Bizvoice Magazine

Agencies Turn Up the Regulatory Heat

Turning Up the Heat
Agencies Act; Will You be Ready?

By Charles B. Baldwin and Susannah P. Mroz

The National Labor Relations Board (NLRB) and Department of Labor (DOL) grabbed headlines in 2011 as they pursued several high-profile enforcement and regulatory actions. This trend will likely continue in 2012. Will your company be ready?

Social media and protected concerted activity
The National Labor Relations Act (NLRA) protects the right of employees to engage in “protected concerted activity.” When employees complain about management, wages, hours or working conditions on behalf of themselves, then the conduct may be protected. In 2011, the NLRB brought protected concerted activity into the Internet age by pursuing enforcement actions against employers who – in its view – went too far in policing employee Internet use.

Recent NLRB enforcement actions make clear that overbroad social media policies may violate the NLRA by punishing or chilling protected concerted activity. For example, an NLRB administrative law judge recently held that a non-unionized company violated the NLRA by firing five employees for making angry, profanity-laced posts on a Facebook page in response to a co-worker’s criticism of their work performance.

From this opinion and multiple similar NLRB enforcement efforts, it seems that the NLRB is poised to take action to protect the right of employees to engage in some amount of online complaining about their workplace – including profane or petty gripes that might not immediately seem like “protected concerted activity.” Companies should revise their social media policies in light of this trend. In addition, they should tread lightly and consult with legal counsel before taking disciplinary action against any employee who uses the Internet to complain about terms and conditions of employment.

NLRB regulatory actions
The NLRB also upped its regulatory efforts in 2011. First, it enacted a rule requiring most employers to post a notice informing employees of their right to unionize. ¹ This provision was originally set to take effect on November 14, 2011. Recently, the NLRB moved the effective date to January 31, 2012. Although the NLRB has granted employers a brief reprieve on this requirement, your company should be prepared to comply by the end of January 2012 or risk sanctions. ²

Second, the NLRB has announced its intent to use the regulatory process to achieve the goals of the now-moribund Employee Free Choice Act (EFCA). Specifically, the NLRB released a notice of proposed rulemaking that would overhaul its current procedures for secret ballot elections. These proposed procedures would permit so-called “quickie elections,” forcing employers to face union representation elections within as little as two to three weeks after a union files its election petition. Union representation elections have always carried high stakes, but employers may find the deck stacked against them if these rules are finalized.

DOL’s independent contractor crackdown
The DOL recently released its “Strategic Plan” for 2011-2016, which represents the vision of Secretary of Labor Hilda Solis. As part of the Strategic Plan, the DOL plans to propose new recordkeeping regulations. These regulations would require employers to provide information regarding hours worked and wage computation to employees. In particular, if an employer categorized an employee as exempt from overtime or as an independent contractor, the employer would be required to perform a classification analysis, provide that analysis to the worker and retain the analysis to give to the DOL upon request. If implemented, such regulations could represent a burden to many employers.

The DOL has also increased its efforts to combat misclassification of workers as independent contractors. Many companies use workers who are classified as independent contractors (as opposed to employees). Generally, companies do not pay payroll taxes for independent contractors, and true independent contractors are not subject to the overtime and minimum wage provisions of the Fair Labor Standards Act (FLSA).

The DOL believes that some companies are abusing the independent contractor classification, resulting in decreased revenues for state and federal coffers and smaller paychecks for workers. To fight such misclassification, the DOL has now entered into an agreement with the IRS and several state agencies to coordinate their efforts on this front.

In response to these developments from the DOL, savvy employers should revisit their job descriptions and the classification status of their workers. Revisiting these issues now will help your company be prepared if the DOL implements its proposed regulations. Because such a review may uncover concerns that must be addressed, it should be conducted in concert with your company’s human resources department and with legal counsel.

Both the NLRB and the DOL have turned up the heat on employers. Employers who prepare now, however, may be able to avoid being burned.

 Authors: Charles B. Baldwin is a shareholder and Susannah P. Mroz an associate in the Indianapolis office of Ogletree, Deakins, Nash, Smoak & Stewart, P.C. They can be contacted at (317) 916-1300 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it. / This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

1 A similar posting requirement already existed for federal contractors pursuant to an Executive Order. Federal contractors can comply with the new NLRB requirement by complying with the pre-existing Executive Order.
2 Readers may purchase an all-in-one employment law poster from the Indiana Chamber of Commerce.