Thursday, May 5, 2016

Judge Strikes Down "Right to Work" Law as Unconstitutional

On April 8, 2016, a Circuit Court in Wisconsin held its “right to work” law was an unconstitutional taking of the Plaintiff-Union’s property without just compensation. (International Association of Machinists District 10, Local Lodge 1061 v. State of Wisconsin (Apr.8, 2016) Case No. 2015CV000628.)

Approximately 26 states have adopted “right to work” laws, which prohibit union security agreements requiring employees to pay union dues as a condition of employment. As the Wisconsin court noted, the “duty of fair representation” prevents a union from declining to represent non-paying members.

The Wisconsin Constitution, like the California and federal Constitutions, prevents the taking of property for public use without just compensation. A taking requires (1) a property interest (2) that has been taken (3) for the public use (4) without just compensation.

The Wisconsin court found the Unions had a property interest in the services they perform for their members and non-members and that the “right to work” statute was a regulatory taking. While the “right to work” laws were determined to be for the “public use,” the court found the State had not compensated the Unions with money for their services. The State argued the Unions had been justly compensated for their compelled labor with the privilege of “exclusive representation.” However, the court rejected this argument, noting “just compensation” requires the payment of money, not a grant of special privileges or other non-monetary benefits.

In a recent California case, Friedrichs v. California Teachers Association, plaintiffs argued that requiring union dues as a condition of employment violated their First Amendment right to free speech. Had the lawsuit been successful, California would have become a “right to work” state, barring agency-shop agreements and "fair share fees." After the death of Justice Scalia, however, the Supreme Court issued a 4-4 decision in the case. With no majority holding, California “fair share fees” were safe. Plaintiffs have already filed a petition for rehearing asking the Supreme Court to reconsider the case when a new, ninth Justice is confirmed.

Under the takings rationale, however, right to work states would either have to pay unions to provide services to all employees or allow unions to decline representation for non-paying members. 

Monday, April 11, 2016

Arbitrator Awards BART POA Nearly $1.1 Million Dollars in Illegal Subcontracting Grievance

The BART Police Officers’ Association secured an award of nearly $1.1 million for its members at arbitration. Arbitrator Ron Hoh ruled for BPOA, finding the Bay Area Rapid Transit District  subcontracted BPOA bargaining unit work in violation of the union's MOU.  

The Bay Area Rapid Transit District decided to replace the nearly forty year old fire alarm systems at seven stations on the San Francisco side of its operations.  The District entered into a contract with Blocka Construction Company to retrofit fire alarm systems at the stations.  When decommissioning the old alarms, the District circumvented the MOU between the District and BPOA by requiring Blocka to subcontract non-union security personnel to act as “Firewatch” while the decommissioned alarms were replaced.

As soon as the BPOA discovered this MOU violation, a grievance was filed demanding the positions immediately be provided to BPOA members along with traditional make-whole remedies. Knowing the MOU prohibits subcontracting, the District attempted to avoid its contractual obligations by supplanting the CSOs with security personnel disingenuously labeled “Firewatch.”  The District could not refute the evidence confirming that the jobs the District subcontracted out were actually jobs historically performed by CSOs.  The Arbitrator stated:

“[t]he evidence thus shows that CSO’s regularly monitor from fixed-site posts [at] various District locations for both safety and security reasons, including safety functions whose goal is to keep the public away from both stations and rail right-of-way at construction locations and when station and track related repairs and necessary.  In addition, their job description includes the duty of ‘monitor(ing) construction sites when contractors are not working at night’ - a major element of the station alarm replacement project involved here - and ‘report(ing) situations requiring...emergency assistance.’  It cannot be disputed that the existence of fires on District property ‘...require(s)...emergency assistance.’”

The District's Project Manager claimed the two positions are wholly unrelated.  But, Arbitrator Hoh admonished the District, stating:

“It is apparent that her (Patrice McElroy) decision during the grievance procedure that the fire watch duties were closest to those of the District Safety Monitor was founded upon less than fully necessary information...The duties involved here do not better fit those of Safety Monitors as claimed by the District.  The fire watch function has nothing to do with either ‘assist(ing) independent contractors in safety areas,’ serving as ‘liaison between the District and (contracted) construction crews’ or reporting to the District and/or those contractors any incidents, injuries or violations of safety work practices.’”

Mastagni Holstedt, APC is privileged to have represented BPOA and its members in obtaining the largest grievance arbitration award in BPOA’s history.  Sean Currin of Mastagni Holstedt, APC represented the BART POA in this matter.    

Friday, April 1, 2016

Appellate Court: Pulbic Agencies Cannot Avoid MMBA Fact-Finding Over Individual Bargaining Disputes

In a closely watched opinion, the Fourth District Court of Appeal held the provisions in the Meyers-Milias-Brown Act (MMBA) for impasse resolution through advisory fact-finding apply to impasses arising during the negotiation of any bargainable matter, and are not limited to impasses arising during the negotiation of a comprehensive memorandum of understanding (MOU).  Overturning the trial court, San Diego Housing Commission v. Public Employment Relations Board held the fact-finding provisions apply to impasses arising during the negotiation of any bargainable matter.  The court stated its holding is consistent with the parties’ obligation to bargain on any bargainable issue, and prepare an MOU to reflect that agreement.

The Court decisively ruled in favor of PERB, which had issued its own precedential decision effectuating this broad application of the fact-finding procedures.  The opinion sends an important message to local agencies seeking to avoid the fact-finding obligations by holding back proposals from negotiations only to submit them after an MOU has been ratified.  A common tactic of agencies seeking to impose controversial policies that may drive contract negotiations to impasse, such as subcontracting unit work, has been to present the proposal while the parties are in contract, attend a few perfunctory meet and confer sessions, and then immediately impose the policy without fact-finding.  

This opinion will provide strong incentive for agencies to bring all their proposals to the table to be resolved in the give and take of negotiations and discourage efforts at piecemeal imposition.  The employer's contention that fact-finding should be limited to just MOU negotiations and not discrete bargainable issues conflicts with the purpose of the MMBA, which is to promote full communication between the agencies and unions through a reasonable method of dispute resolution.

In a companion case, Co. of Riverside v. Public Employment Relations Bd., the Appellate Court adopted the same holding.  In Riverside, the court also dispatched the agency's contention that the entire fact-finding statute is unconstitutional.  Unfortunately, some public agencies reflexively challenge any modification in their bargaining obligation as a purported violation of their authority to set compensation under the home rule of California Constitution. For example, the Fire Fighters Procedural Bill of Rights was unsuccessfully challenged as violating the home rule. The court dismissed this argument stating "fact-finding provisions do not violate this section of the California Constitution because the provisions do not divest a county or a city of its final decisionmaking authority."  

Tuesday, March 29, 2016

Fair Share Fees Safe After 4-4 Decision in Friedrichs v. CTA

In a brief, one-sentence ruling, the United States Supreme Court upheld fair share fees in California.  In Friedrichs v. California Teachers Association, a teacher who benefited from the contract CTA negotiated, asserted a right to "free ride" and pay nothing to the union.  But courts have long decided all employees who benefit from a union contract have to pay a fair share, even if they opt out of union membership.  In California, PERB has detailed regulations for how public sector unions determine and charge these fair share fees.

The Court's ruling stated, "The judgment is affirmed by an equally divided Court."  Initially, many expected the Court to rule against labor in a 5-4 decision, but the death of Justice Scalia resulted in a 4-4 tie among the justices.  The ruling means the decision by the Ninth Circuit Court of Appeals stands and unions may continue to charge fair share fees.

Thursday, March 24, 2016

Chicago Can't Impair Public Employee Pensions

On March 24, 2016, the Illinois Supreme Court declared Chicago Mayor Rahm Emanuel’s pension reductions unconstitutional under state law. (Jonesv. Municipal Employees' Annuity and Ben. Fund of Chicago 2016 IL 119618.)

The sole question before the court was whether a pension reform act violated the pension protection clause of the Illinois state Constitution. Similar to the U.S. Contracts Clause, the Illinois’ Pension Protection Clause prohibits the State or local governments from diminishing or impairing pension benefits.  

The Act reduced the value of annual annuity increases, eliminated them entirely for certain years, postponed the time at which they began, and completely eliminated the compounding component. The Act applied regardless of whether the employee was in active service on or after the effective date of the Act. The court found the modifications “unquestionably” diminished the value of the retirement annuities promised to the employees when they joined the pension system.

Chicago's political leaders, like many throughout the country, responded to the great recession and accompanying revenue reductions by under-funding the pension system.  City leaders then sought to reduce their funding obligations by reducing promised pensions. The City argued the pension cuts were necessary to avoid bankruptcy within 15 years, and therefore did not violate the Illinois Constitution.

The Illinois Supreme Court rejected the argument, stating that it “would lead to an unjust result” because employees have a “legally enforceable right to receive the benefits they have been promised” – not merely the remaining funding after politicians satisfied their more glamorous spending priorities.  

Further, under pension law any detriment to pensioners must be accompanied by an offsetting advantage. The court rejected the City's argument that "by offering a purported 'offsetting benefit' of ... sound funding and solvency in the funds, the legislation merely offers participants in those funds what already is guaranteed to them — payment of the pension benefits in place when they joined the fund." This justification for impairment of contract is frequently raised. The court flatly rejected the argument, stating "thus, the 'guaranty' that the benefits due will be paid is merely an offer to do something already constitutionally mandated by the pension protection clause." 

California courts have also held public employment gives rise to certain vested rights, including pension and retiree medical benefits, under both the United States and California Constitutions.  Our office has successfully vindicated the vested pension and retiree medical rights of public employees in cities as small as Pacific Grove and large as Los Angeles.  Nationally, this ruling sends an important message to public entities that they cannot resolve their budgetary woes on the backs of their employees by breaking promises.

Tuesday, March 22, 2016

U.S. Supreme Court Upholds the Right to Use Statistical Evidence in FLSA Class Actions

On March 22, 2016, the United States Supreme Court held that plaintiffs in a donning and doffing class action properly used representative and statistical evidence to establish class-wide liability in Tyson Foods, Inc. v. Bouaphaeko.   

Employees working in the kill, cut, and retrim departments of the Tyson Food plant in Iowa, argued Tyson violated the Fair Labor Standards Act (FLSA) by failing to compensate them for time “donning and doffing” protective gear. Tyson failed to keep any records of the time employees took for this purpose. As a result, the employees had to rely primarily on a study performed by an industrial relations expert, Dr. Kenneth Mericle. Mericle conducted 744 videotaped observations of employees donning and doffing their gear and averaged the time taken in the observations. Mericle then used the average donning and doffing times and added it to the regular time worked by the 3,344 members in the class action to determine whether they had worked over forty (40) hours in the week. 

At trial, the jury awarded the class $2.9 million in compensatory damages. Tyson sought to reverse the judgment, arguing it was unfair to allow class members to rely on representational evidence to establish damages.  Tyson's primary objections were that some class members had no damages and that the amount of time spent donning and doffing gear varied by job assignment.

Delivering the opinion of the Supreme Court, Justice Kennedy held the class could rely on Mericle’s sample study to prove damages because each class member could have relied on the sample to establish liability had each brought an individual action. Justice Kennedy followed precedent authorizing the use of estimates in wage cases, particularly when the employer failed to keep records of hours worked.  It would otherwise be nearly impossible for plaintiffs to establish a claim in cases where the employer fails to keep time records. He noted “that when employers violate their statutory duty to keep proper records, and employees thereby have no way to establish the time spent doing uncompensated work,” barring the use of statistical evidence would create “an impossible hurdle for the employee.”

While acknowledging "the question whether uninjured class members may recover is one of great importance," Kennedy criticized Tyson for opposing bifurcation of liability and damages.  In so doing, Tyson made it difficult to remove uninjured individuals from the class after the award was rendered. Kennedy indicated that Tyson should not profit from the difficulties it created.

The Court distinguished its 2011 decision in Wal-Mart, which rejected use of statistical analysis to establish liability in a class action for gender discrimination.  Kennedy dispatched the effort to pigeonhole Wal-Mart, noting that the Tyson class members were similarly situated.  This case is an important affirmation of the right to use statistical estimates to enforce FLSA rights and prosecute wage and hour class actions.

Media Policies Can't Impede Protected Activity

An administrative law judge (ALJ) found the Chipotle restaurant chain violated Section 8(a)(1) of the National Labor Relations Act (NLRA) when it asked an employee, James Kennedy, to delete his Twitter comments and stop circulating a petition complaining employees were not being given their mandated breaks. (Chipotle Services LLC dba Chipotle Mexican Grill (March 14, 2016) Cases 04-CA-147314,04-CA-149551.)

In response to a customer who had tweeted “Free chipotle is the best thanks,” Kennedy said, “nothing is free, only cheap #labor. Crew members only make $8.50hr how much is that steak bowl worth really?” Chipotle’s national social media strategist saw the tweet and emailed the regional manager of the Haverford, Pennsylvania location. The manager asked Kennedy to take the tweets down because they violated Chipotle’s “social media policy.”  Kennedy complied. The ALJ found the social media policy’s bans on spreading "incomplete, confidential, or inaccurate information" and "making disparaging, false, or misleading statements" were unlawful.  Likewise, asking Kennedy to delete the tweets was unlawful interference with protected activity.

When Kennedy began circulating the petition, his manager, Jennifer Cruz, asked him to speak with her in the office. According to Cruz, another employee expressed concern that she would be in trouble for not taking her breaks. Cruz told Kennedy to stop circulating the petition. Kennedy refused, saying Cruz would have to fire him to get him to stop. Cruz told him, “Okay, just leave.” According to Cruz, she did not decide to fire Kennedy until the next day because she was “fearful that he might hurt her” because Kennedy had PTSD, punched boxes when breaking them down for the garbage, and he declined to help Cruz replace a lightbulb while he was on break. The ALJ stated Cruz’s justifications “would be laughable” “if it weren’t such blatant disability discrimination.” The ALJ determined Chipotle fired Kennedy due to his refusal to cease engaging in protected concerted activity. 

Kennedy’s tweets and petition addressed matters of concern for all Chipotle employees, not just himself. Under the NLRA, an employee is not limited to only seeking support from other employees, but can also seek assistance and sympathy from the public at large.