s ruling, the three-judge panel found that the claims should be arbitrated individually by any driver who signed the company’s arbitration agreement, which included a class waiver. A majority of the drivers involved signed the agreement. The Ninth Circuit noted that the Supreme Court’s Epic Systems ruling found class waivers legal. The plaintiffs are considering an en banc appeal.
4. Sexual Harassment Laws Go Into Effect in New York
We’re just a few days away from New York State’s new sexual harassment laws taking effect. Starting October 9, all employers in the state will be required to institute a sexual harassment policy and begin annual anti-harassment training for all employees. We are awaiting final word from the state, but proposed guidance says that all current employees must complete compliant training by January 1, 2019. New hires must be trained within 30 days of hire. The law applies to all employers in the state, no matter the size. Next year, additional training requirements will be imposed in New York City.
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