Seventh Circuit Holds Class Action Waiver Unenforceable

The Seventh Circuit sided with the National Labor Relations Board (NLRB), creating a split with the Fifth Circuit, in holding an employer's arbitration agreement was unenforceable. (Lewis v. Epic Systems Corp. (7th Cir., May 26, 2016) No. 15-2997.) 

The employer, a software company, violated the National Labor Relations Act (NLRA) by imposing a mandatory arbitration agreement barring employees from seeking class, collective, or representative remedies to wage-and-hour disputes. The employer required certain employees to sign as a condition of employment. A technical writer who signed the agreement filed a putative class action arguing the employer had misclassified the technical writers as exempt from overtime. The employer moved to compel arbitration. The district court denied the motion.

The Seventh Circuit found "concerted activity" could include resort to class action remedies. The court then determined the arbitration agreement impinged employee's rights to engage in concerted activity. The employer argued the Federal Arbitration Act (FAA) trumped the NLRA and entitled it to enforce its class-action waiver. The Seventh Circuit disagreed, stating the employer's argument "put the cart before the horse." The first question was not whether the FAA "trumped" the NLRA, but whether the two statutes were in conflict at all. The FAA contains a saving clause that does not require a court to enforce agreements "upon such grounds as exist by law." Thus, the Seventh Circuit determined it was not required to enforce an illegal arbitration agreement that violated the NLRA.

The decision also questioned a Ninth Circuit opinion, which held a class-action waiver may be enforceable where the employee had the right to opt out without penalty. According to the Seventh Circuit, the Ninth Circuit's decision failed to defer to previous Board decisions reaching the opposite conclusion.

POBRA's One-Year Limitation Tolled By Internal Criminal Investigations

On May 24, 2016, the Third District Court of Appeal held the one-year statute of limitations under the Public Safety Officers Bill of Rights Act (“POBRA”) is tolled when a law enforcement agency conducts its own criminal investigation. (Department of Corrections and Rehabilitation v. State Personnel Board (Shiekh Iqbal)(May 24, 2016, No. C073865.)

Under POBRA, employers cannot take punitive action for investigations not completed within one year, except under certain circumstances. One such circumstance is that the statute of limitations is tolled while a criminal investigation into the same conduct by the same employee is ongoing. The question before the court was whether the statutory tolling of the limitations for “criminal investigations” applied when the agency conducts its own investigation, rather than having it done by an independent agency.

The court determined the language of the statute was clear and placed no restriction on who conducts the criminal investigation. The court dismissed a State Personnel Board decision that reached the opposite conclusion, finding the Board has misapplied prior case law. Looking to Legislative intent, the court reasoned that the Legislature knew there could be abuses by law enforcement employers who were conducting criminal and internal affairs investigations of their employees which is why it qualified the criminal investigation exemption provision with the language that the investigation had to be “concerned solely and directly with alleged criminal activities.”

            Ultimately, the court held the defendant was arguing a factual issue on whether the employer was conducting a criminal investigation only to toll the statute of limitations. The court found the allegation of delay had no traction because the Notice of Adverse Action (“NAA”) was served only three days past the one-year limitations period expired. Regardless, the court stated the limitations period had been tolled for the entire criminal investigation, and thus, the NAA was timely. 

Ninth Circuit Clarifies Standards for Reasonable Force

In Lowry v. City of San Diego, the Ninth Circuit clarified some of the standards for determining the reasonableness of the force used. In a 2-1 decision, the Ninth Circuit held a reasonable jury could find the San Diego Police Department’s (“SFPD”) K9 “bite and hold” policy was a severe use of force.  

After a night of drinking with her friends, the plaintiff, Sara Lowry, returned to her workplace and fell asleep on her office couch. Lowry unknowingly triggered the building’s burglar alarm when she got up to use the restroom.

SFPD were called to investigate. Sgt. Bill Nulton and his police dog, Bak, along with two other officers, found the door to Lowry’s office suite open. Sgt. Nulton yelled, “This is the San Diego Police Department! Come out now or I’m sending in a police dog! You may be bitten!” Nulton waited 30-60 seconds, but received no response. He repeated the warnings, but eventually released Bak “off lead” (without a leash). Bak made her way to Lowry’s office and bit Lowry’s lip. Nulton immediately commanded the dog to release her hold.

Lowry brought a § 1983 action against the City, alleging the City’s policy of training its police dogs to bite and hold resulted in a violation of her Forth Amendment rights.  According to the Ninth Circuit, a court must consider both the type of force used and the potential harm it may cause. The district court erred in only considering Lowry’s actual harm rather than the potential harm the K9 could inflict. As Sgt. Nulton told Lowry after the incident, “I just can’t believe that’s the only damage. You’re very lucky. She could have ripped your face off.”

The Ninth Circuit also considered whether other tactics would be appropriate in the circumstances. The court believed Sgt. Nulton could have kept Bak on lead to maintain control. While the court did find Nulton’s multiple warnings were helpful in showing the force was reasonable, it was only minimally so because Lowry did not hear the commands.

Law enforcement agencies may look to the Lowry decision when determining whether an officer used reasonable force in a disciplinary case.

Union Violated Duty of Fair Representation by Not Providing Notice and Opportunity for Members to Voice Concerns

The Public Employment Relations Board recently clarified that a union violates its duty of fair representation of its members when it fails to give at least some notice and opportunity for members to voice their concerns about an agreement under negotiation.

The United Teachers of Los Angeles ("UTLA") is the exclusive representative for L.A. Unified School District’s ("LAUSD") certificated employees, including around 4,000 “career” substitute teachers. In mid-2009 LAUSD laid off 1,800 teachers. Shortly after that the UTLA President signed a side letter with LAUSD giving priority for substitute assignments to laid off probationary substitute teachers. This changed the priority rule from one based on seniority. However, the President did not consult with UTLA representatives for substitute teachers nor request input from UTLA members.

When UTLA substitute teachers discovered this months later, one of them (Mr. Kennon Raines) filed an individual unfair practice charge against UTLA. Along with 149 other UTLA substitute teachers, he alleged that UTLA had violated its duty of fair representation.

PERB first ruled in Raines v. UTLA (2016) that UTLA did not violate the duty of fair representation by agreeing to the substantive terms of the side letter. PERB held that the terms were reasonable, even though they were not favorable toward career substitute teachers.

However, PERB also ruled that UTLA violated the duty of fair representation by failing to give notice to its members about the side letter. A violation of this duty involves conduct by the union that is arbitrary, discriminatory, or in bad faith. Here, although side letters do not require a ratification vote, the duty of fair representation "implies some consideration of the views of various groups of employees and some access for communication of those views." Because the UTLA President failed to provide any notice or opportunity for UTLA members to voice their concerns, he violated the duty of fair representation.

When negotiating an agreement that will substantially affect the terms and conditions of employment, a union should always provide at least some notice and opportunity for its members to voice their concerns. Union members must be given the opportunity to voice their concerns even about agreements that do not require a ratification vote.

U.S. Supreme Court: Demotion of Police Officer for Perceived Political Activity Violated First Amendment

The U.S. Supreme Court recently ruled that a government employer violates the First Amendment when it demotes an employee for what it perceives as political activity, even if it is mistaken. A government employer cannot punish an employee for participating in political activity protected by the First Amendment.

In 2005, Jeffrey Heffernan was a police officer in Paterson, New Jersey. At that time, the city mayor was running for re-election against Lawrence Spagnola, a personal friend of Heffernan. The Police Chief and Heffernan's direct supervisor had both been appointed by the current mayor.

During the campaign, Heffernan's mother, who was bedridden, asked him to pick up a large Spagnola sign for her to replace one that had been stolen from her yard. Heffernan went to a Spagnola campaign office and picked up the sign. While there, he spoke for a time to Spagnola's campaign staff. Other members of the police force saw him holding the sign and talking to campaign staff.

The next day, Heffernan's supervisors demoted him from detective to patrol officer. They did this to punish Heffernan for what they thought was his overt involvement in Spagnola's campaign. However, he was not actually involved in the campaign. His supervisors had made a factual mistake.

Heffernan then filed a federal lawsuit against the city for violating his First Amendment rights. The city attempted to defeat his lawsuit by pointing to its factual mistake. It argued that because Heffernan was not actually involved in any political activity, it did not violate his constitutional rights.

The Supreme Court ruled in Jefferson v. City of Paterson (2016) that the city's reason for demoting Heffernan is what matters. Even though Heffernan was not actually involved in any political activity, the city could not punish him for what it wrongly believed to be political activity. And Heffernan actually suffered harm because the city demoted him. That was enough to bring a First Amendment lawsuit. Also, allowing the city to escape liability in this case would likely discourage other employees from actually engaging in political activity.

Thus, a government employer cannot punish an employee for what it believes to be the employee's political activity. This is true even if it is mistaken and the employee has not actually engaged in protected First Amendment activity.

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.