May 12th 1130 navigating the changing landscape of employment law

CONFIDENTIAL © 2015 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP,which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express writtenconsent of the author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes &Thornburg LLP.

Navigating theChanging Landscape of

Employment LawMay 12, 2015

Kenneth J. YerkesPartnerBarnes & Thornburg LLP

Ms. Jennifer CongdonVP Human ResourcesXylem Inc.

Ms. Julie L. JoergerDirector - HR Global Services, M&AHillenbrand, Inc. (Rotex)

Kenneth J. Yerkes

Partner

317-231-7513

317-231-7433 Fax

[email protected]

11 South Meridian Street

Indianapolis, Indiana 46204-3535

Ken Yerkes, Chairman of the Labor & Employment Department, has spentmore than 30 years successfully fighting for his clients' business objectives atthe bargaining table; in federal and state court matters; in arbitrations; and onthe ground, in plants across the country, through proactive training,counseling, and union-avoidance campaigns. Ken's ability to transformcomplex matters into workable strategies has earned him his clients' trust andalso acclaim as one of the country’s recognized leaders in labor andemployment law. It is no surprise, then, that Ken is a Fellow in both TheCollege of Labor and Employment Lawyers and the Litigation Counsel ofAmerica, and has received the highest rating in every edition of ChambersUSA: America's Leading Lawyers for Business. In addition, Ken is rated AVPreeminent® by Martindale Hubbell™ and listed as a 2013 "Top Rated Lawyerin Labor & Employment." Ken has been recognized on multiple occasions asone of Indiana's "Top 50" lawyers in Indiana Super Lawyers, has been listed inBest Lawyers in America® for more than 15 years, was named "Lawyer of theYear" by Best Lawyers and has been interviewed and quoted in numerouspublications, including the Wall Street Journal; Inside Counsel Magazine;Corporate Counsel Magazine; and Law 360. Ken has also been named a"Distinguished Barrister" by The Indiana Lawyer.

Because of his desire to always remain a full-service resource for his clients,Ken has designed his practice to be well-balanced between litigation,counseling, and traditional labor matters. With respect to collective bargaining,Ken's experience runs the gamut from first contract negotiations to patternbargaining, mid-term contract modifications, decision bargaining, effectsbargaining, plant closing agreements, managing strikes, and successfullyimplementing lockouts without union charges resulting in a complaint. He hasbargained with and run union-avoidance campaigns against virtually everyunion in the country, and regularly trains employers on the best practices forremaining union free.

At the same time, Ken has been an active litigator and trial attorney. Ken'snumerous reported decisions over his three decades of practice demonstratehis effective collaboration with clients in planning and executing litigationstrategies. On those rare occasions when summary judgment or an acceptablesettlement are not forthcoming, Ken is willing and able to take cases to trial.He has done so successfully in multiple jurisdictions. Understanding howcases are tried to juries has been instrumental in Ken's development as atrusted counselor and advisor when critical employment decisions need to beimplemented.

Bar AdmissionsIndiana, 1983

Pennsylvania, 1987

Tennessee, 2008

Other Court Admissions

U.S. Supreme Court

6th Circuit Court of Appeals



U.S. Court of Appeals for theDistrict of Columbia Circuit

U.S. District Court for theSouthern District of Indiana

U.S. District Court for theNorthern District of Indiana

U.S. District Court for theEastern District ofPennsylvania

U.S. District Court for theDistrict of Colorado

Education

B.A., Earlham College, 1980

J.D., Indiana University -Bloomington, 1983

A recent sampling of Ken’s results over the past 24 months bears out thesedescriptions:

Two federal court discrimination defense jury verdicts within the last twoyears (Indiana and Dallas, TX)

Favorable Administrative Law Judge ruling in California after a hearingwith live witness testimony that client’s sales force were truly independentcontractors (the state agency had categorized them as employees andimposed tax liability)

After enforcing client’s arbitration agreement in federal court, assisting theclient with winning the subsequent discrimination arbitration in federalcourt

Successful oral arguments before the Seventh Circuit Court of Appealsand the Indiana Supreme Court

Thirteen successful contract negotiations with various unions fromCalifornia to New York, Michigan to Florida.

Successfully represented employers in two union organizing campaigns(Illinois, Missouri), with no litigated objections at either location.

Twenty-five arbitration matters successfully resolved through voluntaryresolution or decision.

The fact that Ken is equally comfortable litigating, counseling, arbitrating, orbargaining is only one distinct feature of his practice. Another is his dedicationto client service and partnering. Ken understands that in order to be good atwhat you do, you have to enjoy the work and the people you are working with.Ken’s passion for the practice makes him a willing partner and collaboratorwith his clients. These relationships also have helped him develop a keenunderstanding about what clients value in each matter. While many lawyers"talk the talk" of value and partnering, Ken has walked the walk:

Ken has been a featured speaker and presenter at numerous lawpartnering conferences as well as in-house law training programs –including programs in New York, Chicago, Washington, DC, and Toronto,which focused on managing litigation as a business and effectivestrategies to manage the cost of legal services.

Ken presented on the topic "Reconnecting Cost with Value" at the ACCCorporate Counsel University and previously participated in the ACCValue Challenge program, where he had the opportunity to interact with in-house counsel on best practices for collaborating with in-house counsel.

Ken has been selected as a "BTI Client Service All-Star" based on clientsanonymously singling out attorneys who deliver superior client service viaclient focus, understanding the clients' business and delivering results.

At the end of the day, Ken seeks to offer clients what they value most: thehighest caliber of legal representation in the context of a relationship based ontrust and the ability to recognize and execute on business objectives.

CONFIDENTIAL © 2014 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP,which may not be disseminated or disclosed to any person or entity other than the intended recipient(s), and may not be reproduced, in any form, without the express written consent ofthe author or presenter. The information on this page is intended for informational purposes only and shall not be construed as legal advice or a legal opinion of Barnes & Thornburg LLP.

Today’s Agenda• Mach Mining, LLC v. EEOC (US 2015)• Young v. UPS (US 2015)• M&L Polymers USA, LLC v. Tackett (US 2015)• EEOC Initiatives• NLRB Initiatives• DOL Initiatives


Judicial Review of EEOC ConciliationMach Mining, LLC v. EEOC(US 2015)

The Set-Up

Mach Mining was accused of failing to hire female miners.

After a Title VII sex discrimination investigation, EEOC foundreasonable cause to suspect the company engaged in unlawfulhiring practices.

The EEOC sent a letter to the company inviting participation inconciliation.

One year later, the EEOC sent another letter saying conciliationefforts failed (unclear what happened in between) and sued


• Mach Mining claimed the EEOC failed to conciliate in goodfaith before filing suit against Company.

• EEOC argued that its conciliation efforts were not subject tojudicial review.

• The District Court agreed with Mach Mining that courts hadjurisdiction to review EEOC’s conciliation efforts, but onappeal Seventh Circuit reversed, saying such efforts were notreviewable.

• Supreme Court accepted certiorari and issued it’s opinion justdays ago.

Judicial Review of EEOC ConciliationMach Mining, LLC v. EEOC

(US 2015)


Mach Mining Supreme Court Opinion

• In a unanimous opinion, Supreme Courtheld that EEOC’s conciliation efforts werereviewable, but set forth very narrow,deferential standard.


Mach Mining Supreme Court Opinion– Mixed Bag

FAVORABLE FOR EMPLOYERS• Courts have the authority to review whether the EEOC has fulfilled its

conciliation duty prior to filing suit (as opposed to no review at all).

• If the EEOC finds reasonable cause, it must inform an employer about thespecific allegations, giving notice of: (1) what the employer allegedly hasdone and (2) which employees (or class of employees) have suffered as aresult.

– Many employers have complained in the past about the EEOC “hiding the ball”regarding the specific allegations/employees at issue, making it hard to mediate orknow the extent of the alleged problem until after a suit has been filed.

• EEOC also must “try to engage the employer in some form of discussion(whether written or oral), so as to give the employer an opportunity to remedythe allegedly discriminatory practice” before filing suit.


Mach Mining Supreme Court Opinion– Mixed Bag

LESS FAVORABLE

• Supreme Court called the review “narrow” and “barebones.”

• Courts will not judge the substance or meaningfulness of thenegotiations.

– Review will address whether EEOC attempted conciliation, nothow it was done.

• High Court said that a “sworn affidavit” from the EEOCattesting that it attempted to conciliate usually will be enough tomeet its minimal burden.


Mach Mining Supreme Court Opinion –Mixed Bag

LESS FAVORABLE – Cont’d

• If an employer has concrete proof of theEEOC’s failure to conciliate, the remedy isto send the matter back for additionalconciliation efforts, not dismissal of thecharge (as some courts have done in thepast).

– Remedy lacks teeth.


Judicial Review of EEOC ConciliationWHAT DOES IT MEAN?


Pregnancy and the Duty To AccommodateYoung vs. UPS(US 2015)

• UPS had a CBA in place that provided for temporary lightwork assignments for: (1) employees temporarily unable toperform the job duties due to an occupational injury or adisability under the ADA; or (2) for DOT-covered drivers whowere disqualified from driving.

• Pregnant employees were ineligible for such an assignment.• Plaintiff (pregnant) had a 20 pound lifting restriction in a driver

position requiring up to 70 pound lifts. She received extendedleave, and eventually lost her health insurance.

• She alleged a violation of the Pregnancy Discrimination Act(“PDA”).


Pregnancy/AccommodationYoung vs. UPS(US 2015)

• The 4th Circuit upheld the District Court’s summary dismissal.• With regard to the PDA claim, the Court found no direct

evidence of discrimination– the policy was “pregnancy blind.”• Court ruled that the PDA only requires that individual be

treated the same as non-pregnant employees similarlysituated in their ability to work.

• An employee with a temporary lifting restriction is notsimilar to a disabled employee under the ADA.

• Not unlawful for the CBA to have a provision requiring lightduty for occupational injuries.

• Supreme Court accepts certiorari.


Pregnancy-Based Discrimination

• Pregnancy-based Discrimination – The EEOC issuedan Enforcement Guidance in July 2014, while this casewas pending before the Supreme Court

• This Guidance takes the position that pregnantemployees must be given equal access to benefits,including leave, light duty, and health benefits

• Uses the reasonable accommodation of disabledindividuals as the comparator group to requirereasonable accommodations for pregnant workers



• Forbids employers from taking action against employee dueto concern over the health of the fetus or concerns aboutpotential for injury

• The Guidance was issued without public comment, andCommissioners Barker and Lipnic opposed publishing theGuidance because Young v. UPS was pending before theSupreme Court

• In support of their opposition these dissenting Commissionersobserved:


Pregnancy-Based Discrimination• “The Guidance takes the novel position that under the language of the PDA,

a pregnant worker is, as a practical matter, entitled to “reasonableaccommodation” as that term is defined by the Americans withDisabilities Act (“ADA”).”

• “No federal Court of Appeals has adopted this position.”

• “Moreover, the Pregnancy Guidance states that non-pregnant workersreceiving such reasonable accommodations are the appropriatecomparators for purposes of PDA compliance.”

– This is also a position rejected by the majority of courts which had considered it.

• “These positions represent a dramatic departure from the Commission’sprior position, and perhaps more important, contravene the statutorylanguage of the PDA. They do so without sound legal basis or rigorousanalysis, and no explanation for the reversal of long-standing Commissionpolicy.”


Pregnancy-Based DiscriminationYoung vs. UPS

(US 2015)

• On March 25, 2015, the Supreme Court reversed the 4th Circuit.

• In doing so, the Court rejected the EEOC Guidance, the plaintiff’s positionand the employer’s position, instead carving out an intermediate position.

– Plaintiff’s interpretation of a “most-favored nation” status for pregnant employees wasrejected, which would in essence require an employer to provide all pregnant workerswith an accommodation if it provided an accommodation to another employee,regardless of the nature of their jobs, the employer’s business needs or otherlegitimate criteria.

– UPS’s interpretation that there was no duty of accommodation in a gender-baseddisparate treatment case, including pregnancy discrimination cases, was too broad.

– EEOC’s Guidance was inconsistent with past positions taken by the Government (e.g.DOJ), nor did the EEOC explain the rationale for it’s change in position.


Pregnancy-Based Discrimination• The newly announced analysis for analyzing disparate treatment

PDA claims:

– Absent direct evidence of discrimination, the prima facie case for PDAdisparate treatment claims include: (1) member of the protected class;(2)employer did not accommodate her; and (3) the employeraccommodated others “similar in their ability or inability to work.”

– Once established, the employer can provide the legitimate,nondiscriminatory reasons for denying the request (not sufficient toclaim more expensive or less convenient to add pregnant women to thelist).

– Once established, the plaintiff can establish pretext by providingsufficient evidence that the employer’s policies “impose a significantburden on pregnant workers” and that the employer’s reasons “are notsufficiently strong to justify the burden, but rather- when consideredalong with the burden imposed – give rise to an inference of intentionaldiscrimination.”


Pregnancy-Based Discrimination“If the employer offers an apparently ‘legitimate, non-discriminatory’reason for its actions, the plaintiff may in turn show that the employer’sproffered reasons are in fact pretextual. We believe that the plaintiffmay reach a jury on this issue by providing sufficient evidence that theemployer’s policies impose a significant burden on pregnant workers,and that the employer’s ‘legitimate, nondiscriminatory’ reasons are notsufficiently strong to justify the burden, but rather – when consideredalong with the burden imposed – give rise to an inference of intentionaldiscrimination.

The plaintiff can create a genuine issue of material fact as towhether a significant burden exists by providing evidence that theemployer accommodates a large percentage of nonpregnantworkers while failing to accommodate a large percentage ofpregnant workers. ...”



WHAT DOES IT MEAN?


Changes to Retiree Health BenefitsM & G Polymers USA, LLC v. Tackett(US 2015)

• Retirees and their former union brought actionagainst a former employer after the employerdecided it would start requiring retirees to contributeto the cost of health care benefits.

• The retirees had been employed under collectivebargaining agreements that since expired.

• The retiree benefits provisions said that eligibleemployees who retire will receive a full Companycontribution towards the cost of health care benefits.

• The case was appealed to the U.S. Supreme Court.


• The retirees claimed that the employer’s decision to requirecontributions was a breach of the agreement and a violation of federallabor law (LMRA and ERISA).– They argued that the promise in the agreement created a right that

continued beyond the expiration date of the agreement.• The Sixth Circuit relied on precedent in its Yard-Man decision to

conclude that the employer had breached.– Parties to collective bargaining agreements would intend retiree benefits to

vest for life, because such benefits are not “mandatory.”– Such inferences outweigh any contrary implications derived from general

termination clauses.– In other words, it would be “unlikely that [the Union] would agree to

language that ensures its members a ‘full Company contribution,’ if theCompany could unilaterally change the level of contribution.

Changes to Retiree Health BenefitsM & G Polymers USA, LLC v. Tackett

(US 2015)



(US 2015)

• The Supreme Court cited ERISA and its ownprecedent, recognizing that “employers havelarge leeway to design disability and otherwelfare plans as they see fit.”

• The Court also held that it “interpret[s]collective-bargaining agreements, includingthose establishing ERISA plans, according toordinary principles of contract law. . . .”



(US 2015)

• The Court found that the Yard-Man rule violatedordinary contract principles and distorted theattempt to reveal the parties’ intentions.

• The Supreme Court said that the Sixth Circuit erred innot applying general durational clauses to provisionsgoverning retiree benefits.

• The Court ultimately remanded the case back down,ordering the Sixth Circuit to apply ordinary principles ofcontract law.


Changes to Retiree Health Benefits

WHAT DOES IT MEAN?


The New Landscape …


Who’s the Lawmaker?• What happens when the President’s

legislative agenda fails to get the supportof Congress?

• In the Obama Administration, thePresident and federal agencies havepushed failed measures through in theform of regulations, enforcement actions,and adjudication.


• “One of the best ways for the Obama Administration toachieve results … is through substantial executive authorityto make and implement policy.”

- John Podesta, former Chief of Staff to President Clinton, November 15, 2010

• “There are lots of things that we’ve been doing administrativelyto try to make sure that people have a fair chance to organize.”

- President Barack Obama, September 30, 2010

• Quoting the President: “If Congress refuses to act, I’ve saidthat I’ll continue to do everything in my power to act withoutthem.”

- New York Times, April 22, 2012

Who’s the Lawmaker?


• This practice certainly impacts employersand the employment relationship, bothunion and non-union.

• The EEOC, NLRB and the DOJ have usedtheir agency “discretion” extensively.

Who’s the Lawmaker?


EEOC INITIATIVES

Equal Employment OpportunityCommission (EEOC)


EEOC INITIATIVES• Pregnancy Discrimination

• Mandatory Wellness

• Telecommuting As A ReasonableAccommodation

• Background Checks


EEOC Challenges Mandatory Wellness Programs

EEOC v. Flambeau, Inc., No. 3:14-cv-00638 (W.D. Wisc. 2014)• The EEOC brought a lawsuit in Wisconsin against a plastics

manufacturer for an ADA violation.• The challenge was brought against an employer’s rule that

required an employee to submit to a health risk assessment.Failure to do so could result in cancellation of medicalinsurance or the requirement to pay the full insurancepremium.

• Employees who submitted to the test did not have theirinsurance coverage cancelled and they were required to payonly 25% of the premium cost.

• The EEOC alleges that the health assessment is a disability-related inquiry and medical examination in violation of ADArequirements.


EEOC Challenges Mandatory Wellness ProgramsEEOC v. Flambeau, Inc., No. 3:14-cv-00638 (W.D. Wisc. 2014)• The EEOC also claims that the employer cancelled an

employee’s insurance and shifted premium costs when theemployee failed to complete the assessment while on medicalleave.

• The EEOC alleges that this constitutes disability discrimination.

• An EEOC attorney stated that voluntary wellness programs mustbe voluntary, such that they can’t compel medical tests orquestions in violation of the ADA.

• Currently, at least 3 lawsuits have been filed by the EEOCchallenging employer wellness programs. All cases are stillpending, so stay tuned . . .


EEOC Challenges Mandatory Wellness ProgramsProposed Wellness Regulations

• The current regulations permit voluntary medicalexaminations and inquiries as part of employee healthprograms.

• Not surprisingly, the EEOC just issued proposed amendmentsto its regulations consistent with it’s litigation theoriesasserting that certain incentives under wellness programswere involuntary and violated the ADA.

• Comments on the proposed regulations are due by June 19,2015.

• Note that these regulations do not analyze the impact of GINAon wellness programs- separate regulations will be issued.


Proposed Regulations• If the program includes disability-related inquiries (e.g. HRAs)

or medical examinations:– the program must be reasonably designed to promote health or

prevent disease (HRA or biometric screening would meet thestandard as long as providing feedback to employee).

– The program must be “voluntary.” To be voluntary:• No requirement to participate.• Cannot deny coverage under any of its group health plans or particular

benefits packages, except as permitted for incentives• No adverse action or retaliation.• Notice must be provided (written to: (1) be understood; (2) describe the

medical information to be obtained and purposes for use of information;and (3) describe the restrictions on the disclosure of medicalinformation.


Proposed Regulations• Incentives for programs that ask disability-related questions,

include medical exams, or require satisfaction of a healthstandard

– The use of incentives (financial or in-kind) in a wellness program,together with rewards for any other wellness program offered aspart of the group health plan should not exceed 30% of the totalcost of employee-only coverage

– Reasonable accommodations must be provided that enableemployees to earn the incentive

– Smoking -- if the employer only asks if the participant is atobacco smoker, can give up to a 50% incentive to the non-smoker. If testing done, such as for nicotine, the maximumincentive is 30%


Proposed Regulations• Medical information or history of an

individual may only be provided to theemployer in aggregate terms

• The regulations also have non-discrimination, non-retaliation provisions


Confidentiality of InformationCollected from Wellness Programs

• Covered entity may only receive informationcollected as part of an employee healthprogram in aggregate form.

• Where the wellness program is part of agroup health plan, the individually identifiablehealth information is protected healthinformation (PHI) under the HIPAA privacy,security and breach notification rules.


Telecommuting As a Reasonable AccommodationEEOC v. Ford Motor Co.6th Cir. April 2014

• The EEOC claimed an employer’s denial of a telecommuting request wasunlawful.

• Plaintiff suffered from severe IBS.• She was a resale steel buyer at Ford.• Her formal evaluations were good on substantive issues, but noted a weakness in

interpersonal skills; however in informal “contribution level” management rankings, she wasrated at the low end of the spectrum.

• She requested flex time as a reasonable accommodation, but was unable to establishconsistent work hours.

• Leave was approved when needed.• She requested telecommuting up to 4 days a week; this was denied.• The company believed that the essence of the job was group problem solving, which it

believed had to be accomplished in person.• Plaintiff made errors because she did not have access to buyers in the off hours.



• When the plaintiff worked weekends and nights she misseddeadlines and made mistakes.

• With supplier meetings, the plaintiff said she could reschedulemeetings if she was having a bad day.

• Summary judgment affirmed en banc for Ford.• Ford had permitted her some prior trials in telecommuting that were

not successful.• Plaintiff’s request was distinguishable from other approved set,

predictable telecommuting arrangements of up to two (2) days perweek where the Company reserved the right to require anemployee’s presence for on-site meetings.

• Technology advances did not fully allow plaintiff to perform theinteractive aspects of her job.



• Tips:– Carefully analyze the reasons why telecommuting is

not appropriate in the given position.– Look at history of interactions/meetings.– Review job descriptions and update as appropriate.– Go through the interactive process with the

employee- discuss issues and how to address them –here, the answer was simply no.

– Recognize that as technology emerges, there aremore options for remote communication than before.


Background Checks• Background checks are still a “big ticket” item.

• The EEOCs guidance states the following:

– Employers cannot deny a job because a person has been arrested, because anarrest does not prove that a person engaged in any conduct. Instead, the employermust consider all of the facts before taking action based on an arrest.

– Employers must assess applicants on an individual basis rather than excludingeveryone with a criminal record through a blanket policy.

– The guideline does NOT prohibit the use of criminal background checks. Rather,employers are encouraged to develop targeted screens that filter out applicantswhose convictions prove they will not be good employees.

– In developing these screens, employers must take into account:

– (1) convictions as opposed to arrests,– (2) the nature of the conviction,– (3) the particular duties of the job, and– (4) the time that has passed since the conviction.


Background Checks• Employers can still do background checks, ask about criminal history, and screen out

applicants whose criminal histories make clear they pose a risk.

• If the EEOC can establish that an employer’s use of background checks had adisparate impact, the employer would have to show that excluding job applicantsbecause of their past misconduct is job-related and warranted by “businessnecessity.”

• However, employers should:

– Eliminate policies and practices that exclude individuals from employment basedon the mere existence of criminal records.

– Develop a narrowly tailored written policy and procedure for screening applicantsand employees for criminal conduct.

– Train managers and decision makers on how to implement hiring policies andprocedures.

– Carefully consider the types of questions asked on applications and types ofrecords requested.

– Notify applicants who may be denied because of criminal records and give theapplicant an opportunity to explain and submit additional information beforemaking a decision.


• The EEOC has suffered a few losses in terms of enforcing its rules on backgroundchecks:

– EEOC v. Freeman (2013): EEOC brought a case alleging that the company’scheck of credit and criminal histories created a disparate impact on African-Americans. The case was dismissed.

• The EEOC failed to present any evidence of disparate impact becausethe EEOC’s expert’s report was “unreliable, rife with analytical errors,untimely, and thus inadmissible to demonstrate the existence of disparateimpact.”

• The 4th Circuit Court of Appeals upheld the ruling, saying that the expert“cherry-picked” data and made a “mind-boggling number of errors.”

– EEOC v. Kaplan Inc. (2013): EEOC’s case over Kaplan’s use of credit checkswas also dismissed.

• The same expert was used and the court similarly held that the EEOCfailed to provide reliable statistical evidence.

EEOC’s Standard for BackgroundChecks in Doubt?


• But recent losses have not deterred theEEOC from filing suits over backgroundchecks against large employers.

• The EEOC recently filed suits againstDollar General Corp. and BMWManufacturing Co. for their use ofbackground checks.

EEOC’s Standard forBackground Checks in Doubt?


NLRB INITIATIVES

National Labor Relations Board (NLRB)


NLRB INITIATIVES• Employee Handbook Policies

• Union Elections & “Micro-Units”

• New Campaign & Election Rules

• Employer Email


“Rules of Recess”Supreme Court Rules 9-0 that the President’s

NLRB Appointments Were Unconstitutional


• The Board had a full quorum as of July30, 2013 following a deal reachedbetween President Obama and SenateRepublicans to confirm new Boardmembers.

“Rules of Recess”


NLRB Overview• Since that time, the NLRB has been

extending its reach to impose its powerson NON-UNION employers, includingemployers who have never had to dealwith “union issues.”

• Only 6.6% of the private sector workforcebelonged to a union in 2014.


NLRB Employee Handbook Policies

• The NLRB has issued several recentdecisions calling into question standardhandbook policies.

• The NLRB challenges the policies underSection 7 of the NLRA.


Section 7 of theNational Labor Relations Act (NLRA)• “Employees shall have the right to:

– self-organization,

– form, join, or assist labor organizations,

– bargain collectively through representatives of their ownchoosing, and

– engage in other concerted activities for the purpose ofcollective bargaining or other mutual aid or protection . . . .”

• NLRB has been taking an expansive view of Section7 in order to infringe on non-union work places.


NRLB’S Approach


• 30 pages of free advice.

• If you haven’t read it, you should.

NLRB’s Approach


Hills and Dales General Hospital, 360 NLRB No. 70 (April 1, 2014)

• At issue in this case were the following three paragraphs inthe employer’s “Values and Standards of Behavior Policy”:

1. A paragraph prohibiting employees from making negativecomments about fellow team members, includingcoworkers and managers;

2. A paragraph requiring employees to represent theemployer “in the community in a positive and professionalmanner in every opportunity;” and

3. A paragraph prohibiting employees from engaging orlistening to “negativity or gossip.”



Hills and Dales General Hospital, 360 NLRB No. 70 (April 1, 2014)

• What did the NLRB have to say about thesepolicies?

– ALL OF THEM ARE UNLAWFUL!

• Why?

– The language in the policies couldbe viewed as “chilling” theemployees’ Section 7 Rights.



First Transit, Inc., 360 NLRB No. 72 (April 2, 2014)• At issue in this case were provisions prohibiting the

disclosure of the following:– “any company information,” including wage and benefit

information;– statements about work-related accidents to anyone but

the police or company management; and– “false statements” about the company.

• In addition, there was a policy barring participation inoutside activities that would be “detrimental” to thecompany’s image.



First Transit, Inc., 360 NLRB No. 72 (April 2, 2014)

• What did the NLRB have to say about thesepolicies?

– ALL OF THEM ARE UNLAWFUL!

• Why?

– Same as the Hills and Dales case: the languagein the policies could be viewed as “chilling” theemployees’ Section 7 Rights.



Laurus Technical Institute and Joslyn Henderson, 360 NLRB No.133 (June 13, 2014)

• The provision at issue:– a “no gossip” policy which prohibited

employees from “participating in or instigatinggossip about the company, fellow employeesor customers.”

• In this case, the NLRB affirmed a December ruling which held that“the language in the no gossip policy [was] overly broad, ambiguousand severely restrict[ed] employees from discussing or complainingabout any terms and conditions of employment.”

• The Board also affirmed the finding that the gossip policyimproperly restricted the employees’ rights to concerted actionunder section 7 of the National Labor Relations Act.



Lytton Rancheria of California d/b/a Casino San Pablo,361 NLRB No. 148 (Dec. 16, 2014)• In another, somewhat surprising ruling on “anti-gossip” handbook

rules, the Board found that a policy prohibiting gossip was lawful.• The rule defined as unacceptable behavior “. . . Gossiping about

other Team Members (including supervisors, managers, directors,etc.).”

• The Board noted that the employees would not reasonably construethe rule as restrictive, considering gossip is defined as “chatty talkor rumors or reports of an intimate nature.”

• Since the rule was limited to gossip, the rule would not reasonablybe construed to prevent employees from discussing concerns abouttheir managers that affect their working conditions.

• The Board contrasted this rule from one which barred employeeconversations about managers generally.



Lytton Rancheria of California d/b/a Casino San Pablo,361 NLRB No. 148 (Dec. 16, 2014)• The Board did, however, agree that the following handbook policy

was unlawful: Unacceptable behavior includes “[i]nsubordination orother disrespectful conduct (including failure to cooperate fully withSecurity, supervisors and managers).”

• The Board said that “employees would reasonably understand thisphrase as encompassing any form of Section 7 activity that might bedeemed insufficiently deferential to a person in authority.”

• However, the Board explained that the rule would be lawful had itbeen limited only to “insubordination,” pertaining to defiance of asupervisor’s directive.

• The Board explained that the phrase “disrespectful conduct” ispatently ambiguous.



Purple Communications Inc.,361 NLRB No. 43 (Sep. 24, 2014)

• The NLRB recently affirmed an ALJ ruling that anemployer’s personnel policy against workplacedisruptions was unlawful.

• The policy said that employees were prohibited from “Causing,creating, or participating in a disruption of any kind duringworking hours on Company property.”

• Again, the Board described the rule as OVERBROAD,especially considering “working hours” included all hours of theday and night.

• The ALJ opinion suggested that the rule may have been lawfulhad it limited the restriction to “work time” as opposed to “workhours.”



Employee Use of Social Media• The NLRB Office of the General Counsel released an advice

memorandum in September 2014, advising on varioushandbook rules, including those on employee use of socialmedia.

• The Office deemed the following rule unlawful:– “[E]mployees should not post any material that is . . .

embarrassing to another person or entity, about thecompany or our customers or clients or that violates . . .the privacy rights of another.”

– The Office wrote that the rule is similar to other unlawfulrules that prohibit negative comments about managers or“derogatory attacks on fellow employees. . . .”



Employee Use of Social Media• The Office also deemed “unlawfully overbroad” a rule

prohibiting employees from using social media to“disclose sensitive, proprietary, confidential, orfinancial information” about the employer.– The policy defined “confidential” information to include

personnel records, official correspondence, and otherinformation ordinarily accessible only to employees.

– Therefore, the Office said employees would construethe rule as prohibitive of Sec. 7 activity.

– The Office also construed the restriction on “sensitive”information as ambiguous and in need of clarification.



Employee Use of Social Media

• The Office did, however, opine that the following rule was lawful:– “Employees must make clear that the views expressed by them

are their own and do not [represent the employer].”– Essentially this disclaimer provision would be allowed, provided

that the disclaimer would not be “unduly burdensome.”– The Office said that an employer “has a legitimate interest in

protecting itself against unauthorized postings . . . .”• The Office also said that a rule similar to the following would not

reasonably be construed by employees as prohibitive of their Sec. 7rights:– Employees must express themselves on social media in a

generally “respectful manner.”



WHAT DOES IT MEAN?



Specialty Healthcare (NLRB 2011, aff’d 2013 by 6th Cir.)

• Prior to this decision, when a union filed a petition torepresent a unit of employees, the Board’s standard fordetermining the “appropriate unit” was whether employeesshared a “community of interest.”

• In this case, however, the Board ruled that if an employerdisagrees with a proposed unit, it now must show that itspreferred unit has an “overwhelming community of interest.”

• The ruling allowed a petitioned-for “micro-unit” to go to anelection.

• The 6th Circuit upheld Specialty Healthcare in August 2013,affirmatively overruling Park Manor Care Center andincreasing the burden on employers in these situations.

Union Elections & “Micro-Units”


Specialty Healthcare (NLRB 2011, aff’d 2013 by 6th Cir.)• Old Standard: Show a community of interest among

employees facility-wide based on:– Similarity of wages and hours– Common supervision– Interchange or functional integration with other

employees– Area practice– Bargaining history

• The Board would evaluate practical businessconsiderations and the potential negative impact dividedunits would have on an employer’s operation.



Specialty Healthcare (NLRB 2011, aff’d 2013 by 6th Cir.)

• New Standard to defeat a micro-unit: Showan “overwhelming community of interest”– The new standard for evaluating whether it is

necessary to expand a bargaining unit will be difficultfor employers to surmount.

– Unions will more readily win electionswhere they “pick and choose” theclassification of employees allowed to vote.



Union Elections & “Micro-Units”• Several cases have demonstrated the difficulty for

employers to overcome the new standard:

– Fraser Engineering Company, 359 NLRB No. 80 (March 20, 2013)(granting union petition of a micro-unit where union had lost anelection three years earlier based on a larger unit).

– Guide Dogs for the Blind, 359 NLRB No. 151 (July 3, 2013)(allowing union to proceed to election on a unit of canine welfaretechnicians and instructors, but excluding breeding, puppy-raising,kennel, training, and veterinary employees).

– Macy’s, 361 NLRB No. 4 (July 22, 2014) (finding a group offragrance and cosmetic sales employees in a department storewas an appropriate unit based on fact that it was grouped as itsown department).



WHAT DOES IT MEAN?


• Unions are winning at the ballotbox.

• Union win rates have increaseddramatically in recent years.

• Since 1997, Unions have won approximatelyhalf or more of all representation elections,peaking in 2009 at 69% and consistentlyhovering at or above 64% in 2010-2013.

The New Ground Rules forNLRB Elections


CAMPAIGNS & ELECTIONS: Old Rules• Prior to an election, the parties could engage in pre-

election litigation to resolve certain issues, including how todetermine which employees are eligible to vote.

– As would be expected, parties could submit formal briefs on theissues litigated.

• Once preliminary issues were resolved, the NLRBscheduled a secret ballot election about 42 days after thefiling of the petition.

– However, when a pre-election hearing occurred, the electioncould not take place until 25-30 days after the issuance of aruling.

– This would often increase the total number of days between apetition and an election.


• After the filing of the petition and prior to the election,both sides conduct a “campaign” to persuadeworkers to vote for or against the Union.– A Union might ask workers to sign union-support cards, but card

signers are not bound to vote for the Union.

– If the Union wins, parties bargain in good faith to reach a newcontract – but neither is forced to agree to terms they findobjectionable.

• After a pre-election hearing, parties could appeal certain pre-election rulings to the full Board prior to the occurrence of anelection.

• In addition, parties could ultimately appeal a Regional Director’selection ruling to the full Board, and the Board had to review them.

CAMPAIGNS & ELECTIONS: Old Rules


• Election procedure changes were passed bythe Board in December 2011, but they weresubsequently withdrawn after being challengedin Court.

• However, the NLRB announced on February 5, 2014 that itwas re-issuing proposed amendments to its election rules.

• On December 15, 2014, the final election rules werepublished in the Federal Register.

• The new rules became effective April 14, 2015 and havebeen referred to as the “quickie” or “ambush” election rules.

CAMPAIGNS & ELECTIONS: Changes Coming SOON


• The new rules allow the union's petition to be filedelectronically (a union currently must file by hand or mail).

• The new rules also require that a pre-election hearing beheld within 8 days of the filing of a union's representationpetition.

• The non-petitioning party (the Company) will also have to file acomprehensive “statement of position” on the union's electionpetition, generally at least one day before the hearing.– This effectively gives the employer one week from the date a

petition is filed to identify issues and prepare for the hearing.– Further, any issues omitted by the employer from its statement will

be waived by the employer, and the rules prohibit the employer fromraising these issues down the road.

CAMPAIGNS & ELECTIONS:New Rules


• The new rules state that a pre-election hearing is to determine only whether arepresentation question exists and that the evidence presented must berelevant to that issue.

– A regional director may defer litigation of such issues to the post-election stage “ifthose issues do not have to be resolved in order to determine if an election shouldbe held.”

– This means that many issues of individual voter eligibility as opposed to voting unitcomposition may be deferred to the post-election procedures rather than litigatedprior to the vote.

• The new rules eliminate procedures providing for pre-election appeals on theelection petition.

– The right of parties to file a post-hearing brief to the Regional Director is now madediscretionary with the hearing officer.

• Companies also will only get discretionary appeal of post-election issuesafter the votes are cast.

– The Board will not be required to review post-election regional decisions.– Further, the results of an election will no longer be stayed pending a request for review.

CAMPAIGNS & ELECTIONS:New Rules


• The new rules require that unions be given employees'email addresses and telephone numbers prior to theelection. Currently, the union receives a list of eligiblevoters from the employer containing names andresidence addresses but not employee email addressesand telephone numbers.

• The new rules require that the voter eligibility list be given to theunion within two business days of the Direction of Election insteadof the current rule allowing seven business days.

• The new rules eliminate the requirement that an election be held nosooner than 25 days after the Board's Regional Director issues aDirection of Election.

– Thus, employers could be looking at elections as soon as 10 to 21 daysfrom the date a petition is filed.

CAMPAIGNS & ELECTIONS: New Rules


CURRENT RULES NEW RULES (EFFECTIVE 4/14/15)

Up to 42 days until election. As little as 10 to 21 days until election.

Prior to an election, the Board could hold ahearing to resolve pre-election issues, suchas the supervisory status of particular workersand what employee classifications should beincluded in a potential bargaining unit.

Hearings only to resolve questions regarding“whether a question of representation exists.”Other voter-eligibility issues previously able tobe litigated pre-election can only be raisedpost-election.

After a pre-election hearing, parties couldsubmit post-hearing briefs advocating theirpositions on the issues litigated and highlightrelevant NLRB precedent.

Hearing Officers have discretion to allow ornot allow the filing of post-hearing briefs.

Parties could appeal certain pre-electionrulings by a Regional Director to the full, 5-member NLRB pre-election.

Pre-election rulings by Regional Directors canonly be appealed to the full NLRB post-election.

In the event a pre-election hearing was held,no election could take place until 25-30 daysafter the Regional Director issued a decisionregarding the issues litigated at the hearing.

A Regional Director no longer must wait until adecision has issued from a pre-electionhearing before directing an election (i.e., pre-election hearings no longer enlarge the 42-day campaign window).

Appeals of Regional Director election rulingsgenerally had to be reviewed by the fullNLRB.

The NLRB has discretion to review RegionalDirector rulings.

Comparison


• In March 2015, both the Senate and Housepassed legislation to prevent the Board fromimplementing the new rules – but it waspromptly vetoed by the President.

• The resolution would have blocked the rulefrom going into effect and required the Boardto get congressional approval before passinga substantially similar rule.

• Not enough votes to override the veto.

CAMPAIGNS & ELECTIONS: New Rules


WHAT DOES IT MEAN?The New Ground Rules for NLRB Elections


• In arguably the most significant decision of 2014,the NLRB reversed long-standing precedent onemployee use of company email.

• Since 2007 the rule has been very clear –employers need not allow employees to usecompany-provided email to engage inorganization activities protected under Sec. 7.

• The NLRB voted 3-2 to overturn this precedent,despite several contentious arguments on bothsides.

NLRB: Employer Email


OLD RULE:

Guard Publishing Co. d/b/a Register-Guard, 351 N.L.R.B. No. 1110 (2007)

• Register-Guard maintained a policy that prohibited the use of email for all “non job-related solicitations.”

• The NLRB held that employees do not have a statutory right to use the employer’s e-mail system for Section 7 purposes.

• The decision conformed with similar rulings on employee use of other companyproperty, including copiers, telephones, break-room televisions and bulletin boards.

• The dissent argued that email systems have important characteristics different fromolder communication methods and that the Board must interpret the NLRA to conformto a changing industrial life.

• The Board, however, relied on the fact that employees were not precluded entirelyfrom engaging in protected activity. In other words, neither the availability of email northe Company’s policy kept them from communicating face-to-face.



OLD RULE:Guard Publishing Co. d/b/a Register-Guard, 351 N.L.R.B. No. 1110 (2007)

• The decision initially was upheld in October 2013 inPurple Commc’ns, Inc., NLRB, No. 21-CA-95151.

• NLRB’s general counsel and Communications Workersof America filed exceptions to the Purple Commc’ns, Inc.decision and urged the Board to overrule Register-Guard and adopt a rule that employees who arepermitted to use company e-mail for work areguaranteed the right to use it for Section 7 activity.



Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)

• On May 1, 2014, the NLRB invited interestedindividuals and organizations to file amicus briefsaddressing whether:– Worker’s should have a right to use employer e-mail

and communications systems during unionorganizing and other activities protected by federallabor law; and

– Whether the Board should overrule Register-Guard.

• The briefs were due to the Board on or before June16th, and sixteen total amicus briefs were filed.



NEW RULE

Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)

• On December 11, 2014, the NLRB issued its ruling in PurpleCommc’ns, and adopted a presumption that “employeeswho have been given access to the employer’s emailsystem in the course of their work are entitled to use thesystem to engage in statutorily protected discussionsabout their terms and conditions of employment while onnonworking time, absent a showing by the employer ofspecial circumstances that justify specific restrictions.”



NEW RULE:Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)

• The employer in Purple maintained the following communications policy:

– Computers, laptops, internet access, voicemail, electronic mail (email),Blackberry, cellular telephones and/or other Company equipment isprovided . . . to facilitate Company business.

– Employees are strictly prohibited from using the computer, internet,voicemail and email systems, and other Company equipment inconnection with . . .

• Activities on behalf of organizations or persons with no professionalor business affiliation with the Company; and

• Sending uninvited email of a personal nature.



NEW RULE:Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)• The Board emphasized the dramatically expanded use of

email in the workplace, describing it as “a common form ofworkplace communication.”– The Board said that Register-Guard “failed to perceive the

importance of email as a means by which employees engage inprotected communications.”

– “There is little dispute that email has become a critical means ofcommunication, about both work-related and other issues, in awide range of employment settings.”

– “In many workplaces, email has effectively become a “naturalgathering place,” pervasively used for employee-to-employeeconversations.”



NEW RULE:Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)

• The argument focused in large part on the balance betweenthe employees’ Sec. 7 rights and the employer’s propertyrights.

• The Board noted that “email’s effectiveness as a mechanismfor quickly sharing information and views increases itsimportance to employee communication.”

• Distinguishing email from other types of company property,the Board said that personal use of email will not interfere withCompany use of the system or add substantial cost.



NEW RULE:Purple Commc’ns, Inc., 361 NLRB No. 126 (2014)KEY TAKE-AWAYS

• The decision applies only to employee email use, anddoes not pertain to non-employees (e.g. unionrepresentatives).

• It also only applies to those employees who havealready been granted email access.– The employer is also not otherwise required to grant

access, when it has not chosen to do so• The decision addresses only email systems, not

other electronic communications systems.




• Under special circumstances, an employer may be able to justify acomplete ban on non-business use of company email.

• The Board suggested that an employer’s interests in protecting itsemail system from damage or from overloads due to excessive usewould be relevant.– The Board did not further explain or provide additional examples of “special

circumstances.”– However, the Board did note that a general prohibition on employees’ use of

email for non-work purposes will not itself constitute a special circumstance.• The employer would have to show a connection between the

interest to be protected and the restriction applied.• The Board said that it anticipates such special circumstances

to occur in rare cases.




• In addition, an employer can still “apply uniform and consistently enforcedcontrols.”

– The Board gave examples of permissible restrictions, such as prohibiting largeattachments or audio/video segments, provided that the employer can demonstrateinterference with the email system’s efficient functioning.

• Regarding the use of email monitoring, the Board said employers maycontinue to “monitor their computers and email systems for legitimatemanagement reasons, such as ensuring productivity and preventing emailuse for purposes of harassment or other activities that could give rise toemployer liability.”

• The Board said that the same standard will continue to apply toallegations of unlawful surveillance of protected activities.

– Monitoring will be lawful, so long as the employer does nothing out of the ordinary(e.g. increasing monitoring during an organizational campaign or focusing efforts onprotected conduct or union activities).



WHAT DOES IT MEAN?



DOL INITIATIVES

Department of Labor (DOL)


DOL Initiatives• U.S. v. Windsor & New Agency Regulation

(February 25, 2015)

• DOL ‘Right To Know’ Rule

• Disclosure of Compensation Information

• Minimum Wage

• Unpaid Internships


The Aftermath ofU.S. v. Windsor: DOMA’s Demise• U.S. v. Windsor Recap:

– Section 3 of DOMA defined “marriage” and “spouse.”

– The definitions were applicable to any Act of Congress or anyruling, regulation, or interpretation of the various administrativebureaus and agencies of the United States.

– Exact language: “The word ‘marriage’ means only a legal unionbetween one man and one woman as husband and wife, andthe word ‘spouse’ refers only to a person of the opposite sexwho is a husband or a wife.’’

– The Supreme Court held that Section 3 of DOMA wasunconstitutional under the equal protection clause.


• The day that Windsor was decided,President Obama directed all agencies of thefederal government to review the effect thedecision may have on more than 1,000federal statutes and programs that mayturn on an individual’s marital status.

– Secretary of Labor Thomas E. Perez then announced that he had directedDOL leadership to “look for every opportunity to ensure that we areimplementing this decision in a way that provides the maximum protection forworkers and their families.”

• The Department of Labor published a Notice of Proposed Rulemakingin June of 2014 to revise the definition of spouse under the FMLA inlight of the United States v. Windsor decision.

The Aftermath ofU.S. v. Windsor: DOMA’s Demise


• The proposed rule was published in the Federal Register onJune 27, 2014.

• The final rule was effective March 27, 2015.• Major features of the final rule:

– The DOL moved from a “state of residence” rule to a “place of celebration” rulefor the definition of spouse under the FMLA regulations. The Final Rule changesthe regulatory definition of spouse to look to the law of the place in which themarriage was entered into, as opposed to the law of the state in which theemployee resides. A place of celebration rule allows all legally married couples,whether opposite-sex or same-sex, or married under common law, to haveconsistent federal family leave rights regardless of where they live.

– The Final Rule’s definition of spouse expressly includes individuals in lawfullyrecognized same-sex and common law marriages and marriages that werevalidly entered into outside of the United States if they could have been enteredinto in at least one state.

The Aftermath ofU.S. v. Windsor: DOMA’s Demise


DOL ‘Right To Know’ Rule• The DOL launched its “misclassification

initiative” in 2011 to increase enforcementagainst employers whose independentcontractors really should be classified asemployees under the Fair Labor Standards Act(FLSA).

• In January 2013, the DOL began administeringa Worker Classification Survey designed tocollect information regarding employeeclassification.


• Data collected during the survey will likely be used to support theDOL’s new regulations.

• The DOL 2014 spring regulatory agenda proposes regulatory actionto its record keeping rules, requiring employers to tell employeeswhat their job classifications are and how pay is calculated.

• The regulatory agenda is not clear as to the intended timeframe toissue new regulations, but the DOL is clearly continuing thisenforcement priority.– The WHD submitted a lengthy budget justification to Congress in February of

this year, focusing on the goal of detecting and punishing misclassification.• The regulations could require an employer to

prepare a classification analysis explaining whya worker is classified as an employee orindependent contractor and to provide thatanalysis to its employees and the DOL.

DOL ‘Right To Know’ Rule


How to Prepare for “Right to Know”?

• Make sure your contractors are“independent.”– Contracts of limited duration– Services rendered require special skills– Makes own hours– Provides services to multiple clients– Uses own tools and equipment– Only responsible for results


Non-Retaliation

• In honor of National Equal Pay Day, thePresident signed the Non-RetaliationExecutive Order on April 8, 2014.


• The Non-Retaliation Executive Order added the following amendmentto Executive Order 11246:– "The contractor will not discharge or in any other manner discriminate

against any employee or applicant for employment because suchemployee or applicant has inquired about, discussed, or disclosed thecompensation of the employee or applicant or another employee orapplicant. This provision shall not apply to instances in which anemployee who has access to the compensation information of otheremployees or applicants as a part of such employee's essential jobfunctions discloses the compensation of such other employees orapplicants to individuals who do not otherwise have access to suchinformation, unless such disclosure is in response to a formal complaintor charge, in furtherance of an investigation, proceeding, hearing, oraction, including an investigation conducted by the employer, or isconsistent with the contractor's legal duty to furnish information."

Non-Retaliation


• On the same day, the President also released a PresidentialMemorandum aimed to address the perceived lack of datareporting on employee compensation by sex and race.

• The Memorandum authorizes and directs the DOL to propose“within 120 days of the date of [the] memorandum, a rule thatwould require Federal contractors and subcontractors tosubmit to DOL summary data on the compensation paid theiremployees, including data by sex and race.”

• The DOL released the proposed rule on Aug. 8, 2014 andcomments were due on Nov. 6, 2014.

Disclosure of CompensationInformation


Unpaid Internships: Are They Legal?

• The DOL would say ‘Probably not.’• In April of 2010, the DOL released ‘Fact Sheet #71:

Internship Programs Under The Fair Labor StandardsAct.’

• The Fact Sheet summarizes the Department’s set of“guidelines” for determining whether a private employermust pay its interns under the FLSA (i.e. whether theyqualify as “employees”).


• The acting director of the Wage and Hour Division ofDOL lit the fire to this discussion when she was quoted inthe New York Times in 2010 saying, “If you’re a for-profitemployer or you want to pursue an internship with a for-profit employer, there aren’t going to be manycircumstances where you can have an internship andnot be paid and still be in compliance with the law.”



• The Fact Sheet Guidelines currently onlyapply to for-profit, private sector internships.

• The Guidelines are based on a U.S.Supreme Court case from 1946. Theyinclude the following controversialrequirement for legal internships:

– The employer that provides the training mustderive no immediate advantage from theactivities of the intern.



• Unpaid interns have recently been taking the issue to court, filingclaims against former “employers,” alleging violations of the FLSAand asserting that they should have been considered “employees”and been paid.

• Courts are in disagreement as to what degree of authority to give theGuidelines, considering they are neither federal law nor official DOLregulations.

• In a few notable cases, former interns have brought such claimsagainst Fox Searchlight Pictures (by interns on the set of “BlackSwan”), major magazine publisher Hearst Corp. (by interns atHarper’s Bazaar, Cosmopolitan, and Marie Claire), and NBCUniversal (by Saturday Night Live and MSNBC interns).



WHAT DOES IT MEAN?Unpaid Internships: Are They Legal?

Firm OverviewYou don’t need more lawyers, you need the right lawyers. You deserve to workwith a firm that offers integrity, reliability and a personal commitment to findingthe right solutions for the challenges and opportunities you face every day.

You’ve come to the right place. Barnes & Thornburg attorneys take the time tolearn about you and your business. We staff matters with small, close-knit teamsled by a fully involved attorney who will keep you informed every step of the way.Our innovative, entrepreneurial spirit continues to attract top legal talent fromacross the country.

We keep a watchful eye on controlling legal costs and craft effective feestructures. Simply put, our value-driven approach is what you should expect inyour law firm. Today, this is more important than ever.

As one of our valued clients, you will gain access to a firm of more than 600 legalprofessionals throughout 12 offices in Atlanta, Chicago, Delaware, Indiana, LosAngeles, Michigan, Minneapolis, Ohio and Washington, D.C. We are among the100 largest firms in the U.S. and have experience in virtually all the legal practiceareas required to do business in today's global marketplace.

The attorneys at Barnes & Thornburg serve clients from more than 50 dedicatedpractice and industry areas. Our main areas of focus include litigation, intellectualproperty, labor and employment, white collar crime, corporate law, governmentalservices and finance, energy, telecommunications, transportation and utilities,environmental, real estate, health care, creditors’ rights and construction law.

We help you achieve solutions that span national borders. We represent many ofthe world’s largest companies in U.S. legal matters and assist a broad array ofU.S. companies operating abroad to achieve their international businessobjectives. As a member of TerraLex, we are part of a selective, internationalnetwork of more than 155 independent law firms located in nearly 100 countries.

The firm also is a member of TechLaw Group, Inc., an international associationof 20 law firms that focuses on technology companies and technology issues,and the State Capital Group, an association of nearly 120 independent law firmsin all 50 U.S. state capitals and in other financial centers throughout the world.

Whether your legal needs are local, national or international, we invite you todiscover the advantages of working with Barnes & Thornburg.

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Principal Areas of PracticeBarnes & Thornburg’s main areas of practice include the following:

Corporate Transactions & CounselingOur corporate lawyers have experience in merger, acquisition, joint venture andcapital raising transactions of all types, and in working with entrepreneurialcompanies. Attorneys counsel corporate clients in the areas of governance,shareholder relations, antitrust planning, distribution, tax and securities matters.The firm’s transactional attorneys handle a wide range of financing matters,including conventional and asset-based lending, commercial real estate finance,structured and asset-backed financing and securitization, and leveragedEmployee Stock Ownership Plans (ESOPs), as well as industrial revenue bonds.

Energy, Telecommunications & UtilitiesThe firm serves investor-owned, municipal, and other utilities;telecommunications companies; energy providers; and large consumers in awide array of regulatory, adversarial, and transactional matters. Attorneys seek tofind solutions on both state and federal regulatory challenges in areas such aselectricity, gas, Internet, telecommunications, high-speed rail, water and wastemanagement.

EnvironmentalAttorneys assist clients with a variety of issues, including compliance counseling,obtaining and negotiating permits, business transactions and planning, facilitycleanups, and administrative adjudication before federal and state agencies. Thedepartment also has a national water practice that assists clients with a broadrange of issues that arise for the regulated community, from policies andrulemaking to permitting and enforcement.

Finance, Insolvency & RestructuringAttorneys handle all aspects of general representation of secured and unsecuredcreditors, borrowers, guarantors, trustees, and creditors’ committees, includingnegotiating and drafting loan agreements, negotiable instruments, and othercommercial transactions in both litigation and transactional aspects of thepractice. They also represent creditors and obligors nationally in out-of-courtworkouts and refinancings, as well as in various state and federal courts,including bankruptcy proceedings, repossessions, and foreclosures.

Governmental Services & FinanceFirm attorneys regularly represent government issuers and underwriters ingovernment bond financings and many other public finance projects in severalstates. Attorneys also assist a variety of clients at the local, state and nationallevels through lobbying and public affairs efforts. The firm serves clients on avariety of business, government and trade association issues and in regulatoryand administrative matters, including licensing, rate, finance, contracting with thefederal government and complaint proceedings before federal regulatoryagencies.

HealthcareBarnes & Thornburg attorneys regularly represent physicians, medical groups,managed care organizations, hospitals, nursing homes, and national healthcare-

related associations located around the country. Attorneys deliver guidance oncomplex healthcare legal issues, including long-term-care facilities, managedcare networks, medical staff issues, Medicare and Medicaid, mergers andacquisitions, physician-hospital contracting, physician practice groups, provider,joint ventures, reimbursement disputes and audits, and tax exemption issues.

Intellectual PropertyThis department ranks among the largest in the nation for full-service law firmsand handles important IP matters domestically and abroad. The group of morethan 100 attorneys and professionals, has experience in virtually all facets ofintellectual property law, from patent and trademark prosecution to franchising,from antitrust and unfair trade practices to technology development anddeployment, and from life sciences and biotechnology to “bet-the-company”patent infringement litigation. The firm’s life sciences and biotech practiceincludes lawyers and patent agents who have earned PhDs in areas such asbiology, chemistry, microbiology and pharmacology.

Labor & EmploymentThis group is one of the largest in the Midwest and spans the country ingeographic reach. It is dedicated solely to proactively representing the interestsof employers. Attorneys routinely defend clients against claims of wrongfuldischarge, harassment, discrimination, workplace defamation, breach of contract,invasion of privacy, ERISA violations, illicit drug testing and other federal andstate law claims, and enforce non-competition and non-solicitation agreements.The firm also has an extensive traditional labor practice, which encompassesdefending against unfair labor practice charges and union organizing campaigns,negotiating and administrating union contracts, and coaching and training onlawful union-avoidance techniques.

LitigationMore than 180 of the firm’s attorneys concentrate their practices resolvingdisputes through negotiation, arbitration or litigation. Barnes & Thornburg’slitigators have represented businesses in controversies in all 50 states andbefore most of the U.S. federal courts, as well as before various international andmulti-jurisdictional tribunals.

Real Estate ServicesAttorneys offer all of the legal services necessary to take a parcel of land frominitial purchase through the completion of a real estate project. These servicesinclude rezoning and land-use planning; negotiation of financing; projectdevelopment; organization of owners’ associations and development ofarchitectural standards; leasing, sale, or tax-free exchange of the completedproject; and any other matters, including litigation, which may be encounteredbefore, during, and after the completion of a project.

Labor and Employment LawBarnes & Thornburg’s Labor and Employment Law Department is one of thefastest-growing labor groups in the nation. Two qualities set us apart: Ourpassion for what we do, and the pride we take in helping clients achieve theirbusiness goals. To succeed in the competitive global marketplace, our clientsmust not only meet but exceed their customers’ expectations. We share thisobjective, offering superior service, innovative ideas and an understanding of thechallenges our clients face.

Our ServicesThe Labor and Employment Law group offers comprehensive advice on the fullspectrum of labor and employment issues, including:

Labor relations

Union agreements

State and federal employment laws, including Title VII of the Civil Rights Act,Americans with Disabilities Act (ADA), Age Discrimination in Employment Act(ADEA), Family and Medical Leave Act (FMLA), Fair Labor Standards Act(FLSA), Worker Adjustment and Retraining Notification Act (WARN),Employee Retirement Income Security Act (ERISA) and Occupational Safetyand Health Act (OSHA)

Litigation

Unemployment and workers’ compensation claims

Corporate governance

Employment contracts

Workforce reorganizations

Trade secret and non-compete claims

International labor law

Immigration and global mobility

Form I-9 employment verification compliance, E-Verify and worksiteenforcement

Affirmative action plans

Class action defense

Diversity and workplace violence training

We take a preventative approach to potential labor and employment claims. Thefirm frequently works with a non-legal consulting affiliate that provides humanresources consulting services, including compensation, strategic planning,employee surveys, workplace conduct training, management and leadershiptraining, coaching, recruiting, and human resource program development.

Our attorneys speak more than a dozen languages, including Spanish,Japanese, German, French and Korean, and are experienced in the culturalnuances of multi-jurisdictional matters. We work across all time zones, from themajor commercial and financial centers of London and Hong Kong to theemerging markets of Thailand and Russia. Our association with TerraLex, an

international legal organization the firm founded and currently leads, gives us theresources to address labor and employment issues in more than 140 countries,states and provinces.

Our TeamThe department is made up of professionals from the firm’s offices in Atlanta,Indiana, Illinois, Los Angeles, Michigan, Minneapolis, Ohio, and Washington,D.C., and includes:

Present and former bar association presidents

Former Supreme Court, federal appellate, district and state court clerks

Lawyers with special appointments from government officials

Former general counsel for Fortune 100 companies

Executive officers of the Japan-American Society

Designated labor counsel for the nation of Mexico

Lead speakers for local and national Chamber of Commerce, Society forHuman Resource Management and American Immigration LawyersAssociation conferences

The current co-chairman of the TerraLex Labor and Employment LawPractice Group

Former member of the board of governors and chapter chair of the AmericanImmigration Lawyers Association

Executive officer of the Chicago chapter of the American ImmigrationLawyers Association

Our ClientsThe firm’s labor and employment clients range in size from Fortune 100companies to small, family-owned businesses. Our resources and reputationhave enabled us to represent some of the world’s most recognizable employerson a regional, national and international level. We also work with smallcompanies in need of legal counsel on a specific issue.

Big or small, each of our clients faces a wide range of workforce-relatedchallenges that can impact their growth and profitability — from productivityissues to rising health care costs and increasingly complex labor laws.

Our AchievementsThe firm’s hard work has been recognized by a wide range of publications andindependent rating organizations. Recent accolades include:

Ranked National Tier 1 for labor law and employment law by U.S. News-BestLawyers

One of 22 firms nationally on Workforce Management Magazine's "Hot List"of Top U.S. Labor and Employment Firms

Top 20 busiest firm for ADA (#8), Civil Rights (#10), Employment Practices(#18) (Litigation Almanac, Law360)

Listed as one of Corporate Counsel Magazine's "Go-To Law Firms of theWorld's Leading Companies"

Union organizing campaigns. Tough labor negotiations. Tricky terminations. Collective bargaining actions. That’s all right in our sweet spot. Barnes & Thornburg steps up with a national Tier One ranking for its labor and employment law practices. So bring the heat.

Sweet spot.

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May 12th 1130 navigating the changing landscape of employment law

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