Employee Rights Posting Requirment-Update
We have been receiving a number of calls and emails regarding the still pending “Employee Rights Posting.” On March 2, the United States District Court for the District of Columbia issued a ruling upholding the National Labor Relations Board’s (NLRB) employee rights poster. The ruling was issued in a lawsuit brought by the National Association of Manufacturers (NAM) to challenge the NLRB’s authority to mandate such a poster. In its ruling, the court held that the NLRB was within its authority to issue a rule requiring employers to post the employee rights notice. The court rejected NAM’s argument that the posting requirement violates employers’ free speech rights.
Although the court upheld the posting requirement, it did place some limits on the NLRB’s enforcement efforts. The court held that an employer’s failure to post the notice, in and of itself, may not be automatically deemed an unfair labor practice by the NLRB. However, an employer’s “knowing and willful” failure to post the notice may be considered as evidence supporting a finding of an unlawful motive on the part of the employer in a case alleging some other unfair labor practice by the employer.
The court also invalidated a portion of the NLRB rule providing that the statute of limitations would be tolled in unfair labor practice actions against employers who failed to post the notice. The court held that the NLRB’s effort to extend the clear six-month statute of limitations provided for in the NLRA exceeded the NLRB’s authority.
The court’s ruling in the case brought by NAM is the first ruling in one of several cases challenging the validity of the NLRB’s employee rights poster. Another ruling is expected in the near future in a lawsuit brought by the Chamber of Commerce in South Carolina. It may well be that the ruling in the NAM case will be appealed as well. Employers should stay tuned for further legal developments with respect to the notice. In the meantime, the current effective date for employer compliance is April 30, 2012. No court has halted or invalidated that posting deadline. As such, employers are advised to begin posting the employee rights notice effective April 30 barring contrary legal developments before that time. The poster is available on the NLRB’s website.
Car Dealerships-A special announcement!
Car dealers have received wage class action demand letters or complaints in recent months seeking hundreds of thousands or even millions of dollars in back pay for service department technicians who experience down time between flag hours, even though the dealer has paid the technicians at two times the minimum wage for all hours worked in full compliance with Industrial Welfare Commission Order No. 7-2002.
There is, however, a way to defeat the class and to minimize exposure to such large liability and legal fees. In order to proceed in a class action, the complaining party must show the court that there are (in most cases) at least 25 current and former individuals in the class covering a period of 4 years prior to the date the complaint was filed. An California appellate court decision in 2009 permits an employer facing a demand letter or a complaint to “buy out the class,” that is., to obtain a release from each current and former service technician by paying each individual $XXX.XX in exchange for a release of all wage claims. Using this procedure enables the dealer to reduce the number of potential claimants to a smaller number below that required to maintain a litigation as a class action. If, for example, there were 45 current and former technicians (in a four year period) and 35 of them signed a release, the matter would not certified to proceed as a class action. The matter in all likelihood would not ripened into class complaint where the dispute was raised in a demand letter, and could in any event then be settled in mediation for a payment far less than the potential exposure and fees associated with litigation. The legal fees incurred in following this buy-out procedure is typically less than $20,000, whereas not going through the procedure and defending a class action litigation results in defense costs in the hundreds of thousands of dollars, exposure to liability and exposure to opposing counsel’s fees as well.
Dealers who face these suits may retain defense attorneys who are financially motivated to take these cases through trial rather than quickly resolve these claims or minimize the number of potential claimants by recommending that the dealer buy out the class. Any dealer who has received a demand letter or been served with a complaint can call me and I will explain the procedure for buying out the class in greater detail.
This special announcement was provided with assistance from:
Arthur F. Silbergeld
Dickstein Shapiro LLP
2049 Century Park East, Suite 700 | Los Angeles, CA 90067
Tel (310) 772-8308 | Fax (310) 772-8301
