Supreme Court Invalidates Decisions of Two-Member NLRB

This morning, in one of the most highly-anticipated decisions of the year, the United States Supreme Court ruled 5-4 that the NLRB does not have the legislatively required quorum to act when it only has two members. New Process Steel v. NLRB, No. 08-1457. Under the 1947 Taft-Hartley Act, the NLRB is supposed to have five members. However, for a variety of reasons – mostly related to the partisan Congress – it only had two members between January 1, 2008 and March 27, 2010 (when President Obama made two recess appointments after it became clear that his appointees would not receive Senate confirmation). During that 27 months, the NLRB had issued approximately 600 decisions when the two remaining members could agree. Two of those decisions involved the employer who appealed enforcement to federal court. The Seventh Circuit ruled that the NLRB could act with only two members, but the Supreme Court reversed in an opinion written by outgoing Justice Stevens. Although the THA permitted the five-member Board to delegate decisions to a three-member panel, that panel could not act with only two members present.

The Board's quorum requirements and delegation procedure are set forth in §3(b) of the NLRA, 49 Stat. 451, as amended by 61 Stat. 139, which provides: "The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof." 29 U. S. C. §153(b).

It is undisputed that the first sentence of this provision authorized the Board to delegate its powers to the three member group effective on December 28, 2007, and the last sentence authorized two members of that group to act as a quorum of the group during the next three days if, for example, the third member had to recuse himself from a particular matter. The question we face is whether those two members could continue to act for the Board as a quorum of the delegee group after December 31, 2007,when the Board's membership fell to two and the designated three-member group of "Members Liebman, Schaumber, and Kirsanow" ceased to exist due to the expiration of Member Kirsanow's term. Construing §3(b)as a whole and in light of the Board's longstanding practice, we are persuaded that they could not.

The Court construed the first clause "as requiring that the delegee group maintain a membership of three in order for the delegation to remain valid" for three reasons.

First, and most fundamentally, reading the delegation clause to require that the Board's delegated power be vested continuously in a group of three members is the only way to harmonize and give meaningful effect to all of the provisions in §3(b). . . . . Interpreting the statute to require the Board's powers to be vested at all times in a group of at least three members is consonant with the Board quorum requirement, which requires three participating members "at all times" for the Board to act. The interpretation likewise gives material effect to the three-member requirement in the delegation clause. The vacancy clause still operates to provide that vacancies do not impair the ability of the Board to take action, so long as the quorum is satisfied. And the interpretation does not render inoperative the group quorum provision, which still operates to authorize a three member delegee group to issue a decision with only two members participating, so long as the delegee group was properly constituted. Reading §3(b) in this manner, the statute's various pieces hang together—a critical clue that this reading is a sound one.

. . . .

Second, and relatedly, if Congress had intended to authorize two members alone to act for the Board on an ongoing basis, it could have said so in straight forward language. Congress instead imposed the requirement that the Board delegate authority to no fewer than three members, and that it have three participating members to constitute a quorum. Those provisions are at best an unlikely way of conveying congressional approval of a two member Board. Indeed, had Congress wanted to provide for two members alone to act as the Board, it could have maintained the NLRA's original two-member Board quorum provision.

. . . .

Furthermore, if Congress had intended to allow for a two-member Board, it is hard to imagine why it would have limited the Board's power to delegate its authority by requiring a delegee group of at least three members. Nor do we have any reason to surmise that Congress' overriding objective in amending §3(b) was to keep the Board operating at all costs; the inclusion of the three-member quorum and delegation provisions indicate otherwise. Cf. Robert's Rules of Order §3, p. 20 (10th ed. 2001) ("The requirement of a quorum is a protection against totally unrepresentative action in the name of the body by an unduly small number of persons").

In sum, a straightforward understanding of the text, which requires that no fewer than three members be vested with the Board's full authority, coupled with the Board's longstanding practice, points us toward an interpretation of the delegation clause that requires a delegee group to maintain a membership of three.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court: Employer’s Review of Employee’s Text Messages Was Reasonable and Did Not Violate Fourth Amendment

This morning, a fairly unanimous United States Supreme Court again reversed the Ninth Circuit Court of Appeals and ruled that a police department's review of the content of text messages sent and received by a police officer on his work pager was reasonable under the circumstances and did not violate the Fourth Amendment. City of Ontario v. Quon, No. 08-1332 (U.S. 6/17/10). The Court found it irrelevant and did not address whether the plaintiff had a reasonable expectation of privacy and did not address (or overrule) the Circuit Court's ruling against the telecommunications provider for giving the message transcripts to the employer under the Stored Communications Act. The employer had asked to review the content of the text messages sent by its employees because they were routinely being assessed extra fees for exceeding their text message ceiling and management wanted to know if the ceiling was reasonable in light of the number of work-related messages being sent/received. Upon reviewing the transcript of the messages, it discovered that few of the messages were work related and some of the messages were sexually explicit. Accordingly, the officer was disciplined and he filed suit alleging that the city's audit of his text messages had violated his right under the Fourth Amendment.

According to the Court's opinion, this decision involved "the assertion by a government employer of the right, in circumstances to be described, to read text messages sent and received on a pager the employer owned and issued to an employee." The city had a policy informing employees that it might monitor their emails and computer usage and disclaiming any right of privacy. The policy did not explicitly apply to pagers or text messages, but the city informed the employees by memorandum that it considered the pagers to be subject to the Policy even though emails were sent via the city's own computer network while the text messages and pagers were operated by a telecommunications company and the messages were stored on the company's servers instead of the city's servers. The City's purchased pagers through a wireless provider which charged the city extra whenever it exceeded its text limit ceiling. The plaintiff exceeded the ceiling every month after he was issued the pager, but when he was given the option of having his use of his pager audited or paying the overage fee, he always chose to pay the overage fee. Nonetheless, the city became tired of having to bill him every month for excessive pager use and decided to audit his use of the pager in order to determine whether it was fair to charge him for work-related message because the text limit ceiling was too low or whether it should renegotiate its contract with the wireless provider.

At the city's request, the provider provided transcripts of the plaintiff's text messages (because the city was the account subscriber, not the plaintiff). A review of the transcripts (which were audited by the union to delete messages sent during non-work time) revealed that many of the plaintiff's messages were not work related and some were sexually explicit. He was referred to Internal Affairs for disciplinary action for pursuing personal matters during work time. The Internal Affairs investigation revealed that the plaintiff

sent or received 456 messages during work hours in the month of August 2002, of which no more than 57 were work related; he sent as many as 80 messages during a single day at work; and on an average workday, [the plaintiff] sent or received 28 messages, of which only 3 were related to police business.

The plaintiff filed suit (along with other individuals who had exchanged text messages with him uncovered by the audit and IA investigation) under state and federal law against the city and the wireless provider. The lawsuit alleged that their fourth amendment rights had been violated by the audit and investigation and that the provider had violated the Stored Communications Act by providing transcripts of the text messages to the city. The trial court granted summary judgment to the provider. It also concluded that the plaintiffs had a reasonable expectation of privacy (in that he had been given the choice of an audit or paying the overage fee), but that it was a jury question whether the city's search was reasonable under the circumstances. The jury found in favor of the city. However, the Ninth Circuit reversed summary judgment in favor of the provider and the jury verdict.

The Court declined to decide whether the plaintiffs had a reasonable expectation of privacy (in that it would affect the decision of whether a city would be reasonable in reviewing the transcripts for other reasons like performance evaluations, litigation or open records laws) and decided to assume for purposes of the appeal that he had such an expectation, that the audit constituted a search and that an employee's privacy interests in electronic communications was as strong as his interest in privacy from physical searches of his person, office, work desk and work locker.

"Although as a general matter, warrantless searches "are per se unreasonable under the Fourth Amendment," there are "a few specifically established and well-delineated exceptions" to that general rule," including an exception for workplaces. Under the approach of the plurality in O'Connor v. Ortega, 480 U. S. 709 (1987), "when conducted for a 'noninvestigatory, work-related purpos[e]'or for the 'investigatio[n] of work-related misconduct,' a government employer's warrantless search is reasonable" if (1) " it is 'justified at its inception'" and (2) "if 'the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of' the circumstances giving rise to the search.'" The Court found that the O'Connor test was met by the city employer in this case.

The search was justified at its inception because a jury found that there were "reasonable grounds for suspecting that the search [was] necessary for a noninvestigatory work-related purpose" in order to determine whether the character limit on the City's contract with its wireless provider was sufficient to meet the City's needs. "The City had a legitimate interest in ensuring that employees were not being forced to pay out of their own pockets for work-related expenses, or on the other hand that the City was not paying for extensive personal communications."

" As for the scope of the search, reviewing the transcripts was reasonable because it was an efficient and expedient way to determine whether [the plaintiff's] overages were the result of work-related messaging or personal use." The review was also not "'excessively intrusive'" in that the City had limited its review to two of the several months at issue (in order to have a sufficient sample size) and had excluded messages sent during non-working hours. Moreover, even if the plaintiff

"could assume some level of privacy would inhere in his messages, it would not have been reasonable for [him] to conclude that his messages were in all circumstances immune from scrutiny. [He] was told that his messages were subject to auditing. As a law enforcement officer, he would or should have known that his actions were likely to come under legal scrutiny, and that this might entail an analysis of his on-the-job communications. Under the circumstances, a reasonable employee would be aware that sound management principles might require the audit of messages to determine whether the pager was being appropriately used."

Further, from the perspective of the police department, plaintiff's limited expectation of privacy, "with boundaries that we need not here explore, lessened the risk that the review would intrude on highly private details of [his] life." Its review of messages on his

"employer-provided pager was not nearly as intrusive as a search of his personal e-mail account or pager, or a wiretap on his home phone line, would have been. That the search did reveal intimate details of [his] life does not make it unreasonable, for under the circumstances a reasonable employer would not expect that such a review would intrude on such matters. The search was permissible in its scope."

The Court specifically rejected the approach of the Ninth Circuit that the availability of less intrusive measures made the search unreasonable. The Ninth Circuit had suggested that (i) the plaintiff be told in advance that his usage would be audited going forward; (ii) that the plaintiff be asked to count the words himself and report back to his employer; (iii) that the plaintiff be asked to redact the transcript of personal messages himself before it was reviewed by the employer. "That rationale 'could raise insuperable barriers to the exercise of virtually all
search-and-seizure powers,' because 'judges engaged in post hoc evaluations of
government conduct can almost always imagine some alternative means by which
the objectives of the government might have been accomplished.'" Therefore,
even if the police department "could have performed the search that would
have been less intrusive, it does not follow that the search as conducted was unreasonable." Similarly, even if the wireless provider had violated the SCA by providing the transcript to the employer, it did not follow that the employer's review of the transcript constituted an unreasonable search. "The otherwise
reasonable search by [the police department] is not rendered unreasonable by the assumption that [the wireless provider] violated the SCA by turning over the transcripts."

The plaintiffs did not attempt to argue that the city's review of the text messages violated the senders' privacy rights even if it did not violate the recipient's privacy rights. Therefore, the Court found that they had no Fourth Amendment claim either.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Appeals Court Holds Community Support Specialist Is Not Exempt from Overtime as An Administrator or Professional

Last week, the Court of Appeals for Cuyahoga County reversed summary judgment in favor of a non-profit community mental health center employer on a claim for unpaid overtime brought by a Community Support Specialist (CSS) formerly employed by the center. White v. Murtis M. Taylor Multi-Serv. Ctr., 2010-Ohio-2602. The trial court had found that the plaintiff was exempt from overtime under both the Fair Labor Standards Act and Ohio Revised Code § 4111.03 law as an administrative and/or learned professional employee. Both courts agreed that Ohio law follows the same standards as the FLSA in evaluating an employee's exempt status and that the burden was on the employer to justify by clear and affirmative evidence that the employee was exempt from overtime pay when working more than 40 hours in a week. However, the appellate court concluded that his job duties did not fit within the administrative exemption; he did not exercise enough independent judgment or discretion to fit within either exemption; and his job did not require a specialized academic degree as required to fit within the learned professional exemption.

According to the Court's opinion, the plaintiff filed suit in January 2008 -- just over three years after he left the non-profit employer -- seeking compensatory and punitive damages. While the employer contended that the plaintiff's job required him to perform managerial duties, the Court found that the employer failed to present any evidence to support its argument. The plaintiff denied that he possessed any authority over other employees. The Court then examined the regulatory examples of duties at 29 CFR §541.201(b) which typically would be performed by an administratively exempt employee and concluded that they indicated policy-making responsibilities which were not reflected in the plaintiff's job. Moreover, the employer failed to present evidence showing that the plaintiff's job required the exercise of judgment and independent discretion over matters of significance.

The exercise of independent judgment requires "the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered. . . .[The plaintiff] simply assisted his clients in learning and completing everyday tasks, such as grocery shopping and locating community resources. Clearly, these are not matters of significance as contemplated by the FLSA. [The plaintiff] did not exercise independent judgment in the general business operations of [the non-profit employer]. He did not supervise anyone, nor did he perform any administrative functions such as human resources procurement or management decisions.

The Court rejected evidence that he was not required to routinely seek his supervisor's approval and that he sometimes worked unsupervised because " he was still required to submit all of his notes and case plans to [his supervisor] for approval." While most of his case plans were approved, his supervisor still impliedly rejected "some" of them.

Similarly, the Court concluded that the plaintiff did not fit within the learned professional exemption:

The first element [the employer] must satisfy to establish that [the plaintiff] is a learned professional, is that [the plaintiff] performs work that requires advanced knowledge. The work must either require advanced knowledge, or be of an artistic or creative nature. Specifically, the work is as follows:

"[P]redominately intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment, as distinguished from performance of routine mental, manual, mechanical, or physical work. An employee who performs work requiring advanced knowledge generally uses the advanced knowledge to analyze, interpret, or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level." . . .

29 CFR § 301(b). "While a degree is not always required, a degree is the best prima facie evidence that an employee is a learned professional." However, the plaintiff's job description did not require any advanced knowledge or education. Rather, it only required:

some course work in social work, counseling, psychology,or related disciplines beyond high school. Bachelor's degree in Social Work, Counseling, Psychology, or related field preferred. At least one year of experience in a mental health organization with a background in substance abuse[,] abuse treatment and/or prevention essential.

"Thus, the evidence showed that the employer did not require a specialized academic degree or experience. " Indeed, the job did not require the applicant to possess any degree.

The Court found that the trial court had erred by placing "significant weight on the actual education [a bachelors degree in research biology and theology] and training [that the plaintiff] has obtained, when the proper inquiry is the education that is actually required of the position." Although the plaintiff possessed experience and training "in chemical dependency and addiction counseling, he was instructed not to provide clients with counseling; therefore, such training was similarly irrelevant to his position as a CSS 1. Courts have concluded that highly trained individuals [ like pilots] who do not possess an academic degree are not learned professionals."

Moreover, the plaintiff testified that "his work included accompanying clients to appointments and referring them to community resources" and "he did not provide treatment to his clients." His duties also

consisted of teaching daily living skills to his clients. He accompanied them on legal and medical appointments, and assisted them in completing everyday tasks such as managing their finances and grocery shopping. Such duties clearly do not fall into the category of science and learning, as these duties do not require any specialized knowledge.

His employment offer letter also "clearly indicated that [his] position as a CSS 1 was a level 1, primary support position." The Court concluded that "[s]uch a vague description does not merit the type of specialized knowledge required of a learned professional."

Finally, the Court examined an opinion letter from the Department of Labor which indicated that social worker positions which require a master's degree in social work are exempt while case workers who were not required to have a specific degree were not. "The Ohio Supreme Court has previously recognized that opinion letters are persuasive authority in interpreting federal statutes and regulations."

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Enforces Employee’s Waiver of USERRA Claims

This morning, the federal Sixth Circuit Court of Appeals affirmed summary judgment in favor of an employer in a claim brought under USERRA on the grounds that the plaintiff had signed a waiver of all claims, including those based on "veteran status" in his separation agreement. Wysocki v. IBM, No. 09-5161 (6^th Cir. 6/16/10). The plaintiff alleged that he had been terminated on account of his military service in Afghanistan. In particular, he claimed that IBM refused to provide him training to update his job skills when he returned to work and then terminated him without cause. The Court found that his USERRA claim was waived in his separation agreement even though it did not specifically refer to USERRA.

IBM responded to the complaint with a motion to dismiss, which the court converted to a summary judgment motion. The plaintiff argued that USERRA claims were not waivable under 38 USC § 4302(b). The Court reviewed the statutory text at 38 U.S.C. § 4302, which establishes that:

(a) Nothing in this chapter shall supersede, nullify or diminish any Federal or State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that establishes a right or benefit that is more beneficial to, or is in addition to, a right or benefit provided for such person in this chapter.

(b) This chapter supersedes any State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.

. . . .

While § 4302(b) supercedes any law, plan or agreement that "reduces, limits, or eliminates in any manner any right or benefit provided by this chapter," its application is limited by § 4302(a), which exempts any law, plan or agreement that is "more beneficial to, or is in addition to, a right or benefit provided for such person in this chapter" from the operation of § 4302(b). Therefore, the critical inquiry is whether the Release is exempted from the operation of § 4302(b) by § 4302(a), because the rights it provided to [the plaintiff] were more beneficial than the rights that he waived.

While some authorities and courts have contended that USERRA rights may not be waived, the Sixth Circuit cited legislative history to the contrary. "Clearly, the ability to waive their USERRA rights

without unnecessary court interference, if they believe that the consideration they will receive for waiving those rights is more beneficial than pursuing their rights through the

courts, is both valuable and beneficial to veterans." It also concluded that veterans should be able to decide for themselves whether the consideration they are receiving for a release is more valuable than their USERRA rights. Therefore, it found that waivers were not conceptually barred by the USERRA statute and could be enforced, as was the plaintiff's waiver enforced in this case.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Supreme Court Gives Employers Another Reason to Ban Moonlighting

There are several reasons why employers ban employees from holding second jobs. Some do it because the second job robs the employee of rest and vitality and creates potential scheduling conflicts. Others do it because the employee may decide to take FMLA from their "hard" job while continuing to work their "easy" job. Others do it to discourage union activities or "salters" from taking a job in order to organize their co-workers. However, a significant reason to prohibit employees from taking a second job is that the employer could become liable for paying the wages for that second job if the employee gets injured at your workplace and is unable to work either job. This is not a new concept, but it is a rule that the Ohio Supreme Court confirmed this week. State ex rel. FedEx Ground Package Sys., Inc. v. Indus. Comm., Slip Opinion No. 2010-Ohio- 2451. In that decision, the Court found that the Industrial Commission did not err in including the claimant's wages from his second job in his average weekly wage for purposes of his temporary total disability claim.

According to the Court decision, the claimant "began working part-time for appellant FedEx Ground Package System, Inc., in 2004. [He] generally made between $190 and $250 per week. In April 2006, [he] took a second job with Integrated Pest Control that paid considerably more than the job at FedEx. [He] was also operating a side business, Affordable Animal Removal, concurrently with the other two jobs." After he was injured at work, FedEx, a self-insured employer, set his average weekly wage and full weekly wage based solely on the wages he earned at FedEx. The Claimant appealed on the grounds that his wages from his second, higher-paying job also should have been considered. The district hearing officer agreed that special circumstances applied based on Ohio Revised Code § 4123.61, which provides in relevant part that:

The average weekly wage of an injured employee at the time of the injury or at the time disability due to the occupational disease begins is the basis upon which to compute benefits.

In cases of temporary total disability the compensation for the first twelve weeks for which compensation is payable shall be based on the full weekly wage of the claimant at the time of the injury or at the time of the disability due to occupational disease begins; when a factory, mine, or other place of employment is working short time in order to divide work among the employees, the bureau of workers' compensation shall take that fact into consideration when determining the wage for the first twelve weeks of temporary total disability.

Compensation for all further temporary total disability shall be based as provided for permanent disability claims.

. . . . .

In cases where there are special circumstances under which the average weekly wage cannot justly be determined by applying this section, the administrator of workers' compensation, in determining the average weekly wage in such cases, shall use such method as will enable the administrator to do substantial justice to the claimants, provided that the administrator shall not recalculate the claimant's average weekly wage for awards for permanent total disability solely for the reason that the claimant continued working and the claimant's wages increased following the injury.

The decision was affirmed on appeal and the employer filed suit. The Industrial Commission argued that the regular AWW benefit included wages from a second job even without special circumstances. In addition to the unfairness, FedEx argued "that inclusion of wages from other, concurrent employment discourages claimants from continuing to work at the second job if they are medically able." The Court disagreed.

"R.C. 4123.61 refers to wages earned in the year prior to injury without qualification or exclusion." Indeed, R.C. 4123.61 . . . specifically states that the AWW includes wages for the year preceding injury without qualification or exclusion." Moreover, the Court did not believe that it was unfair because "if a claimant is so severely hurt at one job as to disable him or her from both, it is not unfair to compensate the individual for that cumulative loss. Second, the inclusion of two sets of wages was not considered unfair by the General Assembly when it promulgated R.C. 4123.61." Finally, the Court found the Industrial Commission's calculation of benefits to be within its expertise and discretion.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.