LEGALLY SPEAKING: Recent Labor Decisions Impact Manufacturers

By Marc Fleischauer and Bob Dunlevey of Taft/Law on Tuesday, 11/26/2024

Three new employment law cases illustrate the constant whiplash experienced by manufacturers whenever the nation’s politics swing back and forth -- two decisions severely impact employers’ opportunities to resist unionization but another benefits employers by limiting eligibility of employees for overtime compensation.

MANDATORY EMPLOYEE UNIONIZATION MEETINGS OUTLAWED

On November 13, 2024, in Amazon.com Services LLC, the NLRB held for the first time since 1948 that employers cannot lawfully require employees to attend “captive audience” meetings where the employer expresses its views on unionization. This decision changes over 75 years of Board law and makes employers’ efforts to challenge unionization much harder. Now, an employer can avoid creating such an unlawful situation only by giving “reasonable advance notice” to employees that (a) the employer intends to express its views on unionization at a meeting at which attendance is voluntary; (b) employees will not be subject to discipline, discharge, or other adverse consequences for failing to attend or for leaving early; and (c) the employer will not keep records about which employees attend, fail to attend, or leave the meeting.

EMPLOYERS’ NEGATIVE PREDICTIONS ABOUT UNIONIZATION THROTTLED

On November 8, 2024, in Siren Retail Corp d/b/a Starbucks, the NLRB ruled that employers’ negative predictions expressed to employees considering unionization “must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond [its] control.” Employers and their supervisors who share their own subjective expectations or predict unprovable negative unionization consequences will now be considered to have made unlawful threats of “retaliation” based on “misrepresentation and coercion.” Yes, the Biden-appointed Board will now “fact check” employers. Gone are the days that an employer can predict that, if a union comes in, the company certainly will go out of business. This reverses four decades old NLRB case precedent that deemed most employer predictions about the impact of unionization to be categorically lawful. Resisting union organizing has just become much more difficult for employers who want to speak out.

Both of these decisions overturning longstanding law were supported by the three Democrat NLRB members and opposed by the sole Republican member currently on the five-member Board. However, come January and the likely opportunity for President-Elect Trump to replace at least one Democrat member and fill a currently vacant seat with a Republican, the staying-power of these two decisions – and a litany of other extraordinarily union-friendly positions the NLRB has taken in the last few years – seem questionable. But overturning these decisions can take up to two years.

RECENT OVERTIME RULES STRUCK DOWN

On November 15, 2024, a Texas federal court struck down a DOL rule reclassifying approximately 4 million salaried workers, which originally made them eligible for overtime pay. The DOL mandate already raised the salary threshold for overtime exemption from $35,568 to $43,888 effective this summer, on July 1, 2024, and it was scheduled to increase to $58,656, effective January 1, 2025. The Court ruled that the DOL exceeded its statutory authority by mandating increases of the salary threshold for employees to be properly classified as exempt under the Fair Labor Standards Act. The rule also would have provided for automatic increases in the threshold amount every three years. Some employers who raised salaries to meet the threshold requirements for exemption this last summer now must consider whether to claw back those hefty wage increases. The DOL could choose to appeal the decision, but in light of the change in administrations it seems unlikely.

Employment law constantly changes, occasionally to the advantage of management, but the impact of adverse employment rulings can create uncertainty and headaches for manufacturers. For more information about these and other labor and employment law topics, including union aversion programs, NLRB, EEOC, and DOL proceedings, OSHA, workers’ compensation, and litigation, contact Bob Dunlevey (rdunlevey@taftlaw.com) or Marc Fleischauer (mfleischauer@taftlaw.com).

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