Law Offices of Stanley E. Niew, P.C.
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LABOR & CONSTRUCTION LAW UPDATES
These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented. Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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SEPTEMBER 2021
Inside This Issue
1. Can Employers Require Employees to Get a Covid-19 Vaccine?
2. SCABBY THE RAT is Back
3. Trade Secrets Can Be Protected
4. Beware of Withdrawal Liability under ERISA
5. Illinois Now Prohibits Use of Criminal Convictions in Employment Decisions
6. Financially Troubled Multi-Employer Defined Pension Plans May Get Relief
7. NLRB Has New General Counsel
Can Employers Require Employees to Get a Covid-19 Vaccine?
The short answer is probably “yes.” The courts and agencies appear to be siding with employers more often than not.
Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for Covid-19. The EEOC has, in the past, allowed employers to mandate vaccines such as for the flu, among other vaccines, to employees to protect the safety and well-being of the workforce. The issue of private companies mandating vaccines for employees is legal and has more often than not been upheld in court challenges, so long as the employer applies an exemption for medical or sincerely-held religious reasons.
Employers must consider the liability issues for requiring vaccinations. Almost certainly any illnesses from a mandatory vaccination is likely to be a ready-made worker compensation claim. It has been reported that some employers are charging more for health insurance for an unvaccinated employee.
Should employers consider implementing a health insurance surcharge for unvaccinated employees? More and more employers are following Delta Airlines’ lead and implementing insurance surcharges. If you are going to consider premium surcharges make sure you hire an insurance company or insurance consultants who designed such a surcharge before, because a myriad of laws must be considered carefully. An analysis of those laws is too broad and complex for this article. It was reported this morning that United Airlines is requiring all employees to be vaccinated and if there are employees who have a medical or religious exception, those unvaccinated people will be put on leave.
Also consider an employer’s obligation under OSHA. The general duty clause under OSHA requires all employers to provide a safe workplace which can make a vaccination requirement if an employee wishes to continue working. This became more important with the FDA granting Pfizer vaccine full approval on August 23, 2021.
Workers do have remedies which include the so-called vaccine exemption for medical grounds and the vaccine exemption due to religious belief. These restrictions are tied to the Americans With Disabilities Act and Title 7 of the Civil Rights Act. If workers have medical reasons or sincerely held religious beliefs that prevent them from taking a Covid vaccine, then employers may be legally required to provide a reasonable alternative accommodation to continue to work.
Employers can require that employees must show proof of vaccination to come back to work, but the same two exemptions would apply, i.e., health reasons and religious reasons.
If an employee calls in sick, it may be prudent to develop questions which are designed to sort out if the sick employee has Covid 19 symptoms. Consider requiring such employee to take a Covid test at the employer’s expense to insure safety of the current workforce.
There is no short “yes” or “no” answer,but consider the factors above.
SCABBY THE RAT is Back
On July 21, 2021, the National Labor Relations Board found that a union did not violate the National Labor Relations Act by displaying a 12-foot inflatable rat with red eyes, fangs and claws along with two large banners, one targeting a neutral employer, near a public entrance to a trade show.
Three members of the NLRB opted to dismiss the complaint by the employer, with one member dissenting.
The case was Lippert Components, 371 NLRB 8 (2021). This case does not mean that unions cannot violate the Act for displaying Scabby the Rat and banners if they verbally threaten employers or employees with unlawful actions in addition to the display. For the foreseeable future, Scabby the Rat is lawful with bannering, provided there is no other unlawful action. Use of a bull horn at a hotel was found unlawful where guests complained of the noise.
Trade Secrets Can Be Protected
This month in Life Spine, Inc. v. Aegis Spine, Inc., decided by a federal judge in the Northern District of Illinois, granted plaintiff’s request for.a preliminary injunction that barred defendant from marketing or competing with a spinal implant device.
The facts are defendant entered into an agreement with plaintiff to distribute plaintiff’s spinal implant device and promised further not to disclose any trade secrets regarding the device and not to reverse engineer it. Defendant then gave the device to a parent company which developed its own implant device after copying the basic design of plaintiff’s device.
The district court found that the plaintiff did not publicly disclose the specifications, plaintiff considered its precise dimensions and measurements of the device components and their inter-connectivity as confidential. The plaintiff did not disclose the specifications in marketing or patent materials and it took measures to prevent hospitals and doctors from learning the specifications.
Precise language in business contracts can protect your trade secrets.
Beware of Withdrawal Liability under ERISA
A case was decided by the 7th Circuit Court of Appeals affirming a decision by District Judge Joan Lefkow. This case stands for the proposition where union employers’ equity investors owned property and businesses, used the property rent free, and the owners engaged in a common trade or business with the union signatory employer, these acts subjected the non-signatory employers with unfunded vested withdrawal liability under ERISA. Two brothers purchased a property with their father under a union company called Gradei Express. Some of Gradei’s employees were members of Teamsters Local 705 which required Gradei to report and make contributions to the Teamsters pension fund under the union agreement.
The obligation to pay pension contributions ended in February 2018 when Gradei ceased all operations and withdrew from the pension plan. Gradei and a sister company, GX Warehousing, both used the property, but neither corporation ever paid rent. One month later the pension fund sent Gradei,GX and the two brothers a notice and demand for payment of assessed unfunded vested withdrawal liability in the amount of approximately $222,000. Gradei apparently did not think the demand was serious and never responded and it filed for bankruptcy.
Five months later the pension fund filed suit against Gradei for withdrawal liability, and also sued GX and the two brothers as trades or businesses under common control with Gradei. The district court entered judgment in favor of the funds and the brothers appealed. The 7th Circuit panel noted that Congress drew a line between affiliated trades or businesses and personal investments, such as holding shares of stock or bonds in publicly traded companies or owning property where the owner spends nearly managing the leases.
The appellate panel noted there was no statutory definition of “trade or business” but that the courts articulated a test which asks whether the activity is for primary purpose of income or profit and whether the activity is undertaken with continuity and regularity. The 7th Circuit then noted that the withdrawing employer was qualified as a “trade or business”.
The 7th Circuit said the land owned by the firm’s equity investors and used by the firm in a business is itself a form of equity investment in the firm and should be treated as a part of the business and the two brothers were engaged in a “trade or business” under common control with Gradei because the ownership of the property and Gradei’s use of the property rent free.
Illinois Now Prohibits Use of Criminal Convictions in Employment Decisions
In March, Governor Pritzker signed into law an Act identifying factors employers may consider as to individual’s criminal conviction history, but only if there is a substantial relationship between the criminal history and the position sought or held. An exception is if an employer can show that a person’s employment raises an unreasonable risk to property, safety and welfare of individuals or the general public or if there is another statute which authorizes the use of criminal convictions.
Employers should exercise care and limit running criminal background checks until there is some case law interpreting the new law.
Financially Troubled Multi-Employer Defined Pension Plans May Get Relief
The Pension Benefit Guaranty Corporation announced last month an Interim Final Rule for Special Financial Assistance for financially troubled multi-employer defined benefit pension plans. Most of the construction pension plans in this area are defined benefit plans. The Interim Rule will provide assistance for troubled pension plans if they can qualify for eligibility by meeting one of four criteria: there is critical and declining status beginning in 2020 through 2022; or a suspension of benefits has been approved under Multi-Employer Pension Reform Act; or critical status with funding ratio of less than 40%; or the plan became insolvent after December 2014 and has remained insolvent and has not been terminated as of March 2021.
This Rule could be of great help to some pension plans.
NLRB Has New General Counsel
On July 22, 2021, the National Labor Relations Board swore in Jennifer Abruzzo as General Counsel. The General Counsel is independent from the NLRB and is responsible for investigation and prosecution of unfair labor practice cases and for general supervision of the NLRB field offices in prosecuting cases. In the writer’s judgment, this position is the most important in the NLRB structure since the General Counsel makes policy and determines the type of cases the NLRB will prosecute.
Abruzzo worked for the NLRB in various positions for more than 20 years. Her last employment was Special Counsel for strategic initiatives for Communications Workers of America, a union.
On August 19, 2021, Abruzzo released a memorandum on the use and importance of 10(j) injunctions.
Section l0(j) of the National Labor Relations Act authorizes the NLRB to seek temporary injunctions against employers and unions in federal district courts to stop unfair labor practices while the case is being litigated before administrative law judges and the NLRB. In other words, if the amount of time it takes to litigate the case would render the remedy less effective, a l0(j) injunction can be sought to allow interim relief. These temporary injunctions are needed to protect the process of collective bargaining and employee rights under the Act, and to ensure that NLRB decisions will be meaningful.
In order to initiate an injunctive action in a district court to obtain interim relief, the Regional Director must identify the need and submit to the Injunction Litigation Branch, which then makes recommendation to the General Counsel, who ultimately seeks NLRB authorization. Once it is authorized, Regions would then file suit in a district court seeking an injunction.
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