The labor movement sent a powerful and potentially revolutionary signal to the tech industry this past week on September 24: contract employees of HCL Technologies, working under a renewable contract with Google, voted to unionize for better salaries, benefits, and working conditions. Nearly 80 contract HCL employees stationed in Google’s Pittsburgh office joined the United Steelworkers trade union, which represents more than 850,000 American employees across various industries. Significantly, this marked the first time contract tech workers have unionized in the United States in an industry that is almost entirely non-union.

The vote for union representation strikes at the heart of the business model used by companies like HCL, a multinational Indian IT services company. Although the HCL employees who have been contracted out to Pittsburgh work alongside Google employees in similar positions, they contend that they receive less favorable benefits and less compensation for their work than do those employed directly by Google. This is often the case for contract workers, who are heavily utilized in the technology industry thanks to the lower costs of employing them. But these same contract employees have historically been less inclined to unionize, fearing that their employers will respond by declining to renew their contracts when the time comes. Indeed, some HCL Technologies employees expressed this exact concern, recognizing the possibility that Google would decline to renew its contact with HCL as a result of Tuesday’s vote.


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In the first post-Epic Systems decision regarding arbitration agreements, the NLRB has underscored just how pro-arbitration courts and regulators have become. In Cordúa Restaurants, the Board put its stamp of approval on employers revising arbitration provisions even after employees file a claim. In doing so, employers can exercise more control as to how employees must bring their claims and—particularly, as in the case of Cordúa Restaurants, by limiting class and collective actions.

FACTS

In Cordúa Restaurants, employees, as a condition of their employment, had to sign arbitration agreements waiving “their right to file, participate or proceed in class or collective actions.” Despite this agreement, some employees still filed collective wage and hour actions in federal court. Additional employees began “opting-in” to these collective actions.

In response, the employer revised its arbitration agreement so that employees waived their right to opt-in to a collective action. The agreement was revised to say “I agree that I cannot file or opt-in to a collective action under this Agreement, unless agreed upon by me and the Company in writing.” Employees had to sign this new arbitration agreement as a condition of employment.


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In a decision that could have wide-ranging implications for all employers, the Fourth Circuit recently held that an employer’s failure to stop a false rumor that a female employee slept with her male boss to obtain a promotion, could give rise to employer liability under Title VII for gender discrimination. Parker v. Reema Consulting Services Inc., No. 18-1206 (4th Cir. Feb. 8, 2019).

So now employers must police the rumor mill? This decision is confusing to say the least, as employers now have dueling obligations—to quash rumors while not infringing upon an employee’s Section 7 rights to discuss the terms and conditions of employment.
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In the decision rendered by the Supreme Court in Epic Systems Corp. v. Lewis, employers are able to enforce individual arbitration proceedings if arbitration was agreed to in an employment contract. Settling a Circuit split on the issue, the Supreme Court decision affirmed the Fifth Circuit holding in Murphy Oil, and remanded the Ninth and Seventh Circuit decisions in Ernst & Young, LLP v. Morris and Epic Systems Corp. v. Lewis. Justice Gorsuch, writing for the majority, found that “as a matter of law the answer is clear. [ . . . ] Congress has instructed federal courts to enforce arbitration agreements according to their terms–including terms providing for individualized proceedings.” (Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018) (slip op., at 2).

The Court, when looking at the Arbitration Act and the National Labor Relations Act (“NLRA”), decided the two provisions could be read in harmony. “When confronted with two Acts of Congress allegedly touching on the same topic, this Court is not ‘at liberty to pick and choose among congressional enactments’ and must instead strive ‘to give effect to both.’” (Id., slip op. at 10) (quoting Morton v. Mancari, 417 U.S. 535, 551 (1974). The Court was unable to find any “clear and manifest” intent, as required by Morton, of Congress to displace the Arbitration Act with the NLRA.

The Court found that their holding was consistent with the prior decisions in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32 (1991) and NLRB v. Alternative Entertainment, Inc., 858 F. 3d 393, 413 (CA6 2017) finding that the Fair Labor Standards Act and Age Discrimination in Employment Act do not displace the Arbitration Act. The Court likened the employee’s theory to an “interpretive triple bank shot” that “raise[s] a judicial eyebrow.” (Epic Systems Corp., slip op., at 15). Justice Gorsuch also reminded the employees that Congress “does not, one might say, hide elephants in mouseholes.” (Id., quoting Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 468 (2001). Therefore, the Court sided with the employers and held that “Congress has instructed that arbitration agreements like those before us must be enforced as written.” (Id., slip op., at 25).
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AB 3080, a bill inspired by the #MeToo movement that would bar employers from inserting binding arbitration clauses into contracts as a condition of employment, passed the California State Assembly on May 31, 2018. The bill is not the law yet – it still must get through the Senate and be signed by Governor Brown, who vetoed a similar bill in 2015. Further, its future may already be in jeopardy as it comes on the heels of the momentous decision in the U.S. Supreme Court Epic Systems Corp. v. Lewis, in which the Court held that employers can include provisions in arbitration contracts that bars workers from suing collectively.

In Epic, the Supreme Court upheld the enforceability of arbitration agreements containing class and collective action waivers of wage and hour disputes. It resolved the circuit split between the Sixth, Seventh, and Ninth Circuits – which held class action waivers violate the right to “concerted activities” under Section 7 of the National Labor Relations Act (NLRA) – and the Second, Fifth and Eighth Circuits, which held that class action waivers were enforceable under the Federal Arbitration Act. In its 5-4 decision, the Supreme Court in Epic found that Congress enacted the FAA “in response to a perception that courts were unduly hostile to arbitration.” In doing so, it not only instructed courts to enforce agreements to arbitrate, but it “also specifically directed them to respect and enforce the parties’ chosen arbitration procedures.” The majority also rejected the employee’s argument that the NLRA’s reference to the right to engage in “other concerted activities for purposes of collective bargaining or other mutual aid or protection” supersedes the FAA’s command to enforce arbitration agreements. The Court emphasized that while the NLRA grants employees “the right to organize unions and bargain collectively,” it does not provide “express approval or disapproval of arbitration” and “does not mention class or collective action procedures.” The Court held that the FAA mandates the enforcement of arbitration agreements, and that the right to pursue class or collective relief is not protected concerted activity under Section 7 of the NLRA.
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As we previously posted, gender discrimination issues have been a hot topic at the National Labor Relations Board (“NLRB”). Now, it seems the NLRB is even more on board the #metoo movement – but with a twist, sexual harassment by unions. On February 20, 2018, the NLRB in ILA Local 28 (Ceres Gulf, Inc.

Earlier, we blogged about James Damore, an engineer at Google who was terminated for his memo, which openly expressed his belief that women were not “biologically suited” for certain types of positions and criticism of the company’s efforts to diversify its work force.

The engineer challenged his termination by filing a charge with the

While President Donald Trump is not known for a deliberate approach, the long-anticipated shifts in labor law and policy is starting to take shape in an efficient and measured form. The National Labor Relations Board (“NLRB” or the “Board”) closed out 2017 with several key decisions overturning significant pro-unions policies. These decisions came on the heels of newly minted NLRB General Counsel Peter Robb’s “Mandatory Submissions to Advice” Memo (the “Memo”) directing regional offices to defer to the General Counsel on certain hot-button labor enforcement actions – a clear signal that many more Obama-era policies will be challenged and likely reversed.

It took little time for both the NLRB and the NLRB’s GC under the Trump administration to get started – contrasting the difficulties the Obama Administration faced in confirming appointees to the NLRB. But, the Trump administration’s unusual patience in ensuring that its pieces were in place has paid off. Now that the ball is rolling, we can expect to continue to take forceful and efficient action in the administration’s second year.

Let’s take a look at what to expect for 2018:
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On Saturday, August 12, as the nation watched, protests in Charlottesville, Virginia regarding the anticipated removal of a statue of Confederate general Robert E. Lee turned deadly. In the days and weeks after, both the small city and the country wrestled to make sense of the events. In the aftermath, employers too were forced to make decisions and judgment calls as the online community identified specific individuals as white supremacists.

We suspect that most of our readers, like us, don’t like white supremacists. But even apart from the moral implications of Charlottesville, the public acts of employees can impact the public goodwill, brand and reputation of an employer—that is, the most valuable things a company has. So when an employee associated with a particular employer engages in distasteful, or hateful, or outrageous public conduct, what can an employer do? Should the employees be terminated? Disciplined? Allowed to do and say whatever they want while not at work?

Background

Soon after August 12, Twitter accounts, including one called @YesYoureRacist, began attempts to identify rally participants, requesting the following of Twitter users: “If you recognize any of the Nazis marching in #Charlottesville, send me their names/profiles and I’ll make them famous.” The viral and fast-moving world of social media helped the YesYoureRacist Twitter account and similar accounts identify rally participants, both with names and pictures.

The identifications resulted in one father’s public open letter response to his son’s participation, informing the public that the family “loudly repudiate[d] my son’s vile, hateful and racist rhetoric and actions” via a North Dakota newspaper. But the disclosures had workplace ramifications as well.

Following the identification of Cole White as a protester involved in the torch-lit march on Friday, August 11, the hot-dog restaurant in Berkley, California where White worked, Top Dog, reportedly displayed a sign on the restaurant’s exterior stating “Effective Saturday 12th August, Cole White no longer works at Top Dog. The actions of those in Charlottesville are not supported by Top Dog. We believe in individual freedom and voluntary association for everyone.” According to a statement issued by Top Dog to the Washington Post, White “voluntarily resigned” from his employment. The statement went on to note, “We do respect our employees’ right to their opinions. They are free to make their own choices but must accept the responsibilities of those choices.”

On the opposite coast, a cook at Uno Pizzeria and Grill in Vermont was reportedly terminated after his participation in the protests. Unlike Top Dog, the pizza chain’s Chief Marketing Office, Skip Weldon, issued a statement to the Burlington Free Press that “Ryan Roy has been terminated…We are committed to the fair treatment of all people and the safety of our guests and employees at our restaurants.”

News outlets similarly reported the termination of a welder and mechanic based in Charleston, South Carolina after he was photographed in Charlottesville beside the individual accused of killing one person and injuring others with his vehicle. Other rally-related terminations were reported.
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The blogs and networks have been buzzing over the past few days with news that a senior software engineer at Google – James Damore – had taken it upon himself to write and post on an internal Google mailing list a ten page memo, explaining his theory on why Google’s efforts to diversify its workforce were not working. In his words, Google’s “politically correct mononculture” had reached the point where efforts to create diversity by hiring and promoting more women (and other under-represented groups) was actually hurting the company.  Implicit in his criticism was what seemed like an undercurrent that men were somehow better suited than women for many tech jobs, and that Google was hiring or promoting women over men, even when the woman might not be the best person for the role.

In the course of this memo, Damore made a number of openly sexist and stereotypical comments about women, which many employees of both sexes took great offense to.  Most disturbing was his core view, that the reason women did not succeed in tech jobs was “biological”.

For instance, he opined:

  • that women were more apt to have a stronger interest in “people rather than things” and that tech was an industry which focused on things
  • that women had a higher level of “agreeableness”, which is why they had a harder time negotiating salary
  • that women had “higher anxiety/lower stress tolerance”

Finally, he theorized that the reason there were not more women in leadership roles at tech companies was because they did not have the same “drive for status” or to succeed as men did.

Damore also was very critical and dismissive of Google’s diversity programs, training, and other company initiatives aimed at helping women and diverse employees advance.

The memo of course went viral, and was soon circulating outside of Google and all over the world.
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