Connecticut Labor and Employment Law Journal

Connecticut Labor and Employment Law Journal

Representing Employers

Unionized Employers May Have Less Than They Bargained For

Posted in National Labor Relations Board

A recent decision from the National Labor Relations Board (“NLRB”) may significantly weaken the “management rights” clauses found in many collective bargaining agreements.  A management rights clause reserves certain rights to management, often anything not covered by the collective bargaining agreement.  When a right is reserved to management, it can be changed unilaterally by the employer without bargaining with the union.

The recent NLRB decision, Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), could have a major impact on the effectiveness of broad management rights clauses utilized by unionized employers in the private sector; unionized public employers are not directly subject to the impact of the decision because they are not governed by the National Labor Relations Act, but the decision could still serve as persuasive authority in public-sector decisions.  In Connecticut, the State Board of Labor Relations has long required such specificity, so this is not a change for public-sector employers in the state.  This decision serves as a reminder of the importance of careful drafting in this area.

In the Graymont PA case, the collective bargaining agreement between the employer and the union contained a fairly typical management rights clause.  It provided that the employer “retains the sole and exclusive rights to manage; to direct its employees; to evaluate performance, . . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees. . . .” The employer decided to change work rules, the absenteeism policy, and the progressive disciplinary policy with notice to the union.  The employer denied the union’s information request and efforts to bargain with the employer over the changes.  The NLRB held that the employer failed to meet its burden of proving that the union had “clearly and unmistakably” waived its right to bargain over these changes, notwithstanding the language of the management rights clause.  Had the management rights language specifically referenced work rules, absenteeism, and progressive discipline or had the employer been able to show that the parties “fully discussed and consciously explored” these topics during negotiations, the outcome may have been different.

What this means for unionized employers is that management rights clauses must be quite specific in order to rely on them as waivers of the union’s right to bargain over changes to the terms and conditions of employment.  As a practical matter, at the next round of negotiations, employers may find that they need to make bargaining concessions just to achieve the management rights outcomes they thought they already had.  When considering changes to the terms and conditions of employment, unless the topic at hand is specifically enumerated as a management right, employers should meet with the union before making changes and respond to information requests from the union.

Our team of labor and employment attorneys can assist you in all aspects of labor-management relations in the public and private sectors.

As Election Season Heats Up Employers Need to Tread Lightly About Employee Speech

Posted in Employer Policies

Election season is here and the evidence can be viewed all around an employer’s campus: from bumper stickers on the cars in the parking lots; buttons festooned to employees; even screen savers on company computers; now more than ever broadcasting your support is easy.  However, with that support may come problems for the workplace.

Connecticut’s free-speech statute Conn. Gen. Stat. §31-51q protects an employee (acting in his or her private citizen capacity and not as an agent of the employer) from discharge or discipline for engaging in speech that would be protected by the First Amendment of the United States Constitution or Sections 3, 4 or 14 of the Connecticut State Constitution.  This includes what is called “political speech.”  Stated differently, an employee who voices support (such as campaigns for or speaks positively/negatively about a particular candidate) may not suffer any reprisal from the employer merely because the employer disagrees with that particular political philosophy.  This includes discipline (demotions, write-ups, suspensions etc.) and discharge based on that speech.

However, much like other issues concerning free speech rights, Conn. Gen. Stat. § 31-51q tapers the rights of employees from engaging in speech that “substantially and materially interferes with the employee’s bona fide job performance or the working relationship between the employee and the employer.”  Thus, while an employee may show support toward a particular candidate, that support cannot disrupt the business operations of the employer.  In other words, if the conduct of the employee is consuming so much of his or her working time; leading to political fights with other employees; and/or resulting in substandard work product or harm to business relationships, discipline is appropriate.

Given the nuances of Conn. Gen. Stat. § 31-51q and free speech laws in particular, it is always a good idea to consult with an attorney well versed in free speech rights in the workplace.  Our attorneys have handled these issues for both public and private employers and are familiar with this changing area of the law.

Department of Labor Updates Two Employment Law Posters

Posted in U.S. Department of Labor

Employers must immediately update their federal labor law posters.  The United States Department of Labor, with little notice, issued new posters related to the Fair Labor Standards Act and the Employee Polygraph Protection Act.  The new posters are available for download here and here.  It is important to ensure you are posting the correct posters at all times, including all required state and federal posters.  The use of “all in one” posters may not guarantee you are in compliance.

Our team of labor and employment attorneys can assist employers in determining the correct workplace postings and ensuring compliance with all applicable labor and employment laws.

State Board of Mediation and Arbitration increases filing fee

Posted in Grievance Arbitrations

On June 10, 2016, the State Board of Mediation and Arbitration (SBMA) announced it would be raising the filing fees for grievance arbitration for the first time in at least 17 years (the last time the regulation was amended). Effective July 1, 2016, the fee for submitting a grievance to the SBMA for arbitration took a huge jump from $25 to $200.  (Regs., Conn. State Agencies, §31-91-24)  The measure was one of a host of fee increases enacted to implement the revenue enhancement measures set forth the Governor’s FY17 budget.

It will be interesting to see if the increase has a chilling effect on the number of grievances filed by the unions.  At the very least, perhaps it will force them to be more selective in the types of matters they choose to advance to arbitration.  Of course, the increased fee also has to be paid by the employer and may significantly impact labor costs in the already fragile budgets of municipal employers, still reeling from cuts in State funding to municipalities, and could be used as leverage by unions with large coffers to negotiate favorable resolutions short of arbitration.

Stay tuned.

Connecticut Supreme Court: Unpaid volunteers not employees for purposes of State’s employment anti-discrimination laws

Posted in Wage & Hour

In a recently released decision, CHRO v. Echo Hose Ambulance, et al, a unanimous Supreme Court affirmed the Appellate Court’s dismissal of the CHRO’s appeal of a human rights referee’s determination that a volunteer was not an employee for purposes of Connecticut Fair Employment Practice Act, Conn, Gen. Stat. §461-60, et seq. (“CFEPA”) The issue before the Court was whether the Appellate Court properly applied the remuneration test to determine employee status.

Brenda Puryear filed a CHRO complaint against the City of Shelton and Echo Hose Ambulance (a volunteer ambulance corps) on behalf of her minor daughter, Sarah Puryear, alleging racial discrimination under both federal (Title VII) and state (CFEPA) antidiscrimination statutes. Sarah was a volunteer in the Echo Hose’s “precepting program”, but was not voted in as a member of Echo Hose Ambulance. The complaint alleges that Sarah was harassed and treated differently in terms of discipline based on her race and color.  The Human Rights Referee dismissed Sarah’s claim after applying the federal remuneration test to determine Sarah was not an employee and, therefore, not protected under either statute. The CHRO appealed and the trial court dismissed the appeal, the Appellate Court affirmed and the Supreme Court thereafter granted certification on the limited issue of whether the Appellate Court properly applied the federal “remuneration test” rather than the State’s common law “right to control” test to determine an “employee” under CFEPA.

The Court determined that the circular definition of an “employee” found in CFEPA (“any person employed by an employer”) was “unhelpful” to its analysis and followed precedent in looking to the federal court employment decisions for guidance in construing CFEPA. The federal courts employ two tests in determining whether an individual is an employee under Title VII, which uses a “virtually identical” definition of employee: The “right to control” test and the “remuneration test”.

The Supreme Court rejected the “right to control” test proposed by the CHRO, agreeing with the Second Circuit that “a test designed to distinguish employee from independent contractor is ill-suited to distinguishing employees from volunteers.”  Instead the Court held that the remuneration test – which was used to address circumstances where it was not clear whether an individual had been hired – was better suited for such a determination.

The remuneration test involves a two-step inquiry: First, as a threshold issue, a volunteer is required to show remuneration.  If remuneration could be established, then – and only then – would the court analyze the employment relationship under the agency test. The Court acknowledged that remuneration was not limited to salary or wages, but could include “indirect benefits not merely incidental to the activity performed.” What exactly that might entail is left for another day.

The Supreme Court also rejected the CHRO’s argument that the legislature’s subsequent enactment of P.A. 15-56, “An Act Protecting Interns from Workplace Harassment and Discrimination”, clarified the existing law to protect volunteers like her. The Court held that P.A. 15-56 expanded protection to a “narrowly defined class of persons – unpaid interns – to which Sarah does not belong.”

Connecticut Law Limits Criminal Inquiries on Employment Applications

Posted in Employee Benefits, Employer Policies

On January 1, 2017, Connecticut will “ban the box” for private employers, as well as public employers.  “Ban the box” laws prohibit employers from asking questions about criminal background on employment applications, with some exceptions.  Such laws are becoming increasingly common in states and municipalities throughout the United States.

The new Connecticut legislation, known as Public Act 16-83, An Act Concerning Fair Chance Employment, defines “employer” as “any person engaged in business who has one or more employees, including the state or any political subdivision of the state.”  The law prohibits employers from inquiring about a prospective employee’s prior arrests, criminal charges, or convictions on an initial employment application.  There is an exception when the employer is required to do so by state or federal law.  However, it is not clear whether this exception will apply only when the employer is bound to inquire about criminal background on an initial application or if it will apply as long as the employer is required to ask at some point in the process.  A literal reading of the language implies the former.  There is also an exception when a security or fidelity bond or an equivalent bond is required for the position for which the prospective employee is seeking employment.

Notably, the legislation only bans employers from asking about criminal history on an initial employment application.  It does not prohibit asking altogether, nor does it require a conditional offer prior to asking.  Therefore, employers need to check their application forms to ensure they do not ask about criminal background (unless an exception applies), but may ask such questions at any later point in the application process.

Existing state law requires that an employment application form that contains any question concerning the criminal history of the applicant contain a notice, in clear and conspicuous language:

(1) That the applicant is not required to disclose the existence of any arrest, criminal charge or conviction, the records of which have been erased pursuant to section 46b-146, 54-76o or 54-142a,

(2) that criminal records subject to erasure pursuant to section 46b-146, 54-76o or 54-142a are records pertaining to a finding of delinquency or that a child was a member of a family with service needs, an adjudication as a youthful offender, a criminal charge that has been dismissed or nolled, a criminal charge for which the person has been found not guilty or a conviction for which the person received an absolute pardon, and

(3) that any person whose criminal records have been erased pursuant to section 46b-146, 54-76o or 54-142a shall be deemed to have never been arrested within the meaning of the general statutes with respect to the proceedings so erased and may so swear under oath.

Further, employers may not reject an applicant or terminate an employee based on erased records or because of a prior conviction for which the individual has received a provisional pardon or certificate of rehabilitation pursuant to Conn. Gen. Stat. § 54-130a, or a certificate of rehabilitation pursuant to Conn. Gen. Stat. § 54-108f.

While the ban-the-box legislation does not allow an individual to sue an employer, a complaint may be filed with the state Department of Labor.

Employers should remain aware of other considerations relating to the role of prior convictions in the application process.  Employers in certain regulated industries, particularly where employees will work with children or finances, may have special requirements to inquire about criminal background.  Employers in all fields should ensure that they make carefully reasoned decisions about the relevance of prior convictions to the employment sought; failure to do so could give rise to discrimination charges based on race and national origin, even where a policy is applied evenhandedly.  Finally, before conducting a criminal background check, employers should ensure they are complying with notification requirements of the federal Fair Credit Reporting Act.

Due to the complexity of the law in this area, employers should consider having their applications and other onboarding materials reviewed by a labor and employment attorney.  Further, before taking adverse action (including refusing to hire an individual) based on a criminal conviction, it is advisable to seek counsel, as certain enumerated factors should be considered and documented.

Our team of labor and employment attorneys can assist employers in adjusting to the new criminal background inquiry restrictions and ensuring compliance with all applicable labor and employment laws.

Major Overtime Rule Change Effective December 1 – What You Need To Know To Prepare Now

Posted in Wage & Hour

The U.S. Department of Labor just issued its final rule, requiring minimum wage and overtime for some employees who are currently “exempt” from these requirements. Employers need to plan ahead for implementation, as the rule change could lead to seismic shifts in some payrolls.

The federal Fair Labor Standards Act (“FLSA”) requires that employees receive minimum wage and overtime (calculated at one-and-a-half times the regular rate of pay for hours over 40) unless they are “exempt” from one or both requirements. The most popular exemptions are the so-called “white collar exemptions,” which apply to executive, administrative, and professional employees who meet rigorous criteria based on their duties. To be exempt, these employees must be paid a salary of at least $455 per week and the employer must pay on a salary basis (meaning no docking for partial workweeks, subject to limited exceptions). Doctors, lawyers, and teachers can be exempt under the FLSA even if they are not paid on a salary basis and there is no minimum salary for these employees. (The computer professional exemption has special rules under which employees can be paid hourly, but in any event, there is no computer professional exemption under Connecticut state law.)

The rule change more than doubles the salary threshold from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). Further, these thresholds will be subject to inflationary increases every three years. Nondiscretionary bonuses and incentive payments (including commissions) may account for up to 10 percent of the minimum salary level. By contrast, discretionary bonuses do not count toward the minimum salary level.  The duties tests are not changing under this rule. The threshold for the “highly compensated employee” exemption increases from $100,000 to $134,004, but Connecticut does not recognize this exemption, so employers should not rely upon it for employees in the state.

Raising the salary threshold is expected to transform millions of exempt employees into non-exempt employees overnight. Some employers will be able to weather this change better than others. Virtually every employer in the country is subject to the FLSA, even if there is only one employee. This includes non-profits and public sector employers. In Connecticut, where the cost of living is high, the effect of this change may be lower than elsewhere in the country. It is more likely here than elsewhere that employees who meet the duties tests are already earning at least $913 per week. However, non-profit, low-profit, and government employers may find that many of their employees are subject to this rule change and these employers may have more rigid budgets that cannot withstand the impact. Employers with an annual volume of sales or business of less than $500,000 may wish to consult an employment lawyer to see if they are one of the very few employers not subject to the FLSA.

To comply with the rule, employers need to either raise salaries of affected employees to ensure they meet the threshold or begin treating these employees as non-exempt. Raising salaries is straightforward, but remember that the rule is likely to require inflationary increases, so the amount will change going forward. If employers do not wish to raise salaries, the employees must be treated as non-exempt. This means that employers must keep records of their hours worked and they must be paid overtime for hours over 40. It is legally permissible to cap hours at 40 by prohibiting employees from working overtime and some employers may choose to hire multiple employees to do what was once one employee’s job. Collective bargaining agreements may limit employers’ options.

It cannot be overstated how important it is to ensure that employees are properly exempted if they are not going to be paid overtime. Consider the following scenario. A passionate, well educated executive director of a nonprofit organization earns a salary of $912 per week – just one dollar short of the new threshold. She labors with love, working 70 hours most weeks. A disgruntled employee complains to the Department of Labor that he is owed overtime and the agency examines the payroll practices of the entire organization. The Department of Labor finds that the executive director is not exempt. It is not that she is underpaid by fifty-two dollars. It is that she is not exempt at all. She is owed unpaid overtime of more than $20,000 (more if the salary was only intended to cover a certain number of hours) all because she was paid one dollar per week too little to qualify as exempt.  She would likely also be eligible for liquidated damages, doubling the underlying liability. (There are some arguments an employer could make to apply more favorable damages calculations, but these arguments have yet to be successful in the Second Circuit.) That is the legal significance of the salary threshold and why employers must be extremely careful. For that matter, when considering the duties tests as well, employers should recognize how a small mistake in classifying an employee or a group of employees could add up to huge liability.

Employers should take time now to review their payroll practices to ensure they are in compliance with state and federal laws now and in the future. For each employee believed to be exempt, ensure that he or she meets the duties tests for the applicable exemption, is paid on a salary if required by the exemption, and is paid a salary that is high enough to support the exemption. In considering the duties of a position, employers should be concerned not with titles or job descriptions, but with how the employee actually spends his or her time. It is a good idea to update job descriptions to match reality.

Ensure that all non-exempt employees’ hours are being tracked, including time spent offsite performing work, on call, or traveling, to the extent required by law. Ensure that break periods of fewer than 20 minutes are treated as working time.

Now is a good time to change payroll practices without raising alarm that perhaps things were not done properly before. Employers can connect changes with the new overtime rule to minimize suspicion, particularly in cases of misclassification. Internal review of payroll practices should be aided by a competent labor and employment attorney, as the rules can be excruciatingly detailed. Using non-attorney human resource consultants or payroll companies for this activity is not advised, as communications will not be privileged. Changes to payroll practices, hours, or other terms or conditions of employment should be communicated to employees well in advance, ideally at least 30 days.

Our team of labor and employment attorneys can assist employers in adjusting to the new white-collar exemption requirements and ensuring compliance with all applicable labor and employment laws.  Contact us to arrange a wage-and-hour self-audit for your organization.

Public Sector Unions Dodge A Bullet With Friedrich’s Decision

Posted in Municipal Labor

A much anticipated decision was released last week in which the U.S. Supreme Court was deadlocked (4 to 4) on a challenge to so called “service fees” charged to employees who opt out of union membership.  The lawsuit was based upon a lawsuit brought by a number of California teachers who objected to being required to pay the fee (typically almost the same cost as union dues) if they chose not to join the union.  While the plaintiffs have announced their intent to request re-argument once a new justice is appointed replacing deceased Justice Antonin Scalia, for now the decision stands, meaning public sector unions may continue to require that non-members pay a “service fee” in states that allow it, including Connecticut.

Connecticut Supreme Court Bolsters Employee Free Speech Claim

Posted in Employer Policies

In a decision that marks a clear departure from national case law, the Connecticut Supreme Court recently expanded the protection of employees who speak out against their employers.

In Trusz v. UBS Realty Investors the Connecticut Supreme Court rejected the standard set by the U.S. Supreme Court as to the U.S. Constitution, ruling, in effect, that the state constitution affords Connecticut employees broader protection than federal law.  In a case called Garcetti v. Ceballos, the U.S. Supreme Court had ruled that employee statements made as part of their official duties were not protected.  In Trusz the Connecticut Supreme Court rejected that exception as to the Connecticut Constitution.

As such, even statements made by an employee as part of their official duties may be protected under Connecticut law assuming the other requirements for bringing a free speech claim are met, e.g. it must be a matter of public (not private) concern.  This means that as compared to other employers throughout the rest of the Country, a Connecticut employer has less latitude to discipline an employee who speaks out against their employer, even if the statements are associated with their regular job duties.  Connecticut employers seeking to discipline an employee for speaking out against them should think twice and consult with counsel before doing so.

Reminder – Connecticut Minimum Wage Rises to $9.60 on January 1

Posted in Wage & Hour

Connecticut employers must begin paying $9.60 per hour to their employees on January 1, 2016 as part of legislation designed to raise the state minimum wage to $10.10 per hour by 2017.  For restaurant waitstaff who receive sufficient gratuities, the employer must pay $7.82 per hour under the new minimum wage, but the employee must still make at least $9.60 per hour including tips and employers must follow recordkeeping and reporting obligations related to the tip credit.

Employers must also update their workplace posters to ensure they reflect the new minimum wage.  The posters are available from the Connecticut Department of Labor at http://www.ctdol.state.ct.us/gendocs/labor_posters.htm.

Our team of labor and employment attorneys can assist employers in adjusting to the new minimum wage requirements and ensuring compliance with all applicable labor and employment laws.

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