Supreme Court Upholds the Use of Class Action Waivers by Employers

By William Bevan III

On May 21, 2018, the U.S. Supreme Court approved the use of class action waivers by employers. Such a waiver requires an employee to submit employment disputes to an individual arbitration proceeding and forbids the employee from banding together with other employees to file class action lawsuits or other court claims against the employer. This was a long-awaited ruling by the U.S. Supreme Court, which was split 5-4 in deciding the case. The Supreme Court rejected the National Labor Relations Board’s argument, supported by several U.S. Courts of Appeals, that class action waivers violate the literal language of Section 7 of the National Labor Relations Act, which gives employees the right to engage in concerted activity for their own mutual aid and protection. This decision will most likely have its greatest impact on the ever-burgeoning number of wage and hour class actions claims. Employers who do not have arbitration agreements, or an agreement with such a class action waiver, would do well to consider “fixing” that issue, now that the Supreme Court has validated their use again. No change in the law is likely unless Congress decides to amend the Federal Arbitration Act. Of course, individual states can forbid the use of such waivers as a matter of state law with respect to certain kinds of state law claims.

If you wish to discuss some of the deeper ramifications of the Court’s decision, or for assistance in developing an employee arbitration agreement, don’t hesitate to contact us.

NLRB Reverses Controversial Browning-Ferris Decision on Joint Employers

By William Bevan III

One might say that Christmas came early for employers concerned about national labor policy as articulated through the decisions of the National Labor Relations Board (“NLRB” or “Board”). During the final days of Chairman Miscamarra’s term (December 14-15, 2017) the Republican majority issued a quartet of important decisions, perhaps none more far reaching than its decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB No. 156 (December 14, 2017) involving the Board’s controversial Browning-Ferris[1] standard for determining when the employers are considered joint employers. In Hy-Brand, while finding that the two employers involved were, in fact, joint employers, the Board overruled Browning-Ferris, and returned to Board law that previously governed the determination of joint-employer status. Thus, the Board rejected the so called “economic realities” tests and “statutory purpose” of Browning-Ferris on the grounds that the Board had exceeded its authority under the statute initiating such a test. The Board has wisely returned to the much more workable standard of prior Board decisions[2] and the Third Circuit’s decision in a prior Browning-Ferris decision,[3] namely, that joint employer status is based on a determination that one contractor, “while contracting in good faith with an otherwise independent company, has retained for itself sufficient control of the terms and conditions of employment of the employees who are employed by the other employer.”[4] Under such traditional joint employer analysis, the Board looked to see if the two separate employers, nevertheless, co-determined the essential terms and conditions of employment of the employees involved. Again, under traditional joint employer analysis, essential terms and conditions of employment are, as one might logically imagine, hiring, firing, discipline, supervision, and direction.[5] If the customer-employer exercises control over one or all of these matters for the employees of the contractor-employees, then a joint employer relationship will be found. Our takeaway is that the Board’s return to pre-Browning-Ferris law will provide employers with far more predictability and ease of application than the “economic realities” and “statuary purpose” tests of Browning-Ferris and will avoid a number of the practical pitfalls posed by the Hy-Brand majority.[6]


[1] Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB No. 186 (2015) petition for review filed (D.C. Cir. Jan. 20, 2016).

[2] See e.g., Laerco Transportation, 269 NLRB No. 324 (1984); TLI, Inc., 271 NLRB 798 (1984)

[3]  NLRB v. Browning-Ferris Industries of Pennsylvania, Inc., 691 F.2d 1117 (3rd Cir. 1982)

[4] Id. at 1124

[5] Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co., 365 NLRB, sl. op. at 6.

[6] Id., sl. op at 4-5

End to Micro-Units—the NLRB Majority Jettisons Specialty Healthcare Decision on Determining Appropriate Bargaining Units under the National Labor Relations Act

By William Bevan III

In September, we advised our clients that the Supreme Court had refused to enter the dispute between the NLRB and the employer community over the micro-bargaining unit controversy created by the Board in its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) enfd. sub nom. Kindred Nursing Center East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013). Happily, we can report that Specialty Healthcare is no longer the law. In PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017), a majority consisting of outgoing Chairman Philip Miscimarra, and newly confirmed Trump appointees Marvin Kaplan and William Emanuel, overruled Specialty Healthcare, and reinstated the Board’s traditional community-of-interest standard, as recently articulated by the Board in United Operations, Inc. 338 NLRB 123 (2012), as the correct standard to apply when determining whether a proposed unit is appropriate when the employer contends that the proposed unit must include additional employees. Id. sl. op. at 1. The Board’s majority found the “new” standard imposed by Specialty Healthcare to be “fundamentally flawed.” PCC Structurals, Inc., supra, sl. op. at 7 The Board further held, in applying traditional community-of-interest factors,[1] that it would determine whether the petitioned-for employees share a community of interest sufficiently distinct from employees excluded from the proposed unit to warrant a separate appropriate unit. Thus, no longer will a union seeking to represent certain employees be able to exclude other employees from the proposed bargaining unit unless those employees have an “overwhelming community of interest” with those the union seeks to represent.[2] In short, micro-units will no longer be the norm and unions will have to show, applying traditional community-of-interest factors, that a small group of employees constitute a traditionally appropriate craft or departmental unit or other sufficiently distinct and homogenous group of employees.


[1] Those factors are whether the petitioned for employees: (1) are organized into a separate department or organizational group; (2) have distinct training and skills; (3) have distinct job functions and perform work characterized as distinct; (4) perform work that overlaps with the work of other job classifications; (5) are functionally integrated with the employer’s other employees; (6) have frequent contact with other employees; (7) have distinct terms and conditions of employment; and (8) are they separately supervised. See United Operations, supra, at 338 NLRB at 123.

[2] The Board remanded the case to the Regional Director to make a new unit determination based on traditional community of interest standards.

The Supreme Court Declines to Enter the Fray with the NLRB over Micro Bargaining Units

By William Bevan III

As the last weeks of June ticked down, the typical flurry of activity that accompanies the end of the Supreme Court’s term overshadowed the Court’s denial of certiorari in Macy’s, Inc. v. NLRB (Case No. 16-1016) on June 19, 2017, thus leaving intact the Fifth Circuit decision[1] affirming the Obama Board’s decision[2] finding a small unit of cosmetics and fragrance employees employed at a local Macy’s department store in Saugus, Massachusetts to be appropriate. As discussed more fully below, the Board in Macy’s relied on it’s prior decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) enfd. sub. nom., Kindred Nursing Center East LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013). In Specialty Healthcare, the Board sets forth the principles that apply in cases where one party, usually the employer, contends that the smallest appropriate bargaining unit must include additional employees beyond those sought in the petitioned-for unit. In Specialty Healthcare, the Board stated that “…when employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classification, departments, functions, work locations, skills or similar factors) and the Board finds that the employees in the group share a community of interest after considering traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that the employees in the unit could be placed in a bargaining unit, …unless the party so contending demonstrates that employee in the larger unit share an overwhelming community of interest with those in the petitioned-for unit. 357 NLRB at 945-946 [footnotes omitted].”[3]

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Protecting Your Confidential Information & Trade Secrets

By Walter P. DeForest and Marie A. DeForest

As a company, we know that you have spent considerable time and money developing your confidential information and trade secrets. Be sure you’ve taken steps to protect your information. At DKYB, we’ve represented companies and their employees in disputes involving confidential information and trade secrets throughout the country. For a step-by-step summary on protecting your organization’s investment in its confidential information and trade secrets, click here.

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