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DOL Declares Policy On Joint Employers

Screen Shot 2016-02-16 at 4.05.36 PMThe Department of Labor has done it again, unilaterally declaring that companies using staffing agencies are joint employers of those temporary workers under wage and hour laws.

Dr. David Weil, head of DOL’s Wage and Hour Division, issued an “agency interpretation” that does not require the usual public comment or need to meet the other procedural steps of rulemakings.

Weil’s interpretation specifically targets the warehouse and logistics, construction, agricultural, janitorial, staffing and hospitality industries.

“Although all employers should review their business-to-business relationships in light of the WHD’s new standards, employers in these industries should be especially concerned,” say attorneys Tammy McCutchen and Michael Lotito of the Littler Mendelson law firm.

In his explanation, Weil declares that “not every subcontractor, farm labor contractor or other labor provider relationship will result in joint employment,” and says the purpose of the AI is to expand federal wage laws to small businesses and collect back wages from larger businesses.

Last year another AI from Weil stated that most independent contractors are company employees under wage and hour laws (AA, 7-31-15, P. 1).

Weil wrote in his latest AI blog post, “In a nutshell, joint employment exists when a person is employed by two or more employers such that the employers are responsible, both individually and jointly, for compliance with a statute.”

National Retail Federation Senior Vice President David French says the DOL will only lead to more litigation. “Congress has to stop the spread of this Orwellian big brother approach to government before it can go any further.”

“Subcontractors and franchisees are independent companies who make their own decisions on how to deal with their employees,” he adds. “Trying to treat large companies and smaller businesses as one large entity is just another effort to make life easier for organized labor.”

Court Eyes NLRB Joint Employer Rule

Last year’s National Labor Relations Board decision establishing joint employer status for temporary workers faces a court challenge.

Browning-Ferris Industries of California is seeking court review of the NLRB’s decision holding that the company shared joint liability for labor law violations allegedly committed by an employee leasing firm Browning-
Ferris had used.

What made the decision outrageous for many employers was that the NLRB admitted Browning-Ferris had not exerted direct control over the staffing firm’s employees. However, the board said the joint employer liability existed simply because at some point in the future the company could choose to exert such control if it so wished.

In the past to be declared a joint employer a company needed to exert direct and immediate control over matters such as hiring, firing, discipline, supervision and direction of the temps.

Following the board’s decision, legislation was introduced in Congress to overturn it that managed to attract the support of some Democrat legislators (AA, 12-15-15, P. 4).

After the board’s decision votes that had not been counted in an earlier organizing vote determined that a majority of the Browning-Ferris employees – including temp workers – wanted to be represented by the Teamsters union. The Teamsters were then certified by the NLRB as the exclusive bargaining representative of the employees.

The Browning-Ferris management refused to recognize and bargain with the union, resulting in an unfair labor practice charge filed by the Teamsters with the NLRB. On Jan. 12, the board issued a unanimous decision holding that the company had violated the law. It is that decision the company has appealed in a case that is expected to be heard later this year or 2017.

Chem Data Shows Economy Slowing

Screen Shot 2016-02-16 at 4.05.29 PMAmerica’s chemical industry’s monthly statistical measurements show signs of that the economy is slowing, at least through the first half of the year.

That was the conclusion drawn by the American Chemistry Council based on data included in its Chemical Activity Barometer, which is considered a leading economic indicator.

The CAB rose only 0.1% in January following a downward adjustment of 0.1% for December, measured on a three-month moving average.

Accounting for adjustments, the CAB was up 1.6% over the same time last year, a marked deceleration of activity from one year ago when the barometer logged a 3.2% year-over-year gain from 2014, ACC pointed out.

On an unadjusted basis the CAB fell 0.1% and 0.2% in December and January, respectively, raising concerns about the pace of future business activity through the second quarter of 2016.

The CAB consists of four primary components covering a variety of indicators: production; equity prices; product prices; and inventories.

In a separate report, ACC said that its U.S. Chemical Production Regional Index rose 0.2% in December, after a 0.5% gain in November, and a flat growth in October. All regions posted growth in December.

Over the same period, chemical production by segment was mixed, the council said. There were gains in the three-month moving average output trend of some inorganic chemicals, consumer products, industrial gases, synthetic dyes and pigments, other specialties, organic chemicals, coatings, adhesives and synthetic rubber.

At the same time, ACC reported declines in the production of pharmaceuticals, fertilizers, pesticides, plastic resins and manufactured fibers.

Orders for Durable Goods Are Eroding

Economic data since the 2008 recession has offered the picture of a consistently inconsistent economic recovery. The most recent durable goods orders numbers seem to offer more of the same.

The Commerce Department reported that orders for durable goods dropped 5.1% in December from the previous month, and were down 3.5% for all of 2015.

Some of this stems from a strong U.S. dollar that discourages export sales, along with the continuing weakness experienced by the economies of China and Brazil. However, Dow Jones Business News points out that the annual decline in durable goods orders is the biggest on record outside of a recession going back as far as 1992.

“Repeating the pattern observed in recent years, the first quarter will be challenging for U.S. manufacturers,” said Don Norman, director of economic studies for the Manufacturers Alliance for Productivity and Innovation.

Taking note of the volatility in U.S. equity markets, he added, “One might say that what is happening bears watching. Or, one could say that the bears are watching what is happening.”

The Institute for Supply Management reported that the manufacturing sector contracted in January for the fourth consecutive month. Making matters more confusing, eight of the 18 industries measured by ISM saw increases in orders while seven of them registered declines.

Reporting growth (in declining order) were: textile mills; wood products; miscellaneous manufacturing; printing and related support activities; furniture and related products; computer and electronic products; machinery; and electrical equipment, appliances and components.

The 10 industries reporting contraction in January were: apparel, leather and allied products; nonmetallic mineral products; petroleum & coal products; paper products; transportation equipment; plastics and rubber products; fabricated metal products; food, beverage and tobacco products; primary metals; and chemical products.

Policymakers Target Workplace Bullying

Screen Shot 2016-02-16 at 4.05.21 PMDo your company managers and supervisors need to take action when an employee reports a bullying incident on the plant floor or in the office? Is it something that corporate management should be concerned about? Yes and yes, says one law firm.

As of now, a private cause of action for workplace bullying does not exist, except in regard to civil rights violations. To be valid under current federal law, a workplace bullying lawsuit must be based on either discrimination or the creation of hostile work environment.

Although simple run-of-the-mill bullying on its own may not be actionable, employer incentives for preventing workplace bullying include minimizing your turnover rate and increasing productivity. However, fear of a lawsuit isn’t a factor – yet.

A group called the Healthy Workplace Campaign is pushing for legislation prohibiting and creating a private cause of action for workplace bullying.

HWC defines bullying as verbal abuse; offensive conduct/behaviors (including nonverbal) that are threatening, humiliating or intimidating; and sabotage that prevents work from getting done.

The goal of HWC is to create legal protection for employees who are abused at work on a basis other than being members of a protected class. According to the HWC, about 100 different versions of the Health Workplace Bill have been introduced in state legislatures and many of them are given a serious chance at being passed eventually.

In fact three states – Utah, Tennessee and California – all have passed laws regulating workplace bullying. The Utah and Tennessee laws focus exclusively on public employees. The California law applies to all employers with more than 50 employees. None of these laws create a private right of action. Instead they define “bullying” and require training for supervisors.

California’s defines “abusive conduct” as “conduct of an employer or employee in the workplace with malice that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interest.”

Currently, New York, Connecticut, Florida, and Illinois, are among the states with versions of the Healthy Workplace Bill under consideration or gaining traction among legislators.  Massachusetts’ healthy workplace bill already has 57 cosponsors.

Be aware of the status of any anti-bullying bill in your state. Creating a cause of action for bullying could lead to frivolous claims from unhappy employees, even though HWC built safeguards into its model law by requiring proof of harm from a medical professional and protecting employers’ internal corrections.

Although there is no federal anti-bullying law at present, the law firm of Seyfarth Shaw warns employers should act now to protect themselves by incorporating anti-bullying training and management procedures into their discrimination and sexual harassment policies.

Seyfarth Shaw’s attorneys outline what employers should include in their anti-bullying policies and training procedures.

Use interactive training sessions. When discussing bullying with your employees it can be helpful to hold an interactive training session. Simply sending out an email or reviewing a PowerPoint presentation may not get the message across. It can be helpful to create sample situations and ask employees to discuss how to handle them.

Enforce the policy. Have a game plan for enforcing an anti-bullying policy, including how to deal with complaints of bullying. While complaints that “he is too hard on me” or “she is not treating me well” are easy to ignore, they can escalate to allegations of harassment or discrimination.

Make employees feel welcome. You must take these complaints seriously and create an environment where employees feel comfortable speaking up.

“The more information your employees give you, the quicker you can prevent a bigger problem down the road,” the Seyfarth Shaw attorneys point out.

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