Is It Legal to Subcontract Out Union Work? (Ask a Song Title)

Subcontract union workI like similar but contradictory song titles. Pink Floyd has Wish You Were Here. But REO Speedwagon has Wish You Were There.

For one Puerto Rican company in the injection-molded products business, the message to its union was Wish You Were Gone (that’s Cosmo Pyke, 2017).  The company decided to outsource a portion of its injection mold production to a subcontractor but otherwise stayed in the business. The union filed an unfair labor practice charge.

The union won. The NLRB recently ruled that the company could not subcontract out work that had traditionally been performed by the union — at least not until the company had bargained over it and reached impasse. The Board ruled that once the union is performing a certain kind of work, a company’s decision to reconsider who performs this work is a mandatory subject of bargaining, so long as the company was remaining in the business. (The result likely would have been different if the company was getting out of that line of work.)

The Board noted that the company “remained an active participant in the production of injection-molded products, owned the machinery that manufactured the product, and continued to sell the product directly to the customers it served prior to its transfer of production to Alpla [the subcontractor].”

The moral of the story here is that — whether you wish the union were here, there, or gone — you need to bargain with it before subcontracting out its work. Exceptions may apply, depending on the facts and circumstances, but be cautious.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Cartels in Seattle? Court Decision May Stop Independent Contractor Drivers from Forming Quasi-Unions

Seattle uber unions cartelUsually when “cartels” are in the news, we’re hearing about El Chapo or other organized drug trafficking operations. But the word “cartel” refers to any combination of independent enterprises joining together to fix prices. The City of Seattle is trying to create ride sharing cartels. The city wants the Teamsters to represent your independent contractor ride share drivers. Really, the Teamsters.

The U.S. Chamber of Commerce is fighting back, reminding our brothers and sisters in the Emerald City that we still have federal antitrust laws. Antitrust laws prohibit the formation of cartels to fix prices. Seattle claimed it was immune from federal antitrust laws and, at first, a federal court in Seattle agreed.

But last week, the federal Court of Appeals stepped in and confirmed that, yes, the federal antitrust laws do apply, even in the Great Northwest. Here’s the ruling.

Here’s what the stir is all about.

In late 2015, Seattle passed a law creating quasi-unions for ride share drivers. We wrote about it here. The ordinance had the city overseeing the collective bargaining processes and didn’t call these collective groups “unions.” Seattle says they’re not unions. Then Seattle picked the Teamsters Local 117 to represent the independent contractor ride share drivers. Still not a union???

The law has not yet gone into effect, and its validity is in question. If antirust laws prohibit independent contractors from colluding on pricing, how can Seattle create a process to encourage independent contractors to collude on pricing?

Last week’s decision by the Ninth Circuit Court of Appeals confirms that federal antitrust laws do apply, even to cities that claim to have good intentions and great music.

The case now goes back to a federal court in Seattle to decide whether Seattle’s ordinance violates federal antitrust laws. I’m betting it does.

© 2018 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.

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Time to Dance? Momentum Builds for Proposed New Joint Employment Law

Screen Shot 2017-10-28 at 11.47.09 AM

Leadership Lessons from Dancing Guy is a low-quality youtube video that has somehow amassed more than a million hits. In the video, a lone (possibly intoxicated) festival goer starts dancing in a field. After a minute or so, momentum builds and others join him, showing off their terrible dance moves in a video you’ll wish you hadn’t wasted three minutes watching. (Just speaking from experience here.)

Several weeks ago, the House began considering a bill that would rewrite the definition of “joint employment” under federal wage and hour law (Fair Labor Standards Act) and federal labor law (National Labor Relations Act). The Save Local Business Act would require “direct” and “significant” control over “essential terms” of employment before a business could be considered a joint employer of a worker employed by another business (such as a staffing agency or a subcontractor). Read more here and here.

Originally sponsored by Rep. Bradley Byrne of Alabama (you might think of Rep. Byrne as the original dancer in the Leadership video, but dressed as a conservative Southern gentleman), the bill now has 112 co-sponsors, including a few Democrats. Dance party!

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Can Independent Contractors Form Unions? Seattle Wants to Allow It.

space-needle-independent contrcator drivers seattle uber lyft seattle law ordinanceA legal battle in Seattle (“The Battle of Seattle!”) may soon determine whether independent contractor drivers can form unions. In 2015, the city passed a law allowing Uber and Lyft drivers to organize. The mayor allowed the law to go into effect but didn’t sign it because he was concerned it would spawn expensive litigation. He was right.

This month, a federal judge handed the City a victory, dismissing a lawsuit by the U.S. Chamber of Commerce which had argued that the ordinance was illegal. The decision is certainly not the last word on the subject, since the Chamber will appeal and there is a companion lawsuit still pending anyway.

The issues go beyond the basic question of whether independent contractors can form unions.

Generally, they cannot. Independent contractors are separate businesses. Antitrust law Continue reading

Appeals Court Slams NLRB Joint Employer Finding in Landmark CNN Case, But Ruling May Prove Hollow

NLRB CNN joint employment Browning-Ferris overrule Second Circuit Court of Appeals IMG_1094A federal Court of Appeals has ruled that the NLRB cannot abruptly change its definition of joint employment without sufficient explanation. This decision (the CNN case) rebukes the NLRB for its initial attempt, in 2014, to expand the definition of joint employment.

This decision does not, however, address the Browning-Ferris case that followed in 2015, in which the Board similarly expanded the definition of joint employment but, that time, with an expansive explanation and justification for doing so. Browning-Ferris in on appeal too.

Here’s what happened.

Back in the good old days, when TV was pure and the world had not yet been exposed to Janet Jackson’s halftime nipple, CNN used to contract with an outside company who Continue reading

NLRB Nominees Hate Puppies & Rainbows, Dems Claim

dog nlrb independent contractor -1674115_1920

Ok, not really, but it seemed that way.

Last week, NLRB nominees William Emanuel and Marvin Kaplan were alternatively tossed softballs and stink bombs in “questions” from Senators on the Health Education Labor and Pensions Committee (known in Congressional circles as the HELP Me Rhonda, HELP HELP Me Rhonda Committee).

I use the word “questions” in quotes because, as both Americans who have ever watched C-SPAN would know, these events are typically staged to allow Senators who have already made up their minds to hear themselves talk, rather than ask questions. Here’s an example:

Question by Sen. Elizabeth Warren:  “Your entire career has been to discourage union Continue reading

New NLRB Nominations May Lead to New Joint Employment Test (or to my misuse of Lynyrd Skynyrd song lyrics)

IMG_1088In the Lynyrd Skynyrd song, “Gimme Three Steps,” we find our hero cutting a rug down at a place called The Jug with a girl named Linda Lou. This catchy song has nothing to do with labor law but does deal with someone who finds himself in a bad situation (shakin’ like a leaf on a tree!) and needs three steps to get out the back door.

Same thing here (in a sense). [C’mon, work with me here, I’m trying to make NLRB appointments interesting!]. When not posting tweets of himself pummeling a photoshopped CNN logo outside a WWE ring, President Trump found the time to make two important nominations to fill vacancies on the National Labor Relations Board (NLRB), giving companies two of the three steps needed to undo a long list of anti-business decisions from the past eight years.

The two new appointmnents, once confirmed, will shift the Board back to a 3-2 Republican majority, which should spell relief for businesses in several areas — including joint employment. (Two appointments = two steps. There’s a third step coming.  Wait for it….)

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