Alec L. v. McCarthy
(D.C. Circuit)
Litigation seeking to impose 6% annual reductions in greenhouse gases under "public trust" theory
This is an appeal of a decision dismissing claims by an environmental group that would force the government to impose further greenhouse gas emissions reduction policies under a "public trust" theory. The NAM intervened in the case in the trial court and helped obtain the favorable ruling there.
For a full summary of our arguments in the district court, click here.
In our appeals court brief, joined by various trucking and construction companies and associations, we argue that the public trust doctrine is a state law doctrine and does not implicate a federal question subject to jurisdiction in the federal courts. The case also presents a political question that is not for the courts to decide, putting the courts in the position of adopting air emission standards of general applicability and monitoring compliance. No court has ever used the public trust doctrine to compel a regulatory action by the federal government, much less a sweeping new regulatory agenda of the type sought here. In addition, the parties bringing suit do not have standing, because their alleged injuries are not imminent and particularized, nor are they fairly traceable to the defendants or likely to be lessened by any court order.
The court decided not to hear oral arguments in the case, and on June 5, 2014, affirmed the district court's dismissal of the claims. It found that the plaintiffs did not present a federal question, and that the court therefore did not have jurisdiction to hear the case. There was no federal question because the claims were based on the legal theory of public trust, which is entirely a state law issue.
The NAM intervened in this case to help block this attempt to use the courts to do an end run around the legislative and regulatory processes that govern regulation of emissions from manufacturing plants. This result is an important development in reining in these kinds of aggressive legal theories and litigation tactics.
The plaintiffs appealed to the Supreme Court, which declined to hear the case on 12/8/2014.
Related Documents: NAM Opening Brief (December 23, 2013)
|
American Chemistry Council v. EPA
(U.S. Supreme Court)
Whether EPA greenhouse gas regulation for motor vehicles triggers limits on stationary sources of GHG emissions
On April 18, 2013, the NAM and 23 other business organizations appealed to the Supreme Court to review an adverse decision on greenhouse gas regulation from the D.C. Circuit. We asked the Court to review EPA's first-ever regulations of greenhouse gases emitted by stationary sources, such as power plants and factories. The lower court rejected lawsuits from hundreds of organizations who question EPA's authority to issue the rules under the Clean Air Act, as well as the procedures it used in doing so. Our petition was granted and consolidated into Utility Air Regulatory Group v. EPA. On June 23, 2014, the Supreme Court agreed with the NAM and ruled that EPA's regulation went too far. Click here for a more detailed summary of this case.
|
American Petroleum Institute v. EPA
(D.C. Circuit)
Challenging EPA greenhouse gas regulation (light-duty vehicles and CAFÉ standards)
The NAM and other organizations filed another petition to review an EPA action that is part of its suite of regulations of greenhouse gases from stationary sources. One of our initial suits in this series challenged the EPA's effort to regulate light-duty vehicles, because the agency used that rule as a predicate for further regulation of manufacturing facilities. We challenged this latest rule, published Oct. 15, 2012, as well. The case was consolidated with Plant Oil Powered Diesel Fuel Systems, Inc. v. EPA (No. 12-1428, D.C. Cir.), but that case was voluntarily dismissed, and our challenge was severed and held in abeyance pending a decision from the Supreme Court in UARG v. EPA. After that ruling, we stipulated a dismissal of this case.
Related Documents: NAM Petition for Review (December 14, 2012)
|
Babb v. Lee County Landfill SC, LLC
(D.S. Car.)
Whether common law nuisance claim is preempted by EPA regulation of air emissions
Landowners near a county landfill in South Carolina sued the landfill claiming that odors from the area caused them damage. The landfill argued that the law suit should be dismissed, because emissions from waste disposal facilities are regulated by Clean Air Act permitting requirements.
The NAM and the National Waste & Recycling Association filed an amicus brief supporting this argument. Congress adopted a comprehensive regulatory process that allows federal and state regulators to set emissions requirements for major stationary sources of pollutants, and the facility at issue in this case is so regulated. Court orders that set different emissions requirements would conflict with the Clean Air Act's system, but would also dramatically alter the cooperative federal-state framework established by Congress to address air quality issues. Different court rulings around the country would create a patchwork of standards under the common law of each state, and regulated entities would face a daunting challenge of predicting what standards their facilities must meet. Instead, we argued, the court should find that this kind of state nuisance claim is preempted by the Clean Air Act.
This is another example of a law suit that attempts to use state common law claims to impose more and different air emission requirements on manufacturers or other facility operators already subject to state and federal regulation under the Clean Air Act. The NAM filed a brief in
a similar case in 2013 involving emissions from a plant in Iowa.
The case was
Related Documents: NAM brief (January 31, 2014)
|
Center for Biological Diversity v. EPA
(D.C. Circuit)
When greenhouse gases become subject to regulation under the Clean Air Act
The NAM and 17 other business associations moved to intervene in a lawsuit brought by the Center for Biological Diversity (CBD) against the EPA over the agency's interpretation of when greenhouse gases become "subject to regulation" (STR) under the Clean Air Act. CBD is expected to argue that greenhouse gases were already subject to regulation before EPA issued the "Johnson memo" in 2008 and a subsequent STR rule in April, 2010. If such a claim is accepted by a federal court, thousands of members of the business associations could be forced to obtain permits for new or existing facilities and to install costly control technology to try to reduce greenhouse gas emissions.
On July 18, 2014, after the Supreme Court's decision in Utility Air Regulatory Group v. EPA, this case was voluntarily dismissed.
Related Documents: NAM motion to intervene (June 28, 2010)
|
CTS Corp. v. Waldburger
(U.S. Supreme Court)
Whether CERCLA preempts state statutes of repose
This case involves the deadline for filing damage suits under CERCLA, the Comprehensive Environmental Response, Compensation, and Liability Act. The Supreme Court agreed to review a decision from the Fourth Circuit involving a suit for alleged contamination of the ground and water near an old North Carolina manufacturing plant site once owned by CTS Corporation. The site is subject to clean-up obligations under CERCLA, but this case involves a private suit alleging nuisance under state law. CTS argued that the nuisance claim was barred by North Carolina’s 10-year statute of repose.
CERCLA provides liberal deadlines for filing suit that supersede state statutes of limitations, but says nothing about statutes of repose.
The NAM filed an amicus brief focusing on the history of statutes of repose and the beneficial purposes they serve—particularly in the efforts of states to create, enhance, and protect economic opportunities for their citizens through job growth. We stressed that states across the country have enacted statutes of repose as part of broader efforts to strengthen their economies—an effort that in the current economic environment is all the more important. These statutes simply put an end to perpetual liability that can remain unknown for years and years, after witnesses are gone and memories fade. They provide certainty and finality in commercial transactions, promote judicial economy, and help keep insurance rates down.
On 6/9/2014, the Court ruled 7 to 2 that CERCLA does not preempt state statutes of repose. Such statutes differ from statutes of limitations in that they are designed to put an absolute time limit on a defendant's liability, while statutes of limitations are designed to require plaintiffs to file suit promptly when their claims accrue. Courts may grant exceptions when plaintiffs miss statute of limitations deadlines for various reasons, but not for statutes of repose. Because Congress knew of the differences and did not include statutes of repose in the law at issue, it did not intend to preempt them.
The decision limits long-term liability under CERCLA for pollution that occurred many years ago.
Related Documents: NAM brief (March 3, 2014)
|
Freeman v. Grain Processing Corp.
(Iowa Supreme Court)
Whether public nuisance claim is preempted by EPA regulation of factory emissions
Eight residents of Muscatine, Iowa, sued a local corn milling plant alleging trespass, nuisance and negligence from pollutants and odors from the plant. The trial court dismissed the claims as being preempted by the Clean Air Act (CAA), Iowa law, and the political question doctrine. That decision was appealed to the Iowa Supreme Court.
The NAM, along with 5 other manufacturing associations, filed an amicus brief supporting the trial court's decision on preemption and political question. Manufacturers are already subject to a complex system of state and federal regulations, and adding common-law tort liability on top of that will further undermine the ability to create jobs and compete. We argued that courts are not equipped to properly handle cases like this, because they require clear and manageable standards for imposing liability, and such standards involve policy judgments that can only properly be developed by legislative and regulatory bodies with the investigative resources and technical and scientific expertise necessary. In addition, the executive and legislative branches of government are authorized to set and adjust standards and rules to guide the regulated community, and they are much better able to consider the views of many more affected parties, including a variety of scientific and economic experts, to revisit their policy choices on a regular basis, and to develop a consistent policy for everyone, not a piece-meal policy that depends on the court or state in which the case occurs.
On June 13, 2014, the Iowa Supreme Court reversed the trial court decision and found that the CAA does not either expressly or impliedly preempt state emissions laws nor preclude a right of action brought under those laws. The Court also stated that several clauses in the CAA reserve for private citizens the power to bring public nuisance claims. Unless a state law or common law right of action is expressly preempted by federal statute, courts are reluctant to apply the preemption doctrine to state causes of action. The Court also found that the Iowa environmental statute did not preempt the plaintiffs’ claims because it too reserved the right to bring a public nuisance claim. Rejecting the political question argument, the court found that no constitutional controversy existed, tort claims are typically not precluded under the political question doctrine, and resolution of the controversy did not require a policy decision by another branch of government.
Claims based on nuisance theories of liability continue to be somewhat of a wild card for the regulation of plant emissions. Manufacturers continue to seek a rational regulatory system where the rules are clear and the potential liabilities are predictable and manageable.
Related Documents: NAM amicus brief (October 10, 2013)
|
GenOn Power Midwest, L.P. v. Bell
(U.S. Supreme Court)
Validity of state tort suits for damages from permitted emissions under Clean Air Act
This is a Clean Air Act preemption case. Some private property owners sued a power company under common law tort claiming damages for nuisance, trespass, negligence and strict liability arising from emissions and particulates from the operation of a coal-fired power plant in Allegheny County, Pennsylvania. The plant had permits from EPA for the emissions, and the lawsuit did not allege any violations of the Clean Air Act. The trial court threw the case out, finding it preempted by the Clean Air Act, but the Third Circuit Court of Appeals reversed, holding that a provision of the Act saves this kind of state lawsuit. The company sought Supreme Court review.
The NAM led a group of 11 other industry associations in filing an amicus brief supporting review. We argued that state common law remedies such as those sought here are irreconcilably inconsistent with the comprehensive system of air pollution control provided by the Clean Air Act. Permits, which are subject to public notice and comment, specify clear emission and operating standards that guarantee certainty, predictability, and evenhandedness to the regulated community. They provide an informed assessment of competing interests. By contrast, common law suits view the issues from a narrower perspective, using vague standards of liability, uneven application between states or even within states, with no guarantee of consistent results even between similar facilities.
Companies must be able to rely on permits for stable business operations, and these kinds of suits are a growing concern. Their effect is to add additional liability for activities that fully comply with federal permit obligations, raising the cost of doing business and threatening jobs and competitiveness.
The Supreme Court denied our appeal on June 2, 2014.
Related Documents: NAM brief (March 26, 2014)
|
Grain Processing Corp. v. Freeman
(U.S. Supreme Court)
Whether public nuisance claim is preempted by EPA regulation of factory emissions
The Iowa Supreme Court ruled that a group of Iowa residents could sue a local corn milling plant for trespass, nuisance and negligence from pollutants and odors emanating from the plant, in spite of the fact that the emissions are regulated by the EPA and the company is in full compliance with its permits. That decision was appealed to the U.S. Supreme Court. This case represents a serious emerging problem for manufacturers. The appeal in a similar case was declined by the Court earlier this year.
Our brief, joined by 6 other national associations, urged the Supreme Court to hear this appeal. We argued that this case presents an ideal opportunity to resolve whether public nuisance claims under state law are preempted by the Clean Air Act. There are serious conflicts between the federal courts of appeals and within state courts concerning this preemption issue. The issue is important because public nuisance litigation threatens one of the Clean Air Act's most important methods of pollution control -- permitting. Permits specify clear standards that guarantee certainty, predictability, and evenhandedness to the regulated community, and allowing public nuisance litigation threatens to substitute ad hoc decisions for considered regulatory policy, a result completely at odds with the goals and purposes of the Clean Air Act.
On December 1, 2014, the Court declined to review this appeal.
Related Documents: NAM brief (October 14, 2014)
|
Mingo Logan Coal Co. v. EPA
(U.S. Supreme Court)
EPA interference with Clean Water Act permits
The NAM and a group of 18 other national business organizations filed an amicus brief urging the Supreme Court to review a ruling that would give EPA the power to revoke a valid discharge permit issued under the Clean Water Act. The ruling, reversing a trial judge's decision that struck down EPA's attempt to interfere with valid permits, prompted widespread concern in the business community that EPA was arrogating to itself the power to upset long-settled reliance on thousands of permits issued by the U.S. Army Corps of Engineers.
The NAM hoped to convince the Supreme Court of the importance of this case. Our brief focused on the impact of the decision on investment expectations and infrastructure projects. About 60,000 discharge permits are issued every year, representing $220 billion of investment in the U.S. economy, and a 2% risk that EPA could revoke a permit decreases the benefit-cost ratio of a project by 30%. We highlighted a study by Professor David Sunding that even small changes in the possibility of such EPA action "can lead to dramatic redutions in private investment." EPA's move also threatens public sector projects for water, transportation, energy and public infrastructure.
The issue is also critical to state governments, with 27 states filing their own amicus brief supporting Supreme Court review of the case.
Here are links for our summaries of action in this case in the trial court and the appeals court.
On March 25, 2014, the Court declined to hear this appeal.
Related Documents: NAM brief (December 16, 2013)
|
National Association of Manufacturers v. EPA
(D.C. Circuit)
Challenging EPA's NAAQS for particulate matter
On March 15, 2013, the NAM filed a petition for the U.S. Court of Appeals to review the EPA's latest regulation of particulate matter. The regulation, published on Jan. 15, lowered the primary annual National Ambient Air Quality Standard for particulate matter from 15 to 12 micrograms per cubic meter. The NAM had urged EPA to retain the existing standard, but the agency opted to move forward with a more aggressive and damaging regulation.
NAM's President and CEO Jay Timmons said that the "new standard will crush manufacturers' plans for growth by restricting counties' ability to issue permits for new facilities, which makes them less attractive for new business. Essentially, existing facilities will have to be shuttered for new facilities to be built in these areas. This is not a conducive way to create jobs."
Our opening brief, filed 8/19/13, focused on whether EPA prejudged the need for the rule and the range of outcomes from the rulemaking process, whether it ignored a substantial body of contrary scientific evidence that does not support lowering the standard, whether its decision to require monitoring devices along roadways was unlawful because it will record maximum rather than ambient particulate matter concentrations, and whether the rule is invalid because EPA failed to provide implementation rules needed to address the legal consequences that flow from it.
The brief recounts the history of EPA's regulation of particulate matter. It notes that promulgation of the rule triggered immediate implementation obligations and started the clock on numerous others, yet many key implementation issues are unresolved. First, EPA has not approved a computer model to demonstrate compliance with the standard, which is typically how companies demonstrate compliance. Second, there are technical problems with the two methods approved by EPA for testing particulate matter emissions that have led EPA to recognize their limitations, indicating that reliable test methods are several years away. Third, EPA has not provided full guidance to the states about how to designate the boundaries of nonattainment areas, which could lead to improper designations and further burdens on manufacturers. Other issues are also highlighted.
On May 9, 2014, the Circuit Court denied NAM’s petitions. On each issue, the court deferred to EPA’s process and decisions. Although we challenged EPA’s lowering of the threshold for particulate matter, the court decided that EPA provided reasonable scientific explanations to justify making the standards more stringent. We also challenged EPA’s elimination of the “spatial averaging” test to determine particulate matter standards. Spatial averaging entails gathering data from several sites within a specified area and then averaging the results to determine the level of emissions in that area. EPA reasoned that spatial averaging would cause certain specific areas within a larger area to be out of compliance. Lastly, the court determined that EPA has the authority to protect air quality, and therefore it may place monitors in all areas, including along heavily traveled metropolitan roads, to accurately determine air quality.
In sum, this decision shows that courts continue to be reluctant to second-guess EPA regulations. Lowering the particulate matter levels will increase costs and harm competitiveness. The court’s unilateral deference to EPA’s justifications for lowering the levels underscores the importance of participation in the rulemaking process to combat future EPA regulations.
Related Documents: NAM brief (August 19, 2013) NAM Statement of Issues (April 17, 2013)
|
National Mining Ass'n v. McCarthy
(D.C. Circuit)
Whether EPA guidance document constitutes regulation that must go through notice-and-comment rulemaking
There’s a law that prevents agencies from charging ahead with regulatory changes without seeking input from the public and the regulated community. It’s called the Administrative Procedure Act (APA), and it was designed to require agencies that want to make significant changes to their regulations to publish the proposed changes and answer criticisms on the record.
In 2009, the Environmental Protection Agency announced -- through a series of memoranda and letters -- a new system of review for certain Clean Water Act permits. These permits, called Section 404 permits, are needed by anyone that wants to build or modify a facility or undertake some other construction project that might have an effect on waters subject to federal jurisdiction. EPA later issued lengthy guidance making substantive changes to the requirements for permits for surface coal mining, also without going through notice-and-comment rulemaking.
The National Mining Association sued, and a federal district judge ruled that EPA had overstepped its authority and violated the APA. That ruling has been appealed to the D.C. Circuit, and the NAM and other business organizations filed an amicus brief supporting the trial judge’s decision. The brief described numerous instances where EPA and other regulatory agencies have issued regulatory requirements -- posing as guidance – that should be adopted by notice-and-comment procedures.
On July 11, 2014, the D.C. Circuit reversed, finding that the "Enhanced Coordination Process" and Final Guidance were procedural, not legislative rules, and therefore not subject to the APA. It also ruled that a court challenge was premature because the Final Guidance was not actually final agency action subject to litigation, because it did not subject regulated parties or state enforcement agencies to any requirements or liabilities. The Guidance can be legally ignored. If it is actually used to grant or deny a permit in the future, a law suit might then be appropriate.
The upshot of this ruling is that EPA can create guidance documents that regulated parties can legally ignore, but they do so at the risk of having to litigate over EPA's use of such guidance documents after a permit is denied. Changing regulatory requirements with guidance documents casts American businesses adrift in uncharted territory in terms of regulatory risk and stymies investment and economic growth. Agencies that fail to use proper rulemaking procedures make decisions without the insight, data and information of the regulated public, including the practical implications of alternative policy choices.
Related Documents: NAM brief (July 22, 2013)
|
Natural Resources Defense Council v. EPA
(D.C. Circuit)
Portland Cement NESHAP litigation
Several environmental groups sued EPA over its emission standards for hazardous air pollutants from cement plants. They argued that amendments to the standards weaken and delay compliance with an earlier rule, and that the agency must not allow an affirmative defense for manufacturers when malfunctions of industrial equipment occur. The NAM is part of the SSM Coalition, which filed an amicus brief supporting the affirmative defense. The environmental groups wanted a standard that regulated sources, including the best-performing sources, will be unable to meet at times despite their proper design, operation, and maintenance. As a result, manufacturers will face civil penalties for events beyond their control.
EPA took the position that malfunctions must be accounted for in standards which require maximum achievable control technology (MACT). To be achievable, MACT standards must be capable of being met on a regular basis, including under most adverse circumstances which can reasonably be expected to recur, including periods of startup, shutdown, and malfunction. EPA may set different requirements during malfunction events than apply to normal operations of plant equipment.
Our brief argued that an affirmative defense to civil penalties that might arise from a malfunction is required by the Clean Air Act and was properly promulgated by EPA. Without the defense, companies would be subjected to citizen suits, as well as administrative penalties, for events beyond their control.
We also argued that EPA has the authority to adjust the compliance deadline when it modifies a MACT standard. Not allowing this authority would be hugely unfair to regulated sources and would ignore the reality that it can take up to three years or more to design, acquire, install and start up pollution control equipment or modified processes.
On April 18, 2014, the court unanimously ruled that EPA properly adopted the emissions-related provisions in the rule, but that it did not have the statutory authority to create an affirmative defense in civil suits against cement manufacturers where an unavoidable malfunction results in impermissible levels of emissions. It found that EPA reasonably read the statute to allow an increase in the emissions limits for particulate matter from cement-making kilns. It also found that EPA reasonably considered costs to industry with a comparative analysis of cost-effectiveness, rather than, as the environmental groups wanted, consider only whether a standard would be "too expensive for industry to achieve", that is, one that would essentially bankrupt the industry.
The court rejected environmental arguments that the compliance date for emissions of mercury, hydrochloric acid and hydrocarbons should be 2013. Because the standard for particulate matter changed in the new regulation, the court found that it would be irrational and even absurd to have different compliance dates for the different pollutants because of the technology involved. The new compliance date is September 2015.
Finally, it agreed with the environmental groups that EPA did not have the authority to establish an affirmative defense for companies whose emissions exceed the regulatory limits because of unavoidable malfunctions. Instead, private civil suits may be filed by those affected by the emissions, and it is up to the courts to decide whether to award damages. During court proceedings, EPA may seek to intervene, or file an amicus brief, stating its views about whether a company should be liable for such emissions. It is up to the courts to determine the scope of remedies available to plaintiffs, taking into consideration the company's compliance history and good faith efforts to comply, the duration of the violation, and other factors.
Related Documents: SSM Coalition brief (July 30, 2013)
|
Oklahoma v. EPA
(U.S. Supreme Court)
EPA power to take over state enforcement on regional haze
The NAM and other groups asked the Supreme Court to review a lower court decision that allows the EPA to take over 14 state enforcement plans under the Clean Air Act with respect to regional haze, and impose Federal Implementation Plans (FIPs). Oklahoma and North Dakota objected to this EPA action, saying that the agency overstepped its statutory authority and the result will be billions of dollars in power plant upgrades that will needlessly boost electric rates by as much as 20 percent.
Our amicus brief supports review, focusing on the fact that the Clean Air Act limits EPA's authority with respect to state implementation plans, instead giving the states primary responsibility for making air quality decisions and limiting EPA's role to the secondary function of determining whether those state plans are "based on a reasoned analysis." This is particularly important regarding state regional haze decisions, which involve aesthetic concerns such as visibility in parks. EPA wanted to impose a control technology that is too costly, and conducted a visibility analysis differently. However, Congress gave the states significant latitute by allowing them to choose the mix of sources that must install controls to attain the national standards.
This litigation reflects a growing pattern of disregard by EPA for the statutory limits on its authority, undermining the balance in the Clean Air Act between federal and state enforcement. Allowing this will only make matters worse -- empowering EPA to take unilateral action without engaging with states to help craft workable standards.
On May 27, 2014, the Court declined to hear this appeal.
Related Documents: NAM brief (March 5, 2014)
|
Sierra Club v. EPA
(D.C. Circuit)
Whether carbon dioxide must be considered in EPA PSD permits
In the Deseret Power decision in 2008, the EPA Environmental Appeals Board rejected the Sierra Club's contention that preconstruction permits for new power plants must include "best available control technology" (BACT) for carbon dioxide, but sent the case back to the EPA to reconsider whether to impose the requirement under its discretionary authority, and to develop an adequate record for its decision. It encouraged the EPA to consider whether the issue in this case should be resolved "in the context of an action of nationwide scope, rather than through this specific permitting proceeding."
On Sept. 14, 2010, the court ordered the case held in abeyance pending the outcome of other greenhouse gas cases.
Former EPA Administrator Stephen Johnson issued an interpretative guidance memorandum on Dec. 18, 2008, that concluded that PSD permits (for the Prevention of Significant Deterioration of air quality) do not need to include BACT limits for greenhouse gases. The Sierra Club challenged that guidance, while the NAM and other business organizations supported it.
Our motion to intervene, filed 2/13/09, outlined why this case will have a substantial impact on many manufacturers, and why the EPA, which represents the general public interest, will not adequately represent the interests of the business community.
On Feb. 17, 2009, EPA Administrator Lisa Jackson granted a Sierra Club petition for reconsideration of the Johnson memo, and permitted public comment on the matter. The D.C. Circuit stayed the litigation.
On April 2, 2010, EPA completed its reconsideration of the Johnson memo and published a new "Subject to Regulation" notice that made January 2, 2011 the date on which greenhouse gas emissions were regulated. On June 9, EPA asked the court to hold the case in abeyance while other litigation over its GHG regulation was resolved. The NAM opposed this motion, saying that the issues in this case are being addressed in other greenhouse gas cases, and the environmental groups here should not be allowed to have a second chance to litigate should they lose in those other cases. We also opposed an effort to allow the Center for Biological Diversity to switch its challenge from those cases into this one, as that could create competing panels of judges reviewing the same issues. Ultimately, the case was held in abeyance and finally dismissed in 2014 after the Supreme Court ruled in Utility Air Regulatory Group v. EPA, partially upholding EPA regulation of greenhouse gases, but limited its scope under the PSD program.
Related Documents: NAM Opposition to EPA's Procedural Motion (June 22, 2010) NAM Motion to Intervene (February 13, 2009)
|
Utility Air Regulatory Group v. EPA
(U.S. Supreme Court)
Whether EPA greenhouse gas regulation for motor vehicles triggers limits on stationary sources of GHG emissions
On April 18, 2013, the NAM and 23 other business organizations appealed to the Supreme Court to review an adverse decision on greenhouse gas regulation from the D.C. Circuit. We asked the Supreme Court to review EPA's first-ever regulations of greenhouse gases emitted by stationary sources, such as power plants and factories. The lower court rejected lawsuits from hundreds of organizations who questioned EPA's authority to issue the rules under the Clean Air Act, as well as the procedures it used in doing so.
Greenhouse gas regulation is one of the most costly, complex and encompassing energy regulatory issues facing manufacturers and damaging our global competitiveness. EPA’s regulations could eventually force new permitting requirements for more than 6 million stationary sources, including 200,000 manufacturing facilities, 37,000 farms and millions of other sources, such as universities, schools and hospitals – impacting every aspect of our economy.
EPA’s regulatory decisions produced what it concedes were absurd results. We argued that this was not Congress’s intent when it enacted the Clean Air Act, and that courts must avoid agency interpretations that undermine the purpose of the law.
Moreover, EPA tried to avoid these absurd results by modifying the express statutory thresholds defining who is regulated. Only Congress can make those kinds of changes, and had the agency properly interpreted the statutory requirements from the beginning, it would not be in the position of having to alter the statutory requirements.
The effects of this regulation are immediate, concrete and massive, and will require the installation of “best available control technology”, with total costs estimated by EPA to increase to more than $50 billion per year. This case is of critical importance to manufacturers and our economy.
The Supreme Court agreed to hear our appeal, along with petitions from 5 other groups, limited to the following question: "Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases."
On June 23, 2014, the Court decided that EPA's regulation went too far. A majority concluded that, while greenhouse gases are within the class of emissions that are included within the broad reach of the Clean Air Act, specific sections of that law limit the EPA's regulatory power. Five Justices found that EPA neither was compelled nor permitted to require PSD (Prevention of Significant Deterioration) permits of companies solely because of their greenhouse gas emissions. They also ruled that EPA did not have the statutory authority to rewrite the unambiguous statutory thresholds, and even if EPA would not enforce its greenhouse gas requirements on smaller emitters, those companies would have remained subject to citizen suits to enjoin construction, modification or operation and to impose civil penalties of up to $37,500 per day of violation.
Seven Justices agreed with the NAM's argument that only companies already subject to permitting under the PSD program will be subject to any permitting requirements relating to greenhouse gases. They agreed that the PSD program was intended for the largest emitters that are already subject to PSD permitting. By limiting EPA's authority in this way, the decision provides substantial regulatory relief for the owners of millions of buildings and plants across the country.
Related Documents: NAM Reply Brief (February 14, 2014) NAM Brief on the Merits (December 9, 2013) NAM Petition (April 18, 2013)
|
White Stallion Energy Center, LLC v. EPA
(D.C. Circuit)
Challenging EPA Maximum Achievable Control Technology regulation
This case is about how the EPA establishes standards for maximum achievable control technology (MACT) which is used to minimize the emission of pollutants into the air. It arose in the context of a new regulation on emissions of hazardous air pollutants from electric utilities, as well as industrial-commercial-institutional steam generating units. The 2012 "Utility MACT" regulation adopts a methodology that has broad implications for industries subject to existing MACT standards that may be revised, or new standards yet to be developed.
The NAM filed an amicus brief arguing that the EPA erred in adopting a "pollutant-by-pollutant" approach. Under that approach, the EPA cherry-picks emissions data from multiple sources and sets a MACT floor based on whatever source is deemed the "best" for each individual pollutant. This often means there is a different best performer for each pollutant, and no single source of emissions will be able to achieve the regulatory requirement. The NAM believes that these measurements need to be made from producers operating under practical conditions -- not individually measuring pollutants and not from sources ideally positioned to limit their pollution, as the EPA argues. The EPA's approach is like asking a decathlon champion to be able to win not only the overall decathlon, but all of the individual events as well.
In addition, we argued that the EPA must give meaningful consideration to costs in determining whether a particular standard is achievable. The Clean Air Act requires that the level of pollution reduction that the EPA specifies be achievable, and its methodology will severely curtail or eliminate operations. Some vendors are unwilling to offer guarantees that their pollution control technology will meet the new standards, and financing of new projects is jeopardized.
On 9/12/2012, the court ordered this case to be held in abeyance pending reconsideration of the new source standards now under way at the EPA. The agency stated that it intends to complete the reconsideration by March 2013. It said it would reconsider "measurement issues related to mercury and the data set to which the variability calculation was applied when establishing the new source standards for particulate matter and hydrochloric acid." See 77 Fed. Reg. 45968 (Aug. 2, 2012).
The case was settled in 2014 by stipulated agreement.
Related Documents: NAM brief (August 3, 2012)
|
Alec L. v. Jackson
(D.D.C.)
Litigation seeking to impose 6% annual reductions in greenhouse gases under "public trust" theory
An environmental group in California spearheaded litigation and administrative proceedings in all fifty states, as well as this lawsuit in federal court against the EPA and the Departments of the Interior, Defense, Agriculture, Energy and Commerce, to try to force government to impose further greenhouse gas emissions reduction policies under a "public trust" theory. The federal suit was brought by WildEarth Guardians, Kids vs. Global Warming and five individuals who sought to preempt the federal legislative and regulatory processes by getting a federal judge to compel massive societal changes that they believe are necessary to address climate change.
On Oct. 31, 2011, the NAM moved to intervene in this litigation, because the law suit, if successful, would have a dramatic effect on manufacturing processes and investments, increasing production and transportation costs, decreasing global competitiveness and driving jobs and businesses abroad. The litigation, which seeks a minimum 6% reduction in carbon dioxide emissions every year, would be devastating to the entire U.S. economy.
Along with our motion to intervene, we asked the court to dismiss the law suit for various reasons: (1) the case presents political questions that the courts are not able to resolve, (2) the plaintiffs lack standing because their injuries are too speculative and not likely to be reduced by the relief sought, (3) the public trust doctrine does not exist under federal law and the claims have been displaced by federal regulation in this area, and (4) the doctrine does not apply to the atmosphere or require a duty to regulate greenhouse gas emissions.
A hearing was held before Judge Edward Chen on November 30, 2011 to determine whether to grant the government's request that the case be transferred from a federal court in northern California to one in the District of Columbia. The NAM supported this request. On December 6, the court agreed, ordering the case transferred. A hearing was held on April 2, and the judge granted our motion to intervene. A hearing was held on May 11 to consider our motion to dismiss the case.
On May 31, Judge Wilkins granted our motion to dismiss. He ruled that public trust claims are grounded in state, not federal, law, and the allegations in this suit represent "a significant departure" from the public trust doctrine as it has been traditionally applied to water-related activities. Federal courts may exercise jurisdiction in a case if it raises a federal question, but the public trust doctrine is a matter of state law. The judge also ruled that even if the doctrine had been a federal common law claim at one time, it has been displaced by federal regulation under the Clean Air Act. Citing the American Electric Power case from the Supreme Court, he found that federal judges may not set limits on greenhouse gas emissions "in the face of a law empowering EPA to set the same limits, subject to judicial review only to ensure against action arbitrary, capricious, . . . or otherwise not in accordance with the law."
The court closed with a suggestion that the parties need not "stop talking to each other once this Order hits the docket. All of the parties seem to agree that protecting and preserving the environment is a more than laudable goal, and the Court urges everyone involved to seek (and perhaps even seize) as much common ground as courage, goodwill and wisdom might allow to be discovered."
That is certainly a laudable suggestion, as the plaintiffs have filed administrative petitions in 39 states and the District of Columbia to seek similar relief at the state level, and 31 of those have already been denied. Suits were brought in 10 other states, and were dismissed in 9 of them, many with appeals or amended complaints in the works.
However, the plaintiffs filed a motion for reconsideration of the court's ruling, and the NAM filed an opposition on 7/16/12. The motion was denied on 5/22/13.
Related Documents: NAM Opposition to Motion for Reconsideration (July 16, 2012) NAM Reply brief Supporting Motion to Dismiss (April 23, 2012) NAM brief re Intervention (March 26, 2012) NAM Opposition to Plaintiffs' Motion for Preliminary Injunction (November 2, 2011) Declaration of NAM chief economist Dr. Chad Moutray in support of intervention (October 31, 2011) NAM Motion to Dismiss (October 31, 2011) NAM Motion to Intervene (October 31, 2011)
|
American Chemistry Council v. EPA
(D.C. Circuit)
"Grounds arising after" challenge to EPA regulations relating to greenhouse gases
The NAM and 16 other business associations filed 4 petitions for review in the U.S. Court of Appeals for the D.C. Circuit, challenging EPA regulations from 1978, 1980 and 2002 that are a part of EPA's effort to regulate greenhouse gases from stationary sources of emissions. No one anticipated that these previously issued rules would be used to mandate greenhouse gas permit requirements, but that is the interpretation EPA has adopted. Our legal challenge was consolidated under the case captioned American Chemistry Council v. EPA.
We also filed an administrative petition for reconsideration with EPA on the same rules. Our lawsuits and the administrative petition challenged each of the four older rules to the extent that EPA considers them to allow the regulation of pollutants such as greenhouse gases that are not subject to a National Ambient Air Quality Standard (NAAQS). Our administrative petition went into great detail regarding the grounds for our request (see Related Documents below). The petitions below also contain the text of the regulations that were challenged.
Our main brief on the merits was filed May 10, 2011, focusing primarily on the timeliness of the lawsuits and on the fact that EPA’s interpretation of the Clean Air Act is unreasonable and creates absurd results.
Oral arguments were held Feb. 29, 2012.
We argued that Congress intended for EPA to require PSD permits only for facilities that can financially bear the substantial regulatory costs and which, as a group, are primarily responsible for deleterious emissions. The number of permits needed by facilities that meet these criteria was about 280 per year, a number consistent with congressional intent to limit the permit program to a manageable number. The greenhouse gas regulations, however, would require more than 81,000 PSD permits per year, according to the EPA, crushing EPA, state agencies and the economy.
EPA’s reading of the Clean Air Act is unlawful because it severs the link between the PSD permit program and the attainment of national ambient air quality standards (NAAQS). We argued that PSD permits are only required for emissions of a “criteria” pollutant, such as sulfur dioxide, nitrogen oxides or lead, and then only if the emissions occur in an area that has attained compliance with national standards.
EPA’s interpretation also is flawed because it leads to requiring an absurd number of permits. Its interpretation was announced three decades ago, and this is the first time a court has been asked to scrutinize its lawfulness. Only now do sources emitting major amounts of GHGs have to get PSD permits, and now their complaints about EPA’s interpretation are ripe for judicial review.
The purpose of the PSD permitting program is to maintain air quality in areas of the country that have attained satisfactory levels of quality, hence the name "Prevention of Significant Deterioration". EPA sets ceilings for each of a number of specific pollutants, and requires permits for new facilities that might emit more of those pollutants into areas in attainment. Our brief argued that EPA is now forcibly making the PSD permit program an all-purpose regulatory program. However, to do so, we argued that EPA must first define greenhouse gases as criteria pollutants, and specify the maximum levels at which they may be present in attainment areas. It has not done so, and it is arguably impossible to set meaningful NAAQS levels for greenhouse gases.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.
On August 10, 2012, the NAM coalition filed a petition for rehearing en banc, asking that all the judges on the D.C. Circuit review the 3-judge panel's ruling. We argued that the panel relied on an unreasonable interpretation of the Clean Air Act to approve "the most sweeping expansion of EPA authority in the agency's history, for the first time covering a broad swatch of mobile and stationary sources of greenhouse gases and granting itself discretion to determine and revise the scope of the statute’s coverage, previously fixed by the statute’s explicit terms, for the indefinite future." The panel's ruling conflicts with Supreme Court decisions, produces absurd results, and could lead to annual cost increases of more than $20 billion upon full implementation.
On December 20, 2012, the D.C. Circuit denied our petition. Judges Brown and Kavanaugh filed separate dissenting opinions that supported our arguments. Such dissents are rare, sending a clear signal that significant legal issues remain to be addressed.
On April 18, 2013, the NAM filed a Petition for Writ of Certiorari wth the U.S. Supreme Court and awaiting the Court's determination whether to hear the case. The NAM's involvement in thisw case is critical because no other petitioners have been found to have standing to challeng the PSD regulations and NAM members are adversely affected by EPA's overly burdensome requirements.
Related Documents: NAM petiton for writ of certiorari (April 18, 2013) NAM petition for rehearing en banc (August 10, 2012) NAM reply brief (August 5, 2011) NAM opening brief (May 10, 2011) NAM petition re: 1980 PSD Rule (July 6, 2010) NAM petition re: 2002 PSD & SIP Rule (July 6, 2010) NAM petition re: Part 51 Rule (1978) (July 6, 2010) NAM petition re: Part 52 Rule (1978) (July 6, 2010) NAM petition to EPA to reconsider PSD rules (July 6, 2010)
|
American Lung Ass'n v. EPA
(D.C. Circuit)
Environmental challenge to EPA's decision not to reconsider ozone regulation in 2011
The EPA has been reconsidering whether to lower the limits on ozone emissions from stationary sources since early in 2010, and engaged in a lengthy reconsideration process. Finally, President Obama called on EPA to put aside their reconsideration of the existing standard. OIRA Administrator Cass Sunstein sent a letter to EPA explaining the reasons that he was sending the proposal back to EPA for reconsideration, including that "a new standard now is not mandatory" and new scientific work is underway and will be based on the best available science. EPA then withdrew its proposed regulation and terminated reconsideration of the March 2008 standards.
The American Lung Association, Environmental Defense Fund, Natural Resources Defense Council and Appalachian Mountain Club sought court review of this decision. The Ozone NAAQS Litigation Group, of which the NAM is a member, moved to intervene in this litigation to support EPA's decision not to change the existing ozone limits at this time. Our participation is needed because EPA represents the "general public interest" and the agency may not adequately represent the interests of manufacturers in avoiding costly and burdensome emissions limitations. On Dec. 1, we filed an opposition to the ALA's motion to coordinate or consolidate this case with Mississippi v. EPA, involving the 2008 ozone standard. We argued that ALA's motion is premature, since EPA is considering filing a motion to dismiss, which, if granted, would moot other issues in the case.
On Feb. 17, 2012, the Court dismissed ALA's petition for review, saying that it "lacks jurisdiction over the agency's non-final decision to defer action on the 2008 voluntary revision of the national ambient air quality standards for ozone." This decision mooted all the other issues in the case. The court also adopted a briefing schedule for separate litigation challenging the 2008 standard.
|
Defenders of Wildlife v. Bureau of Ocean Energy Management
(11th Circuit)
Environmental challenge to oil drilling exploration plan permit in Gulf of Mexico
On October 12, 2010, the Secretary of the Interior lifted the moratorium on deepwater drilling in the Gulf of Mexico, after extensive consultations with the Bureau of Ocean Energy Management. When the Bureau approved Shell's exploration plan (EP), some environmental groups sued to halt the exploration. They sought to overturn the Bureau's "Finding of No Significant Impact," claiming that erroneous assumptions led the agency to understate the risk of an oil spill.
The court reviewed the issues whether Shell’s EP violated the environmental assessment provisions of the National Environmental Policy Act (NEPA) or the interagency consultation provisions of the Endangered Species Act (ESA). On June 22, 2012, the court denied the petition for review, refusing to overturn the Bureau's approval of Shell’s EP to conduct deepwater drilling in the Gulf of Mexico because the environmental group petitioners failed to overcome the extremely deferential “arbitrary and capricious” standard of review for the Bureau's actions.
On Nov. 23, 2011, the NAM joined with other business organizations in an amicus brief in support of the Bureau's decision. Reimposing a moratorium would do little to protect the environment and would stall America's economic recovery and compromise our energy security. The toll would be particularly high for communities in the Gulf States that have faced more than their fair share of disasters and are still recovering from losses caused by Hurricanes Katrina and Rita, the Macondo oil spill, the drilling moratorium and the current slowdown in regulatory approvals. Slow approvals also affect the overall U.S. economy, meaning fewer jobs, less oil and gas production, foregone tax revenue and royalties, and increased dependence on foreign oil.
Our argument focused on the Bureau's statutory obligation to balance economic and energy-policy interests with environmental effects. Jobs and energy security must be taken into account under the law, and exploration of the Outer Continental Shelf involves billions of dollars in investments and hundreds of thousands of jobs. This lawsuit threatened to require extensive Environmental Impact Statements (EIS) for every exploration plan. However, the court explained that it is within the Bureau's discretion to not require a separate EIS for every exploration and that it could rely on prior EISs to approve future EPs. In addition, the court held that when interagency consultation is reinitiated, the prior consultations remain valid until the new process is completed.
Ultimately, the court deferred to the Bureau's balancing of environmental concerns with the expeditious and orderly exploration of resources in the Gulf of Mexico and denied the environmental groups petition for review of the Bureau’s action.
Related Documents: NAM brief (November 23, 2011)
|
Defenders of Wildlife v. U.S. Dep't of the Interior
(U.S. District Court for the District of Columbia)
|
Mingo Logan Coal Co. v. EPA
(U.S. District Court for the District of Columbia)
EPA interference with existing Clean Water Act permits
Mingo Logan Coal Co. challenged an EPA decision that it argued retroactively changed a Clean Water Act permit issued by the U.S. Army Corps of Engineers four years earlier. This change withdrew certain creeks as disposal sites for dredged material, affecting the validity of a permit that EPA had previously reviewed and assented to, and even though the permit holder was in full compliance with it.
The NAM and 11 other business groups filed an amicus brief urging the trial court judge to rule that EPA does not have the authority to modify previously issued permits under Section 404 of the Clean Water Act. The section 404 permitting program authorizes roughly 60,000 permits representing about $220 billion in economic investment every year, and EPA's assertion of authority to revise existing permits creates tremendous investment uncertainty for all permit holders and potential project proponents. Inevitably, that uncertainty will translate into higher risks in borrowing, less investment, lost jobs and slower growth throughout the U.S. economy.
Our brief highlighted the dramatic change that EPA's action represents. Section 404 permits are required for the discharge of fill material into waters of the United States (including wetlands), and affects construction of utility infrastructure, housing and commercial development, renewable energy projects like wind farms or solar arrays, and transportation infrastructure projects such as highways and rail lines. While EPA has occasionally exercised its authority and often uses the threat of such action to obtain concessions during the permitting process, it has never before used Section 404(c) authority to review a previously permitted project.
We also highlighted a study by Dr. David Sunding, a professor at UC Berkeley, showing that the threat that EPA may modify existing permits distorts the cost-benefit ratio of new investment projects. Existing permits are already subject to the Army Corps of Engineers' regulations governing suspension, revocation and modification, and now EPA's interference will delay or deter investment in new projects. For example, a 2% chance that EPA would act adversely decreases a project's cost-benefit ratio by an astounding 30%. Also detailed are effects on bank financing and interest rates, bond ratings, rationed credit, land prices, and other harms throughout the economy.
On Sept. 23, the government moved to strike the Sunding report from consideration, as it was not part of the record considered by EPA. We opposed this motion, arguing that EPA was repackaging their efforts to exclude us from the case, efforts that were rejected by the court in August. We also argued that the report did not add to the administrative record, but provided context for the court to interpret Section 404(c) and to understand the broad consequences that flow from the government's theory of liability.
On March 23, 2012, Judge Amy Berman Jackson ruled that EPA does not have the authority to render a permit invalid once it has been issued by the Army Corps of Engineers. The ruling found that Section 404(c) does not expressly give EPA that power, and even if it did have some power to interpret that section, its interpretation was unreasonable. The Corps is the only permitting agency identified in the statute, and the judge said, "This is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute." It has the power to block the initial issuance of permits by refusing to allow the Corps to specify certain areas as disposal sites. But even if it had the power to subsequently remove the designation of certain sites, that does not affect the validity of the existing permit, which only the Corps can issue. Mingo Logan need only comply with the terms of the original permit.
The court described as "magical thinking" EPA's position that withdrawing a specification of a disposal site revokes the permit that affects that site. "It posit[ed] a scenario involving the automatic self-destuction of a written permit issued by an entirely separate federal agency after years of study and consideration. Poof!" Thus, even if the agency were accorded some deference under administrative law procedures, the agency's interpretation was unreasonable and could not stand. The judge also cited the NAM's amicus brief to show that eliminating finality from the permitting process would have a significant economic impact on industry, in turn making EPA's assertion of power less reasonable.
EPA appealed this ruling to the D.C. Circuit and won. Click here for details.
Related Documents: NAM brief (June 3, 2011)
|
National Association of Manufacturers v. EPA
(D.C. Circuit)
Challenging EPA's light-duty vehicle GHG emissions standards
On July 6, 2010, the NAM and 15 other business associations filed a petition for review in the D.C. Circuit challenging the EPA's final regulation of light-duty motor vehicles, also known as the Section 202 motor vehicle rule or the tailpipe rule. EPA has announced that this rule, which regulates greenhouse gases from certain motor vehicles, was effective on January 2, 2011. The rule thus established the first EPA regulation of greenhouse gas emissions, and the agency previously announced that once a pollutant is regulated, the usual permit requirements of the PSD program (Prevention of Significant Deterioration) kick in. As a result of this combination of interpretations, EPA has begun to regulate stationary sources of greenhouse gas emissions such as manufacturing facilities around the country.
Our lawsuit was the third in a series of suits challenging four EPA rules that together implement the greenhouse gas regulatory program. Our fundamental concern was over EPA's decision to automatically trigger PSD regulation of all stationary sources.
On Sept. 15, 2010, the NAM coalition filed a motion for a partial stay of the regulation of greenhouse gases from stationary sources of emissions. The court denied this motion in December.
On June 3, 2011, the NAM and 66 other parties filed a combined brief, as required by court order, detailing all the key arguments arising from the motor vehicle rule. Section 202 of the Clean Air Act requires EPA to justify the level of emissions controls imposed by explaining why those controls represent a rational choice in light of the identified endangerment risk. However, EPA said that it had no obligation to show that its regulations would be effective or reduce harm. It failed to justify its interpretation that the light-duty motor vehicle rule triggers stationary source regulations, and failed to address the enormous burdens and costs imposed on stationary sources.
The motor vehicle regulation arises under Title II of the Clean Air Act, while the regulation of stationary sources of emissions is governed by Title I, which focused on local emissions in defined geographical areas causing elevated ground-level exposures to a pollutant. EPA failed to exercise its discretion to limit the scope of the pollutants subject to the Title I, Part C PSD program, as it has done in another context -- the visibility program under the state part of the Clean Air Act.
We also argued that EPA failed to address the “absurd consequences” that the motor vehicle rule produces for stationary sources of greenhouse gas emissions. Had it done so, EPA could have avoided those consequences by adopting a more reasonable interpretation of the Clean Air Act. Instead, it told the regulated community to address the stationary-source consequences of its regulation of greenhouse gases in the tailoring rule proceeding, but then refused to address the stationary source impacts in the tailoring rule, because that rule provided only relief and did not impose costs. This failure to consider the stationary-source impacts violates Section 202 of the Clean Air Act and is inconsistent with multiple mandates from Congress and the President.
The brief itemized several statutes and orders mandating that EPA consider economic effects: (1) Section 317 of the Clean Air Act, which requires an economic impact assessment, (2) the Regulatory Flexibility Act, which requires an analysis of effects on small businesses, (3) the Unfunded Mandates Reform Act, which requires an assessment of the impact on state and local governments, (4) the Paperwork Reduction Act, which requires OMB approval for significant information-collection obligations, (5) Executive Order 12898, which requires addressing disproportionate effects on minority and low-income populations, and (6) Executive Order 13211, which requires an assessment of a rule’s impact on energy supply, distribution and use.
The brief also argued that EPA has not demonstrated that the final rule will meaningfully and substantially reduce any endangerment to public health or welfare. It adds virtually no additional benefits to already existing fuel economy standards issued by the National Highway Transportation Safety Administration (NHTSA).
Oral arguments were held on February 28, 2012.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.
Related Documents: NAM/Industry brief (June 3, 2011) NAM statement of issues (August 20, 2010) NAM petition for review (July 6, 2010)
|
National Association of Manufacturers v. EPA
(D.C. Circuit)
Challenging EPA's endangerment finding
In February, 2010, the NAM and other business groups filed a petition in federal appeals court challenging the U.S. Environmental Protection Agency’s (EPA) decision to regulate greenhouse gas (GHG) emissions from stationary sources through the Clean Air Act. Joining the NAM on the petition were the American Petroleum Institute, the National Petrochemical & Refiners Association, the National Association of Home Builders, the Corn Refiners Association, the Brick Industry Association, the Western States Petroleum Association and the National Oilseed Processors Association.
On March 18, 2010, a group of 21 industry associations and chambers of commerce filed a motion to intervene in the NAM suit in support of our position. This group represents a wide cross-section of sectors around the country that will be severely affected by EPA's effort to regulate stationary sources of greenhouse gases under the Clean Air Act.
A variety of other business groups and some states also challenged the endangerment finding. Some of these groups asked the EPA directly to reconsider its finding, but the agency turned down the request in July, 2010.
In the endangerment case, industry's opening brief was filed on May 20, 2011. Because the court required that all non-state petitioners and intervenors file only one brief, the views of 80 parties were consolidated, and the resulting brief includes disparate arguments from a variety of interests.
The brief explains that EPA does not say what constitutes a “safe climate,” acceptable global temperature ranges, or “safe” levels of GHGs in the atmosphere, nor will anyone be able to judge whether or when EPA has ever achieved a congressionally defined goal. EPA will not be able to say that its action will reduce global temperatures or that a temperature reduction will avoid an actual danger to public health and welfare.
The brief focused on, among other things, key EPA errors relating to (1) construing its authority to produce absurd results, (2) failing to provide a rational basis for determining whether GHG regulations will mitigate a defined public health or welfare risk, (3) lumping together six pollutants without making separate determinations about the effects of each, (4) failing to consider future mitigation and adaptation steps that impact whether health and welfare are endangered, and (5) failing to follow statutory procedures, including consultation with its own Science Advisory Board.
Congress did not intend for EPA’s endangerment finding to produce absurd results, yet that is the effect of EPA’s finding. The EPA should not have used the endangerment finding to cause PSD permitting requirements, since those requirements apply to emissions whose harm is concentrated in a particular geographic area. It should have adopted a more restricted reading of the statute, instead of a broad reading that would be narrowed by the absurd results doctrine.
We also argued that EPA has no rational basis for treating all six GHGs from motor vehicle emissions as a single air pollutant. Automobiles do not emit 2 of the six pollutants, and each of the pollutants that are emitted has radically different heat-trapping properties. In addition, EPA’s use of a “CO2 equivalent” as a proxy for regulation of each gas individually unlawfully avoids having to make endangerment findings for five of the six GHG air pollutants it seeks to regulate.
EPA also refused to consider “whether any harms from the regulated emissions will be independently averted or mitigated.” The agency also ignored emissions reductions that will occur from implementation of the Energy Independence and Security Act of 2007.
EPA's response was filed on Aug. 18, 2011. The agency argued that the administrative record was sufficient, that it reasonably classified six gases on one pollutant, and that it did not need to consider costs, administrative burdens, benefits or mitigation when making its endangerment finding. It also argued that it was not required to submit the proposed finding to the Science Advisory Board for review, and that complaints that it did not do so came too late in the process.
This litigation is one of many suits by the NAM and our coalition partners against EPA's attempt to regulate GHGs. In one, we challenged the agency’s interpretation of the so-called “Johnson Memo,” where EPA stated for the first time that it would apply controls on greenhouse gas emissions on a wide range of manufacturing and other stationary sources. See our summary in NAM v. EPA described as "Challenging EPA's STR interpretation". We subsequently filed additional suits challenging EPA's tailoring rule, tailpipe rule, and other rules being used to regulate stationary sources of greenhouse gases.
On September 26, 2011, the EPA's Inspector General issued a report in part finding that EPA did not make an independent assessment of key scientific evidence that it relied on in issuing its endangerment finding. We then asked the court to take judicial notice of the report. Public documents that are not already in the record of a case may be considered by a court, and we brought this development to the court's attention because it is directly relevant to EPA's claim in court that it exercised independent judgment when reviewing the scientific evidence.
Oral arguments were held on Feb. 28, 2012.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.
Related Documents: NAM Request for Judicial Notice of EPA Inspector General's Report (September 30, 2011) Petitioners' Opening Brief (May 20, 2011) NAM Joint Briefing Proposal (January 10, 2011) NAM Docketing Statement (April 15, 2010) NAM Nonbinding Statement of Issues (April 15, 2010) NAM Petition for Review (February 16, 2010)
|
National Association of Manufacturers v. EPA
(D.C. Circuit)
Challenging EPA's STR interpretation
On June 1, 2010, the NAM and other business organizations filed suit against EPA's latest interpretation of the so-called “Johnson Memo,” where the Agency stated for the first time that it will apply controls on greenhouse gas emissions on a wide range of manufacturing and other stationary sources beginning on January 2, 2011. This is the second piece of litigation against the EPA, which has issued 4 rules and interpretations that all combine to set limits on stationary sources of greenhouse gas emissions. Manufacturing facilities are among many sources of such emissions, and legal challenges must be filed now even though enforcement against many of these sources will not occur immediately.
This case is related to our challenge to EPA's endangerment finding. See our summary in NAM v. EPA described as "Challenging EPA's endangerment finding".
On Sept. 15, the NAM coalition filed a motion for a partial stay of the regulation of greenhouse gases from stationary sources of emissions. The court denied this motion in December, 2010 and we spent 2011 filing briefs in all the greenhouse cases on the merits. Oral argument was held in the D.C. Circuit on February 29, 2012.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.
Related Documents: NAM/Industry brief (June 20, 2011) NAM's Non-Binding Statement of Issues (August 30, 2010) NAM Petition to Review STR Rule (June 1, 2010)
|
National Association of Manufacturers v. EPA
(D.C. Circuit)
Challenging EPA's tailoring rule for greenhouse gas regulation
On August 2, 2010, the NAM and 16 other business associations filed a petition for review in the D.C. Circuit challenging the EPA's final regulation that sets out its schedule for enforcing regulatory controls on greenhouse gas (GHG) emissions from stationary sources. The agency has previously announced that greenhouse gas emissions are subject to regulation beginning January 2, 2011, and the usual permit requirements of the PSD program (Prevention of Significant Deterioration) kick in. Because there are millions of facilities that fall under EPA's regulatory requirements, the agency has adopted the tailoring rule to focus its initial enforcement only on facilities with the largest amounts of GHG emissions.
This is the last of eight petitions filed by the NAM coalition of business organizations challenging EPA's efforts to regulate stationary sources of greenhouse gases.
Our lawsuit is the third in a series of suits challenging four EPA rules that together implement the greenhouse gas regulatory program. Our fundamental concern is over EPA's decision to automatically trigger PSD regulation of all stationary sources.
On Sept. 15, 2010, the NAM coalition filed a motion for a partial stay of the regulation of greenhouse gases from stationary sources of emissions. The court denied this motion in December.
On June 20, 2011, the NAM and several other industry associations filed the fourth major legal brief challenging the EPA’s regulation of greenhouse gas emissions. This brief argued, in part, that the EPA’s tailoring rule essentially rewrote parts of the Clean Air Act by changing clear, congressionally established numerical thresholds for pollutants that are subject to regulation. The brief reiterated that the Clean Air Act was never meant to regulate GHGs. As a result, the rules should be vacated and remanded.
Oral arguments in the case were held on Feb. 29, 2012.
On June 26, 2012, the 3-judge panel upheld all of the primary greenhouse gas regulations. It upheld the EPA’s endangerment finding as within its discretionary power and procedurally sufficient, it upheld the tailpipe rule as being required by law once the endangerment finding is made, it found that the business community lacked standing to challenge the timing and tailoring rules because those rules helped rather than hurt, and, while it found our challenge to earlier rules in 1978, 1980 and 2002 to be timely, it rejected our legal arguments and found EPA’s interpretation compelled by the statute.
On August 10, 2012, the NAM coalition filed a petition for rehearing en banc, asking that all the judges on the D.C. Circuit review the 3-judge panel's ruling. We argued that the panel relied on an unreasonable interpretation of the Clean Air Act to approve "the most sweeping expansion of EPA authority in the agency's history, for the first time covering a broad swatch of mobile and stationary sources of greenhouse gases and granting itself discretion to determine and revise the scope of the statute’s coverage, previously fixed by the statute’s explicit terms, for the indefinite future." The panel's ruling conflicts with Supreme Court decisions, produces absurd results, and could lead to annual cost increases of more than $20 billion upon full implementation.
On December 20, 2012, the D.C. Circuit denied our petition. Judges Brown and Kavanaugh filed separate dissenting opinions that supported our arguments. Such dissents are rare, sending a clear signal that significant legal issues remain to be addressed.
On April 18, 2013, the NAM filed a Petition for Writ of Certiorari with the U.S. Supreme Court and awaiting the Court's determination whether to hear the case.
Related Documents: NAM petition for writ of certiorari (April 18, 2013) NAM petition for rehearing en banc (August 10, 2012) NAM reply brief (November 16, 2011) NAM/Industry brief (June 20, 2011) NAM reply in support of partial stay (November 8, 2010) NAM statement of issues (September 15, 2010) NAM motion for partial stay (September 15, 2010)
|
National Association of Manufacturers v. EPA
(5th Circuit)
Challenging EPA's denial of Texas Flexible Permit program
The NAM and 5 other business associations have asked the U.S. Court of Appeals for the Fifth Circuit to review EPA's decision published July 15 to disapprove revisions to a Texas Clean Air Act implementation plan that relates to the state’s Flexible Permits
Program. The Texas plan was submitted to EPA for approval in 1994 and revised several times since then. After a recent notice-and-comment period, EPA decided that the Texas plan did not meet its requirements for a minor plan revision ("Minor NSR SIP revision") for various reasons described in its decision. Alternatively, it ruled that the plan did not meet its requirements for a substitute Major NSR SIP revision.
This petition for review is the first step in a proceeding that will eventually present the court with detailed legal issues to be resolved. The Texas flexible permits program allows operators of facilities that generate air emissions flexibility in managing their operations. While one flexible permit is allowed per plant site or account, the applicant can choose which facilities and pollutants to include. The permits allow plants to exceed pollution limits from individual emission sources as long as the facility as a whole remains below an overall emissions cap. EPA's action highlights a serious struggle between national and state environmental authorities in regulating air emissions.
Click here for further developments in this case, which has been consolidated with Texas v. EPA.
Related Documents: NAM petition for review (September 13, 2010)
|
Native Village of Kivalina v. ExxonMobil Corp.
(9th Circuit)
Public nuisance litigation over climate change is displaced by EPA regulation
A native village in Alaska sued various energy companies, alleging that greenhouse gas emissions cause climate change and made them relocate their village because of flooding. The trial court dismissed the case because it involves political questions that are not for courts to decide. It also said the plaintiffs did not have standing because they were unable to establish that their injuries are fairly traceable to the named defendants.
The issue was appealed to the Ninth Circuit. The NAM filed an amicus brief July 7, 2010, arguing that the case represents an unprecedented attempt by environmental lawyers to recast public nuisance as a "super tort", in an effort to bypass 4 time-honored elements of fundamental public nuisance law. Their theory is unfounded in federal or state law, and they cannot establish direct causation between the defendants' energy activities and the plaintiffs' injuries. In addition, to determine whether the elements of proving public nuisance were met, a court would have to address complex political questions and establish nationwide emissions standards.
Even the plaintiffs admitted the case was born out of their frustration with the legislative process. Allowing this kind of suit would give rise to endless claims of liability in highly speculative mass tort cases after every harsh weather event.
On September 21, 2012, the Ninth Circuit dismissed the case, finding that the plaintiffs' claims were displaced by federal law. Because EPA is regulating greenhouse gases, federal common law cannot be the basis for public nuisance claims in this area.
This is another in a series of cases involving public nuisance claims arising from greenhouse gas emissions, including the Comer, American Electric Power, and Tennessee Valley Authority cases, all of which the NAM has participated by filing amicus briefs. The AEP case largely rejected this kind of wasteful litigation, but left open the possibility of nuisance claims under state law.
Related Documents: NAM brief (July 7, 2010)
|
Native Village of Point Hope v. Salazar
(9th Circuit)
Challenge to exploratory drilling permit in Alaska
The development of Alaska offshore oil resources is the center of legal disputes involving exploration permits issued by the Department of the Interior. Environmental groups have filed multiple lawsuits to impair the permitting process, and this one alleged violations of the National Environmental Policy Act (NEPA) and the Outer Continental Shelf Lands Act (OCSLA). At issue was a revised exploration plan prepared by Shell following an extensive environmental assessment and approved by the Department. The Government’s latest estimates show that the Beaufort Sea contains a staggering 6.3 billion barrels of undiscovered oil that is economically recoverable at roughly current market prices, and a recent economic analysis estimates that the development of these resources, including the Chukchi Sea, will create an annual average of over 54,000 new jobs over the next 45 years, generating $145 billion in employee payroll.
The NAM and other business groups filed an amicus brief Feb. 3, 2012, arguing that the OCSLA was adopted with the specific goal of encouraging the expeditious exploration and production of the Outer Continental Shelf. Thousands of exploration plans have already been approved under quick timetables, including 31 exploratory wells in the Beaufort Sea. The Department should be able to use its scientific and technical expertise to approve the exploration plans without undue court interference.
The first lawsuit was filed challenging an offshore exploration plan in the Beaufort sea, and a second was filed challenging a similar plan in the Chukchi Sea. These cases were consolidated in March, and on April 3, the NAM and other business groups filed a supplemental amicus brief raising the same concerns we had expressed before.
On May 25, the Ninth Circuit rejected the environmental challenges to the exploratory permits. It found that one part of the challenge was made moot by a subsequent filing of documentation, and that the agency was not arbitrary and capricious in issuing the company's plan with the documentation provided. Also, an agency can approve applications that have inconsistent statements, because the statements were not made by the agency and the statements reflected changing circumstances. Other evidence in the record need not be fully reconciled by the agency as long as the agency's conclusion is supported by substantial evidence on the record considered as a whole. The agency complied with the law's requirements to ensure that the exploration plan would not probably cause serious harm or damage to life, property or the environment, and its decision is entitle to deference when supported by the record.
Related Documents: NAM Supplemental brief (April 3, 2012) NAM brief (February 3, 2012)
|
Sackett v. EPA
(U.S. Supreme Court)
Right to preenforcement review of EPA compliance order
A couple who graded a small lot to build a house was ordered by EPA under the Clean Water Act to fill in the lot, replace vegetation and monitor the land for 3 years, or face a $32,500 penalty for each day of violation. They sought court review of the order, but were denied.
On March 21, 2012, the Supreme Court decided that they have a right to go to court to get pre-enforcement review of the order. They do not have to wait for EPA to sue them for violating the order in order to raise their claims. The unanimous Court held that the Administrative Procedure Act allows aggrieved parties to sue an agency after it takes "final agency action," and EPA's order qualified. Although the majority did not limit the claims that could be raised in such a challenge, Justice Ginsburg's concurring opinion argued that a challenge could only involve EPA's jurisdiction over the land in question. It remains to be seen whether the Court's opinion is ultimately interpreted in such a limited manner.
The NAM filed an amicus brief in 2011 supporting this result.
The case has implications beyond the Clean Water Act to similar orders under the Solid Waste Disposal Act (Resource Conservation and Recovery Act) and the Safe Drinking Water Act. EPA orders such as this one essentially coerce alleged violators into compliance, denying due process. Pre-enforcement review by the courts is a critical check on agency abuse. Otherwise, persons subject to such orders risk substantial financial penalties for violating an order even if they did not violate the Clean Water Act itself.
One of the claims the landowners hope to raise is whether their property is even subject to EPA jurisdiction in the first place. This question involves defining "waters of the United States," and, as Justice Alito mentioned in his concurring opinion, neither Congress nor EPA has provided a clear answer to this question. The NAM supports efforts to prevent EPA and the U.S. Army Corps of Engineers from expanding the federal government's regulation of private and public lands under the Clean Water Act, since such expansion would create significant regulatory barriers to economic growth in an already struggling economy. In 2011, we filed extensive comments on this proposed agency action.
Related Documents: NAM brief (October 3, 2011)
|
Sierra Club v. EPA
(D.C. Circuit)
Environmental group's challenge of EPA's delay of the effective dates of its boiler rule and incinerator rule
The NAM and other groups moved to intervene in a law suit brought by the Sierra Club against EPA over the agency's decision to delay the effective date of new regulations on boilers and incinerators. The rules, issued on March 21, 2011, concern major source industrial boilers and commercial and industrial solid waste incinerators. When it published the rules, EPA announced that it would initiate administrative reconsideration of them, and later delayed the effective dates during the reconsideration period. Our intervention in this case was intended to support the EPA's decision to delay implementation.
At the same time, the NAM challenged the boiler MACT and incinerator rules themselves. The rules have the potential to dramatically impact the U.S. economy and impose enormous costs on key industrial sectors, and they force companies to make compliance investment decisions well in advance of their effective dates.
This suit by the Sierra Club was voluntarily dismissed on March 29, 2012. A similar suit brought in federal district court ended when the court invalidated EPA's delay notice.
Related Documents: NAM Motion to Intervene (August 15, 2011)
|
Texas v. EPA
(5th Circuit)
Challenging EPA's denial of Texas Flexible Permit program
On December 3, 2010, the NAM and others filed a joint brief arguing that states have substantial discretion under federal law to adopt flexible requirements the apply to minor changes in plant operations as long as air quality is protected. We also argued that the Texas program meets all the federal Clean Air Act (CAA) standards, is in some cases years ahead of schedule, and the EPA’s action more than 15 years after the adoption of the Texas program has no legal support. EPA has also failed to defer to Texas’ interpretation of its own regulatory laws, as required by federal law. This litigation is intended to eliminate the ambiguity of EPA’s latest actions and to restore predictable air pollution control regulation in Texas.
On Aug. 13, 2012, the Fifth Circuit agreed, throwing out EPA's action. The court found that EPA's demands for language and program features in the state's implementation plan had no basis in the Clean Air Act or its implementing regulations. Instead, the Act sets goals and basic requirements, and gives the states broad authority to determine the methods and particular control strategies they will use to achieve the statutory goals. Environmental regulation is a shared responsibility of the federal and state governments, and EPA must approve state plans that meet the requirements of the Clean Air Act within 18 months of a state's submitting them for approval.
The Court rejected an EPA effort to require the state to adopt express language prohibiting major sources from evading statutory major new source review regulations. It found no requirement in the statute compelling such a statement, and even EPA's prior views accepted wide variations in state enforcement program language. Thus, EPA's attempt to require specific language in a state's implementation plan violated principles of federalism embodied in the Clean Air Act, as well as the Administrative Procedure Act.
The Court also rejected EPA's criticism of the flexible permit program's monitoring, recordkeeping and recording provisions. Texas allows its enforcement director discretion to write monitoring and recordkeeping requirements into each permit, based on the size, needs, and type of facility applying for a permit. The Court found that there was no authority in the law to allow EPA to limit the director's discretion, and EPA provided no evidence that the Texas program interferes with attaining Clean Air Act requirements. In fact, EPA approved similar director discretion in previous state plan amendments.
Finally, the Court rejected similar EPA arguments about the methodology allowed for calculating each emissions cap at a permitted facility. The agency's objections "rely on standards not found in the CAA or its implementing regulations."
Related Documents: NAM reply brief (March 17, 2011) NAM brief (December 3, 2010)
|
Wilderness Society v. U.S. Dep't of the Interior
(N.D.Cal.)
Defending expedited siting of transmission lines in the west
The NAM and other major energy and business trade associations sought to intervene on the side of the Department of Interior, defending a lawsuit brought by 15 environmental groups against the agency’s expedited siting of transmission lines under the Energy Policy Act of 2005. Led by the Wilderness Society, the environmentalists sued in U.S. District Court, Northern District of California, to stop the designation of energy corridors in the western United States, specifically the West-wide Energy Corridors (WWEC). The groups had previously challenged the Department of Energy’s designation of corridors through the administrative process.
On Dec. 17, 2009, the NAM filed a motion to intervene as an intervenor/defendant in the litigation, joined by the Edison Electric Institute, American Public Power Association, National Rural Electric Cooperative Association, American Gas Association, and U.S. Chamber of Commerce. The Environmental Protection Act includes many provisions necessary to expedite development of a modernized electricity grid to meet increased demand, and the NAM endorses policies that will expedite development of a "smart grid," which will save manufacturers money. The NAM supports the identification and designation of corridors across federal lands, and this lawsuit threatened to block or impose additional delays or regulatory constraints on the WWEC.
Our motion to intervene was granted on March 9, 2011. A settlement was reached in this case, and a joint motion to dismiss was granted on 7/11/12. It called for periodic interagency reviews, agency guidance, training and a corridor study to assess whether the corridors are efficient and environmentally sensitive.
Related Documents: NAM Motion to Intervene (December 17, 2009)
|
Ackison v. Anchor Packing Co.
(Ohio Supreme Court)
Application of medical criteria law to pending cases
On June 8, 2007, the NAM joined other business groups in filing an amicus brief in this case involving a recently enacted Ohio law that defers claims of injury due to exposure to asbestos until and unless there is evidence of asbestos-caused impairment. The estate of Danny Ackison brought suit to try to establish a relationship, although congestive heart failure and aortic stenosis are listed on his death certificate as the cause of death.
The issue is whether the statute may, consistent with constitutional requirements, be applied to cases pending on the date it was enacted. The defendant, supported by the NAM, argued that it may. The brief outlined the history of asbestos litigation and the severe problems caused to defendants, and to plaintiffs with actual injuries, when plaintiffs bring suit without any actual symptoms or medical evidence that asbestos caused an injury. The statute simply puts such claims on hold until actual symptoms develop. We have participated in similar recent cases in Georgia and Florida.
On Oct. 15, 2008, the Ohio Supreme Court ruled 5-2 that the law may be applied to cases pending on the date it was enacted. It ruled that the law was "remedial and procedural" rather than a retroactive change in vested or substantive rights. The law established a procedural prioritization of asbestos-related cases without putting new substantive burdens on plaintiffs. It also ruled that pleural thickening alone is insufficient to establish a compensable injury for asbestos exposure under common law in Ohio, and the plaintiff had not been diagnosed with any asbestos-related illness or impairment. The legislation does not prevent plaintiffs from pursuing pending actions that satisfy the actual-injury requirement.
The is an important decision upholding the validity of the retroactive application of case-management procedures involving about 40,000 asbestos-related suits. Shortly after the decision, a three-judge panel in Cuyahoga County dismissed 30,000 asbestos claims.
|
Altria Group, Inc. v. Good
(U.S. Supreme Court)
Whether federal labeling law preempts state law deceptive advertising claims
In this case, some smokers sued the makers of Marlboro Lights and Cambridge Lights under Maine’s Unfair Trade Practices Act, alleging that the manufacturer’s advertising the cigarettes as “light” and having “lowered tar and nicotine” was deceptive. They claimed that smokers might compensate for the lowered tar and nicotine by increasing their smoking, thus making the products just as unhealthy as non-light cigarettes.
The federal district court held that the state law claims were preempted by the Federal Cigarette Labeling and Advertising Act, which expressly prohibits states from imposing any requirements “based on smoking and health . . . With respect to the advertising or promotion of any cigarettes,” and gives the Federal Trade Commission exclusive authority to regulate all cigarette labeling and advertising involving the health impact of smoking. The First Circuit reversed, holding that the state law claims were not preempted because they were not based on “smoking and health” but instead on a more general duty not to deceive and thus did not fall within the scope of the Federal Cigarette Labeling and Advertising Act.
The NAM filed an amicus brief urging the Court to reverse the First Circuit. We argued that one of the principal reasons for the FTC is to provide regulatory guidance to businesses in order to comply with laws prohibiting deceptive practices. If plaintiffs can file lawsuits in state court with respect to labeling for which the FTC provides guidance, this would undermine the ability of manufacturers in a variety of industries from relying on guidance from the FTC. Congress empowered the FTC to issue guidance with respect to deceptive acts and practices. Allowing this state lawsuit to proceed would not supplement the FTC's role in the area of labeling -- it would be wholly at odds with federal law.
On Dec. 15, 2008, the Supreme Court upheld the lower court, 5 to 4. The majority held that the federal law is narrowly written and bars claims based on the effect of smoking on health, not claims based on fraudulent statements. It ruled that the FTC's approval of the words "light" and "low tar" was not clear enough specific authorization to impliedly conflict with the state fraud claim. When a preemption law is unclear, the benefit of the doubt goes to the plaintiff asserting a state-law claim.
The dissenting Justices oppose this presumption against preemption, and warned that the test adopted by the majority for determining whether state law is preempted is unworkable and has frustrated many courts. Instead, the dissenters argued that claims such as "American-made," or "the official cigarette of Major League Baseball," would not be preempted, since they do not relate to the effect of smoking on health, but that claims such as "Light" or "lowered tar and nicotine" would be. If a fraudulent advertising claim is preempted, federal regulators rather than juries in every state would decide whether the advertising is fraudulent.
Related Documents: NAM brief (April 7, 2008)
|
Behshid v. Bondex Int'l, Inc.
(California Supreme Court)
Causation in asbestos litigation
In an asbestos exposure case, the California Court of Appeal ruled that a plaintiff who had been exposed to multiple asbestos products, only one of which had been made by the defendant, but did not provide any testimony regarding the level of exposure to that product, nonetheless satisfied the court’s requirement that the defendant’s product was a “substantial” factor in causing the plaintiff’s injury.
The NAM joined with seven other groups in an amicus letter urging the California Supreme Court to review this decision. We argued that the lower court permitted liability to be imposed based on speculative testimony regarding specific causation that failed to meet the basic standard established by the California Supreme Court in Rutherford v. Owens-Illinois, Inc., which requires courts to distinguish between products to which a plaintiff was incidentally exposed and those products to which a plaintiff’s exposure was significant enough to be considered a “substantial” factor in causing the harm.
Additionally, we argued that the flimsy causation standard permitted by the California Court of Appeal has been rejected by other states’ courts that are experienced in asbestos litigation. In fact, one of the reasons why California has become a magnet for asbestos cases is because its state courts have lowered its specific causation standard.
On Oct. 28, the court denied review of this case.
Related Documents: NAM brief (September 30, 2008)
|
Braaten v. Saberhagen Holdings
(Washington State Supreme Court)
Duty to warn of hazards from third party products
The NAM joined with 7 other organizations urging the Supreme Court of Washington to reverse a lower court ruling that held a valve manufacturer liable for failing to disclose the hazards that arose when the Navy covered the valves with asbestos insulation and installed another company’s asbestos gaskets. Under common law, manufacturers are only liable for hazards in their own products. We opposed the court’s creation of a new duty to warn about hazards a manufacturer does not produce or put in its products. Such a duty would require syringe manufacturers to warn of the drugs that might be used in the syringe, or lighter manufacturers to warn of the hazards of smoking, or bread or jelly manufacturers to warn of the foreseeable risk of peanut allergies in peanut butter and jelly sandwiches. The lower court’s rationale – foreseeability – is unsound policy and invites a flood of new product liability cases, particularly involving asbestos. The duty to warn should be placed on the party in the best position to know the risk, and any economic loss should be borne by the party who caused it.
We are pleased to report that on 12/11/08, the Washington Supreme Court reversed the appellate court and held that makers of non-hazardous component parts have no duty to warn about asbestos products made by others and attached to the components post-sale. The court stated that its decision was based on the majority rule in product liability law that only those within a product's chain of distribution (such as a dealer or distributor) or those who manufacture a product have a duty to warn of the dangers associated with its use.
Related Documents: NAM motion to re-apply for amicus status (January 14, 2008)
|
Chemtall Inc. v. Stern
(U.S. Supreme Court)
Procedure for early consideration of punitive damages
The NAM had joined with other groups in August 2007 urging the West Virginia Supreme Court to strike down a trial court plan that requires a determination of punitive damages liability and a punitive damages multiplier before certification of a medical monitoring class, before a full determination of the defendants' liability for medical monitoring, and before any medical monitoring damages have been determined.
The case involves alleged exposure to polyacrylamide, which is used in to treat coal wash water at coal preparation plants. We argued that punitive damages must be based on actual damages, and cannot be determined in a vacuum before actual damages are determined. The trial court had not yet determined who should be in the class of plaintiffs, let alone whether any of them were actually harmed by the plaintiffs or how reprehensible the challenged conduct was to those plaintiffs. Setting punitive damages without making such determinations biases the jury, arbitrarily imposes punishment, and jeopardizes the right to receive a fair trial in West Virginia.
On Nov. 15, the West Virginia Supreme Court denied the appeal. It ruled that determining the constitutionality of punitive damages requires that it wait until the lower court actually enters a judgment awarding punitive damages. It also indicated its reluctance to intervene in pre-trial issues.
After the West Virginia Supreme Court refused to strike down this plan, the NAM filed a brief in the U.S. Supreme Court urging that the decision be reviewed and overturned. On 3/31/08, the Court declined to hear this appeal.
See also earlier cases decided in West Virginia in 2004 and 2007, Chemtall Inc. v. Madden.
Related Documents: NAM brief (February 28, 2008) Summary of Chemtall Inc. v. Madden (West Virginia Supreme Court) (August 15, 2007) Summary of Chemtall Inc. v. Madden (West Virginia Supreme Court) (August 2, 2004)
|
Donoughe v. Hobart Bros. Co.
(Superior Court of Pennsylvania)
Reverse bifurcation of trial in asbestos cases
The flood of asbestos cases filed in Philadelphia over recent years has led the courts there to practice reverse bifurcation, where issues of medical causation and damages are tried before issues involving theories of liability and product identification. The NAM believes this procedure, virtually automatic, is prejudicial to defendant manufacturers. Juries are asked to determine how high the damages are, and then, afterwards, to decide whether the defendants are liable. For hundreds of years, in regular tort cases, liability and damages have been tried simultaneously.
The NAM and others filed an application Dec. 10 to join as amici, or friends of the court, in a petition for reconsideration of the court’s procedure. The court denied rehearing and sent the case back for trial.
|
Foster Wheeler LLC v. Superior Court
(California Supreme Court)
Whether sophisticated user defense extends to employees of purchaser
The plaintiff in this case worked for the Navy for many years, working around asbestos-containing boilers sold to the Navy by Foster Wheeler. He sued the company and many others for failing to warn him about the dangers of asbestos. The company's defense is based on the principle that a manufacturer does not need to warn a sophisticated user about the hazards of a product that are already known to it. The company asked for a ruling absolving it of liability because the Navy was in a better position and had the responsibility to warn its employees of hazards in the workplace.
The company lost a motion for summary judgment, and appealed to the California Supreme Court. The issue is whether the sophisticated user defense can be asserted against an employee of the sophisticated user. The NAM and other business groups sent a letter to the Court urging it to review this issue, as the issue affects hundreds of pending asbestos-related cases. Many cases recognize that the defense applies in suits by employees of sophisticated users. The Navy is in a much better position than the manufacturer to take proper precautions to protect their workers, and shifting that responsibility to the manufacturer removes the economic incentives that encourage employers to protect the safety of their employees.
On approximately 10/31/08, the California Supreme Court declined to review this case.
Related Documents: NAM Amicus Letter (October 14, 2008)
|
Groch v. General Motors Corp.
(Ohio Supreme Court)
Supporting constitutionality of Ohio's new statute of repose
The NAM and other business organizations asked the Ohio Supreme Court to declare that state's 10-year statute of repose to be constitutional. The plaintiff suffered injuries while using a 30-year old trim press and sued his employer and the manufacturers of the machine. A federal court submitted eight questions of law to the Ohio Supreme Court, including ones involving the validity of the statute of repose.
The NAM argued that it is the prerogative of the Ohio legislature to decide broad public policy, including state tort law. When states formed, they delegated to the courts some of their authority to develop common law, but always retained the position as the chief policymaking branch of state government. The legislature is uniquely qualified to weigh and balance the many competing societal, economic and policy considerations involved in changing tort law, while courts are better able to decide individual disputes.
The brief warned about a nationwide effort under way to nullify legislative attempts to change tort law. Statutes of repose are important safeguards against stale litigation, and common sense indicates that a product that has been used reliably for years will ultimately malfunction for reasons outside the control of the manufacturer, such as ordinary wear and tear, improper maintenance or misuse. A statute of repose can help level the playing field between Ohio manufacturers and their foreign competitors, since our nation's principal competitors -- the European Community, Australia and Japan -- have adopted 10-year statutes. Our brief also warned against courts that use an expansive view of their role to override legislation and impose their own economic policy views -- as the Supreme Court did in the highly discredited period known as the Lochner era.
On Feb. 21, 2008, the Ohio Supreme Court affirmed the constitutionality of Ohio’s 10-year statute of repose. However, the court held that retroactive application of the statute of repose to bar a claim for injuries that a plaintiff suffered before the statute took effect was unconstitutional under the Ohio Constitution, which prohibits retroactive application of a law when such application infringes on the exercise of a substantive right. Thus, in this particular case, the 10-year statute of repose will not bar Groch’s claim against the trim press manufacturer.
|
Henry v. Dow Chemical Co.
(Michigan Court of Appeals)
Class action certification
The NAM joined in an amicus brief 4/24/06 urging the Michigan Court of Appeals to reverse a trial court ruling that granted class certification without conducting a rigorous analysis of whether the facts and issues in the case satisfy the factors for class action certification. The trial court failed to give the appropriate level of scrutiny to whether the class claims met the Michigan class action requirements, such as predominance, superiority, typicality and adequacy. It certified a class whose members owned property with varying dioxin levels, including some with no elevated dioxin levels, with different flooding histories, and with different histories of exposure to dioxin. The damage claims varied widely, with some plaintiffs claiming no more than vague concerns. Thus, injury, causation and damages were all highly individualized issues unsuitable for class action treatment. Our brief highlighted the dangers of allowing cases to be certified as class actions without a rigorous analysis of the class claims. Lax standards for class action certification encourage unwarranted litigation, blackmail settlements, skewed trial outcomes and windfall legal fees. They also make those jurisdictions that use them magnets for statewide class actions, resulting in higher prices, withdrawn products and services, hampered economic development and bankruptcies. In addition, we urged the court to reject a novel plaintiff’s theory that the class be certified based on the barest minimum alleged commonality – that they are located within the 100-year flood plain of the Tittabawassee River and allegedly share a fear that the river could flood at unknown times and frequency in the future, and could leave contamination on their property. This is a speculative concern by plaintiffs who are not currently injured, and allowing such claims would create a stampede of litigation and drain resources needed to compensate those with real physical injuries and a need for medical care. This theory, if adopted in Michigan, could be used against nearly any industrial facility that someone might fear could cause a hazardous release at some point in the future. On 1/24/2008, the Michigan Court of Appeals upheld the trial court's certification of the case. It ruled that only clearly erroneous rulings may be overturned, and that what little evidence was available to the trial judge was insufficient to overturn the judge. An invstigation by the Michigal Department of Environmental Quality generally supported the class definition, although the appeals court recognized that the class could have been reduced to the extent property owners had "zero to a little amount of dioxin" in their soil.
Related Documents: NAM brief (June 27, 2008)
|
Honer v. Merck and Co.
(California Supreme Court)
Secondhand exposure to hazardous substances
The NAM joined with six other organizations in an amicus letter urging the California Supreme Court to review a lower court ruling that landowners have a duty to protect against off-site injuries that could result from secondhand exposures to asbestos and other substances emitted in the workplace. Whether one person owes a legal duty, as opposed to a moral or ethical obligation, is a policy judgment that must balance providing a remedy with extending exposure to tort liability almost without limit. On Jan. 3, 2008, the court declined to review this appeal.
In this case, a woman sued two companies with New Jersey facilities where her father and brother worked as insulators. The men would bring home clothing with asbestos fibers, and she would wash the clothing and otherwise be exposed to the substance. She sued the companies for strict liability, negligence, fraud and misrepresentation, and premises liability. Only premises liability was at issue here.
The trial court dismissed the claim under a statute of repose, because it was brought more than 10 years after the completion of the insulation work.
The California Court of Appeal reversed, holding that California law shields its residents, like the plaintiff in this case, from out-of-state statutes of repose. Thus, the New Jersey statute of repose did not apply and the plaintiff could bring her claim. The court also held that a premises owner can be liable for secondhand asbestos exposure.
Our amicus letter, which focused on the issue of secondhand exposure liability, argued that 5 other states rejected such liability in recent cases, finding that the mere foreseeability of harm to third parties is not enough to extend the employer's duty of providing employees with a reasonably safe work environment to potential harm outside the workplace. The companies in this case did not spread the release of toxins among the general population.
In addition, this brand new duty requirement for landowners will bring about countless new lawsuits, potentially involving asbestos and other substances and involving a wide variety of people who might come in contact with an exposed worker.
This is another example of a case where courts have been asked to extend liability beyond that which is generally available in our tort system. If such a leap is to be made, it should be considered by state and federal legislatures considering all the policy implications, and not by individual judges.
|
Jesensky v. A-Best Products
(3rd Circuit)
Liability for second-hand exposure
This case is about second-hand exposure to asbestos under Pennsylvania law. A federal district court judge properly ruled that a company has no duty to protect family members of independent contractors against off-site exposure to asbestos. There have been several recent cases involving this issue, and the NAM's amicus brief urges the Third Circuit to join most of them in finding no duty by the company. The NAM joined five other organizations warning that expanding such a duty would lead to a new wave of asbestos litigation. The employer owes a duty of safety in the workplace, but not to distant third-parties whose potential claims are so remote.
On July 11, 2008, the Third Circuit affirmed the dismissal of the complaint, but did not reach the question of liability for third-party exposure. Instead, it ruled that the complaint, filed 12 years earlier and never amended, did not raise a premises liability or failure-to-warn claim that is essential to the case. The ruling has not resolved the substantive issue, which will have to await another case.
|
Liggett Group, Inc. v. Davis
(Florida Supreme Court)
Proof of reasonable alternative design in product design cases
Manufacturers can be sued for defective design, defective manufacturing, and failure to warn of known risks from their products. This suit involved a cigarette smoker who developed lung cancer and sued the manufacturer for defective design and negligent manufacturing of its cigarettes. A jury returned a verdict in her favor for more than $500,000.
On appeal, the manufacturer argued that that the plaintiff did not prove that the cigarettes were dangerous beyond that contemplated by the ordinary consumer, nor did she show that there was an alternative design that would have allowed her to avoid her injury. The NAM and 5 other business and insurance groups filed an amicus brief supporting the company’s position on liability for design defects. We argued that under either old or more recent standards of liability, the plaintiff must show that there is a more reasonable design for the product. Manufacturers should not be subject to insurer-like liability when their products come with risks, if there is no alternative design that will make them less risky. Our brief provided a broad policy perspective that goes went beyond the tobacco products at issue, and showed that holding manufacturers liable for making risk-free products could be devastating to a broad category of other products and industries, such as convertible automobiles, motorcycles, personal watercraft, pharmaceuticals and a cold beer on a hot day. We highlighted the common sense principle that before a product manufacturer can be found liable, there must be something wrong with the product, and implicit in that concept is the requirement that there must be “a better way to build the mousetrap.” Inherently dangerous products are not necessarily unreasonably dangerous.
If a product has no reasonable alternative design (i.e., there is no way to make it safe), the focus is no longer on whether it is defective, but whether it is so lacking in social utility that it should not be marketed at all, and that is a decision for legislators, not the courts.
Unfortunately, on 12/11/08, the Florida Supreme Court declined to hear this appeal, thereby perpetuating the ambiguity in Florida law as to whether injured parties must prove that safer products could be made in order to prevail in liability cases involving inherently dangerous products.
Related Documents: NAM brief (June 13, 2008)
|
Lowe v. Philip Morris USA Inc.
(Oregon Supreme Court)
Medical monitoring without injury
The NAM joined with 7 other business groups in urging the Oregon Supreme Court not to recognize a claim seeking medical monitoring when there is no showing of injury. The case involves a claim on behalf of a class of Oregonians who have smoked the equivalent of one pack of cigarettes a day for five years or more and who have not been diagnosed with lung cancer. The plaintiff sought a court-monitored program of medical monitoring, smoking cessation and education, and attorney's fees.
Traditional tort law requires that a plaintiff have some injury before he or she may file suit for damages, including the cost of medical treatment or monitoring. There should be no recovery based on the mere possibility of a future injury. If such a remedy is to be provided, the legislature should make that decision, considering all the daily situations that might lead some to seek medical monitoring and the ramifications for the economy. Medical monitoring claims would create the opportunity for abuse, would burden the courts, and have been rejected by many other courts, including the Supreme Court.
On May 1, 2008, the Oregon Supreme Court affirmed the lower court, rejecting the medical monitoring claim. It ruled that the threat of physical harm in the future is not sufficient harm to bring suit now. The court also rejected the theory that the cost that plaintiffs incurred to undergo medical monitoring on their own was an injury. Purely economic losses, without actual injury to a person or his or her property, are not actionable, said the court. Oregon joins a significant number of other states in rejecting medical monitoring claims without injury. Since 1999, only Missouri and West Virginia have allowed such claims.
|
Mikolajczyk v. Ford Motor Co.
(Illinois Supreme Court)
Risk-utility test for design defects in complex products
This case involves a manufacturer's liability for using a "yielding seat" design rather than a rigid seat design in a car's front seat. A fatal car accident led to a suit alleging defective design, and the lower court allowed the jury to use a simple "consumer expectations" test in determining whether the design was proper.
The NAM joined with the Illinois Manufacturers Association in an amicus brief arguing that the correct standard in design defects cases for complex products is the modern "risk utility" test found in the Third Restatement of Torts: Products Liability. That test looks to the risks and benefits of the product's allegedly defective design and the feasibility of safer alternative designs. The lower courts in this case, however, looked solely to whether the product (a common type of automobile seat) was unreasonably dangerous according to consumer expectations; this is a test found in the older Second Restatement that is still widely applied to manufacturing defects, but not to design defects.
Our brief noted that rigid seat designs create greater risks in some accidents, and that yielding seats are clearly superior and far safer in most rear end collisions. We argued that a jury should be directed to consider whether the benefits of the car's design outweigh the risk of damages, as well as the feasibility of possible alternative designs and their possible effects on the overall safety of the product. The risk-utility test is fair and reasonable in complex products design litigation, and while the consumer expectations test is arbitrary and completely unsuited for this type of case. Its use puts manufacturers in the untenable position of not being able to minimize harmful accidents without incurring tort liability in some cases.
On 10/17/08, the Illinois Supreme Court disagreed, holding that the risk-utility test is not the exclusive test under Illinois law to determine whether a product is designed in an unreasonably dangerous way. Such policies, it ruled, should be changed by the legislature, not the courts.
|
Norris v. Crane Co.
(California Supreme Court)
Causation and consumer expectation test in asbestos litigation
The NAM joined with 7 other business groups in an amicus letter 5/7/08 urging the California Supreme Court to review an appellate court ruling that (1) blamed the defendant company for 50% of the fault in an asbestos case where the plaintiff was only minimally exposed to the defendant's product, and (2) improperly applied a consumer expectation test to a product that the plaintiff knew little about. The lower court allowed a $2.15 million verdict by a plaintiff who was a passerby on a few occasions while work on the defendant's product was being done.
The court relied on the theory that "every exposure to asbestos fibers" was a substantial factor in causing the plaintiff's injury, despite evidence that exposure to asbestos from other products was much higher. Our letter brief argues that a particular exposure or series of exposures must be a substantial factor in bringing about an injury, to a reasonable degree of medical probability. De minimis or incidental exposure is not enough; instead, a court should assess the "length, frequency, proximity and intensity" of exposure. The California Supreme Court should review the case to clarify how this issue will be handled in product liability cases in that state.
The lower court also allowed the plaintiff to take advantage of the consumer expectations test, a legal principle that assesses liability if a consumer expects a product to perform a certain way but it doesn't. The NAM's amicus letter urges review of this ruling, pointing out that the test is difficult to apply, particularly with complex products, and tends to be unworkable for bystanders who do not have any expectations about product performance.
On June 25, the court declined to hear this appeal.
Related Documents: NAM amicus letter (May 7, 2008)
|
Rhode Island v. Lead Industries Ass'n, Inc.
(Rhode Island Supreme Court)
Public nuisance from lead pigment
Rhode Island sued and won a jury verdict against 3 former lead pigment manufacturers, ordering them to pay to remove lead paint from more than 300,000 homes in that state, at a cost estimated to be $2.4 billion. The suit, brought on a contingency basis by attorneys at Motley Rice, was premised on the claim that lead paint is a public nuisance. Lead paint has been banned in the United States since 1978, but poor maintenance of old walls in homes and apartments has led to elevated lead levels and associated health problems in children.
On January 30, the NAM and other business groups filed an amicus brief urging the Rhode Island Supreme Court to reverse the verdict because the trial court improperly rewrote the law of public nuisance. Our brief argued that public nuisance law should never be used to replace product liability law. Traditional standards of public nuisance law require that there be an injury to a common public right, that there must be some conduct by the defendants that created a public nuisance, and not merely injury, and that the defendants must have some control over the nuisance, both for imposing liability and for providing a remedy of abatement. The lower court also ignored the need to show proximate cause between a particular manufacturer's actions and an injury.
On July 1, 2008, the Rhode Island Supreme Court unanimously reversed the verdict. Creating new causes of action is a legislative function, and the danger from lead paint was created by landowners who allowed the paint to deteriorate, not by manufacturers who do not have control over proper maintenance in private homes. It ruled that claims against product manufacturers should be brought under product liability law, and concluded that "the state has not and cannot allege any set of facts to support its public nuisance claim." A proper public nuisance claim must allege interference with a public right, something different than an aggregate of private rights by a large number of people. It must also allege conduct of a quasi-criminal nature, and a defendant must have control over the nuisance "at the time the damage occurs."
Allowing this suit would have created unpredictable liability for manufacturers in situations where they have no control over the ultimate use and/or maintenance of their products, and would constitute regulation by litigation. The NAM has been very active in opposing the attempted expansion of the public nuisance theory of liability by plaintiffs' lawyers who are attempting to avoid the straightforward requirements of product liability law. Similar cases have been brought against manufacturers of firearms, cigarettes, automobiles, gasoline additives, chemicals and electricity. Many of these also have been rejected.
This decision, coming as it does in the midst of a variety of cases in which plaintiffs are trying to expand notions of public nuisance into product liability, will likely be a very important precedent for other state courts to emulate.
Related Documents: NAM brief (January 30, 2008)
|
Satterfield v. Breeding Insulation Co.
(Tennessee Supreme Court)
Liability for second-hand exposure to asbestos
This case is about second-hand exposure to asbestos under Tennessee law. The lower court ruled that a company has a duty to protect family members of employees against off-site exposure to asbestos, since such exposure is foreseeable.
There have been several recent cases involving this issue, and the NAM's amicus brief urges the Tennessee Supreme Court to join most of them in finding no duty by the company. The NAM joined six other organizations warning that expanding such a duty would lead to a new wave of asbestos litigation. The employer owes a duty of safety in the workplace, but not to distant third-parties whose potential claims are so remote.
On 9/9/08, the Tennessee Supreme Court ruled that, under Tennessee law, employers owed a duty to individuals who regularly over an extended period of time came into close contact with the asbestos-contaminated work clothes of its employees, to prevent them from being exposed to a foreseeable risk of harm. The court stated that this duty could extend to babysitters, carpool members, or domestic help, should they develop mesothelioma.
|
Snyder v. Superior Court
(California Supreme Court)
Validity of court procedures requiring plaintiffs to link defendant to alleged hazard
The NAM joined with 6 other organizations in support of a general court order in California that requires plaintiffs in asbestos cases to file basic information to support their claims about 8 months after a complaint is filed and allowing defendants to move to dismiss the case if the required report does not identify witnesses or documents linking the defendant to the plaintiff's exposure. Our brief in the court of appeals supported a trial court order as a sound approach to manage complex litigation, to facilitate pretrial resolution of evidentiary and other issues, and to minimize the time and expense of trials.
On 12/18/07, that court ruled that the general order conflicts with a state rule of civil procedure that prohibits the discovery of an attorney's "impressions, conclusions, opinions, or legal research or theories." It held that disclosing the witnesses, their expected testimony, and product identification documents intended to be relied on at trial depends on an attorney's impressions, conclusions and opinions and violates the work product doctrine encompassed by the rule. It overturned the lower court order and reinstated Caterpillar as a defendant in the case.
On January 25, 2008, the NAM filed a brief urging the California Supreme Court to hear this appeal. California's asbestos docket appears to be increasing, and out-of-state parties make up a large percentage of plaintiffs. We urged the court to take the case and recognize the validity of this trial court procedure, which does not interfere with attorney work product or disclose anything that won't have to be disclosed anyway at trial. The procedure helps prevent trial by ambush and coercive settlement power.
On April 9, the court declined to hear this appeal.
Related Documents: NAM brief (January 25, 2008)
|
Spiewak v. AC and S, Inc.
(Florida Court of Appeals)
Asbestos medical criteria law
The NAM and five other business groups filed a joint brief on 9/7/07 urging the Florida Court of Appeals to affirm a lower court decision that held Florida’s Asbestos and Silica Compensation Fairness Act to be constitutional. Enacted in June 2005 to preserve funds for individuals actually impaired by asbestos, this Act requires dismissal of claims by individuals who show no such impairment. As a result, claimants who cannot presently demonstrate impairment may only bring their cases after they develop a physical impairment that satisfies the minimum requirements of the law. We argued that this Act should be upheld as constitutional, as Florida’s Third District Court of Appeal concluded in DaimlerChrysler Corp. v. Hurst, another case in which we filed a brief.
Our brief described the asbestos litigation crisis that led Florida to change its law and the need for courts to dismiss cases where no injury has yet been found. We focused on mass filings by non-sick individuals threatening the truly sick, unreliable medical screenings, and the effect of these claims on solvency, peripheral defendants and the Florida economy.
In May, 2008, the court ruled that the Florida statute could not be applied retroactively to causes of action that have already accrued and that are in litigation. A cause of action is a property right that vests when it accrues to the plaintiff. The statute's requirement to prove an actual malignancy or physical impairment was rejected for those plaintiffs who could show only that they suffered an injury from an asbestos-related, non-malignant disease.
|
Williams v. American Optical Corp.
(Florida Court of Appeals)
Asbestos medical criteria law
The NAM and five other business groups filed a joint brief on 9/7/07 urging the Florida Court of Appeals to affirm a lower court decision that held Florida’s Asbestos and Silica Compensation Fairness Act to be constitutional. Enacted in June 2005 to preserve funds for individuals actually impaired by asbestos, this Act requires dismissal of claims by individuals who show no such impairment. As a result, claimants who cannot presently demonstrate impairment may only bring their cases after they develop a physical impairment that satisfies the minimum requirements of the law. We argued that this Act should be upheld as constitutional, as Florida’s Third District Court of Appeal concluded in DaimlerChrysler Corp. v. Hurst, another case in which we filed a brief.
Our brief described the asbestos litigation crisis that led Florida to change its law and the need for courts to dismiss cases where no injury has yet been found. We focused on mass filings by non-sick individuals threatening the truly sick, unreliable medical screenings, and the effect of these claims on solvency, peripheral defendants and the Florida economy.
Despite our best efforts, on 5/28/08, Florida’s Fourth District Court of Appeal reversed and remanded, holding that the Asbestos and Silica Compensation Fairness Act cannot be applied retroactively to defeat causes of action already accrued and in litigation. The court reasoned that applying the statute retroactively would adversely affect the vested rights of plaintiffs, since before the statute was enacted Florida law had recognized a cause of action for damages arising from the disease of asbestosis without any permanent impairment or the presence of cancer.
|
NLRB v. CNN America, Inc.
(D.C. Circuit)
Joint employer status
The NAM filed an amicus brief opposing an expansion of employer liability for companies that share control over certain employees. In this case, the National Labor Relations Board (NLRB) departed from precedent and imposed new “indirect” control factors into its analysis of CNN’s status as a joint employer, which could challenge traditional business relationships and expose manufacturers to additional liability. The NAM’s brief argued that the new control factors would create a standard that would impose significant burdens and uncertainties in business relationships. In a win for manufacturers, the court noted that the NLRB had not explained how CNN satisfied the traditional “direct and immediate” test for determining joint-employer status and remanded the case.
Related Documents: NAM amicus brief (February 2, 2016)
|
California v. Dillingham Construction, N.A. Inc.
(U.S. Supreme Court)
State apprenticeship law
The Employee Retirement Income Security Act of 1974 (ERISA) preempts any state law that "relate[s] to" a benefits plan covered by the Act. 29 U.S.C. Sec. 1002(1). In a host of cases beginning shortly after the enactment of ERISA, the Supreme Court construed this pre-emption provision expansively. Two years ago, however, in New York State Conference of Blue Cross and Blue Shield Plans v. Travelers Ins., 115 S. Ct. 1671 (1995), the Court appeared to rein in the preemption clause, suggesting that in areas of traditional state regulation the pre-emption clause applies only where its application would further the purposes of ERISA. In Dillingham, a unanimous court confirmed this change in direction.At issue in Dillingham was a California prevailing wage law. Under that law, state public contractors are required to pay their workers prevailing local wages unless those workers are enrolled in a state-approved apprenticeship program. Arguing that such apprenticeship programs are ERISA-covered benefits plans, a contractor asserted that the prevailing wage law "relate[s] to" ERISA-covered plans and is therefore pre-empted by the Act. The Ninth Circuit agreed, and in Dillingham the Supreme Court reversed. The Court began by noting that a law relates to a covered benefit plan under ERISA's pre-emption clause if it has a "connection with or a reference to such a plan." The Court then found that California's prevailing wage law does not make reference to an ERISA plan under the clause because the effect of the law is not limited to ERISA-covered benefit plans. Specifically, the prevailing wage law applies to apprenticeship plans funded out of an employer's general assets and therefore not subject to ERISA. The Court also found that the prevailing wage law lacks a sufficient connection with ERISA-covered plans to trigger pre-emption because the law simply provides employers with an economic incentive to obtain state approval for their apprenticeship plans. Relying on Travelers, the Court held that a law which only "alters the incentives, but does not dictate the choices, facing ERISA plans" is not sufficiently connected to an ERISA plan to trigger pre-emption. Consequently, as Justice Scalia observed in his concurrence, it appears that at least in areas of traditional state regulation pre-emption under ERISA will be no broader than in other areas of the law. The NAM filed an amicus brief opposing the ultimate result in this case.
|
Faragher v. City of Boca Raton
(U.S. Supreme Court)
Employer liability for sexually harassing acts of supervisor
When is an employer liable for the acts of supervisory employees in a hostile work environment sexual harassment claim? In a 7-2 decision on 6/26/98, the Supreme Court held that an employer may be held liable for discrimination caused by a supervisor, subject to an affirmative defense that would look to the reasonableness of the employer’s and the victim’s conduct.Plaintiff, a lifeguard employed by the City, sued her supervisors and the City for hostile work environment sexual harassment. The district court found for the plaintiff, holding the City liable because it had constructive knowledge of the harassment and because the supervisor was the City’s agent. In an en banc opinion, the Court of Appeals for the Eleventh Circuit reversed the district court's judgment for the plaintiff. The Supreme Court reversed the decision of the Court of Appeals, and ordered judgment for the lifeguard. Speaking through Justice Souter, the Court ruled that an employer is subject to vicarious liability for hostile work environment sexual harassment perpetrated by a supervisor. Where no tangible employment action has been taken, the employer may assert an affirmative defense consisting of two elements: (1) that the employer exercised reasonable care to prevent and promptly correct sexual harassment in the workplace, and (2) that the employee unreasonably failed to avoid the harm by taking advantage of preventive measures established by the employer. The employer may not avail itself of this defense where the supervisory harassment resulted in an adverse employment decision. The NAM filed an amicus brief 1/28/98 in support of Boca Raton, arguing that an employer should not be liable for a hostile workplace environment unless it should have known about or failed to respond reasonably to incidents of sexual harassment. The Court has now held that the employer may be held liable for the acts of a supervisor regardless of whether the employer should have known about them. The new affirmative defense for companies thus becomes crucial to defending these cases.
|
Associated Builders & Contractors v. Southern Nevada Water Authority
(Nevada Supreme Court)
Project labor agreements
The Nevada Supreme Court ruled 6/7/99 that a project labor agreement requirement in bid specifications for a reservoir project outside Las Vegas did not violate state competitive bidding law. The NAM filed an amicus brief supporting ABC's argument, since such agreements force companies to impose unwanted union agreements on their employees if they want to work on state public works projects. This reduces the number of companies that bid on government contracts, and raises costs to the state.
|
Associated Builders & Contractors v. Metropolitan Water District
(California Supreme Court)
Project labor agreements
The NAM supported this challenge to California project labor agreements for state construction projects. Project labor agreements promote favoritism and undermine competitive bidding laws to the detriment of taxpayers and non-union companies that want to bid on state government contracts. The appeal was dismissed and remanded on 11/20/99.
|
Connecticut Associated Builders & Contractors v. Anson
(Connecticut Supreme Court)
Project labor agreements
On November 4, 1999, the Connecticut Supreme Court affirmed a Superior Court ruling that greatly impairs the ability of injured parties to challenge unlawful government action in the competitive bidding process. The NAM had filed an amicus brief on February 11, 1999, urging the court to reverse the holding.Both the State Department of Public Works and the City of Hartford imposed new bid specifications on public works projects that would require all successful bidders to sign a labor agreement with a designated union as a condition of performing work on the projects. The Superior Court dismissed challenges filed by general contractors, subcontractors, and an association of contractors who have been deterred from bidding by the union-only requirements. The Superior Court held that notwithstanding the injury suffered by the plaintiffs as a result of the alleged unlawful favoritism in the competitive bid process, they have no standing to sue. The NAM believes that government agencies should not dictate the labor relations of contractors as a condition of awarding government contracts under competitive bidding laws.
|
In re Vizcaino
(9th Circuit)
Temporary leased employees
The NAM on 6/2/99 urged the Ninth Circuit to rehear a panel decision calling temporary leased workers "employees" for purposes of eligibility for Microsoft’s stock option plan. The panel decision allows a dual employer situation, potentially allowing duplicative benefits and creating confusion and disrupting temporary staffing services, especially in high tech industries. On June 24, the Ninth Circuit rejected the appeal and sent the case back for further proceedings.
|
Murphy v. United Parcel Service, Inc.
(U.S. Supreme Court)
Disabilities under ADA
On March 24, 1999, the NAM filed an amicus brief urging the Supreme Court to maintain the fair standards of the ADA and to prevent the expansion of the term "disabled" to cover individuals with controllable medical conditions. The NAM argued that employees may not claim the special protections of the ADA when their medication allows them to live normal lives.In this case, Murphy has had high blood pressure most of his life but medication controls his condition. In August 1994, Murphy applied for a position as a mechanic for UPS. All mechanic applicants must obtain a Department of Transportation health card. At the time of his medical exam, Murphy's blood pressure met the DOT standards. He was issued a health card, and UPS hired him. In September 1994, a company nurse reviewed his file and determined that his blood pressure did not meet DOT requirements for commercial drivers. UPS decided that the card was issued in error and Murphy was fired. The trial court ruled in favor of UPS, holding that Murphy is not an individual with a disability. The court stated that the determination of whether an individual's impairment substantially limits a major life activity should take into consideration mitigating or corrective measures utilized by the individual. The Tenth Circuit affirmed, and so did the Supreme Court. On 6/22/99, it held that the determination of whether a person with a physical or mental impairment is "disabled" under the Americans with Disabilities Act (ADA) must be made with reference to measures — such as medication, medical devices, or assistive devices — that mitigate the person’s impairment. The Court also held that a person is "regarded as" disabled under the ADA only if the employer mistakenly believes that the person’s actual, nonlimiting impairment substantially limits one or more major life activities. Therefore, ADA plaintiffs who claim that an employer regards them as substantially limited in the major life activity of working must, at a minimum, allege an inability to work in a broad class of jobs. The Court’s decision is a tremendous victory for employers facing the specter of ADA liability.
|
TNS, Inc. v. Oil, Chemical and Atomic Workers International Union
(NLRB)
Recusal
The NAM urged that NLRB Chairman Gould be recused from participating in this case because of his public pronouncements in opposition to legal precedents permitting employers to hire permanent replacements for economic strikers. A decision in this case on 9/30/99 made the recusal motion moot, since Chairman Gould was no longer on the Board
|
Wright v. Universal Maritime Service Corp.
(U.S. Supreme Court)
Arbitration not required before litigation of ADA claims
This case involves the enforcement of the ADA. The Supreme Court ruled 11/16/98 that an arbitration provision in a collective bargaining agreement does not require employees to arbitrate claims arising under federal anti-discrimination statutes where the arbitration provision does not clearly and unmistakably waive the employees' right to litigate such claims in federal court.
In this case, Wright sued his employer under the ADA in federal district court. The employer successfully moved to dismiss the case on the grounds that Wright had failed to exhaust his remedies (arbitration) under the collective bargaining agreement. However, the Supreme Court held that Wright was not required to arbitrate his ADA claim, because the collective bargaining agreement did not clearly require arbitration of claims arising under federal anti-discrimination statutes. The Court further noted that even a sufficiently clear waiver might not be enforceable, but declined to resolve that issue.
NAM Comment: The NAM filed an amicus brief on June 29, 1998, supporting Universal Maritime. We argued that arbitration is a well-established, vital aspect of a broad range of legal relationships, and that arbitration provisions in collective bargaining agreements should be enforced. While this decision is a temporary setback for having these issues resolved through arbitration, companies can include more express language in collective bargaining agreements that clearly encompass the resolution of statutory claims, and we will await another Supreme Court case to resolve whether such provisions will be enforced by the courts.
|
Gemini, Inc. v. Thorson
(8th Circuit)
FMLA coverage
The NAM’s amicus brief failed to convince the Eighth Circuit to reject a Department of Labor regulation that allows the common cold, flu and other minor ailments to qualify as "serious health condition[s]" under the Family & Medical Leave Act. Case decided on 3/3/00.
|
Local 702, IBEW v. NLRB
(D.C. Circuit)
Company lockout of union engaged in inside-game tactics
On 10/15/99, the NAM filed a brief supporting the NLRB’s decision allowing a company to lock out employees who engage in inside-game tactics. The D.C. Circuit ruled 5/9/00 to uphold the company’s lockout.Union employees use "inside game" tactics to win bargaining-table concessions, slowing down the work pace, refusing to work overtime, asking for minute instructions from supervisors, filing mass charges with government agencies, calling in sick, or otherwise impeding or disrupting operations without actually going on strike. By taking the strike inside, union employees continue to be paid. The company in this case faced this situation and locked them out. The U.S. Court of Appeals for the D.C. Circuit affirmed an NLRB decision in favor of the company, Central Illinois Public Service Co. (CIPSCO). The court and the Board allow companies to lock out such employees, as a legitimate countervailing economic weapon. According to the court, lockouts are not "inherently destructive of employee rights," and the employer had a "legitimate and substantial business justification" for the lockout. A lockout is a reasonable tool to help bring about a resolution of collective bargaining negotiations, and there was no evidence of anti-union animus on the part of the employer.
|
UAW v. Chelsea Inds., Inc.
(NLRB)
Withdrawal of recognition of union
The NAM joined the U.S. Chamber of Commerce in filing a brief 5/18/98 opposing an NLRB proposal that would require elections whenever employees want to decertify their union as their authorized collective bargaining representative. In Chelsea, the Board ruled that an employer may not rely on signatures from a majority of workers to decertify a union, if the signatures were received during the first year of the union's representation of the employees. In Levitz, the Board ruled that an employer may not withdraw recognition from a union unless the union "has actually lost the support of the majority of the bargaining unit employees." It also ruled that an employer needs uncertainty, but not disbelief, as to a union's continuing majority status in order to seek a Board-conducted election by its employees. Also filed under as UFCW v. Levitz Furniture Co.
|
UFCWU v. Levitz Furniture Co.
(NLRB)
Withdrawal of recognition of union
The NAM joined the U.S. Chamber of Commerce in filing a brief 5/18/98 opposing an NLRB proposal that would require elections whenever employees want to decertify their union as their authorized collective bargaining representative. In Chelsea, the Board ruled that an employer may not rely on signatures from a majority of workers to decertify a union, if the signatures were received during the first year of the union's representation of the employees. In Levitz, the Board ruled that an employer may not withdraw recognition from a union unless the union "has actually lost the support of the majority of the bargaining unit employees." It also ruled that an employer needs uncertainty, but not disbelief, as to a union's continuing majority status in order to seek a Board-conducted election by its employees.
|
United States Bakery, Inc. v. Schneider
(U.S. Supreme Court)
Preemption of state overtime claim
This case involves federal preemption of claims by union employees that they are entitled to overtime pay under state law for work they did under a collective bargaining agreement. The NAM filed an amicus brief 3/1/2000 urging the court to reverse a Washington Supreme Court decision that would allow a class action, worth at least $40 million in this case, to proceed on the theory that baker-salespersons are not "outside salespersons" under state law. The NAM’s brief cites federal precedent that local claims involving the interpretation of collective bargaining agreements are preempted. The Supreme Court declined to review the case.
The case has implications for any unionized company with an agreement that defines, either explicitly or implicitly, certain employees as exempt or not exempt from the overtime laws. Preemption applies whenever the remedies sought, such as overtime pay, depend on or are inextricably intertwined with an interpretation of the provisions of the collective bargaining agreement.
If a company and a union agree to classify certain employees as salespersons, union employees should not be able to enjoy the benefits of the contract, then sue later, claiming they didn't like the contract.
|
Epilepsy Foundation v. NLRB
(D.C. Circuit)
Investigatory interviews
On 11/2/01, the D.C. Circuit ruled that the NLRB acts legally when it requires that employees in non-union workplaces be given the right to have a co-worker or other individual with them during an investigatory interview by an employer. Section 7 of the National Labor Relations Act protects the right of an employee to engage in concerted activities for the purpose of mutual aid or protection, and having a co-worker present during an investigatory interview is justifiable to ensure that the employer "does not initiate or continue a practice of imposing punishment unjustly." However, the court refused to apply the NLRB's revised interpretation retroactively in this case. It will be applied in future cases.The NAM and other groups filed an amicus brief on 5/15/01 objecting to the extension of so-called Weingarten rights of union employees to non-union workers, arguing that an individual non-union employee's representative does not represent the interests of the entire workplace.
|
The Park Associates, Inc. v. NLRB
(D.C. Circuit)
Successorship bargaining issues
The NAM joined in an amicus brief urging the D.C. Circuit to reverse a recent 2 to 1 NLRB ruling. The ruling required the new owner of a company to bargain with the union that represented the employees of the company before it was sold, in spite of the fact that a majority of the employees signed a petition to decertify the union as their representative. The decision undermines employee freedom of choice, forcing upon them an artificial and unwanted relationship which could give rise to industrial strife and tension. The NAM, joining with the Master Printers of America, the Center on National Labor Policy, Inc., and Associated Builders and Contractors, Inc., argues that the National Labor Relations Act gives an employer the right not to recognize a union when it has a good faith doubt that the union represents a majority of its employees.
|
Chevron U.S.A., Inc. v. Echazabal
(U.S. Supreme Court)
ADA coverage for conditions affected by certain work
The Supreme Court ruled 9-0 on 6/10/02 to uphold an EEOC regulation permitting an employer to defend against an ADA claim by showing that the worker’s disability on the job would prose a direct threat to his, rather than a co-worker’s, health. This means that an individual with a disability cannot use the ADA to require an employer to provide a reasonable accommodation to work in a location that may be hazardous to him. Instead, the employer can refuse to put the person in harm’s way.Two points are clear from the Court’s ruling. First, the EEOC has the authority to fill in gaps that Congress left in the statute when the ADA was passed. In this case, the EEOC properly interpreted a broadly worded employer defense to include situations that are hazardous to the affected employee himself. Second, the Court recognized that employers are in a very difficult position when trying to comply with the employee accommodation requirements of the ADA and the safety and health requirements of the Occupational Safety and Health Act (OSH Act). It found that the EEOC could reasonably resolve this conflict by refusing to hold the employer liable for acting to protect employees from hazards that the employees themselves are willing to risk. This decision is an important victory for all companies subject to the ADA. It gives employers a path with some breathing room between government demands for maximum workplace safety and competing demands by employees who are willing to risk their lives on jobs that others can do more safely. It highlights a fundamental question that will continue to cause conflict. To what degree are we willing to sacrifice an individual’s need for a job to prevent injuries to that person in the workplace? This will not open the floodgates for companies to refuse to hire individuals based on broad types of conditions. Companies must make individual determinations in each case to conclude that a particular workplace is not suitable for a particular employee’s condition. They must consider reasonable medical judgments based on “the most current medical assessment of the individual’s present ability to safely perform the essential functions of the job," and must consider "the imminence of the risk and the severity of the harm portended." Thus, there will continue to be cases where these choices are evaluated by the courts.
|
Mulder v. NLRB
(U.S. Supreme Court)
Using compulsory union dues for organizing another company
The NAM and Associated Builders & Contractors filed an amicus brief supporting a petition for cert. in this case involving union dues. We argue that employees may not be required to pay portion of union dues for organizing a competitor’s business, since such expenditures by unions are not germane to collective bargaining and violate prohibitions in the 1988 Beck case.
|
Tamko Roofing Products v. United Steelworkers
(U.S. Supreme Court)
Arbitration
The NAM filed an amicus brief urging the Supreme Court to review an 11th Circuit ruling that allowed a labor arbitrator to reinstate an employee who had been fired for racially harassing a third-party worker. The arbitrator ruled that since there was no written policy prohibiting racial harassment of outsiders, an employee could not be fired for doing so. This decision undermines an employer's ability to comply with antidiscrimination laws.
Our brief argued that the case involves situations where collective bargaining agreements are in effect. Employers needs to be able to root out racial harassment, and arbitrators should respect not only the at-will employment doctrine but also the business judgment rule. Employment policies need not memorialize in writing every conceivable standard of behavior, including compliance with the thousands of laws and regulations that apply to personal behavior of employees. Unfortunately, the Court on 2/19/02 declined to hear the appeal.
|
TNS, Inc. v. NLRB
(6th Circuit)
Walk-offs in hazardous conditions
The NAM filed an amicus brief 6/13/00 asking a federal appeals court to overturn an NLRB decision that allows employees to walk off the job anytime they may feel they're being exposed to dangerous working conditions--without regard to factual evidence.The court was to decide two key issues: 1) who decides what are abnormally dangerous working conditions; and 2) if employees walk off, can the company hire permanent replacements? The NAM argued that there must in fact be "abnormally dangerous" workplace conditions before employees may walk out. Federal, state and local safety and health agencies that monitor workplace conditions--not the NLRB--should make that decision. On 7/10/02, the court upheld the NLRB's legal rulings but vacated on factual grounds and because the case was not resolved in a reasonable time.
|
Toyota Motor Manufacturing, Kentucky, Inc. v. Williams
(U.S. Supreme Court)
Scope of ADA coverage
The Supreme Court unanimously ruled on 1/8/02 that an individual cannot establish the existence of a disability under the Americans with Disabilities Act by simply showing that she is restricted from performing certain elements of a single job.
The plaintiff in this case had carpal tunnel syndrome and tendinitis, and the lower court had found that Williams could be considered disabled due to her inability to perform certain manual tasks associated with her job. On appeal, the Supreme Court ruled that the inability to perform a single job - or, as here, elements of a single job - cannot be the basis for finding a disability. Rather, there must be "an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The impairment's impact must also be permanent or long-term."
Moreover, the Court said that an individual can't prove a disability merely by submitting evidence of a medical diagnosis of an impairment. Instead, there must be evidence that the limitation caused by their impairment in terms of their own experience is substantial. Each person must show that central activities in his or her daily life are severely restricted.
On March 5, the NAM filed an amicus brief in the Supreme Court supporting Toyota’s petition to review this case. The brief, written by Peter Susser and Joseph Schuler at Littler Mendelson, highlights the erroneous result and the serious consequences for manufacturers if it is allowed to stand. The petition for cert. was granted, and the NAM filed a brief on the merits on 6/28/01, along with the Equal Employment Advisory Council.
|
Washington Employers Concerned About Regulating Ergonomics v. Washington Dept. of Labor and Industries
(Thurston County Superior Court)
Ergonomics regulation challenge
The NAM has joined with WE CARE, a broad-based coalition of 230 private and public employers and other organizations, to sue the State of Washington over its new ergonomics standards, which are to become effective July 1, 2002. The suit charges that the rule requires "unnecessary, scientifically unsupported and economically irrational modifications" to the workplace, and that the state's actions are unauthorized, procedurally defective and arbitrary and capricious. The suit asks that the rule be declared invalid.Ruling from the bench, the judge threw out a large business coalition suit, including the Association of Washington Business and the NAM, that challenged Washington State's new ergonomics regulation. The court rejected challenges involving cost/benefit analysis, timeliness, statutory authority, the validity of the evidence supporting the rule, and the sufficiency of the implementation plan.
|
State ex rel. Diehl v. O'Malley
(Missouri Supreme Court)
Jury trial in employment discrimination case
The NAM filed a joint amicus brief with Associated Industries of Missouri, the Greater Kansas City Chamber of Commerce, the Missouri Bankers Association, and the Missouri Chamber of Commerce and Industry urging the Missouri Supreme Court to affirm ruling that state’s Human Rights Act on employment discrimination provides trial by judge, not by jury. We argued that the Act is clear on its face, and is supported by legislative history and the Missouri Constitution. Allowing jury trials in such cases would burden small manufacturers, clog the courts and lead to venue shopping.On 1/28/03, the Missouri court held there is a right to trial by jury for money damages.
|
Washington Employers Concerned About Regulating Ergonomics v. Washington Dept. of Labor and Industries
(Washington State Supreme Court)
Ergonomics regulation
The NAM joined with hundreds of companies and other associations in a brief 11/13/02 on the appeal of an adverse ruling in a case where the business community challenged the validity of Washington's new ergonomics regulation. The brief argues in part that the issuance of the rule violated the Regulatory Reform Act of 1995 by not having a cost-benefit analysis prior to adoption, that the eventual cost-benefit analysis was poor, and that the Department exceeded its statutory authority in attempting to regulate simple physical activity in the workplace.On 11/4/03, Washington voters approved the ballot initiative rescinding the Washington State ergonomics rule. The initiative would also bar the state from adopting another ergonomics rule unless a federal standard is put in place. The overreaching ergo regulation would have required all employers (private and public) to identify jobs likely to cause "work-related musculoskeletal disorders." Employers then would have been required to do whatever was "technologically or economically feasible" to eliminate ergonomic hazards. This state regulation was as bad as the old Clinton federal ergonomics regulation.
A big congratulations to the Washington State business community--especially the NAM ’s state affiliate, The Association of Washington Business-- for its part in rescinding the regulation. This is a very big victory for all of the business community especially manufacturers. It is also a substantial loss for the unions because future adoption of comprehensive, but misguided, ergonomics rules at the state level will be even more difficult.
|
Cavin v. Honda of America, Inc.
(6th Circuit)
FMLA notice requirements
The NAM and the Equal Employment Advisory Council filed an amicus brief 10/23/03 supporting Honda's petition to rehear a Sixth Circuit decision that restricts that company from adopting formal reporting requirements for employees that want to avail themselves of time off under the Family and Medical Leave Act (FMLA). We argue that the court should reassess a 3-judge panel's ruling that allowed an FMLA suit to proceed. The court ruled that Honda's procedures were too strict and that it was sufficient that the employee gave "timely verbal or other notice" that he was going to miss work for reasons that satisfy the requirements for FMLA leave. We argue that companies are allowed to enforce reasonable notice procedures, that written notices need only be waived for medical emergencies, that restricted compliance requirements will discourage more generous leave benefits, and that other circuit courts are in conflict with the Sixth Circuit. Review denied 2/04.
|
IBEW, Wal-Mart Stores, Inc. & IBM Corp.
(NLRB)
Right to have representative in investigatory interview of non-union employee
IBEW, Wal-Mart Stores, Inc. & IBM Corp. The NAM and other business groups urged the NLRB to reinstitute its position prior to the Epilepsy Foundation case (2000) that non-union employees do not have statutory right to have a third-party representative with them during an investigatory interview by their employer. On 6/15/04, the NLRB agreed. Because employers are subject to increasing legal obligations regarding employment discrimination, financial fraud and heightened security concerns, the Board found sufficient justification for adopting a policy that gives greater weight to the employer's right to conduct investigations than to an employee's right to have a co-worker present during a confidential interview. We were concerned that third party presence in such investigations will hinder getting at the truth and maintaining confidentiality. Employers are under substantial legal and moral pressure to fully and adequately address sexual or racial discrimination, financial malfeasance, simple theft or violence, job-impairing drug use, or terrorism and other homeland security issues. The NAM joined with the EEAC, Associated Builders & Contractors, the U.S. Chamber of Commerce, the Society for Human Resource Management and the International Mass Retail Association in the amicus brief in this case.
|
In re California Assembly Bill 1889
(NLRB)
Seeking injunction against state contractor labor relations restraints
The NAM and 4 other business groups 6/28/02 urged the NLRB to sue California to enjoin the enforcement of that state’s Assembly Bill 1889, which is now law and is being enforced. We feel strongly that the National Labor Relations Act preempts the law, which pervasively regulates the labor relations activities of private sector recipients of state funds, lessors of state property, and anyone else doing business with California. It prohibits employers from using state funds and state property for a wide variety of otherwise legitimate labor relations activities, while allowing union-friendly activities such as recognizing a union without a secret ballot representation election. Before the NLRB could act, a federal court enjoined the provisions at issue. The 9th Circuit affirmed on 4/2/04 in a case captioned Chamber of Commerce v. Lockyear.
|
IBP, Inc. v. Alvarez
(U.S. Supreme Court)
Pay for changing clothes
The Supreme Court 11/8/05 held that under the Fair Labor Standards Act (“FLSA”) and Portal-to-Portal Act, employers must compensate their employees for pre- and post-shift time spent donning or doffing employer-required clothing or equipment and time spent walking between such clothing and equipment stations and the employees’ work areas; compensation for time spent waiting at clothing and equipment stations is not required, however. Regulations promulgated under the Portal-to-Portal Act adopted the “continuous workday rule,” which provides that an employee’s compensable “workday” includes all time from commencement to completion of the employee’s “principal activity or activities.” The Portal-to-Portal Act nevertheless excepts from the FLSA’s coverage time spent on activities “preliminary or postliminary” to the employee’s principal activity. Justice Stevens, writing for a unanimous Court, reiterated the Court’s earlier holding that donning or doffing required equipment constitutes an “integral and indispensable part of the [employee’s] principal activities” and therefore is a compensable part of the workday. Moreover, under the continuous workday rule, time then spent walking between the clothing or equipment station and the employee’s work area also necessarily constitutes part of the compensable workday. Time spent simply waiting to don the first piece of clothing or equipment does not qualify as an “integral or indispensable part of the principal activity,” however, and therefore is not required to be compensated. The decision in these consolidated cases is important to any business whose employees must pick up and/or wear certain clothing or equipment in order to perform their jobs.The NAM, the American Chicken Council and the American Meat Institute filed an amicus brief urging the Supreme Court to review the IBP case. On 8/1/05, the NAM joined with the U.S. Chamber of Commerce, the Society for Human Resources Management and the Association of International Automobile Manufacturers in a brief on the merits. See also Case #04-66, Tum v. Barber Foods.
|
Tum v. Barber Foods, Inc.
(U.S. Supreme Court)
Pay for changing clothes
The Supreme Court 11/8/05 held that under the Fair Labor Standards Act (“FLSA”) and Portal-to-Portal Act, employers must compensate their employees for pre- and post-shift time spent donning or doffing employer-required clothing or equipment and time spent walking between such clothing and equipment stations and the employees’ work areas; compensation for time spent waiting at clothing and equipment stations is not required, however. Regulations promulgated under the Portal-to-Portal Act adopted the “continuous workday rule,” which provides that an employee’s compensable “workday” includes all time from commencement to completion of the employee’s “principal activity or activities.” The Portal-to-Portal Act nevertheless excepts from the FLSA’s coverage time spent on activities “preliminary or postliminary” to the employee’s principal activity. Justice Stevens, writing for a unanimous Court, reiterated the Court’s earlier holding that donning or doffing required equipment constitutes an “integral and indispensable part of the [employee’s] principal activities” and therefore is a compensable part of the workday. Moreover, under the continuous workday rule, time then spent walking between the clothing or equipment station and the employee’s work area also necessarily constitutes part of the compensable workday. Time spent simply waiting to don the first piece of clothing or equipment does not qualify as an “integral or indispensable part of the principal activity,” however, and therefore is not required to be compensated. The decision in these consolidated cases is important to any business whose employees must pick up and/or wear certain clothing or equipment in order to perform their jobs.The NAM, the American Chicken Council and the American Meat Institute filed an amicus brief urging the Supreme Court to review the IBP case. On 8/1/05, the NAM joined with the U.S. Chamber of Commerce, the Society for Human Resources Management and the Association of International Automobile Manufacturers in a brief on the merits. See also Case #03-1238, IBP v. Alvarez
|
Olivo v. ExxonMobil Corp.
(New Jersey Supreme Court)
Liability for second-hand exposure
The NAM joined with six other groups in an amicus brief 12/12/05 urging the New Jersey Supreme Court to reject a theory of liability that would hold a company liable for second-hand exposure to a hazard in the workplace. The court, however, ruled 4/24/06 that the company owed a duty to protect against foreseeable harm to an employee’s wife (who laundered his work clothes). The court sent the case back for further proceedings on the extent of the duty owed to the worker and whether the company had satisfied the duty. It also left open the possibility that the company could be exonerated if the hazard-incident-to-work exception applies.The wife of a contractor allegedly was harmed by asbestos brought home by her husband from work. Her husband worked as a union pipe welder at over fifty worksites during his 37-year career, sometimes being exposed to asbestos insulation and carrying it home on his clothing. Sixteen years after his retirement, she was diagnosed with mesothelioma. Her husband sued 30 companies over her illness.
Whether a landowner or employer is liable to third parties for second-hand exposure to hazardous substances brought home from work is an aggressive new position that plaintiffs are pressing in the courts. Two state courts have recently refused to create this new liability. Our brief highlighted the fact that liability to remote parties is a policy issue for the legislature, and that extending it in a case like this is not appropriate because of difficult questions relating to causation, control and limitless liability.
|
Sereboff v. Mid Atlantic Medical Services, Inc.
(U.S. Supreme Court)
Recovering health care expenses advanced to employees
The Supreme Court held 5/15/06 that section 502(a)(3) of ERISA, 29 U.S.C. § 1132(a)(3), authorizes an action by a plan fiduciary against a beneficiary to recover specifically identified funds where the beneficiary has recovered for its injuries from a third party. According to the terms of the ERISA plan administered by Respondent, Mid Atlantic Medical Services, a plan beneficiary is required to reimburse Mid Atlantic for benefits paid by the plan if the beneficiary subsequently recovers from a third-party tortfeasor, as Petitioners, the Sereboffs, did. After Mid Atlantic had claimed a lien on the expected proceeds from the Sereboffs’ tort suit, it brought an action under section 502(a)(3) of ERISA to recover approximately $75,000 in medical expenses that it had paid on the Sereboffs’ behalf. The district court approved a stipulation by the parties creating a separate account to segregate the amount sought by Mid Atlantic from the remainder of the Sereboffs’ recovery. Rejecting the Sereboffs’ argument that Mid Atlantic’s claim was really a legal claim for damages, the Supreme Court held that Mid Atlantic’s claim was “equitable” within the meaning of section 502(a)(3) because Mid Atlantic “sought its recovery through a constructive trust or equitable lien on a specifically identified trust, not from the Sereboffs’ assets generally.” In so holding, the Court relied on precedent “from the days of the divided bench” to determine “those categories of relief that were typically available in equity.” This decision is important to any business that maintains an ERISA plan.Decision Below: 407 F.3d 212 (4th Cir. 2005)
|
Dana Corp. and Metaldyne Corp.
(NLRB)
Secret ballot elections regarding union representation
The NAM and 18 other associations filed a brief at the National Labor Relations Board urging the Board to allow secret ballot elections when there is doubt about whether the employees actually authorized a union to represent them. The cases arose where the companies had agreed to neutrality agreements with the UAW, whereby the companies would not communicate information to employees, or lawfully express views, arguments and opinions which the union perceived as critical of the union. The union then obtained signatures from a majority of the employees authorizing them to represent the employees, but the validity of that majority was subsequently challenged. This neutrality agreement/card-check procedure has proven significantly more effective for union organizing than other methods.
The NAM argued that in this situation the NLRB's procedures should allow for a secret ballot to accurately and definitively determine whether the union enjoys majority support, rather than require employees to have to wait until a contract is negotiated and run its course before being allowed to have an election. The NAM joined with Associated Builders and Contractors, the National Restaurant Association, Printing Industries of America, the Society of Human Resource Managers, and 14 NAM-member employer association groups around the country in the brief.
On Sept. 29, 2007, the NLRB agreed by a vote of 3 to 2. It ruled that employees must have 45 days after their employer recognizes a union based on card-check authorizations to file a petition to decertify the union or to support an election petition from another union. The Board underscored the preferred method of having a secret election to determine the majority status of a union. The majority found that card-check procedures are much less reliable as indicators of employee free choice on union representation than secret elections. To have an election, an employee petition must be supported by 30% or more of the unit employees eligible to vote. The new rule will be applied prospectively only, so the decertification petitions involving the two companies in this case were dismissed.
|
Taylor v. Progress Energy, Inc.
(4th Circuit)
Release of FMLA claims
The NAM filed a motion 8/3/05 to join in an industry amicus brief in this case involving an employee’s voluntary release of rights under the Family and Medical Leave Act (FMLA). The plaintiff was paid more than $12,000 as part of an enhanced severance benefits package during a reduction in force, in return for a release of all legal claims relating to her employment. She then sued, claiming the release was ineffective for FMLA claims. A 3-judge panel of the U.S. Court of Appeals for the Fourth Circuit interpreted a Department of Labor (DOL) regulation as requiring DOL or court approval for all waivers, and the employer sought rehearing on this issue by the full court.The industry brief, filed by the Equal Employment Advisory Council, the U.S. Chamber of Commerce, and the Society for Human Resource Management, argued that employees should be able to voluntarily release claims they may have against their employer under the FMLA without having that release approved by the Department of Labor or a court. The DOL regulation should be declared invalid if it requires supervision of releases. Another court, the 5th Circuit, has ruled that the regulation only applies to releases of future FMLA claims, but the 4th Circuit has created a difficult conflict that threatens to make it virtually impossible for employers to obtain an enforceable general release without litigation, since DOL lacks any vehicle for supervising the hundreds of thousands of releases signed every year. The NAM needed to file a motion to join the brief because of an unusual Fourth Circuit rule that requires trade associations to disclose their membership lists to the court. To protect the confidentiality of our membership list, we moved to waive the rule and join the brief, but the motion was denied 8/9/05.
The court decided to rehear this case, but affirmed its first ruling on 7/3/07.
|
Arizona Contractors Ass'n. v. Napolitano
(U.S. District Court for Arizona)
Exclusive federal jurisdiction over immigration
The NAM is part of a coalition of business entities that filed a joint brief on 9/14/07, urging a federal district court to declare that an Arizona immigration law is preempted by federal law.
Passed in July, Arizona’s House Bill 2779 requires employers to use a voluntary federal government-administered electronic verification system, commonly known as the “Basic Pilot,” to verify work eligibility of all employees. Our brief argued that federal immigration law preempted the new Arizona law, because the state law conflicted with federal law and with congressional intent. Deference to Congress, which has plenary authority in this field, is essential to ensuring a consistent national immigration policy and avoiding local policies that frustrate Congress’ objectives. Additionally, state immigration laws impose inconsistent requirements on and create substantial confusion for employers who conduct business in multiple jurisdictions, with conflicting state laws occasionally making it impossible for employers to comply with all of the laws simultaneously.
In addition to Arizona, Arkansas, Colorado, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Nebraska, Nevada, New Hampshire. Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, and West Virginia all have passed legislation addressing the general issue of immigration control at the worksite, but with each state enacting its own unique requirements.
On February 7, 2008, the district court upheld the Legal Arizona Workers Act, holding that its licensing sanctions did not make employers "conform to a stricter standard of conduct than federal law." The court also held that the Act provided employers with procedural due process for their claims to be heard.
|
Illinois Bell Tel. Co. v. IBEW, Local 21
(U.S. Supreme Court)
Whether recognition clause justifies arbitration of disputes not specified in collective bargaining agreement
This case arises from a dispute between AT&T's subsidiary, Illinois Bell Telephone Co., and its union, the IBEW, which sought to compel arbitration concerning new "performance guidelines" the company implemented for sales staff. The applicable collective bargaining agreement limits arbitration to matters involving the interpretation and application of the agreement's terms or provisions, and it says nothing about the arbitrability of performance guidelines. The Seventh Circuit nevertheless ruled that the guidelines were arbitrable, basing its decision solely on the fact that the agreement contained a recognition clause, i.e., standard language found in virtually every labor agreement in the country which says that the union is recognized as the exclusive bargaining agent for the defined bargaining unit of employees.
The NAM joined with the Council on Labor Law Equality to support Illinois Bell's appeal of this case to the Supreme Court. We urged the Court to take the case, arguing that the lower court's decision converts virtually any company action that is contrary to a union's interests into a violation of a boilerplate recognition clause. Arbitration should only be required where the parties have agreed to it, and courts should decide whether the parties have done so.
On March 17, the Court refused to hear this appeal. This precedent improperly introduces a judicially imposed form of 'interest arbitration' over a limitless set of issues arising under labor agreements that do not authorize such arbitration.
Related Documents: NAM brief (January 2, 2008)
|
Noe v. PolyOne Corp.
(6th Circuit)
Lifetime vesting of retiree health care benefits
The NAM and 4 other organizations filed an amicus brief 4/9 urging all the judges on the U.S. Court of Appeals for the Sixth Circuit to review a ruling by three of their members that threatens to impose huge health care liabilities on manufacturers. At issue is whether a union contract implies lifetime health care for retirees if the contract does not specify that health benefits are provided for the length of the contract only. We argue that in the non-union context, courts do not presume that retiree health care benefits are vested for life without a clear intent by the employer to do so, and there is no reason to apply a different presumption in the union context.
The Sixth Circuit is the only federal appeals court to cling to the so-called Yard-Man inference that retiree health benefits vest. This conflicts with the goal of federal labor policy to provide some degree of uniformity around the country, and encourages lawsuits in the Sixth Circuit.
The petition for rehearing was denied on June 2, 2008.
Related Documents: NAM Brief (April 9, 2008)
|
Thompson v. North American Stainless, LP
(6th Circuit)
Whether Title VII covers third-party retaliation claims
Title VII of the Civil Rights Act of 1964 protects employees from retaliation by their employers after complaining about discrimination in the workplace. This case involves not the employee who complained, but her fiance, who was terminated from his job. He claimed the termination was in retaliation for his fiancee's complaint, while the company cites performance-related problems. The company also argued that the plain language of the statute provides claims only to those who make a charge or otherwise participate in an investigation, proceeding or hearing.
A 3-judge panel of the Sixth Circuit ruled that a fiance or other person that is closely related or associated with those who are directly involved in protected activity may sue if there is a "causal connection between the protected activity and adverse employment action." The trial judge had ruled that the plaintiff had presented no evidence that he had participated in any protected activity.
The NAM filed an amicus brief urging the full complement of Sixth Circuit judges to uphold the trial judge, arguing that the statute is clear on its face and already protects those who "oppose discriminatory employment practices" or "participate" in equal employment proceedings. A rule that permits third-party retaliation claims would increase even more dramatically retaliation charges, which are the fastest-growing category of charges filed under Title VII, and would put employers in the untenable position of having to speculate about possible relationships an employee may have that could give rise to potential liability each time they contemplate disciplinary or other action against that employee.
This case presents a clear example of judges reading statutes in a way to achieve a policy objective rather than to enforce the text as written. A strong dissent by one judge in this case warns against legislating from the bench.
On June 5, 2009, the full Sixth Circuit ruled that "the authorized class of claimants [in third-party retaliation cases] is limited to persons who have personally engaged in protected activity by opposing a practice, making a charge, or assisting or participating in an investigation." The majority affirmed dismissal of the case against the company, finding the language in the anti-retaliation provision plain on its face. Congress did not provide a cause of action by those who do not personally oppose an unlawful employment practice, make a charge, testify, assist or participate in an investigation. The text of the statute should not be disregarded in favor of arguable public policy preferences.
The Supreme Court agreed on 6/29/2010 to hear this case on appeal.
Related Documents: NAM Brief (October 10, 2008)
|
Baker v. American Horticulture Supply, Inc.
(California Supreme Court)
Interpreting California's Independent Wholesale Sales Representatives Act
On Aug. 20, 2010, the NAM and the California Manufacturers and Technology Association filed an amicus letter urging the California Supreme Court to review a state appellate decision that subjects manufacturers to treble damages liability for inadvertent violations of a state statute that prescribes various formalities for contracts with sales representatives. The Independent Wholesale Sales Representative Act, Cal. Civ. Code Sec. 1738.13, requires, among other things, that contracts specify the rate and method by which commissions are computed, the precise geographical area covered, and that sales representatives sign a written receipt acknowledging that he or she has received a copy of the contract. "Willful" violations are subject to treble damages, but the statute does not specify the level of damages that are available for non-willful violations. In this case, a California appellate court ruled that this legislative oversight would be corrected by allowing suits for single damages where a party does not act willfully, but it also adopted a loose standard of willfulness that could make most suits by sales representatives subject to treble damages.
Our amicus letter urged the California Supreme Court to review this decision. The lower court's ruling threatens to "open the floodgates of litigation against manufacturers doing business in California who inadvertently run afoul of the Act . . . No matter how innocuous the violation." In addition, by lowering the threshold for recovery of treble damages, the opinion "creates a trap for unwary manufacturers who do not know about technical requirements of the Act." The result is bad for manufacturers doing business in California.
The California court declined to review this appeal.
Related Documents: NAM amicus letter (August 20, 2010)
|
Chamber of Commerce v. Edmondson
(10th Circuit)
Preemption of state immigration verification requirements
The NAM is a member of the Human Resource Initiative for a Legal Workforce, which filed an amicus brief on 10/23/08 in the 10th Circuit in a case involving an Oklahoma law that requires every business that has a contract or subcontract with a public employer to use the federal Status Verification System to verify the employment authorization status of all new employees. The law also makes it illegal to fire a U.S. citizen or permanent resident alien while retaining in a similar job an employee who is an illegal alien. Employers using the federal system are exempt from liability, investigation or suit under this section; those who do not are at risk of litigation.
The problem is that Oklahoma is one of a growing number of states and municipalities that have passed or are considering such laws, but their enforcement schemes are different, making it increasingly difficult for an employer doing business in multiple states to navigate the conflicting requirements. The laws impose a wide variety of inconsistent verification requirements, squarely conflicting with the intent of Congress to create a nationally uniform and comprehensive federal system for regulating the employment of alien workers.
Our amicus brief enumerated the serious flaws that exist with the federal verification system, specifically the experimental Basic Pilot Program known as E-Verify. Studies have pointed out the errors in the system, including 17.8 million records that contain discrepancies related to name, date of birth or citizenship status. The GAO reported that the government is not equipped to manage a significant expansion of E-Verify users. Employers have complained of multiple problems and delays, prompting Illinois to prohibit employers from using it. Participation in the program is burdensome and costly.
On 2/2/2010, the court ruled that the lawsuit was likely to succeed on the merits regarding Sections 7(C) and 9 and that the trial court properly issued an injunction against enforcement of the law. The court also found that Section 7(B) of the law is not impliedly preempted by federal law. Section 7(C) prohibits discharging an employee who is a U.S. citizen while still employing employees who are unauthorized aliens, and Section 9 requires verification of employment authorization.. Section 7(B) applies to state government contractors.
Related Documents: Human Resource Initiative's Brief (October 23, 2008)
|
EEOC v. Kronos Inc.
(3rd Circuit)
Breadth of EEOC administrative subpoenas
How broad is the EEOC's administrative subpoena authority? That agency urged the courts to allow it to seek information from companies and third party testing firms that goes far beyond the bounds of an individual complaint. The EEOC wants to search for systemic discrimination by employers or the third parties they hire to do personality tests or other tests prior to employment. However, the courts are not all so expansive.
The defendant in this case, Kronos, won before a federal judge. The EEOC appealed to the Third Circuit. The NAM and others filed an amicus brief arguing that the EEOC’s tactics in this case exceed its statutory authority. Pursuing unbridled fishing expeditions in search of a big system case diverts valuable resources from investigating actual, live charges. The statute granting the EEOC investigatory powers is limited to investigations relating to the specific charge that an individual files.
Also on appeal was a district court order protecting the confidentiality of personality test information disclosed to the lawyers during discovery. We argued that validated employment tests are important hiring tools whose integrity could be compromised by even a minor breach of confidentiality.
On Sept. 7, 2010, the Third Circuit reversed in part, allowing the EEOC authority to expand an investigation of a single complaint into a broader investigation involving hiring practices in general and other job positions. It allowed a broadening of the time period to be examined and allowed the EEOC to look at the effect of the company's use of an employment assessment in hiring nationwide. According to the Third Circuit, the EEOC's power to investigate "encompasses not only the factual allegations contained in the charge, but also any information that is relevant to the charge." The court also ruled that while the EEOC may expand its investigation to include various legal theories of disability discrimination, it may not expand its investigation to seek out racial discrimination that is wholly unrelated to the original charge. Only "reasonable" expansion of the investigation is allowed.
The court sent the confidentiality issue back to the trial court for further explanation.
Related Documents: NAM brief (December 14, 2009)
|
Granite Rock Co. v. International Brotherhood of Teamsters
(U.S. Supreme Court)
Union contract formation and remedies for breach
After Granite Rock reached an agreement with the union representing one of its facilities, and the workers ratified the agreement, the union sought an additional contract provision that would absolve the international union of any liability for damages arising from its activities at other Granite Rock facilities. The company refused to make the additional concession, and the union went on strike. When Granite Rock sued for breach of the no-strike clause, two issues wound up on appeal to the Supreme Court.
The first involved whether a court or an arbitrator should decide whether there was in fact a valid contract. The NAM filed an amicus brief May 1, 2009, urging the Supreme Court to hear the appeal and apply existing law that federal courts have the authority to determine the existence of a collective bargaining agreement. In its ruling on June 24, 2010, the Court agreed. Whether a collective barganing agreement has been created is an issue to be decided by a court, not an arbitrator, according to the 7-2 majority.
Also at issue in the case was whether there is any remedy under Section 301 of the Labor Management Relations Act against the international union for allegedly interfering in the contractual obligations of the local. The NAM supported review of the Ninth Circuit decision, which said the international union was immune from suit even if it compelled its affiliated union to refuse to honor its previous commitment to Granite Rock. We argued that many unionized employers will face the prospect of internationally sanctioned strikes that violate local bargaining agreements but that cannot be remedied. It is very common for international unions to retain control over the bargaining process even though they do not sign the final agreement, and the Ninth Circuit's narrow interpretation conflicted with other federal court rulings and ignored the realities of the relationship between local unions and their international controllers. On this issue, the Supreme Court ruled unanimously that the Ninth Circuit did not err in rejecting Granite Rocks' request for a remedy under Section 301, but 7 Justices left the door open to such a claim if further proceedings in this case fail to provide relief under a different statute. It is possible that the Court could recognize a claim under Section 301 if no other remedies are available.
Related Documents: NAM brief on the merits (September 3, 2009) NAM brief on the petition (May 1, 2009)
|
Chamber of Commerce v. Whiting
(U.S. Supreme Court)
Preemption of state immigration verification requirements
The NAM is a member of the Human Resource Initiative for a Legal Workforce, which filed an amicus brief on 8/27/2009 urging the Supreme Court to review an adverse decision from the Ninth Circuit in a case involving the Legal Arizona Workers Act. That state law requires businesses to use a particular employment verification program, E-Verify, that Congress decided should be voluntary, not mandatory. It also imposes penalties beyond those prescribed by federal law.
The problem is that Arizona is one of a large number of states and municipalities that have recently passed or are considering such laws, but their enforcement schemes are different, making it increasingly difficult for an employer doing business in multiple states to navigate the conflicting requirements. The laws impose a wide variety of inconsistent verification requirements, squarely conflicting with the intent of Congress to create a nationally uniform and comprehensive federal system that limits the imposition of undue burdens on businesses.
Our amicus brief enumerated the serious flaws that exist with the federal verification system. Studies have pointed out the errors in the system, including 17.8 million records that contain discrepancies related to name, date of birth or citizenship status. We also provided compelling evidence about the different penalties and enforcement schemes embodied in various laws around the country, and the burdensome and costly effect these will have on business.
On May 26, 2011, the Supreme Court, over dissents from Justices Breyer, Ginsburg & Sotomayor, affirmed the lower court's decision. It found that the Arizona law falls well within the confines of the authority Congress chose to leave to the states and is not expressly preempted. Federal law does not prohibit state licensing law restrictions, but it does prohibit civil or criminal sanctions.
A plurality of the Court found that the Arizona law is not impliedly preempted by federal law, because Congress expressly allowed the states to pursue sanctions through licensing laws, and because the state law uses federal definitions and verification information.
The Court also found that mandating the use of the federal E-Verify program is not preempted. Federal law limits what the federal government can do with E-Verify, but does not prevent states from participating in it. The Court found that the consequences to an employer that does not use the E-Verify system to verify the employment eligibility of an employee are simply that the employer forfeits an otherwise available rebuttable presumption of compliance with the state law.
Related Documents: NAM brief (August 27, 2009)
|
EEOC v. Schwan's Home Service
(8th Circuit)
Breadth of EEOC subpoena authority
The NAM joined with the Equal Employment Advisory Council and the U.S. Chamber of Commerce in an amicus brief urging the Eighth Circuit to overturn a trial court ruling that authorized the EEOC to enforce an administrative subpoena that is not based on a valid charge of discrimination, and that broadly seeks information through a subpoena enforcement action that is not relevant to the charging party’s claims.
A single employee complained to the EEOC about alleged sexual harassment and retaliation under Title VII of the Civil Rights Act of 1964, but the company says she did not meet the performance requirements of the general manager position she sought. The EEOC sought a variety of information and documents from the company based on amended allegations that included a charge of class-wide discrimination.
Our brief argued that the new allegations fail to provide a “clear and concise statement of the facts” constituting the alleged violation and would authorize an open-ended audit of all of the company’s employment practices, in violation of statutory language designed to prevent the exercise of unconstrained investigative authority.
We also argued that the individual did not herself claim to be aggrieved by class-wide hiring discrimination, an essential element to an EEOC investigation in this case. The EEOC’s subpoena must be limited to the charges made and supported with facts by the complaining party.
On July 13, 2011, the Eight Circuit affirmed the district court's order enforcing the EEOC's broad subpoena. It found that the charging party had complied with all the statutory requirements, and the charge did not need more than an unsubstantiated belief that discrimination had occurred. It also found that the subpoena generally related to the charge of potential systemic gender discrimination. The ruling validates broad subpoena power at the EEOC, based on unsubstantiated claims.
Related Documents: NAM brief (November 10, 2010)
|
Harris v. Superior Court
(California Supreme Court)
Classifying employees under California's administrative exemption
The NAM filed an amicus letter urging the California Supreme Court to review a lower court ruling that throws into question whether employers can classify many different kinds of employees as exempt from the minimum wage and overtime provisions of California law under the "administrative" exemption. Administrative personnel are exempt from the wage and hour laws, but defining who is administrative is the heart of this case.
Our letter points out that the lower court's ruling will affect many more jobs than just the insurance claims adjusters that are the plaintiffs, and that the California Supreme Court should try to help ensure that state and federal interpretations are consistent and predictable.
Also, the test used by the court of appeal ignores the fact that employees do not necessarily need to “participate in the formulation of management policies or in the operation of the business as a whole” to be doing work “directly related to management policies or general business operations” and thus be covered by the administrative exemption. Employees need only affect policy or have the responsibility to carry out policy to be doing work “directly related” to management policies or to general business operations.
On Dec. 29, 2011, the California Supreme Court reversed the lower court and sent the case back to them to apply a legal standard outlined in its decision. According to the court, "The essence of our holding is that, in resolving whether work qualifies as administrative, courts must consider the particular facts before them and apply the language of the statutes and wage orders at issue."
Related Documents: NAM Amicus Letter (October 11, 2007)
|
In re Specialty Healthcare and Rehabilitation Center v. .
(NLRB)
Defining scope of bargaining units
This case involves how to define a bargaining unit at a company. The United Steelworkers attempted to organize and represent a group of certified nursing assistants at a nursing home, while the employer contended that the appropriate unit includes all nonprofessional service and maintenance employees. The NLRB’s regional director ruled for the union. When issues like this are appealed, the NLRB decides them on a case-by-case basis, and it asked for input on how to determine the appropriate employees to include in each bargaining unit. In nursing homes and other nonacute health care facilities, the Board considers “community of interests” factors and background information about the workplace in determining the bargaining unit, and it asked for the views of interested parties on this question, not only for nursing homes but also for all industries. It planned to issue rules governing appropriate units via this litigation, rather than by a rulemaking process.
The Coalition for a Democratic Workplace, of which the NAM is a member, filed an amicus brief March 8, 2011, focusing on the Board’s broader question of whether employees performing the “same job at a single facility is presumptively appropriate” as the bargaining unit. Our brief urged the Board not to tackle this question in the context of the nursing home case, but if it did, to continue to use the “community of interest” test that has guided employers and labor organizations for decades. If the Board were to adopt a standard that allows very small bargaining units, employers would be burdened with negotiating and administering a number of different contracts covering only a few of its employees. The Board should not attempt to establish a comprehensive approach to bargaining unit designations by adjudicating a nursing home dispute; rather, it should use the rulemaking process with public hearings.
In addition, the proliferation of units limits the rights of employees by creating barriers in the workplace, creating the risk of balkanizing the workforce and making employee advancement more difficult. A bargaining unit should include employees who have a community of interest that is sufficiently distinct from those excluded from the unit.
On August 30, 2011, the Board released a 3-1 ruling that the group of certified nursing assistants was the appropriate bargaining unit, and did not need to include all other nonprofessional service and maintenance employees of the workplace. It did so by applying a community-of-interest approach, adding that the burden is on the employer to prove that employees not included in the group seeking recognition "share an overwhelming community of interest with the included employees." This means that the factors used in determining whether members of groups share a community of interest must "overlap almost completely." The majority adopted this formulation to provide employers and employees with a clear standard to reduce litigation and produce more predictable and consistent results.
The National Labor Relations Act creates a set of presumptively appropriate bargaining units encompassing "the employer unit, craft unit, plant unit, or subdivision thereof." If the employees choose to define a bargaining unit in a way that is "appropriate," their decision will be upheld by the Board. This means that small bargaining units will be allowed as long as members in that unit share a community of interest, and the majority even stated that a unit is not "inappropriate simply because it is small."
NLRB Member Hayes dissented, arguing that the decision "fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry subject to the Board's jurisdiction," and warning about proliferation of bargaining units. He said that the majority's community-of-interest test effectively gives controlling weight to whatever unit a union has been able to organize. Rather, he would require a showing that a group's interests "are sufficiently distinct from those of other employees to warrant the establishment of a separate unit." Thus, the decision "encourages unions to engage in incremental organizing in the smallest units possible." He concluded by saying that the majority's opinion in this case and their proposed snap elections and limited Board review means that unions will organize in units as small as possible and it will be "virtually impossible for an employer to oppose the organizing effect either by campaign persuasion or through Board litigation."
The rule created in this case was overturned in December 2017 in a case called PCC Structurals, Inc.
Related Documents: CDW amicus brief (March 8, 2011)
|
Kasten v. Saint-Gobain Performance Plastics Corp.
(U.S. Supreme Court)
Whether oral complaints are covered by anti-retaliation provisions of FLSA
An employee orally complained about the placement of a time clock during a period of months in which he was receiving increasing discipline for time-clock violations. When he was terminated after the fourth offense, he sued his employer, alleging a violation of the anti-retaliation provision in the Fair Labor Standards Act. That provision makes it unlawful for an employer to terminate an employee because such employee has "filed any complaint . . . ." under the Act.
The Seventh Circuit, along with a majority of other federal appeals courts, ruled that this law covers employees who have filed written complaints, not just made oral statements. On March 22, 2011, the Supreme Court reversed, deciding that the statute also covers employees who do not put their claims in writing. It interpreted "filing" a complaint broadly to encourage "those who would find it difficult to reduce their complaints to writing, particularly the illiterate, less educated, or overworked workers who were most in need of the Act's help at the time of passage[.]"
This interpretation could open up a tremendous volume of lawsuits following termination decisions. In August, 2010, the NAM joined with the Equal Employment Advisory Council and the NFIB in an amicus brief arguing that the Fair Labor Standards Act provision is clear and narrower than similar provisions under other federal civil rights statutes which prohibit retaliation based on an individual's mere opposition to an employment practice. Extending the FLSA to verbal complaints would undermine the ability of employers to effectively manage their workforces and enforce legitimate workplace rules.
Requiring written complaints of potential violations "not only would facilitate swift resolution of the dispute, but also would discourage employees from making false or frivolous complaints that stem more from idle 'grumblings' than from legitimate workplace concerns." Written complaints are fully protected against retaliation and can be properly addressed by management.
The Court's new interpretation providing special status to employees making oral complaints makes employers face more difficult problems when addressing poor performance or disciplinary situations. It can be difficult to tell when an employee is making a statement that constitutes "filing a complaint," but the Court adopted the following test to make that decision: "To fall within the scope of the antiretaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection. This standard can be met, however, by oral complaints, as well as by written ones." This issue is likely to be one of those raised in future cases fleshing out this decision.
Related Documents: NAM brief (August 23, 2010)
|
Kraft Foods Global, Inc. v. Spoerle
(U.S. Supreme Court)
Preemption of state wage law on donning and doffing
This law suit is about compensation for time spent putting on and taking off steel-toed boots, hard hats, smocks and hair nets when working at a meat processing plant. In collective bargaining, the union agreed to exclude such "donning and doffing" time from hours worked in return for a higher wage rate. Federal law allows such a tradeoff. Wisconsin law does not.
The Seventh Circuit ruled that a collective bargaining agreement cannot override the state law, and the company must pay for the donning and doffing time at the higher compensation rate. This decision was appealed to the Supreme Court. The NAM filed an amicus brief urging review, arguing that the decision was of national significance and interfered with long-standing collective bargaining agreements and customs and practices in various industries. In addition, the provision at issue was specifically addressed by Congress, and federal law should preempt inconsistent state laws in this area. Unfortunately, on Jan. 10, 2011, the Court declined to review it.
Related Documents: NAM brief (December 2, 2010)
|
Lamons Gasket Co. v. .
(NLRB)
Secret ballot elections regarding union certification
Forty-one associations joined the NAM in an amicus brief submitted to the National Labor Relations Board in response to the Board's request for advice on its 2007 decision in the Dana Corp. case. There, the Board ruled 3 to 2 that employees must have 45 days after their employer recognizes a union based on card-check authorizations to file a petition to decertify the union or to support an election petition from another union. The Board underscored the preferred method of having a secret election to determine the majority status of a union. The majority found that card-check procedures are much less reliable as indicators of employee free choice on union representation than secret elections.
The current Board reversed that ruling. On August 30, it ruled 3-1 that only a small percentage of card-signing union authorizations are ultimately overturned with a secret ballot, calling those cases "buyer's remorse." It also held that requiring employers to post a notice informing employees of their right to seek a decertification election after a card-check procedure "actually placed the Board's thumb decidedly on one side of what should be a neutral scale" by requiring a notice of only two of their many rights under the law.
Our amicus brief argued that Dana should not be overruled. Individual free choice regarding whether to be represented at all by a third party is a necessary precondition to any collective negotiation. "In nearly 25 percent of the 54 Dana elections conducted by the Board, employees exercising free choice voted to reject the employer’s initial, voluntary recognition."
We also argued that without a card-check review process in the form of a secret election, "employees are left . . . with the likelihood of peer pressure and/or coercion, lack of information, no measurement of unit-wide employee sentiment at the same point in time, and no assurance that the alleged, resulting majority is an accurate reflection of free choice."
One member of the NLRB dissented from the Lamons Gasket ruling. He said that the majority's decision was "a purely ideological policy choice, lacking any real empirical support and uninformed by agency expertise." He said that the law only imposes an election bar after a valid Board election, not after a voluntary recognition of a union by an employer. He also pointed out that there is no doubt but that a Board-supervised election "provides a more reliable basis for determining employee sentiment than an informal card designation procedure where group pressures may induce an otherwise recalcitrant employee, to go along with his fellow workers." A reversal rate of 25% against the incumbent recognized union is "substantial and supports the need for retention of a notice requirement and brief open period."
The NAM is also a member of the Coalition for a Democratic Workplace, which filed a separate brief.
Related Documents: NAM brief (November 1, 2010)
|
Thompson v. North American Stainless, LP
(U.S. Supreme Court)
Whether Title VII covers third-party retaliation claims
Title VII of the Civil Rights Act of 1964 protects employees from retaliation by their employers after complaining about discrimination in the workplace. This case involves not the employee who complained, but her fiance, who was terminated from his job. He claimed the termination was in retaliation for his fiancee's complaint, while the company cites performance-related problems. The company also argued that the plain language of the statute provides claims only to those who make a charge or otherwise participate in an investigation, proceeding or hearing.
A 3-judge panel of the Sixth Circuit ruled that a fiance or other person that is closely related or associated with those who are directly involved in protected activity may sue if there is a "causal connection between the protected activity and adverse employment action." The trial judge had ruled that the plaintiff had presented no evidence that he had participated in any protected activity.
The NAM filed an amicus brief in the Sixth Circuit (see summary here) and in the Supreme Court. We argued that the statute is clear on its face and protects only those who personally “opposed” a discriminatory employment practice or personally “made a charge, testified, assisted, or participated” in a Title VII proceeding.
A rule that permits third-party retaliation claims would increase even more dramatically retaliation charges, which are the fastest-growing category of charges filed under Title VII, and would put employers in the untenable position of having to speculate about possible relationships an employee may have that could give rise to potential liability each time they contemplate disciplinary or other action against that employee.
On Jan. 24, 2011, the Supreme Court unanimously reversed the lower court (Justice Kagan did not participate), ruling that the antiretaliation provision in Title VII must be construed to cover a broad range of employer conduct. It prohibits an employer from action that might dissuade a reasonable worker from making or support a discrimination charge. The test must be applied in an objective fashion, and in this case, a reasonable worker might be dissuaded from engaging in a protected activity if she knew that her fiance would be fired. The Court refused to identify a fixed class of relationships that are protected against reprisals, instead ruling that the standard for judging harm must be "objective."
In addition, the Court slightly narrowed the universe of potential plaintiffs -- it is not enough that a plaintiff have some injury caused by the company and remediable by a court. Instead, a plaintiff must be within the "zone of interests" sought to be protected by the statutory provision. Thus, a statute protecting employees covers an employee who is the fiance of another employee intended to be harmed by the employer. The fiance was not an accidental victim of the retaliation, but rather a person with the zone of interests protected by the statute, and he therefore had standing to sue. This result will be difficult to apply in many situations, and more litigation over the breadth of third-party retaliation rights can be expected.
Related Documents: NAM amicus brief (October 29, 2010)
|
Brinker Rest. Corp. v. Superior Court
(California Supreme Court)
Mandated lunch and rest breaks
The NAM and 9 other associations and companies filed an amicus brief 8/18/2009 urging the California Supreme Court to uphold a lower court ruling that an employer's duty to "provide" meal periods is a duty to make meal periods available, not a duty to ensure meal periods are actually taken, and that statistical evidence concerning actual breaks is irrelevant to determining whether an employer afforded the opportunity to take a break. The statute is clear on its face that employers need to "provide" a lunch break, meaning to make it available.
Our brief warned that reversing this ruling would have negative consequences for employees: (1) employees nearing the end of a 6-hour shift would have to take a 30-minute meal period before returning to work for a few more minutes, (2) employees would be subject to discipline if they are late to clock out for a meal or early to clock in, and (3) employees would be unable to work through a meal period to end the workday 30 minutes earlier. The brief expanded upon adverse consequences in the restaurant, retail, waste management, construction, agricultural, temporary staffing and hospitality industries.
On 4/12/2012, the California Supreme Court generally upheld the lower court, ruling that (1) an employer need only provide a reasonable opportunity to take the 30-minute lunch break, not ensure that employees use it, (2) meal periods must start after no more than five hours of work, (3) rest breaks are required according to a clarified formula, and (4) a class of employees making off-the-clock claims could not be certified as a class action because there was no substantial evidence of a uniform company policy pressuring employees to work off the clock.
This California law has been the basis for thousands of class action suits involving lunch breaks, rest breaks and off-the-clock work. The court's decision is a very important new ruling to help manufacturers with employees in California to understand the requirements and to establish compliant workplace policies.
Related Documents: NAM brief (August 18, 2009)
|
Chamber of Commerce v. NLRB
(D.D.C.)
Challenging NLRB's ambush elections rule
This lawsuit challenged the NLRB's ambush election rule, issued in December, 2011, which effectively shortened the amount of time in which union certification elections take place and could allow votes to occur in as little as 20 days. The Coalition for a Democratic Workplace, of which the NAM is a leading member, immediately filed a legal challenge to this rule in federal court in Washington, D.C.
The final rule, effective April 30, 2012, is harmful to employers. Specifically, it alters what types of pre-election hearings can be held (such as who is even eligible to vote in the election) and what types of appeals can be filed prior to an election. If certain matters can be discussed only after an election is held, these matters will often become moot, leaving the employer with no voice to be heard prior to the election. The rule also appears to shorten the time between a petition for certification being filed and the election being held. If most pre-election matters will be deferred until after the election, the election itself could take place very quickly.
The complaint sought to enjoin the NLRB from enforcing the final rule. It charged that the rule violates the statutory requirement that the NLRB must hold pre-election evidentiary hearings if there are questions concerning whether representation exists. The rule also eliminates a party's right to seek Board review of a regional director's pre-election rulings until after an election, thus depriving employees of the fullest freedom in exercising their rights as required by the law. Other claims raised fundamental concerns that the Board's action impinges on the freedom of speech by employers, that it did not provide an adequate opportunity for comments, and violated the Regulatory Flexibility Act.
On Feb. 3, 2012, the CDW filed a motion for summary judgment, arguing that employees need at least 30 days to decide how to vote in NLRB elections. Even former Senator and President John F. Kennedy emphasized the need for this time to "safeguard against rushing employees into an election where they are unfamiliar with the issues."
On April 27, the Chamber and CDW filed a motion for a temporary stay of NLRB action pending judicial review to allow the court time to decide the issues in the case before the rule goes into effect. The next day, the judge denied the motion, saying that the plaintiffs will not suffer irreparable injury because the court will issue its opinion on the merits by May 15, "which date will precede any potential election under the new rule."
True to his word, Judge Boasberg ruled on May 14, denying the NLRB's motion for summary judgment and granting the plaintiffs'. He ruled that the vote to adopt the rule did not have a quorum. The vote was 2-0, with the third member of the NRLB not voting, and the judge found that the vote of two members in an online voting situation is "simply not enough." The third member "need not necessarily have voted, but he had to at least show up." More is required than just being a member of the Board in order to establish a 3-person quorum. He must "participate" in the decision, although he need not vote to be counted in determining a quorum. In the context of electronic voting, he had to affirmatively express an intent to abstain, or acknowledge receipt of the notification about the vote, but that did not happen. It was as if he had failed to attend the vote at all.
The ruling leaves open the possibility that members of the NLRB could simply not participate in votes in order to prevent the Board from having a quorum. This could slow down the rulemaking and adjudicatory process at the agency. The court did not reach any of the other procedural and substantive challenges to the ambush election rule, and those issues may have to be litigated later, if the Board reissues the rule with a proper quorum.
On June 11, 2012, the NLRB filed a motion to alter or amend the judgment, arguing that Member Hayes was in fact present in the Board's electronic voting room. This motion was denied on July 27.
Related Documents: Memo in Support of Motion for Summary Judgment (February 3, 2012)
|
National Association of Manufacturers v. NLRB
(U.S. District Court for the District of Columbia)
Challenging NLRB's requirement to post provisions of NLRA
The NAM filed this suit challenging a regulation issued by the National Labor Relations Board that requires employers to post in their workplaces a notice of the right of employees to organize into unions, bargain collectively, discuss wages, benefits and working conditions, jointly complain, strike and picket, or choose not to do any of these activities. The required notice also lists all the things an employer or a union may not do under the law.
The regulation requires posting in "conspicuous places" as well as where other notices to employees are customarily posted, and on electronic sites if the employer customarily communicates with its employees about personnel rules or policies by such means. In addition, if 20% or more of an employer's workforce is not proficient in English and speaks a language other than English, the employer must post the notice in the language employees speak. Special requirements apply to different segments of the workforce that speak different languages. The NLRB listed this rule as "major," estimating a total compliance cost of $386.4 million for some 6 million employers nationwide.
The NAM raised 4 issues in our complaint. First, we alleged that the National Labor Relations Act (NLRA) does not expressly grant the Board the authority to promulgate a rule requiring employers to post a notification of employee rights under the NLRA. Second, the Board's authority under the NLRA is triggered when a representation petition or an unfair labor charge is filed, not before. Third, the rule purports to establish a new unfair labor practice -- i.e., failing to post the required notice -- without the statutory authority to do so. And fourth, the new regulation authorizes the Board to allow any employee to file unfair labor practice charges long after the 6-month statute of limitations has expired. We argued that the NLRA does not authorize the Board to waive the statute of limitations except for members of the armed forces whose service interferes with their ability to file charges on time.
The NAM asked the court to declare the notice posting requirement null and void. Failure to post the notice could result in the Board finding that an employer engaged in an unfair labor practice by interfering with, restraining or coercing employees in the exercise of their rights. It could also result in waiver of the statute of limitations for employee complaints about other unfair labor practices, or could be used as evidence against an employer in any case in which unlawful motive is an issue.
On Sept. 28, the NAM and co-plaintiff Coalition for a Democratic Workplace, filed a motion for a preliminary injunction and an expedited hearing. We hoped to have the court rule before the effective date of the regulation, or enjoin NLRB implementation and enforcement of the rule indefinitely. We hoped to avoid a situation where companies needed to implement the rule by November 14, its original effective date, only to find that the rule was issued unlawfully.
On Oct. 5, the NLRB announced that it would voluntarily delay implementation of the posting requirement until January 31, 2012., and after oral arguments on December 19 in which the judge sought a further extension, the Board postponed the effective date again, until April 30, 2012.
On March 2, Judge Amy Jackson ruled that the NLRB has broad authority to issue rules, and the notice posting provision was valid. However, the Board did not have the authority to impose the penalties for noncompliance, namely making failure to post an unfair labor practice and suspending the statute of limitations for employees that want to file suit for unfair labor practices years after they occur. However, the NLRB may find the failure to post the required notices to be an unfair labor practice, or to toll the statute of limitations, in case-by-case decisions. Failure to post the notices could in some cases result in findings that an employer intended to improperly influence employees from exercising their rights, or could make it easier for the Board to allow an employee to file charges after the statute of limitations has run out.
The court rejected the NAM's First Amendment arguments, and found that the enforcement provisions were severable from the posting requirement, thus allowing the posting requirement to continue to stand even though a portion of the regulation was found to be invalid.
On March 5, the NAM and others filed a notice of appeal. All are challenging the adverse decisions on the posting requirement, and all but the NAM are challenging the validity of the recess appointment of some of the current Board members who were appointed by President Obama while the Senate was still meeting regularly in pro forma sessions.
Related Documents: NAM Notice of Appeal (March 5, 2012) NAM Reply brief (November 22, 2011) NAM Motion for Preliminary Injunction (September 28, 2011) NAM Complaint (September 8, 2011)
|
Sandifer v. United States Steel Corp.
(7th Circuit)
Whether changing clothes is a principal activity that starts the work day
The NAM, the American Meat Institute and the Society for Human Resource Management filed a joint brief in a federal appeals court arguing that courts should respect collective bargaining decisions relating to whether clothes-changing activities are excluded from the compensable workday.
The case involves whether to compensate time spent walking from a locker room to a work station. In some industries, this is a substantial issue. Here, an employer and union agreed that the activities of donning, doffing and washing (clothes-changing activities) were to be excluded from the work day. The company argued these same activities are not “principal activities” that start or end the continuous workday, and thus no additional compensation, including overtime, is required. Various union-represented employees sued to have this travel time compensated, and the trial court held open the possibility.
Our amicus brief argued that courts should defer to the collective bargaining process. Congress has repeatedly emphasized the need for courts and governmental entities to defer to the sanctity of the collective bargaining process to protect the interests of both employees and employers, by giving them the flexibility to resolve the challenges of their specific industry as they deem best. The Portal-to-Portal Act was adopted to rein in litigation that was forcing employers to pay for unbargained-for wages relating to clothes-changing activities. Moreover, until last year, the Department of Labor has long advocated that where a collective bargaining agreement excludes clothes-changing activities from the start of the workday, travel time would be non-compensable.
The trial court wrongly left open the possibility that clothes changing could be a principal activity that starts the work day, but that decision undermines the collective bargaining process and deprives employers and employees of the latitude that Congress intended. Unions negotiate other benefits, such as higher rates of pay for time actually worked, in exchange for not counting travel time as compensable. Paying for travel time rewards employees who are inefficient when using it, at the expense of those who are more efficient. The law was enacted to avoid situations where courts could override collective bargaining terms through litigation, and was designed to keep the Department of Labor from stepping in and changing expectations, potentially resulting in the award of many years of back pay. Instead, in a time of economic crisis, we should be focusing on strengthening relationships between employers and their unions, not making it more expensive for employers to maintain their present workforces.
On 5/8/12, the Seventh Circuit ruled that the workers here changed into "clothes" as defined in the Fair Labor Standards Act (FLSA), and that activity was covered by the collective bargaining agreement and not subject to compensation under the FLSA. In addition, the court found that if the union and employer agree that such activity is not compensable, then it cannot be a "principal activity" under the statute that would start the clock for the workday. According to the court, "Not all requirements imposed on employees constitute employment." The court also refused to defer to the position of the Department of Labor in this case, because the Department's position has shifted from one administration to another, and they did not offer any useful knowledge that might help the court decide the case. The opinion is filled with straightforward, common-sense, practical and economic-based reasons why clothes-changing provisions in collective bargaining agreements should be enforced as written.
Interesting note: The court denied our request to file this amicus brief, so we filed an additional motion urging reconsideration, which was also denied. The Seventh Circuit has recently taken a more restrictive attitude toward briefs from groups that are affected by litigation but that are not parties to the litigation. At the same time, it used the fact that no union filed an amicus brief to support its view that the employee claims in this case would not help unions.
Related Documents: NAM brief (August 29, 2011)
|
Chamber of Commerce v. NLRB
(D.C. Circuit)
Challenging NLRB's ambush elections rule
The NLRB has appealed a decision of a federal judge who ruled that it did not have a quorum when it promulgated its “ambush election” rule in 2011. The Coalition for a Democratic Workplace, of which the NAM is a leading member, challenged the rule. Click here for a summary of the proceedings in the trial court.
The NLRB filed its main brief on Nov. 16, and the Chamber and CDW filed their brief on Dec. 31, 2012. Oral arguments were scheduled before Judges Henderson, Brown and Kavanaugh, but the arguments were postponed and the case was held in abeyance pending resolution of the Noel Canning decision on whether the recess appointments to the Board were constitutional.
In December of 2013, the NLRB voluntarily dismissed its appeal in Chamber of Commerce v. NLRB, the case in which the U.S. District Court for the District of Columbia found the Board’s expedited representation election rule invalid because the Board lacked a quorum when it issued the rule in December 2011.
Related Documents: Chamber and CDW brief (December 31, 2012)
|
Huntington Ingalls Inc. v. NLRB
(4th Circuit)
Defining scope of bargaining units
This is another case in which the NLRB has applied its decision in the Specialty Healthcare case to allow employees to create a bargaining unit that is small and underinclusive. The Board’s decision was appealed to a federal appeals court, and the NAM and other filed an amicus brief arguing that the Specialty Healthcare decision was wrong and violated at least two provisions of the National Labor Relations Act. An employer should not have to bear the burden of demonstrating that a proposed bargaining unit should include additional employees who share “an overwhelming community of interest with the included employees.”
In this case, the company argued that a unit of technical employees working in one department at its shipyard should include all the technical employees at that location. We argued that the Board’s rule eliminates important considerations in determining the breadth of the bargaining unit, and will disrupt the smooth operation of the company processes at a time when American employers face unprecedented economic and competitive pressures. The rule also places too much weight on the grouping selected by the organizing employees, thus effectively violating a statutory provision that the “extent to which the employees have organized shall not be controlling.” In addition, the statute requires the bargaining unit decisions assure employees the fullest freedom in exercising their legal rights, but the Board’s rule failed to consider the rights of employees to refrain from collective activities. By allowing small bargaining units, the Board effectively denies the rights of a majority of the remaining workers to refrain from having union representation in an appropriately defined unit.
This is another example of how the Board’s new ruling fosters disruptions that smaller or multiple bargaining units can have on business operations, stable labor relations, and realistic collective bargaining. A unit determination should reflect an employer’s functional integration and the resulting “community of interests” shared by its employees. Smaller units reduce employer flexibility and employee advancement opportunities as separate units isolate employees in different seniority systems and job classifications.
On 7/17/2013, the Fourth Circuit ruled that the NLRB did not have a quorum to issue the decision in this case, because three recess appointments to the Board were unconstitutional. But it also upheld the selected bargaining unit under the standard that was in place prior to the Specialty Healthcare decision, thus avoiding any decision on the propriety of the standard adopted in that case. Although the employees in this case possessed a sufficiently distinct community of interest to qualify for their own bargaining unit, the court refused to enforce the Board's order because it was not properly constituted. Subsequently, the Board issued another decision in October 2014 that required Huntington Ingalls to bargain with the micro-bargaining units. Huntington Ingalls then filed a petition of review of the Board’s order, claiming that the Board did not have jurisdiction, but the 4th circuit enforced the Board’s order.
Related Documents: NAM brief (October 17, 2012)
|
Kindred Nursing Centers East, LLC v. NLRB
(6th Circuit)
Challenging burden on companies to prove "overwhelming community of interest" when contesting bargaining units
The NAM, along with the HR Policy Association and the Society of Human Resource Management, filed an amicus brief 4/23/12 urging the Sixth Circuit to overturn a new NLRB rule that makes it much easier to create exceedingly small collective bargaining units in a workplace. The rule, announced by the NLRB in the Specialty Healthcare case, allows a group of employees to select the bargaining unit they want, and as long as the unit is defined to include those workers who share a “community of interest,” that defined union can only be rejected if an employer can prove that a larger unit is appropriate because the excluded employees share an “overwhelming” community of interest. This burden of proof is extremely difficult to satisfy, and our brief argued that it violates Section 9(c)(5) of the National Labor Relations Act, which limits the Board from granting controlling authority to a union based on the extent to which the employees are organized. Instead, the Board should decide not only that the employees in a proposed unit have a community of interest, but also whether their interests “are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”
We also noted that Section 9(b) of the Act requires the Board to decide on the appropriateness of a bargaining unit, and we argued that it may not delegate this duty to petitioning employees or unions, because that would undermine its obligation to guarantee all employees – including those excluded from the union’s proposed unit – the fullest freedom in exercising their collective bargaining rights. Otherwise, unions can gerrymander the bargaining units “to their hearts’ content” and leave many employees out of the collective bargaining process.
Furthermore, the Board must act to effectuate the law’s policy of promoting efficient collective bargaining, and the micro-union policy announced in Specialty Healthcare leads to piece-meal unionization and inefficient collective bargaining. Multiple unions may have inconsistent goals, may shut down a plant, affecting other employees, and will create a state of chaos.
Finally, we argued that the NLRB must change its policy through notice-and-comment rulemaking, not by simply announcing its new rules in a decision in one of its many cases. This change is a legislative-type judgment that is generalized and designed to govern all future cases.
On August 15, 2013, the Court of Appeals approved the NLRB’s "overwhelming community of interest test" in bargaining unit determination cases. The court rejected all of the employer's challenges to the Board's decision and found that not only did the Board have considerable discretion under the Act in determining the appropriateness of voting units, but also that the Board, in this case, did not substantially change prior law in the unit determination area. The court also held that the Board's decision in Specialty Healthcare did not violate Section 9(c)(5) of the NLRA, which prohibits the approval of bargaining units on an extent-of-organizing basis.
Related Documents: NAM brief (April 23, 2012)
|
National Association of Manufacturers v. NLRB
(D.C. Circuit)
Challenging NLRB's requirement to post provisions of NLRA
The NAM has won a major victory for manufacturers that we have been fighting for since 2011. This win came from the U.S. Court of Appeals for the D.C. Circuit, where we appealed a federal court ruling that upheld the NLRB's regulation that required employers to post in their workplaces a notice of the right of employees to organize into unions, bargain collectively, discuss wages, benefits and working conditions, jointly complain, strike and picket, or choose not to do any of these activities. For details on the district court proceedings, click here.
On 5/22/2012, the NAM filed a brief arguing 3 main issues. First, we challenged the fundamental authority of the Board to issue a posting rule at all. Congress never authorized notice-posting requirements, and rejected an express notice-posting amendment in the National Labor Relations Act (NLRA) while accepting notice-posting requirements in other labor laws.
Second, we again raised the argument that a mandate that private parties post government notices, without a clear statutory basis or compelling governmental interest, violates the First Amendment rights of employers as well as the balance of requirements spelled out in the NLRA.
Third, if the penalties for failing to post the required notice were themselves unlawful, the judge should have thrown out the entire regulation, because the NLRB did not intend for the posting requirement to stand on its own without enforcement teeth. The posting requirement was not severable from the enforcement provisions, and the entire regulation should fall.
We later filed a reply brief arguing that the NLRB failed to establish any statutory authority for the posting requirement. The Board had no authority to impose affirmative duties on employers who are charged with violations of the NLRA. The rule also violated the statutory provision which prohibits the Board from regulating expression that “contains no threat of reprisal or force or promise of benefit,” and violated employers’ First Amendment rights by forcing employers to communicate an unwanted editorial judgment to their employees.
On May 7, 2013, the D.C. Circuit agreed and overturned the NLRB regulation. It found that the rule's requirement that employers post a Government message requires an act of speech, and Section 8(c) of the Labor Management Relations Act declares that speech "shall not constitute or be evidence of an unfair labor practice under the provisions of this [Act], if such expression contains no threat of reprisal or force or promise of benefit." Thus the rule itself violates Section 8(c) because it makes an employer's failure to post the Board's notice an unfair labor practice.
It also ruled that the Board could not consider noncompliance with the rule to be evidence of antiunion animus, since that is also an unfair labor practice based on protected speech.
Finally, the court ruled that the Board did not have the authority to amend the statute of limitations for filing unfair labor practice charges. Unless Congress intended the statute of limitations to include exceptions, the NLRB cannot create them years after the law was enacted.
Because all three means of enforcing the Board's posting requirement were invalid, the court ruled that the posting requirement itself was invalid, because the NLRB would never have promulgated it in the first place without ways to enforce it. The Board did not want just voluntary compliance.
A concurring opinion from 2 of the 3 judges found that the Board did not have authority under Section 6 of the NLRA to issue the rule because the posting requirement was not necessary to carry out the Board's responsibilities. It may only issue regulations that are necessary to carry out its responsibilities. The law does not impose an obligation on employers to educate its employees on labor relations law. In addition, the NLRB was set up to handle complaints that are filed by others, not promulgate rules that are "so aggressively prophylactic as the posting rule."
On 7/22/13, the NLRB asked the full complement of judges on the D.C. Circuit to rehear this case. The NAM filed a brief in opposition, arguing that the Board failed to identify any conflict between the court's ruling and any other court decision that would warrant further review. We also noted that a majority of the panel that decided the case also ruled that the Board exceeded its statutory authority on other grounds which independently preclude enforcement of the poster rule. On Sept. 4, the court declined to rehear the case. The NLRB had 90 days to appeal to the Supreme Court, but it declined to do so. The D.C. Circuit's ruling is now final.
Related Documents: NAM Opposition to Appeal (August 20, 2013) NAM reply brief (July 11, 2012) NAM opening brief (May 22, 2012) D.C. Circuit's Injunction (April 17, 2012)
|
Banner Health Sys. v. NLRB
(D.C. Circuit)
Challenging NLRB decision undermining confidentiality of investigatory interviews
This case involves an employer who asked employees not to discuss their complaints about co-workers with others while an investigation was ongoing. The NLRB ruled that an employer violates employee union-organizing rights when it has such a blanket policy, and that employers must “first determine whether in any given investigation witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.”
The NAM and other business groups submitted an amicus brief in support of the employer, stating that the NLRB was incorrect in its decision because the Board failed to take into account the challenges employers will now face when conducting an investigation. For example, with the Board’s decision an employer may not be able to uncover the entire story because employees will not come forward if they know the investigation is not confidential. Additionally, the amicus brief pointed out the Board ignored its previous decisions on investigations and overturned decades of its own precedent on the matter. The Board’s decision places an enormous burden on employers to justify the confidentiality of their investigations prior to interviewing all the witnesses or even assessing the situation.
The D.C. Circuit sent the case back to the NLRB. In June 2015, the NLRB again ruled the employer’s confidentially policy violated the NLRA, and Banner again appealed to the D.C. Circuit. The NAM also filed an amicus brief in the second appeal.
Related Documents: NAM brief (January 14, 2013)
|
Cochran v. Schwan's Home Service Inc.
(California Supreme Court)
Employee reimbursement for a personal item used for work purposes
On September 29th the NAM submitted an amicus letter to the Supreme Court of California supporting Schwan’s Home Service’s Petition for Review in the case of Colin Cochran v. Schwan’s Home Service. The case asks if an employee is owed reimbursement for a personal item used for work purposes even if the employee incurred no additional costs. California Labor Code Section 2802 requires that employers reimburse employees “for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” The trial court ruled that calculating compensation for use of personal item at no cost would be too hard to calculate. However, the Court of Appeals (CoA) held that “The answer is that reimbursement is always required.” Nothing in the language of the decision limits the analysis to cell phones, and thus employees could be owed compensation for any number of mundane personal items utilized in a work context, even if the employee suffered no loss or expenditure. We argued that this ruling is so broad as to be completely unworkable, as well as completely unreasonable. Additionally, the Private Attorney General Act allows for civil fines to be levied against an employer for any violation of the Labor Code, thus compounding innocent failures to reimburse into disproportionate and frivolous fines. Thus, the NAM argued that the Supreme Court of California should take the decision up for review.
Related Documents: NAM brief (September 29, 2014)
|
In re Purple Communications, Inc.
(NLRB)
Protecting employer email systems
The NAM and our association allies filed an amicus brief with the NLRB arguing that the Board should not create an exception for employer owned email from the longstanding rule that employees generally have no right to use employer-owned property, equipment, or materials for purposes of Section 7 organizing activities, as long as the employer’s restrictions on such usage are not discriminatory. There is no discrimination in keeping the use of employer email systems restricted to legitimate business purposes and there are many alternatives available for these communications.
On December 11, 2014 the NLRB issued a decision the Purple Communications, Inc case. The 3-2 decision overturns the 2007 Register Guard case, and holds that employees now may use email for union-related communications during nonworking time. The NAM filed a brief with the NLRB arguing against this possible outcome.
Related Documents: NAM brief (June 16, 2014)
|
Integrity Staffing Solutions, Inc. v. Busk
(U.S. Supreme Court)
Whether security screening time is compensable work
On June 4th the NAM filed an amicus brief in the Supreme Court in Integrity Staffing v. Busk. This case presents the question of whether routine post shift security screenings of employees are compensable under the FLSA. Such screenings are conducted by many employers, as in this case, to help prevent theft. The resolution of this case could also have an effect on the compensability of the entire broad range of pre and post-shift screenings, conducted by employers to ensure the security of employers’ property and the safety of employees and the public. Until the 9th Circuit’s decision, employers have been able to rely on a uniform body of case law holding that security screenings are not compensable under the Portal-to-Portal Act of 1947, 29 U.S.C. §§ 251-262, as applied by this Court and regulations adopted by the Department of Labor.
The Ninth Circuit’s decision undermines the decades-old understanding of the Portal-to-Portal Act as interpreted by the Supreme Court in Steiner and Alvarez and by the Department of Labor. In holding time spent in post-shift security screenings to be compensable, the Ninth Circuit incorrectly applied the well-established “integral and indispensable” test and instead developed a new approach based on its view that the screenings were compulsory and done for the employer’s benefit. In so ruling, the court did away with the requirement under the Portal-to-Portal Act of a close and intertwined relationship between the productive work for which an employee is hired and the activity for which the employee seeks additional compensation. The court’s rule would disrupt established workplace practices imposing an unwieldy test that has already increased litigation. The Solicitor General has also filed an amicus brief in the case supporting the legal arguments raised by Petitioner and the NAM brief.
On December 9, 2014 the U.S. Supreme Court ruled unanimously that the Fair Labor Standards Act (FLSA) does not require employers to compensate employees for the time spent in security checks before and after the work day. The ruling reversed a decision by the U.S. Court of Appeals for the Ninth Circuit and reinforces arguments asserted in the amicus brief filed by the NAM and a coalition of industry groups.
Related Documents: NAM brief (June 4, 2014) NAM brief (November 7, 2013)
|
Macy's, Inc.
(NLRB)
Challenge to micro-unions
The NLRB’s Specialty Healthcare decision favoring micro-unions has led to numerous cases involving the definition of a bargaining unit. In Macy’s Inc., the Board’s regional director decided that employees of the fragrance and cosmetic departments at Macy’s could form their own union. The regional director found that the small group of employees was an appropriate unit because they were readily identifiable as a group and shared a community of interest. Moreover, the burden to show that the small unit is inappropriate is on the employer, who would have to demonstrate that a larger unit shares an overwhelming community of interest with the smaller unit. Interestingly, the previous year, the union unsuccessfully tried to organize a wall-to-wall unit in the entire store.
The NAM filed an amicus brief urging the Board to overturn the regional director’s decision. The Board’s policy conflicts with the rights of employees who do not want to form a union by allowing them to be gerrymandered out of the bargaining unit. In effect, if the majority of employees in a facility do not favor forming a bargaining unit, they can be relegated to a minority status when a union selects a gerrymandered unit where it has majority support. The NAM argued that the burden should be shifted to the union to initially demonstrate that the a proposed smaller bargaining unit is constituted on factors other than union support and that the employees are readily identifiable as a group.
Manufacturers are starting to face a multitude of small unionized bargaining units, making management of the workplace much more difficult and harming their ability to compete. This is the fifth case since Specialty Healthcare in which the NAM has sought to change the Board’s policy and encourage the proper definition of bargaining units in manufacturing facilities.
Related Documents: NAM amicus brief (February 27, 2013)
|
Neiman Marcus Group, Inc.
(NLRB)
Challenging NLRB's policy promoting micro-unions
A small group of women’s shoe salespeople were handed a decision by an NLRB regional director that allowed them to hold a vote to unionize. The employer appealed, arguing that their group should include many more store employees that have common workplace interests.
The NAM and other business groups filed a brief 6/13/12 arguing that the NLRB’s recent decision in the Specialty Healthcare case improperly allows this kind of micro-union to be formed, and puts an unreasonable burden on employers to show that a large group is more appropriate. The regional director had ruled that the employees at the store may serve different functions and thus vary in skills to the point that they qualify to form multiple unions. The NAM argued that Congress intended that each case be determined on its own, rather than having the NLRB impose a blanket determination for all cases that a proposed group is valid unless the employer can show otherwise.
The brief noted that all employees have a statutorily protected “right to refrain from” unionizing activities, and micro-unions prevent those employees from exercising the right to reject a union.
Furthermore, the Board abused its power by adopting its new standard in the Specialty Healthcare case when it should have gone through formal notice-and-comment rulemaking procedures.
Finally, it is bad policy to favor micro-unions, because they prevent employees from performing varying job functions, thus inhibiting employee skill development. They also lead to “endless multiple negotiations, conflicting union demands and contract obligations, and burdensome administrative duties.” Micro-unions may foster disruptive employee and union rivalry, as well as situations where one small group of employees could shut down an entire location.
Related Documents: NAM brief (June 13, 2012)
|
Nestle Dreyer's Ice Cream Co. v. NLRB
(4th Circuit)
Forming micro-unions under a community of interest standard
The NAM filed an amicus brief on July 10, 2012, arguing that the ruling in Specialty Healthcare, which allows very small numbers of employees to form a union, should be overruled because it violates provisions of the National Labor Relations Act (NLRA). That decision creates policy implications that will upset and reduce American investments and competitiveness. We argued that Specialty Healthcare prevents all of the employees from fully controlling the creation of the union. This violation allows micro-unions of as little as 2 employees to circumvent employees who do not wish to unionize. Further, by its ruling in Specialty Healthcare, the NLRB does not determine bargaining units “in each case,” and gives nearly all the control of determining who will be in the union to a very small group. The labor uncertainty from this precedent endangers investment in manufacturing, as employers would be required to deal with multiple and often conflicting unions.
In 2014, the court vacated and remanded the case to the NLRB. The original decision had been made by a Board that was ruled unconstitutional by the Supreme Court in the Noel Canning case. In 2016, the 4th Circuit denied Nestle Dryer’s petition for review, stating the NLRB was correct in allowing a maintenance-only bargaining unit, holding that the maintenance workers shared a community of interest distinct enough from the production workers for them to have their own bargaining unit.
Related Documents: NAM brief (July 10, 2012)
|
Thyssenkrupp Waupaca, Inc. v. DeKeyser
(U.S. Supreme Court)
"Nature of the work" requires employees to don, doff and shower on-site
On 8/27/14 the NAM supported review of this case in the Supreme Court. The issue presented revolved around whether the “nature of the work” at Waupaca’s foundries required employees to don, doff and shower on-site. Plaintiffs contended that foundry dust containing silica and other chemicals made the work so hazardous that on-site clothes changing and showering was required by the nature of the work. The district court disagreed and granted summary judgment. The Seventh Circuit reversed, finding that there was a factual dispute over whether the nature of the work required on-site donning, doffing and showering.
This case is very important to manufacturers. The Seventh Circuit’s position takes the determination of health and safety out of the hands of the legislature and places it in the hands of each district court judge across the country. This is not the role the courts should play, and such a perspective creates instability and unpredictability, and increases costs on business and ultimately harms the employees.
The NAM’s brief argued that OSHA had promulgated standards for foundries which do not require on-site clothes changing and showering after work. This bright-line rule has been referenced in the donning and doffing space since roughly 1968. It provides a clear and easily administrable criterion for determining whether time spent changing clothes and showering is compensable under the Fair Labor Standards Act (FLSA). If these activities can be performed offsite, at home or elsewhere, they are not compensable. If courts are going to be allowed to order them to pay for time spent changing clothes and showering when, as here, no federal or state agency requires that this conduct be performed on-site, and no rule of the employer requires that these activities be performed on-site, the impact of such a finding could be devastating. A flood of lawsuits would be filed in the foundry and other manufacturing industries, exposing these employers to huge potential payouts from overtime and require payment for additional hours of work at time and one-half. It is further likely that two to three years of back-pay would be in issue in every case, and all employees during this time period would potentially have a claim under the FLSA or Rule 23, the financial consequences would be staggering.
On November 3, 2014, the Court declined to hear this appeal.
Related Documents: NAM brief (August 27, 2014)
|
Baker DC, LLC v. NLRB
(U.S. District Court for the District of Columbia)
Employers harmed by ambush rule
The NAM and coalition associations filed an amicus brief supporting three construction employees from Baker LLC which joined a federal lawsuit challenging the National Labor Relations Board’s (NLRB) Ambush Rule. Baker requested a Temporary Restraining Order (TRO) against implementation of the Rule due to suffering irreparable harm on a variety of grounds including a strong objection to the Rule’s requirement mandating employer’s turn over employees personal information over to organizing officials. However, the court found no showing of irreparable harm on the notice posting requirement, a failure to show that the disclosure requirements caused certain and irreparable harm, and a failure to demonstrate that Baker’s due process rights will be irreparably injured. The judge distinguished the prior notice posting rule and states that the NAM case does not signal a substantial likelihood of success on the merits in this case. The Baker case has been consolidated with NAM’s challenge to the Rule in D.C. District court with a hearing scheduled for May 15.
Related Documents: NAM brief (April 21, 2015)
|
In re Browning-Ferris
(NLRB)
What constitutes a "joint-employer"
On April 30, 2014, the Board issued an order granting review of the Acting Regional Director’s Decision and Direction of Election of the current joint-employer standard as articulated in the Board’s decisions in TLI, Inc., 271 NLRB 798 (1984), enfd. mem. 772 F.2d 894 (3d Cir. 1985), and Laerco Transportation, 269 NLRB 324 (1984). “To establish joint employer status there must be a showing that the employer meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.” In June 2014, the NAM’s Manufacturers’ Center for Legal Action (MCLA) submitted an amicus brief outlining key concerns of manufacturers in changing the definition of joint employer.
On August 27, 2015 in a 3-2 decision, the Board loosened the standard for determining joint employment under the National Labor Relations Act. For the past 30 years, the relevant joint employer inquiry was whether or not an entity exerts a direct and immediate degree of control over another business's employees and their essential terms and conditions of employment. Under the new standard, the Board evaluates whether an entity exercises indirect control over the means or manner of the employees' work and terms of employment, or whether the entity has the potential to exercise such control. This requires a very fact-specific case-by-case inquiry.
The NLRB’s actions challenge the way manufacturers are able to work in the United States, and the NAM continues to advocate and fight for manufacturers on this issue.
Browning-Ferris has appealed the Board's decision to the D.C. Circuit Court of Appeals. The NAM has joined that fight, which can be found here.
Related Documents: NAM brief (June 26, 2014)
|
Case New Holland, Inc. v. EEOC
(D.D.C.)
EEOC's authority to send blast emails to company employees
On June 5, 2013, without any finding of discrimination or advance notice to Case New Holland (CNH), the EEOC delivered an email blast to the business email inboxes of 1,169 CNH employees. The blast email advised the employees, well over a hundred of whom were managers, that the EEOC was investigating CNH for age discrimination. It then directed the employees to provide to the government, through a secure Internet site, evidence of discrimination and personal contact information. The EEOC actually admitted, in later correspondence, that its blast email was trolling for class action plaintiffs to sue CNH.
CNH asked for a declaratory judgment finding that the EEOC had overreached its authority under its governing statutes and the United States Constitution. There were five counts in the complaint. The First Count asserted an Administrative Procedure Act (APA) violation because no authorizing rule or regulation permitted the blast email. The Second Count asserted that the blast email was neither “necessary [n]or appropriate,” and thus exceeded the permissible scope of the EEOC’s authority under Section 7(a) of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 626(a). The Third Count alleged that the EEOC failed to comply with its own Compliance Manual’s provisions on the conduct of investigations, again in violation of the APA. The Fourth Count asserted an unreasonable invasion of the CNH computer network and of the privacy interests of CNH employees, in violation of the Fourth Amendment to the Constitution. Lastly, the Fifth Count asserted that the EEOC trespassed on the CNH computer network and, by so doing, effected a taking without compensation in violation of the Fifth Amendment to the Constitution.
The EEOC moved to dismiss the complaint, and on Nov 14, 2013, the NAM filed an amicus brief opposing the motion. Our brief argued that the extensive CNH employee time and property used to complete the EEOC evaluations and interviews constitutes a violation of the Fifth Amendment’s takings clause.
The EEOC took the highly unusual step of filing a reply brief to the NAM amicus brief calling it "unprecedented" and asked for an extension to file their full reply. The substance of the full EEOC reply demonstrates the significance of the NAM argument. On 1/6/14, we responded (see brief below).
On 9/24/14, the judge dismissed the case for lack of jurisdiction based on standing. CNH amended its complaint and filed an appeal, and the judge reinstated the case. CNH voluntarily dismissed the case on 10/28/2015.
Related Documents: NAM reply brief (January 6, 2014) NAM amicus brief (November 14, 2013)
|
Chamber of Commerce v. NLRB
(U.S. District Court for the District of Columbia)
Ambush Election Rule
On January 5, 2015 the NAM sued the NLRB in D.C. District Court to stop the agency’s overreach on its “ambush elections” rule issued on December 12, 2014. The coalition brief argues that the Final Rule violates the statutory requirement for an “appropriate hearing” prior to the election, by giving Regional Directors authority to defer litigation of voter eligibility and inclusion issues until after the election. The brief also argues that the Rule is arbitrary and irrational. Specifically, it promotes speed over all other statutory goals, including employer free speech rights and the opportunity for a full and informed debate before the election; requires employers to give out employees’ private phone numbers and personal email addresses. The Board acknowledges that “the privacy, identity theft, and other risks may be greater than the Board has estimated” but nonetheless concludes that these “risks are worth taking.” Finally, the brief argues that the Rule will result in more election-related litigation, not less, even though the stated purpose of the Final Rule is to reduce such litigation.
On February 4, 2015, the NAM filed a motion for summary judgment.
On July 28, 2015, the Court ruled against the NAM's motion.
Related Documents: NAM Opposition to Motion to Dismiss (March 25, 2015) NAM Reply to Motion for Summary Judgment (March 25, 2015) NAM Motion for Summary Judgment (February 24, 2015) NAM complaint (January 5, 2015)
|
In re Constellation Brands
(NLRB)
Unlawful application of bargaining unit determination
The NAM filed a letter with the National Labor Relations Board affirming support for Constellation Brands. The NAM’s letter asserted that the Regional Director ignored important factors which influenced unit determinations including the departmental lines drawn by Constellation. NAM members have a vital interest in the Board’s application of Specialty Healthcare in the manufacturing setting. The standard for bargaining-unit determinations applied by the Regional Director in this case, which is an inaccurate application of the already unlawful standard established by the Board in Specialty Healthcare is problematic in all industries covered by the National Labor Relations Act (“Act” or “NLRA”), 29 U.S.C. §§ 151-169 including manufacturing. The NAM letter further asked that the Board grant Constellation’s Request for Review and invite NAM and other interested parties to brief these issues as they relate to manufacturing/production facilities.
Related Documents: NAM letter (February 12, 2015)
|
M&G Polymers USA, LLC v. Tackett
(U.S. Supreme Court)
Retiree health-care benefits
On July 24, 2014, the NAM filed an amicus brief urging the Supreme Court to reverse a Sixth Circuit decision ruling that retiree health-care benefits, resulting from silence in collective bargaining agreements, are presumed to be indefinite. This decision undermines Congress’ intent regarding employee retirement health benefits and disrupts judicial precedent in other circuits. NAM’s brief clarified that when Congress passed the Employee Retirement Income Security Act (ERISA), it in no way intended retiree health care benefits to be indefinite. Furthermore, other federal circuits have effectuated Congress’ intent by requiring clear and express language in order for retiree health benefits to be provided indefinitely. Accordingly, the NAM encouraged the Supreme Court to adopt a clear and express rule affirming ERISA and precluding a presumption of indefinite health-care benefits.
On January 26th, 2015, the Supreme Court rendered its opinion in this case holding that to determine whether retiree health-care benefits survive the expiration of a collective bargaining agreement, courts should apply ordinary contract principles. Those principles do not include the Sixth Circuit’s inference that parties to collective bargaining would intend retiree benefits to vest for life.
Related Documents: NAM brief (July 24, 2014)
|
National Association of Manufacturers v. Perez
(D.D.C.)
NAM sues OFCCP over its labor rights poster requirement
Continuing the fight against forced speech and aggressive overreach by federal agencies, the NAM and the Virginia Manufacturers Association (VMA) filed a lawsuit 12/18/13 to stop the Office of Federal Contract Compliance Programs (OFCCP) from enforcing its “posting requirement” rule. The OFCCP, an agency within the Department of Labor, enforces rules and regulations imposed on federal contractors.
The OFCCP rule adversely affects thousands of federal contractors and subcontractors by forcing them to promote unionization of their workforces or risk being debarred from federal contracts. Our lawsuit asked the court to strike down the rule on the grounds that poster is compelled speech and violates the First Amendment.
A similar rule put forth by the National Labor Relations Board (NLRB) was struck down earlier in 2013 by a federal appeals court due to a successful lawsuit from the NAM. In that case, the court ruled that similar posters amount to compelled speech and extend beyond the intent of the National Labor Relations Act. Federal contractors deserve the same protection from this aggressive overreach.
The NAM and VMA filed a joint Motion for Summary Judgment in D.C. District Court on 5/1/14. This case arises from a facial challenge brought by Plaintiffs against Defendant’s Final Rule, at 29 CFR Part 471, 75 F.R. 28368 implementing Executive Order 13496 which forces all federal contractors to post a “Notification of Employee Rights Under Federal Labor Laws”, prominently and conspicuously in places of employment. NAM and VMA argue that the Rule must be vacated as it constitutes compelled speech in violation of the First Amendment of the United States Constitution, has been promulgated in excess of Defendants’ statutory authority, is arbitrary and capricious, and is preempted by the NLRA.
On May 7, 2015, the D.C. District Court denied the NAM’s motion for summary judgment and entered judgment for the DOL. The DOL rule requiring contractor posting of NLRA rights statement was upheld by the Court and does not violate the constitutional rights of covered employers.
Related Documents: NAM brief (May 1, 2014) NAM Motion (May 1, 2014) NAM & VMA complaint (December 18, 2013)
|
Roundy's Inc.
(NLRB)
Right to exclude nonemployee union handbillers from company property
The NAM and 194 other national, state and local business organizations filed a brief at the NLRB as part of the Coalition for a Democratic Workplace in a case involving access by nonemployee union members to private property for purposes of handbilling. The case arose when union agents engaged in handbilling in front of 26 of the company's stores. The NLRB allowed the picketing where the company did not have a sufficient property interest, but asked for input from the public about 2 other stores where Roundy's property rights were arguably stronger.
The NAM/industry amicus brief argues that the company may allow some handbillers, such as charitable solicitors, but may exclude others from its property. The company should have the right to exclude individuals whose handbilling advocates a boycott or otherwise is detrimental to the company. A company must have some degree of control over the messages it conveys to its customers on its private property, and the courts have upheld this principle. Our brief urged the Board to stop requiring employers to allow nonemployee union agents to trespass on private property for the purpose of harming the employer's business under any circumstances. If any limitation on a company's right to exclude handbillers is allowed, it should recognize the difference between handbillers that are engaged in beneficent activities and those that are engaged in harmful activities.
Related Documents: NAM amicus brief (January 7, 2011)
|
Walgreen Co. v. Hinchy
(Indiana Supreme Court)
Indiana court allows for vicarious employer liability for personal employee misconduct
On February 18, 2015 the NAM filed an amicus brief with the Indiana Supreme Court in Hinchy v. Walgreen Co. An appeals court in Indiana adopted a “strict liability” respondeat superior theory, holding businesses liable for the actions of their employees, regardless of whether the employee was acting within what is traditionally considered the “scope of employment,” and regardless of whether the employee had been trained not to engage in the behavior.
The NAM brief sought clarification from the Indiana Supreme Court on when an employer can be held liable for the unlawful actions of an employee, where the employee knowingly violated company policy. Although this particular case arose in the health care context, and could have very significant implications for health care companies, the issue is of interest to all Indiana employers.
Unfortunately, the Court declined to take the case.
Related Documents: NAM brief (February 18, 2015)
|
Augustus v. ABM Sec. Serv., Inc.
(California Supreme Court)
Prohibiting on-call rest periods
The NAM filed two amicus briefs with the California Supreme Court, in an employment litigation suit, to defend reasonable rest periods for manufacturing employees under California labor laws. The plaintiff alleged that while on-call rest periods are allowed under California law, an employer cannot satisfy its obligation to relieve employees from duties during rest periods when the employer nonetheless requires its employees to remain on call. This limitation could present manufacturers with operational uncertainty and impose additional costs. The NAM’s briefs argued that: under the plain language of the governing statutes and regulations, employers need not relieve employees of all duty during rest breaks because California wage regulations treat rest breaks differently than meal breaks; and the legislative history of the relevant statutes and regulations confirmed that California law authorizes on-call rest breaks. Unfortunately, the California Supreme Court denied the petition for rehearing.
Related Documents: NAM amicus letter supporting reconsideration (January 12, 2017) NAM amicus brief (November 23, 2015)
|
Constellation Brands US Operations, Inc. v. NLRB
(2nd Circuit)
Standard for determining bargaining units
The NAM filed an amicus brief supporting Constellation Brands in a collective bargaining dispute stemming from the application of the National Labor Relations Board’s (NLRB) new Specialty Healthcare doctrine. The NLRB determined that 46 winemaking cellar employees within a completely integrated production facility constituted an appropriate bargaining unit because they were “readily identifiable as a group” that “shared a community of interest.” This litigation is important to manufacturers because under the new standard, employers would have multiple bargaining agreements that make it difficult to address employee concerns and halt operations until those concerns are addressed. The NAM’s brief argued that 1) the NLRB wrongly decided Specialty Healthcare, which should be overruled because the Specialty Healthcare rule grants too much deference to the union’s proposed unit; 2) Specialty Healthcare represents a radical departure from the NRLB’s longstanding precedent and encourages a multiplicity of fractured units within workplaces throughout the country; and 3) in deciding Specialty Healthcare the NLRB violated the Administrative Procedure Act. Although the court upheld the Specialty Healthcare standard, it found the regional director did not apply the standard correctly.
Related Documents: NAM brief (December 16, 2015)
|
District of Columbia v. U.S. Dep't of Labor
(D.C. Circuit)
Davis Bacon Act does not apply to private construction projects
The NAM filed an amicus brief in a labor litigation lawsuit to oppose the Department of Labor’s (DOL) application of the Davis-Bacon Act, which requires “prevailing wages” for construction workers on public buildings or public works projects funded by the federal or D.C. government, to a private construction project. This is an appeal after DOL ruled that the City Center DC project was subject to the 1931 Davis-Bacon Act. If left unchecked, the DOL’s attempt to apply the Davis-Bacon Act to the private construction industry would have had a significant and potentially negative impact on private industry, the government and the economy. The NAM’s brief argued that DOL’s application of the Davis-Bacon Act to a private construction project was contrary to the language of the Act and that it was an unprecedented attempt to expand the scope of the Davis-Bacon Act into the private construction industry. The court applied common sense reasoning to reject DOL’s expansion of federal law.
Related Documents: NAM brief (March 11, 2015)
|
In re Cooper Tire & Rubber Company
(NLRB)
ALJ rules that racist statements are not grounds for firing
The NAM filed an amicus brief defending employers’ rights to implement and follow anti-discrimination and anti-harassment policies in an employment litigation suit. The litigation arose from Cooper Tire’s discharge of an employee for racist statements made by the employee while on a picket line. Manufacturers have a moral and legal obligation to ensure that employees are free of discrimination and harassment in the workplace. The NAM’s brief argued that 1) the National Labor Relations Act (NLRA) should not protect racist comments, regardless of where or when the comments are made; 2) the National Labor Relations Board (NLRB) cannot force employers to violate other federal statutes through its protection of racist speech used on a picket line; and 3) employers need to be able to rely on and apply their legitimate anti-discrimination and anti-harassment policies. Unfortunately, the NLRB held that although the employee’s “statements most certainly were racist, offensive and reprehensible,” they did not forfeit the protection of the NLRA.
Related Documents: NAM brief (August 20, 2015)
|
In re Kellogg Brown & Root, Inc.
(D.C. Circuit)
Privilege for investigations supervised by in-house lawyers
The NAM filed an amicus brief supporting employers’ rights to protect sensitive communications between employees and an employer’s counsel. This case involves an in-house investigation of tips alleging potential False Claims Act violations where, although the company provided 100,000 pages of documents during the discovery phase, the trial judge ordered that 89 documents identified as privileged be disclosed. If upheld, this precedent will penalize companies for adopting internal compliance programs and force companies to either risk a waiver of attorney-client privilege or to forego legal advice. The NAM’s brief argued that 1) a communication with counsel should be protected provided that the predominant or primary purpose of the communication is for securing legal advice; and 2) if these communications were to lose their privilege solely because they were part of a compliance investigation, “required by regulatory law’” many regulatory programs would be frustrated. In 2014, the appellate court overruled the trial court’s decision and ruled that the communications were protected by the attorney-client privilege. The trial court again ruled against the privilege assertions, and the NAM filed a second amicus brief in 2015 supporting mandamus to the appellate court. In a win for manufacturers, the appellate court reversed the district court for a second time.
Related Documents: NAM brief (January 30, 2015) NAM brief (March 19, 2014)
|
In re Miller & Anderson
(NLRB)
Defining multi-employer bargaining units
The NAM filed an amicus brief opposing the creation of a joint bargaining unit composed of employees employed solely by one of the entities that comprise a joint employer without the consent of both employers. In this case, a union filed a petition seeking to represent a “multi-employer” bargaining unit consisting of employees from Miller & Anderson and temporary employees from a staffing company. This matter is important to manufacturers because a bargaining model where one entity has no employment relationship with all bargaining unit employees creates conflicting interests that are disruptive to productive bargaining. The NAM’s brief argued that any bargaining unit seeking to include employees employed solely by one of the constituent entities that comprise a joint employer is, of necessity, a multi-employer unit, which requires consent of both employers. The National Labor Relations Board decided that the union was not required to obtain consent from both employers and that it would apply traditional community-of-interest factors to determine if such a joint union is appropriate.
Related Documents: NAM brief (September 18, 2015)
|
In re Space Exploration Technologies Corp.
(Dept. of Labor Admin. Rev. Bd.)
Scope of Davis-Bacon Act coverage when government property is involved
The NAM filed an amicus brief supporting Space X in its challenge against an extension of the scope of Davis-Bacon Act coverage. The Department of Labor (DOL) alleged that because the lessor, SpaceX, was located on government property, Space X was therefore subject to the prevailing wage requirements of the Davis-Bacon Act. If left unchecked, the DOL’s attempt to apply the Davis Bacon Act to the private construction industry would have had a significant and potentially negative impact on private industry, the government and the economy. The NAM’s brief argued that the DOL’s application of the rule to a private construction project is contrary to the language of the act and that the DOL’s interpretation was an improper attempt to expand the scope of the Davis-Bacon Act into the private construction industry. The National Labor Relations Board remanded this case to the DOL’s Wage and Hour Division for further proceedings.
Related Documents: NAM brief (February 18, 2014)
|
In re The Boeing Company
(NLRB)
Camera-enabled devices in non-restricted areas
The NAM filed an amicus brief with the National Labor Relations Board (NLRB) supporting an employer’s right to properly manage its workforce during employee demonstrations and to adequately safeguard its manufacturing processes. The plaintiffs alleged that Boeing violated the National Labor Relations Act (the Act) by videotaping employee marches within production facilities on four separate occasions and that Boeing violated the Act when it promulgated and maintained a procedure prohibiting use of employees’ personal camera-enabled devices on site without a valid camera permit approved by security. If upheld, this decision would have significantly infringed on an employer’s ability to safeguard proprietary materials and monitor employee safety. The NAM’s brief argued that 1) photographing or videotaping employees on company premises did not violate the Act because Boeing maintained legitimate reasons to observe the marches; and 2) similarly, the restriction of camera enabled devices on company property did not violate the Act because Boeing had a legitimate business need to protect its manufacturing process. The NLRB concluded that Boeing violated the Act by videotaping employee marches but lawfully maintained a no-camera rule that prohibited employees from using camera-enabled devices.
Related Documents: NAM brief (June 12, 2014)
|
International Union of Painters v. Great Wash Park LLC
(Nevada S. Ct.)
Trespass is not protected union activity
The NAM filed an amicus brief supporting the rights of property owners to access state courts in a dispute regarding third-party trespassers. The owner sought relief from trespass, under state law in a Nevada trial court after the defendants, a labor organization, used projection bombing to beam giant images onto the owner’s property. Effective trespass laws are necessary to protect property owners from trespass. The NAM’s brief argued that 1) the “photobombers” effectively took control of the physical space on which the image was displayed; 2) that state law property claims are not preempted by federal labor laws; 3) labor speech is not privileged over other types of speech; and 4) projection onto private property not only constitutes trespass but also takes property owners’ fundamental ownership rights. Unfortunately, the Nevada Supreme Court declined to hear this appeal.
Related Documents: NAM brief (September 2, 2015)
|
Macy's, Inc. v. NLRB
(5th Circuit)
Fifth Circuit case to reverse micro-unit determination
The NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit supporting Macy’s, Inc., in a collective bargaining dispute. In this case, the National Labor Relations Board applied the Specialty Healthcare standard to conclude that sales employees in the fragrance and cosmetic departments at a Macy’s location were an appropriate bargaining unit. This litigation is important to manufacturers because smaller bargaining units will render it virtually impossible for an employer to oppose the organizing effect and make it more difficult to address employee concerns. The NAM’s brief argued that the application of the Specialty Healthcare doctrine, which reversed 70 years of precedent and instated a new standard for determining a collective bargaining unit, should not apply because the standard is inconsistent with the National Labor Relations Statue and the legislative history. Unfortunately, the court upheld the Specialty Healthcare standard.
Related Documents: NAM brief (April 27, 2015)
|
Nestle Dreyer's Ice Cream Co. v. National Labor Relations Board
(4th Circuit)
Overturning the NLRB's "overwhelming community of interest" test for bargaining units
The NAM filed an amicus brief in the U.S. Court of Appeals for the Fourth Circuit supporting Nestle Dreyer's Ice Cream Co. (Dreyer) in a collective bargaining dispute after the lower court held that Dreyer’s technical refusal to bargain violated the National Labor Relations Act (the Act). The litigation followed Dreyer’s refusal to bargain after the National Labor Relations Board’s (NLRB) certification of the petitioned-for unit, which consisted solely of maintenance employees. This case is important because to simply allow the instant certification of a maintenance-only unit would be a disservice to employers, employees and orderly collective bargaining. The NAM’s brief argued that the court should reverse the NLRB’s decision because the NLRB1) erroneously failed to give proper consideration to the bargaining history that included a broader unit of maintenance and production employees; 2) relied on the “overwhelming community of interest” test announced in Specialty Healthcare, which was inconsistent with prior doctrine; and 3) Incorrectly made the extent of organization a controlling factor in unit determination. The court denied Nestle Dryer’s petition for review.
Related Documents: NAM brief (January 13, 2015)
|
Tyson Foods, Inc. v. Bouaphakeo
(U.S. Supreme Court)
Uninjured class members should be excluded
The NAM filed an amicus brief with the U.S. Supreme Court in a class action litigation urging the Court to determine whether a certified class may include uninjured claimants. The plaintiffs sued Tyson foods alleging injury and damages under the Fair Labor Standards Act (FLSA) and seeking overtime wages for time spent dressing and removing protective gear; however, the plaintiffs used statistical modeling to create a fictional plaintiff as the basis of class certification. The rise of no injury class plaintiffs is troublesome to manufacturers because it subjects them to increased litigation from plaintiffs who can hide the deficiencies of individual class member claims. The NAM’s brief urged the Supreme Court to set a bright-line rule against the inclusion of uninjured class members and argued that individuals without injuries do not have a claim. The Supreme Court affirmed the lower court’s ruling but did so on narrow grounds and did not reach the issue that was central to the NAM’s amicus brief.
Related Documents: NAM brief (August 14, 2015) NAM brief (April 20, 2015)
|
Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42
(NLRB)
Application of Specialty Healthcare to maintenance employee micro unit
The NAM filed an amicus brief with the National Labor Relations Board supporting Volkswagen in a collective bargaining dispute with the United Auto Workers (UAW). The UAW brought the complaint after Volkswagen opposed the creation of a micro-bargaining unit exclusively for maintenance employees. UAW argued that because maintenance employees “share a unique function” they are readily identifiable and therefore should be recognized as a bargaining unit. This litigation is important to manufacturers because multiple bargaining agreements make it difficult to address employee concerns. The NAM’s brief argued that the application of the Specialty Healthcare doctrine, which reversed 70 years of precedent and instated a new standard for determining a collective bargain unit should not apply because the standard is inconsistent with the statute and the legislative history and that the decision in this case fails to even comply with the standard as set forth in Specialty Healthcare. The NLRB rejected Volkswagen’s request for review, but the case was appealed to the U.S. Court of Appeals for the D.C. Circuit, which remanded the case for reconsideration.
Related Documents: NAM brief (December 23, 2015)
|
Banner Health Sys. v. NLRB
(D.C. Circuit)
Challenging NLRB decision undermining confidentiality of investigatory interviews
The NAM filed an amicus brief in support of an employer’s right to manage internal company investigations of employee misconduct. This case stemmed from a previous National Labor Relations Board (NLRB) decision where Banner Health Systems instructed employees to maintain confidentiality during ongoing investigations of employee misconduct. This issue is important to manufacturers because their business operations would be disrupted by employees discussing the details of a sensitive internal company investigation. The NAM’s brief argued that the NLRB’s ruling would burden employers by requiring them to justify the need for investigatory confidentiality at a point where such justification would be almost impossible. Although the decision is narrowly tailored, the outcome is a win for manufacturers as the court did not opine on the NLRB’s case-by-case approach to justify employer confidentiality.
Related Documents: NAM amicus brief (January 21, 2016)
|
EEOC v. Day & Zimmermann NPS, Inc.
(D. Conn.)
EEOC interference with employer free speech
The NAM filed an amicus brief supporting manufacturers’ employment rights in an Equal Employment Opportunity Commission (EEOC) claim against an employer for retaliation and interference under the Americans with Disabilities Act (ADA) based on a letter sent from the employer to employees identified as witnesses advising the employees of their rights during a disability discrimination investigation. Not only would the EEOC’s interpretation have negatively impacted the employer/employee relationship by making it more difficult for manufacturers to provide information to employees, but the interpretation also violated employers’ constitutional rights to communicate with employees. The NAM’s brief argued that the EEOC’s action was unlawful because the letter did not violate the ADA and that the EEOC interfered with the employer’s First Amendment right to communicate with its employees. The parties settled the case.
Related Documents: NAM brief (October 28, 2016)
|
FedEx Home Delivery v. NLRB
(D.C. Circuit)
Delivery service contractors as employees
The NAM filed an amicus brief in support of FedEx’s position that delivery service contractors working for FedEx were independent contractors, not employees of FedEx. The facts of this case were “materially indistinguishable” from a prior case where the U.S. Court of Appeals for the District of Columbia Circuit determined that a group of delivery service contractors were not FedEx employees, but were independent contractors under the National Labor Relations Act. This case is important as worker classification may have broad ramifications affecting the use of independent contractors and partnerships between manufacturers and commercial vehicle drivers are a key asset. The NAM’s brief explained that worker classification issues directly impact all segments of the economy and more directly, the trucking industry. In a win for manufacturers, the court ruled against the plaintiffs.
Related Documents: NAM brief (August 17, 2015)
|
International Brotherhood of Boilermakers v. NASSCO Holdings Inc.
(Cal. Ct. App.)
Notice requirements under the California WARN Act
The NAM filed an amicus brief in the California Court of Appeals to challenge the California WARN ACT, which requires employers to provide 60-days’ notice before any “mass layoff, relocation, or termination.” This is an appeal from a lower court decision which held that NASSCO violated the WARN Act when it failed to provide required notice before informing 90 employees that they should not return to work for four to five weeks. California manufacturers, particularly those with cyclical employees or staffing requirements that ebb and flow, need certainty in meeting their staffing needs. The NAM’s brief argued that the court erred by reading “layoff” in the Act to include a furlough — a brief break during which about 90 employees (less than 3% of NASSCO’s workforce) did not earn wages but nevertheless remained as NASSCO employees. Unfortunately, the court did not agree with this view but instead affirmed the lower court’s decision, requiring an employer to provide 60 days’ notice prior to a mass layoff, even if the layoff is not permanent and is for less than six months.
Related Documents: NAM brief (May 1, 2017)
|
Mendoza v. Nordstrom, Inc.
(California Supreme Court)
Understanding California's Day-of-Rest law
The NAM filed an amicus brief supporting Nordstrom Inc. in an employment litigation suit to defend reasonable rest periods for manufacturing employees under California labor law. The plaintiff argued that Nordstrom violated California labor laws when the company failed to provide statutorily guaranteed rest days. The issues in this case are 1) whether employees are statutorily required to take a rest on a defined weekly basis, rather than an undefined consecutive period; and 2) whether an employer may permit an employee to independently choose to decline a rest day. This case is important for manufacturers because it implicates employers’ ability to reasonably manage their workforce and allow flexible rest days to accommodate both the needs of the employer and the employee. The NAM’s brief argued that a defined workweek is the proper and most reasonable framework for calculating the required day of rest and the law should be interpreted to encourage employee flexibility and autonomy in scheduling. The court agreed with the NAM’s arguments, which allows manufacturers to continue to provide employees with flexible scheduling options.
Related Documents: NAM brief (November 30, 2015)
|
Nevada v. U.S. Dept. of Labor
(5th Circuit)
Appeal of DOL's new overtime rule
The NAM filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit asking the court to uphold a preliminary injunction of a Department of Labor (DOL) overtime rule that would place significant economic burdens on businesses. The overtime rule would have increased the minimum salary exemption thresholds by more than 100% from $23,660 to $47,476 annually. If the injunction was not upheld, more than 4.2 million employees, many of them in manufacturing, would have immediately lost their exempt status causing economic harm to both employers and employees. The NAM’s brief argued that the DOL’s overtime rule is inconsistent with decades of regulations and failed to consider the business community’s legitimate interests. The court granted a motion by the DOL to dismiss the appeal, and the DOL reopened the rulemaking process.
Related Documents: NAM amicus brief (January 24, 2017)
|
Plano Chamber of Commerce v. Perez
(E.D. Tex.)
Challenging DOL's new overtime rule
The NAM sued the Department of Labor (DOL) to challenge its overtime rule. The rule was scheduled to become effective on December 1, 2016 and would have increased the minimum salary exemption threshold for executive, administrative or professional employees by more than 100%, from $23,660 to $47,476 annually. This case is important as more than 4.2 million employees, many of them in manufacturing, would have immediately lost their exempt status causing economic harm to both employers and employees. The NAM argued that the rule exceeded the DOL’s authority under the Fair Labor Standards Act, and as such the rule is invalid. In a win for manufacturers, the judge granted summary judgement allowing business to continue to operate without a detrimental impact.
Related Documents: NAM Opposition Motion to Intervene (December 15, 2016) NAM Opposition Motion to Stay (December 15, 2016) NAM Reply Brief (November 21, 2016) NAM Response (October 21, 2016) NAM Motion to Consolidate (October 17, 2016) NAM Summary Judgment Brief (October 14, 2016) NAM Complaint (September 20, 2016)
|
The Boeing Company v. National Labor Relations Board
(9th Circuit)
Employee confidentiality in workplace investigations
The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit challenging a National Labor Relations Board (NRLB) holding that prohibits employers from recommending employee confidentiality during workplace investigations. The NLRB disapproved of a Boeing form which recommended that employees refrain from discussing a case with any other Boeing employee, other than company representatives investigating the issue or the employee’s union representative. If upheld, this holding would have undermined the ability of employers and employees to engage in confidential workplace investigations for legitimate business purposes. The NAM’s brief explained that the NLRB’s holding infringes on employers’ free speech rights and impedes employers’ abilities to conduct effective workplace investigations. The court remanded the case back to the district court because the NLRB established new rules after the case was filed.
Related Documents: NAM amicus brief (May 23, 2016)
|
Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42
(D.C. Circuit)
Application of Specialty Healthcare to maintenance employee union micro unit
The NAM filed an amicus brief in the U.S. Court of Appeals for the D.C. Circuit supporting Volkswagen in a collective bargaining dispute with the United Auto Workers (UAW). The UAW brought the complaint after Volkswagen opposed the creation of a micro-bargaining unit exclusively for maintenance employees; UAW argued that because maintenance employees “share a unique function” they are readily identifiable and therefore should be recognized as a bargaining unit. This litigation is important to manufacturers because micro-bargaining units disrupt highly integrated manufacturing operations. The NAM’s brief argued that the Specialty Healthcare case, which reversed 70 years of precedent and instated a new standard for determining a collective bargain unit, should not apply because that case is inconsistent with the statue and the legislative history. After the National Labor Relations Board (NLRB) issued a revised ruling in another case, the D.C. Circuit remanded this case back to the NLRB for reconsideration.
Related Documents: NAM amicus brief (February 2, 2017)
|
Williams v. S.C. (Marshalls of CA)
(California Supreme Court)
Discovery limits under California's Private Attorney General Act
The NAM filed an amicus brief urging the California Supreme Court to uphold longstanding discovery rules and to limit the delegation of state enforcement power to private plaintiffs to protect the public’s interest in an employment litigation case. The plaintiff brought this litigation against Marshalls under California’s Private Attorneys General Act (PAGA), alleging that Marshalls failed to provide its employees with meal and rest breaks or premium pay in lieu thereof, to provide accurate wage statements, to reimburse employees for necessary business-related expenses and to pay all earned wages during employment. Manufacturers need civil litigation and workplaces laws in California that are balanced, reflect sound public policy and respect due process. Allowing private plaintiffs to pursue discovery demands broader than their allegations contributes to the growth of opportunistic lawsuits, which harm manufacturers and California’s economic climate. The NAM’s brief argued that allowing private plaintiffs to leverage PAGA without first laying the factual and legal foundation for their claims goes around longstanding discovery rules, and the delegation of state enforcement power to private plaintiffs must be safeguarded to protect the public’s interest. Unfortunately, the court did not agree with NAM’s arguments.
Related Documents: NAM amicus brief (May 6, 2016)
|
Alvarado v. Dart Container Corp.
(California Supreme Court)
Proper formula for computing overtime pay
The NAM filed an amicus brief with the California Supreme Court in support of Dart Container Corp. in its dispute regarding the proper formula for calculating overtime wages. This is an appeal from a lower court decision which held that Dart Container was correct to use the federal overtime formula when it calculated wages because, although the federal law did not preempt state law, there was no valid state law specifying a formula to calculate overtime. Employers should not be penalized because of the ambiguity of state law when trying to pay their employees fairly. The NAM's brief argued that no California law provides guidance to calculate overtime on bonuses, and in the absence of such a law, courts should look to federal regulations for guidance and employers should be able to rely on existing law. Unfortunately, the California Supreme Court held that the lower court erred in finding that there was no state law specifying a formula to calculate overtime.
Related Documents: NAM brief (September 28, 2016)
|
Associated Builders & Contractors v. Perez
(E.D. Ark.)
DOL Persuader Rule chills employer and employee communications
The NAM challenged the Department of Labor’s (DOL) Persuader Rule, which required employers, third-party lawyers and other labor consultants to disclose their relationships more frequently than under the 50-year-old "bright line" standard. The new rule required employers to file reports if consultants provided guidance to employers even if the consultants did not contact employees directly. If upheld, the rule would have restricted manufacturers’ ability to communicate with their workforce and would have resulted in employers not seeking counsel for guidance on important employer and employee related questions. The NAM’s brief argued that the Rule was arbitrary and capricious, unconstitutionally overbroad under the First Amendment, vague under the Fifth Amendment and interfered with ethical duties to maintain confidentiality. In July 2018, the DOL officially rescinded the Rule.
Related Documents: NAM Motion to Stay Brief (December 12, 2016) NAM Memorandum (April 2, 2016) NAM Motion (April 1, 2016) NAM Complaint (March 30, 2016)
|
Browning-Ferris Indus. v. NLRB
(D.C. Circuit)
What constitutes a "joint-employer"
The NAM filed an amicus brief in the D.C. Circuit supporting Browning-Ferris in its appeal from an adverse decision by the National Labor Relations Board (the Board) in a dispute regarding the legal standard that should apply when determining whether two or more companies are “joint employers” under federal labor law. The Board abandoned its longstanding legal standard for joint employer determinations, replacing it with a new standard that evaluated whether an entity exercised indirect control over the means or manner of the employees’ work and terms of employment, or whether the entity had the potential to exercise such control. If upheld, the new standard would unreasonably expand the companies deemed to be an individual’s employer and impose employment obligations and liabilities on those employers. The NAM’s brief argued that the longstanding “direct control” standard should remain the standard for determining joint employment and that the Board’s loosened standard subjected companies to unmerited liability, without providing the same benefits as the old rule. The D.C. Circuit upheld the Board’s consideration of “reserved right to control” and “indirect control” in the joint-employer inquiry but remanded the case to the NLRB for it to adequately define what constitutes control.
Related Documents: NAM amicus brief (June 14, 2016)
|
Cooper Tire & Rubber Co. v. NLRB
(8th Circuit)
Challenging NLRB ruling that racist statements are not grounds for firing
The NAM filed an amicus brief defending an employer’s right to implement and follow anti-discrimination and anti-harassment policies in an employment termination appeal. A National Labor Relations Board (NLRB) decision reinstated a Cooper Tire employee who was fired for using racial epithets toward replacement workers while the employee was on the picket line. Employers have a moral and legal obligation to protect the employees’ right to be free from discrimination and harassment in the workplace. The NAM’s brief urged the court to reverse the NLRB decision and establish that there is no statutory protection for racist or discriminatory statements made on the picket line and that protecting these statements is contrary to federal policies against discrimination and harassment. Unfortunately, the court deferred to the NLRB’s decision because the harassment took place in the context of picket-line activities during a strike.
Related Documents: NAM brief (September 29, 2017)
|
DirecTV v. Hall
(U.S. Supreme Court)
Joint employer liability under FLSA
The NAM filed an amicus brief urging the U.S. Supreme Court to review a case addressing standards applicable to joint employment liability under the Fair Labor Standards Act (FLSA). The U.S. Court of Appeals for the Fourth Circuit’s ruling would treat any business as an FLSA joint-employer if the business is “not completely disassociated” from a worker’s direct employer and applies even if a business has no direct relationship with the employee, or if the business has only a limited relationship. That ruling unreasonably expands the scope of companies deemed to be an individual’s employer and imposes employment obligations and liabilities on those employers. The NAM’s brief explained that the Supreme Court should hear the case to bring uniformity to joint employment liability standards and avoid the potential imposition of extensive unanticipated liability on the many employers impacted by this new rule. Although the Supreme Court denied certiorari, the National Labor Relations Board overturned the Browning-Ferris case that initially broadened the definition of a joint employer.
Related Documents: NAM amicus brief (July 6, 2017)
|
Emerson Electric Co. v. Superior Court of California
(U.S. Supreme Court)
Federal OSHA preemption of state unfair competition law
The NAM filed an amicus brief in the U.S. Supreme Court supporting Emerson Electric Co.’s request for review of the California Supreme Court’s decision that enforcement actions under California’s Unfair Competition Law (UCL) are not preempted by the federal Occupational Safety and Health Act (OSH Act). The OSH Act subjects employers and employees to one set of workplace safety regulations and imposes uniform health and safety requirements. States may regulate and enforce additional workplace safety only pursuant to a federally approved plan that avoids duplicative and counterproductive regulation. One California county sidestepped an approved state plan to seek additional penalties against Emerson for an alleged workplace violation. That circumvention could set a dangerous precedent for manufacturers by allowing counties to impose duplicative and conflicting workplace requirements on manufacturers. The NAM’s amicus brief argued that the federal OSH Act preempts such conflicting requirements and asked the U.S. Supreme Court to hear and reverse the decision, but the U.S. Supreme Court declined review.
Related Documents: NAM brief (July 27, 2018)
|
McAdams v. Marquette University
(Wisconsin Supreme Court)
Right of employers to terminate employees for disruptive conduct
The NAM filed an amicus brief on behalf of Marquette University in a case involving the authority of a private employer to terminate an employee for conduct that violates the employment contract between the employee and employer. The NAM’s brief argued that private employers should remain free to discipline employees for conduct or speech that disrupts or adversely affects the employer’s mission, and where an employment contract establishes a process to resolve disciplinary disputes, courts should not disrupt that process. The Wisconsin Supreme Court ruled 4-2 that Marquette breached its employment contract with the professor by suspending him.
Related Documents: NAM brief (March 21, 2018)
|
Newton v. Parker Drilling Management Services, Inc.
(9th Circuit)
Applicability of state employment laws on the outer continental shelf
The NAM filed an amicus brief arguing for en banc review of a decision by a panel of the U.S. Court of Appeals for the Ninth Circuit that held that workers employed on drilling platforms on the outer continental shelf (OCS) may bring claims under state wage and hour laws. The panel’s holding not only sharply departs from the settled expectations of both employers and employees working on OCS platforms, it also creates hundreds of millions of dollars of potential retroactive liability for employers and invites lawsuits in an area long understood to be under exclusive federal authority. The NAM’s brief argued that the panel opinion disrupts existing employer-employee relationships formed in reliance on longstanding interpretations of the Outer Continental Shelf Lands Act and that the decision improperly elevates state law to supremacy over federal law, conflicting with congressional intent and inviting states to frustrate offshore oil and natural gas development. The court denied the petition for rehearing en banc; however, the court issued a stay on the mandate that allows OCS platform workers to bring claims under state law pending the filing of a petition for a writ of certiorari in the U.S. Supreme Court.
Related Documents: NAM brief (April 2, 2018)
|
Solus v. Superior Court of California
(California Supreme Court)
Federal OSHA preemption of state unfair competition law
The NAM filed an amicus brief urging the California Superior Court to hold that federal preemption prohibited a district attorney’s action under California’s Unfair Competition Law (UCL). The district attorney sought civil penalties, in addition to those already imposed by the California Division of Occupational Safety and Health, against a manufacturer under the state’s unfair competition law and fair advertising law. This litigation is concerning to manufacturers that are already subjected to federal workplace safety regulations, which impose uniform, deliberate and predictable health and safety requirements, because they would be subjected to duplicative and counterproductive regulation. The NAM’s brief argued that 1) the lawsuit is preempted by federal law, which determines the regulations and enforcement methods for workplace safety standards in California; 2) the UCL is inconsistent with California’s approved penalty structure for workplace safety violations; and 3) the court should require pre-approval under the state plan of unfair competition claims for workplace safety violations. Unfortunately, the California Supreme Court held that the UCL was not preempted by the federal Occupational Safety and Health Act.
Related Documents: NAM brief (May 28, 2015)
|
BNSF Railway Co. v. EEOC
(U.S. Supreme Court)
ADA definition of disability for preemployment screenings
The NAM filed an amicus brief with the U.S. Supreme Court urging the court to reject expansion the scope of the Americans with Disabilities Act (ADA) “regarded as” prong of the definition of “disability.” This litigation arises from an Equal Employment Opportunity Commission (EEOC) charge after BNSF withdrew a conditional offer of employment because the company lacked enough information to determine whether an applicant suffered from an impairment that could limit his ability to perform the essential functions of the position. If allowed to stand, the decision would impose significant costs and expose employers to uncontrolled liability. A Supreme Court decision in this case would resolve a circuit split between the Ninth Circuit and other circuits that have considered this question. The NAM’s brief argued that 1) under the Ninth Circuit’s reasoning, an employer that requires an employee to undergo an individualized medical examination “for the purposes of determining whether he has an impairment” will be deemed to per se perceive the employee as having such an impairment and “regard” the employee as disabled; 2) other circuits have rejected this logic; and 3) that the Ninth Circuit’s holding improperly imposes the costs of medical examinations on employers. On November 13, 2019, the Court denied certiorari.
Related Documents: NAM brief (April 3, 2019)
|
Boeing v. Int'l Ass'n of Machinists and Aerospace Workers
(NLRB)
Supporting appeal of fractured, small union bargaining unit determination
The NAM filed an amicus brief to support Boeing’s request for the National Labor Relations Board (NLRB) to review its finding that a small group of employees constituted a unit appropriate for collective bargaining. The Boeing Company’s 787 Dreamliner manufacturing facility in South Carolina employs approximately 3,000 production and maintenance employees, who have twice voted against joining a union. The NLRB Regional Director directed the election for a subset of employees at the plant. If the Regional Director’s decision stands, manufacturers could have their workforces artificially fractured into smaller bargaining units in violation of the “community of interest” standard required in making bargaining unit determinations. The NAM’s amicus brief argues that the Regional Director improperly applied a standard that had been overturned and that the fragmented unit creates an artificial barrier that separates employees and departments and frustrates the ability to maintain stable labor relations. On September 9, 2019, the NLRB reversed the regional director's decision, concluding that he misapplied the governing test for whether a subset of employees can bargain separately from the larger workforce.
Related Documents: NAM brief (July 16, 2018)
|
Busk v. Integrity Staffing Solutions, Inc.
(U.S. Supreme Court)
Compensation for security screenings
The NAM filed an amicus brief with the U.S. Supreme Court urging review of a lower court decision that Nevada and Arizona employers were obligated to compensate warehouse workers for time spent going through security screenings at the end of the day. That decision identified a federal standard for compensable “work” under the Fair Labor Standards Act independent of the Portal to Portal Act; the court held that Nevada and Arizona did not have to take the Portal to Portal Act into account because neither state adopted the Act. If allowed to stand, that decision would have adverse consequences for businesses who would incur significant liability from the opportunistic plaintiffs’ bar or significant costs in revamping their procedures to try to avoid liability. The NAM’s brief argued that the decision undermines Supreme Court precedent and that it will invite significant financial implications for employers across the country. On October 7, 2019, the court denied certiorari.
Related Documents: NAM brief (April 5, 2019)
|
Caesars Entertainment Corp. v. Int'l Union of Painters
(NLRB)
Protection of employer email systems
The NAM filed an amicus brief before the National Labor Relations Board (NLRB) in response to the NLRB’s request for input on whether to reconsider legal precedent that held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system for union communications. The NAM’s brief argues that employers should be allowed to safeguard their electronic communications for legitimate business interests, including to minimize distractions in the workplace, to prevent misuses of communications systems, to guard against data security vulnerabilities and to address other liabilities. On December 17, 2019, the NLRB agreed, and reinstated the right of an employer to restrict employee use of its email system as long as it does so on a nondiscriminatory basis.
Related Documents: NAM brief (October 1, 2018)
|
Cellco Partnership v. NLRB
(9th Circuit)
Restriction on use of email in employee handbooks
The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit supporting employers’ right to limit what information is sent on work emails. The case arises from a decision by the National Labor Relations Board (NLRB) that deems illegal portions of Verizon's workplace Code of Conduct that restricts employee use of company email because the NLRB believes the policies violate employee rights to discuss wages, hours and terms of employment. This case is important because manufacturers need to be able to adopt reasonable workplace regulations. The NAM’s brief argues that the ruling ignores the rights of employers to establish safe and productive workplaces and secure email systems, creates legal and practical problems for employers of all sizes, and infringes First Amendment speech rights. On September 24, 2018, the court held the case in abeyance pending the NLRB's reconsideration of the standard set forth in Purple Communications Inc., 361 N.L.R.B. 1050 (2014), which held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on nonworking time, for communications protected by NLRA Section 7. On December 17, 2019, the NLRB issued its decision, agreeing with the NAM and reinstating the right of an employer to restrict employee use of its email system as long as it does so on a nondiscriminatory basis.
Related Documents: NAM brief (November 16, 2017)
|
Communication Workers v. NLRB
(9th Circuit)
Use of company email by employees
The NAM filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit supporting restrictions on the use of company email systems by employees. This case arises from a 2014 decision by the National Labor Relations Board (NRLB) that if a company allows employees to use their email system, the employees have a statutory right to use the system on nonworking time for a wide range of messages and companies have limited oversight authority. This is important for manufacturers because the 2014 NLRB decision allows for extensive workplace distractions and personal misuse of business communication systems. The NAM’s brief argues that the ruling creates legal and practical problems for employers of all sizes, is unnecessary in today's world of social media and free email accounts, and infringes First Amendment speech and Fifth Amendment property rights. On September 24, 2018, the court held the case in abeyance pending the Board’s decision in a separate case, Caesars Entertainment Corp. v. Int’l Union of Painters, which similarly involved the NAM as amicus. The Caesars decision, issued on December 17, 2019, followed the NAM's rationale and reinstated the right of an employer to restrict employee use of its email system as long as it does so on a nondiscriminatory basis.
Related Documents: NAM amicus brief (October 10, 2017)
|
Marathon v. NLRB
(6th Circuit)
Unreasonable union document requests
The NAM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit to support Marathon Petroleum in its appeal from a National Labor Relations Board (NRLB) decision that required Marathon to produce documents during a union discussion. The underlying issue is whether “meet and discuss” means “bargain” under labor law. Marathon agreed to meet and discuss over outside contractors but not to bargain. Manufacturers and their employees rely on maintaining a fair and balanced system for economic growth and job creation. The NAM’s brief argues that the NLRB abuses its discretion by finding that Marathon incurred a bargaining obligation by agreeing to meet and discuss with the union. The Sixth Circuit agreed with Marathon, denied enforcement of the NLRB decision and remanded the case to determine if Marathon had any duty to bargain with the union over outside contractors.
Related Documents: NAM brief (December 26, 2018)
|
McDonald's v. Serv. Emp.'s Int'l Union
(NLRB)
NLRB preclusion standards
The NAM filed an amicus brief urging the National Labor Relations Board (NLRB) to uphold specific, well-established recusal standards. This case involves the Service Employees International Union’s (SEIU) attempt to force two republican NLRB members to recuse themselves because their former law firms represented clients with similar issues as the issues in this case, even though neither NRLB member nor their former law firms served as counsel for any of the parties in this case. This “issue preclusion” standard advocated by the SEIU is an extraordinary departure from established recusal procedures, is irreconcilable with federal regulations and unmanageable as a practical matter. The NAM’s brief explains why prior recusal standards should be upheld to allow the NLRB to efficiently decide the many matters it confronts without fundamentally altering how it functions. On November 19, 2019, the NLRB issued its Ethics Recusal Report, which largely upholds the prior recusal standards advocated by the NAM and establishes a new filing obligation requiring all parties appearing before the Board to file an organizational disclosure statement. The report also adopts a written Board member disqualification protocol and determines that Board members can challenge the agency’s ethics official recusal determination and insist on participating in a particular case (though this, according to the report, should be very rare). On December 12, 2019, the Board denied the SEIU's recusal motion.
Related Documents: NAM brief (August 28, 2018)
|
Nat’l Women’s L. Ctr. v. OMB
(D.D.C.)
EEO-1 Component 2 pay data reporting
The NAM filed an amicus brief urging the U.S. District Court for the District of Columbia to delay the deadline for filing the Revised EEO-1 Report “Component 2” pay data. Because Component 2 significantly expands the data fields employers must submit, employers need sufficient time to revise their systems, implement new procedures and train employees in order to collect the data. Component 2 creates an administrative burden for employers who will now be forced to bear the costs of complying with the requirements. The NAM’s brief argued that the EEOC has previously recognized that changes to EEO-1 require implementation time; 2) employers reasonably relied on EEOC’s direction and did not take the steps need to comply with collection of the data; 3) consistent with these reasons employers should receive sufficient time to prepare for the revised EEO-1; and 4) the data should not be required until EEOC can preserve confidentiality. The court declined to delay the filing deadline.
Related Documents: NAM summation (April 22, 2019) NAM brief (April 4, 2019)
|
Nevada v. U.S. Dep’t of Labor
(5th Circuit)
Defending the overtime preliminary injunction from a collateral attack
The NAM filed an amicus brief on behalf of Chipotle Mexican Grill, supporting the nationwide injunction of the overtime rule. The plaintiff in this case filed suit against her employer, Chipotle, alleging violations of the new overtime rule, which had been enjoined by an Eastern District of Texas judge. The judge who issued the nationwide injunction held the plaintiff in contempt. The plaintiff is now appealing the contempt order, arguing that she was not within the judge’s jurisdiction and cannot be held in contempt. If the contempt order is vacated, it would functionally invalidate the nationwide injunction of the overtime rule because it would allow employees to sue employers for non-compliance. The 5th Circuit vacated the contempt order because the court lacked jurisdiction over the plaintiff.
Related Documents: NAM brief (July 13, 2018)
|
Parker Drilling Management Services v. Newton
(U.S. Supreme Court)
Employment liability on the outer continental shelf
The NAM filed an amicus brief in the U.S. Supreme Court to overturn an appellate court ruling that workers on offshore drilling platforms may bring state-law labor and employment claims. An employee located on an offshore drilling platform in federal waters on the Outer Continental Shelf sued his employer—an offshore drilling services company—alleging the employer failed to pay the employee for his non-working “standby” time on the platform. The employee argued that California’s labor laws entitled him to payment for the standby time. The drilling company countered that federal labor laws applied because the platform is located on the Outer Continental shelf. A district court ruled that federal law applies, but the U.S. Court of Appeals for the 9th Circuit reversed. The drilling company petitioned the U.S. Supreme Court for review. The NAM filed an amicus brief in support of review. The Court granted review, and on June 10, 2019, concluded that federal labor law applies because the Outer Continental Shelf Lands Act broadly preempts state labor and employment laws. This decision restores certainty for offshore platform owners and operators and removes the specter of hundreds of millions of dollars in unwarranted wage-and-hour liability.
Related Documents: NAM brief (February 27, 2019) NAM brief (October 26, 2018)
|
Taylor v. Burlington Northern Santa Fe Railway Co.
(Washington State Supreme Court)
Whether obesity is an impairment under Washington state law
The NAM filed an amicus brief in the Washington State Supreme Court arguing that obesity is not a legally protected disability unless the obesity is the result of a physiological disorder. The U.S. Court of Appeals for the 9th Circuit sent a certified question to the Washington State Supreme Court asking whether obesity is an impairment under Washington law to resolve allegations by a plaintiff that his denial of employment because he was obese constituted discrimination. An adverse ruling on this question could affect employee relations and a wide variety of business interactions negatively and could impose significant costs and uncertainty on Washington businesses. The NAM’s brief argues that defining obesity as a “per se” disability would encompass 40 percent or more of the adult population, would be at odds with legislative intent and would place significant burdens on employers. The court held that obesity is always an “impairment” under Washington law, regardless of whether obesity is related to an underlying medical condition.
Related Documents: NAM brief (January 14, 2019)
|
United Nurses & Allied Professionals
(NLRB)
Union dues spent on lobbying
The NAM filed an amicus brief with the National Labor Relations Board arguing against treating lobbying as a core union function and significantly altering the current way employees exercise their rights to object to union dues expenditures for political activities. Mandatory union dues may be used only to support union activities germane to collective bargaining, contract administration and grievance adjustment, and may not be used for political speech that conflicts with the First Amendment rights of the union members who pay dues. This case is important because union dues should not be used to promote political causes to which employee's object. Our brief argued that lobbying is not a core union function, the Supreme Court has already decided the issue and employees should not be compelled to fund these political activities. The NLRB agreed, and on March 1, 2019, issued a decision holding that lobbying activities are not so related to the Union’s representational duties to employees as to justify the compelled financial support of those activities.
Related Documents: NAM brief (February 19, 2013)
|
UPS Ground Freight v. NLRB
(D.C. Circuit)
As-applied challenge of the ambush election rule
The NAM filed an amicus brief in support of UPS in the first as-applied challenge of the ambush election rule. In 2014, the National Labor Relations Board (NLRB) issued the election rule, which elevated speed above due process and transparency. Shortly thereafter, because the Election Rule failed to balance other important policy objectives, the NAM brought a facial challenge to the rule in the U.S. District Court for the District of Columbia, which rejected the challenge based on its belief that the rule would be applied in a fair manner. A fair, transparent and thorough election process is important for manufacturing employees to be able to have an informed choice whether they want to be represented by a union. The NAM’s brief argues that this case serves as a prime example of how the rule has been applied to deny employers due process, such as by failing to resolve a voter eligibility issue before the election and denying an appropriate hearing. The D.C. Circuit held that there was no defect in the Board’s decision to certify the Union and consequently denied UPS’s petition for review.
Related Documents: NAM brief (October 22, 2018)
|
Zino v. Whirlpool Corp.
(6th Circuit)
Whether collective bargaining agreement entitles retirees to vested healthcare benefits for life.
The NAM filed an amicus brief supporting Whirlpool in this appeal to the Sixth Circuit. The issue is whether a collective bargaining agreement provides health benefits for life absent explicit language that the agreement provides for such benefits. Previously, the Sixth Circuit has provided conflicting holdings in similar cases, at times holding that the collective bargaining agreements do not provide such lifetime benefits and at times reading them into the agreement. However, in Tackett, the Supreme Court held that using ordinary contract principles, parties to collective bargaining agreements would not intend retiree benefits to vest for life if not explicitly stated in the agreement. The NAM encouraged the Sixth Circuit to provide a clear standard that does not conflict with Tackett, which it did by holding on February 15, 2019, that the agreement did not provide lifetime health benefits.
Related Documents: NAM brief (January 12, 2018)
|
Franze v. Bimbo Bakeries USA, Inc.
(2nd Circuit)
Defending the independent contractor model
The NAM filed an amicus brief to seek to uphold a district court ruling granting summary judgment for defendant Bimbo Foods Bakeries in a putative class action brought by delivery drivers who allege that the company misclassified them as independent contractors and, as a result, they are entitled to overtime pay and other benefits guaranteed to employees under the Fair Labor Standards Act (FLSA) and related New York state labor laws. A federal district court applied a well-established set of factors to determine whether the drivers were independent contractors or employees including the degree of control exercised by the alleged employer over the drivers, the drivers’ opportunity for profit or loss and their investment in the business, and the degree of skill and independent initiative required to perform the work, among others, ultimately concluding that the drivers were indeed independent contractors. Many manufacturers contract with independent contractors and have a significant interest in the proper interpretation of laws that implicate the distinction between employees and independent contractors. On appeal to the 2nd Circuit, the NAM filed a coalition amicus brief which explains that the independent contractor business model is common across a diverse range of industries and offers significant benefits to businesses and contractors alike. On Sept. 15, 2020, the court affirmed the lower court's summary judgment ruling in favor of the defendant.
Related Documents: NAM brief (February 10, 2020)
|
General Motors, LLC and Charles Robinson
(NLRB)
When profane outbursts and offensive statements lose the protection of the NLRA
The NAM filed an amicus brief with the National Labor Relations Board (NLRB) urging the Board to reconsider its standards for determining whether an employee's profane outbursts or offensive statements of a racial or sexual nature lose the protection of the National Labor Relations Act (NLRA). The NLRB invited interested amici to file briefs after prior Board decisions in which extremely profane or racially offensive language was judged not to lose the protection of the NLRA were met with frequent criticism. Those decisions were grossly out of touch with the realities of today's workplace and the interests of employers in ensuring workplaces are free from harassment, discrimination, and bullying. In response to the specific questions posed by the Board, the NAM's brief, filed November 12, 2019, argues that (1) there are instances of employee misconduct that are so egregious that they should automatically result in the forfeit of the NLRA's protection; (2) employers are not required to tolerate insubordination, particularly where racially or sexually charged language is used; (3) the "norms" of the workplace cannot be used as an excuse to protect harassment and incivility; (4) the Board should abandon the standard applied in prior cases to the extent it protects sexual or racially offensive language that would otherwise not be tolerated simply because it occurs in the context of picketing; and (5) the Board should afford great weight to civil rights and antidiscrimination laws, and the requirements they place on employers.
On July 21, 2020, the Board issued a decision holding that the Wright Line, 251 NLRB 1083 (1980) standard applies to abusive conduct cases. Under that standard, the NLRB "General Counsel must make an initial showing that (1) the employee engaged in Section 7 activity, (2) the employer knew of that activity, and (3) the employer had animus against the Section 7 activity[.]" If the General Counsel meets her burden, "the burden of persuasion shifts to the employer to prove it would have taken the same action even in the absence of the Section 7 activity."
Related Documents: Board Decision (July 21, 2020) NAM brief (November 12, 2019)
|
Nat’l Women’s L. Ctr. v. OMB
(D.C. Circuit)
EEO-1 Component 2 pay data reporting
The NAM filed an amicus brief urging the U.S. Court of Appeals for the D.C. Circuit to reverse the U.S. District Court for the District of Columbia's refusal to delay the deadline for filing the Revised EEO-1 Report “Component 2” pay data. The district court also should not have crafted its own remedy that ignored the significant deficiencies in the record. Component 2 creates an administrative burden for employers who will now be forced to bear the costs of complying with the requirements. The NAM’s brief argued that the EEOC had previously recognized that changes to EEO-1 require significant time and expense, the record showed questionable public benefits and the data should not be required until EEOC can preserve confidentiality.
Related Documents: NAM brief (August 26, 2019)
|
Mountaire Farms, Inc. v. UFCW
(NLRB)
NLRB reconsiders contract bar doctrine
The NAM filed an amicus brief with the National Labor Relations Board (NLRB) urging the Board to rescind or modify the "contract bar doctrine." The doctrine dictates that once a collective bargaining agreement is executed, no representative elections are permitted for that bargaining unit for up to three years. Further, an employee may only file a decertification petition during a narrow (and confusing) 30-day period between 60 and 90 days before the end of the contract. The rule is not found in the National Labor Relations Act (NLRA), but rather is a creature of NLRB case law. Following invitation from the NLRB, the NAM filed a coalition amicus brief recommending that the Board rescind the doctrine because it interferes with the statutory right of employees to choose or refrain from choosing union representation. In the alternative, the Board should limit the duration of the bar period to just one year, instead of three years. Unfortunately, on April 21, 2021, the NLRB decided to retain its longstanding contract-bar doctrine.
Related Documents: NAM brief (October 7, 2020)
|
See’s Candies, Inc. v. Superior Court of California, et al.
(Cal. Ct. App.)
Keeping COVID-19 claims derivative to Workers’ Comp Claims out of the Civil Court System
The NAM filed an amicus letter brief asking the Court of Appeal for California’s Second Appellate District to review a trial court order that improperly creates a Covid-19 exception to the longstanding “derivative injury rule.” That rule establishes workers’ compensation as the exclusive remedy for all claims that are derivative of an employee’s covered workplace injury—including claims for injuries sustained by members of the employee’s household. In this case, the court created a new exception to that bright-line rule for injuries from Covid-19 that allegedly derive from employees who contract the virus in the employer’s workplace and then infect their family members.
The NAM’s brief argues that if the trial court’s rule is allowed to stand, it could subject employers to potentially unlimited tort liability for alleged injuries that the Legislature intended to be addressed in the workers’ compensation system. Not only does the decision have the potential to devastate businesses already struggling to recover from the COVID-19 pandemic, it creates a clear conflict with a recent decision by a California federal court holding that such claims are barred by the exclusive remedy provisions of California’s workers’ compensation system. Unfortunately, on December 21, 2021, the court affirmed the trial court order.
Related Documents: Opinion (December 21, 2021) NAM brief (August 30, 2021) NAM brief (May 21, 2021)
|
UPMC Presbyterian Shadyside v. NLRB
(3rd Circuit)
Court limits on NLRB's subpoena authority
The NAM filed an amicus brief in the U.S. Court of Appeals for the Third Circuit supporting constitutional protections for employer information. The National Labor Relations Board (NLRB) issued subpoenas requesting information purportedly in connection with an NLRB investigation of unfair labor practices. The district court found that those subpoenas are unprecedented in breadth and unrelated to the underlying charges. Limitations on the NLRB’s authority are important to protect the Constitution’s separation of powers and due process requirements and to protect against abuse of subpoena power. The NAM’s brief argues that the NLRB lacks the authority to compel an employer to produce information because that authority is vested exclusively in Article III courts. The Court later held the case in abeyance so that the parties could finalize the terms of a settlement agreement.
|
Keene v. CNA Holdings, LLC
(South Carolina Supreme Court)
Protecting South Carolina's statutory employer doctrine
The NAM called on the South Carolina Supreme Court to reconsider a decision that leaves countless manufacturers and contractors exposed to unexpected tort liability and upsets the statutory scheme and purpose of having workplace injuries addressed through the no-fault workers’ compensation system. In this wrongful death case involving alleged asbestos exposure, the South Carolina Supreme Court defied 80 years of precedent by upholding a $20M jury verdict against CNA Holdings, even though the decedent was a “statutory employee” of CNA, meaning that he was covered by the workers’ compensation system and barred from pursuing a claim through the civil law tort system. Under the statutory employer doctrine—codified in South Carolina’s workers’ compensation statute—a business which subcontracts out work that is important, necessary, essential or integral to the business is treated as the statutory employer of the subcontractor’s employees and thus responsible for providing workers’ compensation insurance for those employees. That is precisely what CNA did in this case, yet the court deprived CNA of the immunity from civil liability that is the benefit of that bargain.
The NAM filed an amicus brief in support of CAN’s petition for rehearing, emphasizing the significant destabilizing impact on the manufacturing sector should the court’s erroneous construction of the “statutory employer doctrine” not be reconsidered. Our brief further argues that the doctrine must be construed in the broadest manner possible in order to extend workers’ compensation coverage to South Carolina workers, as the state legislature intended.
Unfortunately, in April 2022, the court denied rehearing.
Related Documents: NAM brief (November 8, 2021) Notice of Intent to file amicus brief (September 13, 2021)
|