Hunton Employment & Labor Perspectives

As indicated in our previous blog on this topic, on May 30, 2020, the U.S. District Court for the District of Columbia issued a two page order invalidating five elements of the NLRB’s 2019 election regulation, based on Count One of the plaintiff’s complaint.  On June 7, the court issued its promised memorandum opinion further explaining that order.

The opinion makes three key points.

Hunton Andrews Kurth LLP partners Deidre Duncan, Amber Rogers and Emily Burkhardt Vicente were named among Profiles in Diversity Journal’s 2020 Women Worth Watching^®. The honorees, whose profiles will appear in the journal’s summer issue, represent women executives from nonprofit, corporate and government sectors whose accomplishments and contributions have broken new ground.

Based in Washington, DC, Duncan is the Environmental Practice Leader and focuses on environmental, energy and administrative law relating to water and natural resource issues ...

Under ERISA, a plaintiff must file a lawsuit within six years of an alleged breach of fiduciary duty, or within three years if the plaintiff had “actual knowledge” of the breach. There has been a longstanding split among the circuits regarding what constitutes “actual knowledge” for purposes of determining whether ERISA’s three-year limitations period should apply. On February 26, 2020, the Supreme Court settled this issue in Intel Corp. Investment Policy Committee v. Sulyma, 140 S. Ct. 768 (2020).  In that decision, the Supreme Court held that a participant must have a genuine subjective awareness of information, and, therefore, the mere availability of plan disclosures will not, in itself, establish “actual knowledge” of a potential breach of fiduciary duty under ERISA.

As we have previously reported here, here, and here, Virginia has enacted several new labor and employment laws that are poised to dramatically change the legal landscape for employers in Virginia.  In addition to the laws discussed above, Virginia has also enacted “ban the box” legislation for simple possession of marijuana.

On May 14, 2020, the Department of Health and Human Services (HHS) issued a final rule stating that group health plans, including employer-sponsored health plans, are not required to count the value of drug manufacturer coupons toward participant deductibles and out-of-pocket maximums (the “Final Rule”).  The Final Rule, published in HHS's Notice of Benefit and Payment Parameters for 2021, allows group health plans to exclude the value of drug manufacturer coupons from participant annual cost-sharing amounts even where no medically appropriate generic drug is available.

In mid-May the NLRB established a clear rule regarding stray marks on ballots in union representation elections, eradicating years of convoluted and inconsistent precedent. The decision, which applied retroactively, resulted in a union’s failure to amass a majority of the votes and, consequently, a reversal of the Regional Director’s Decision and Certification of Representation.

In a dispute between Providence Portland Medical Center (the “Employer”) and Service Employees International Union Local 49 (the “Union”), the representation election was decided by the narrowest margin, ultimately resulting in 383 votes for representation, and 382 votes against representation. Included in the mix was a single ballot with a clear “X” in the “Yes” box and a dark diagonal line with a smudge mark in the “No” box. The ALJ and Regional Director applied Board precedent and both concluded that the smudge mark on the diagonal line in the “No” box was an “obvious attempt at erasure,” resulting in the ballot being counted in favor of representation.

One day before they were to go into effect, the U.S. District Court in Washington, D.C. blocked portions of the NLRB’s recently promulgated election rule, but left the agency free to implement the remainder.  American Federation of Labor and Congress of Industrial Organizations v. National Labor Relations Board, Civ. No. 20-cv-0675 (KBJ) (May 30, 2020).

Specifically, the Court granted the AFL-CIO’s motion for summary judgment “with respect to Count One of the Complaint”, but “will not vacate the remainder of the rule,” which was “remanded to the NLRB for reconsideration in light of this Court’s ruling.”

In another decision recognizing employers’ rights to issue reasonable prohibitions even if they have some slight impact of employees’ right to engage in concerted activity under the National Labor Relations Act, a beverage manufacturer’s rules banning cell phones in food production and warehouse working areas was recently upheld by the National Labor Relations Board.  Cott Beverages Inc., 369 NLRB No. 82 (2020).

On May 19, 2020, the US Department of Labor (“DOL”) issued its final rule likely expanding the FLSA’s Section 7(i) overtime exemption for commission-based workers in retail and service industries by withdrawing the long-standing, historical list of businesses that the DOL identified as falling within or outside of what it deemed to be a retail or service establishment.

As Texas begins to reopen, some employers are recalling employees placed on furloughs or leaves of absences due to the COVID-19 pandemic. As we previously reported, the Department of Labor recently issued guidance to clarify that an individual who is able and available to work, but refuses to take a job offer or return from a furlough, absent one of the COVID-19-related criteria, will not be eligible for the federal Pandemic Unemployment Assistance benefit under the CARES Act. On April 30, 2020, the Texas Workforce Commission (TWC) issued guidance stating that, depending upon the reason for refusal, these employees may remain eligible for receipt of state unemployment benefits.