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In Supreme Court Brief, MCLA Defends Manufacturers Against Overreaching Investigation

By | Briefly Legal, Environment, Manufacturers’ Center for Legal Action, Shopfloor Legal | No Comments

On Thursday, the National Association of Manufacturers (NAM) continued its fight against state attorneys general targeting manufacturers. The Manufacturers’ Center for Legal Action (MCLA) filed an amicus brief in the U.S. Supreme Court, arguing against the misguided efforts of Massachusetts Attorney General Maura Healey to silence energy manufacturers.

The NAM’s amicus brief asks the U.S. Supreme Court to consider and reverse a ruling by the Massachusetts Supreme Court that upheld the validity of the attorney general’s subpoena, which sought decades of ExxonMobil’s communications relating to climate change. ExxonMobil challenged the authority of Massachusetts courts to enforce the subpoena because ExxonMobil’s limited commercial activity in the state (licensing agreements with independent gas stations) is unrelated to the focus of the subpoena.

The Massachusetts Supreme Court upheld the subpoena despite the tenuous connection between the company’s advertising and the subpoena. That low bar threatens all manufacturers by massively expanding the range of venues through which plaintiffs or government officials may pursue claims against manufacturers. The NAM’s amicus brief argues that subpoenas like this are valid only when the nature of the company’s in-state conduct has a substantial relationship with the focus of the subpoena.

Healey’s investigation is just part of a larger effort nationwide to target energy manufacturers, purportedly over climate change. But as manufacturers have argued, and the Supreme Court has concluded, the courts are not the right venue for setting climate change policy. That work belongs in the legislative and executive branches, and the MCLA, as well as the Manufacturers’ Accountability Project, will continue to work to ensure that attorneys general, trial lawyers and activists do not succeed in their efforts to undermine our judicial system.

Seismic Changes Announced at the National Labor Relations Board (NLRB)

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Saturday marked the last day of Philip Miscimarra’s tenure as chairman of the NLRB. While the Board was fully constituted with five members, it managed to release a passel of decisions of major importance to manufacturers. Highlighted below are the key rulings, each garnering a slim 3-2 majority and culminating long-fought struggles on fundamental questions. In the months ahead, manufacturers will better understand and comply with labor laws on a variety of topics: (1) how broadly an employee bargaining unit should be defined, (2) how much of a connection should one employer have with employees of another in order to be considered a joint employer, (3) whether workplace policies interfere with the labor rights of employees, and (4) whether annual changes in health plan costs and benefits are mandatory subjects of collective bargaining.

Micro-Bargaining Units

The NLRB’s decision in the Specialty Healthcare case in 2011 overturned 70 years of labor law regarding the standard for an appropriate size of a collective-bargaining unit. That decision has now been overruled. In PCC Structurals, Inc., the Board reinstated the traditional community-of-interest standard, throwing out a standard that allowed as few as two people to form a “micro-union” in one facility or location.

The old standard, now reversed, made it harder for a manufacturer to manage operations effectively, enabling one micro-union to shut down production and/or operations at any given time. It also made it easier for union organizers to organize, since fewer people would need to vote on any particular union.

The National Association of Manufacturers (NAM) expressed our opposition to the old standard in at least 11 amicus briefs over the past six years. We also helped lead efforts on Capitol Hill to overturn the opinion through legislation. Finally, the Board has voted to return the law to a more even-handed and rational approach that recognizes the need for bargaining units to be properly defined.

Joint Employer

The NLRB provided a substantial victory for manufacturers on December 14 by overturning the Browning-Ferris Industries case and returning the joint-employer standard back to its original definition. It stated that to be classified a “joint employer,” jointly liable for labor violations, a business must have a direct and immediate connection to the employees in question. Browning-Ferris had said that a business could be classified a joint employer even if its relationship to the employees in question were indirect.

“We find that the Browning-Ferris standard is a distortion of common law as interpreted by the board and the courts, it is contrary to the [National Labor Relations] Act, it is ill-advised as a matter of policy, and its application would prevent the board from discharging one of its primary responsibilities under the Act, which is to foster stability in labor-management relations,” the majority wrote in its decision.

The NAM filed amicus briefs in the original Browning-Ferris case at the NLRB, as well as in the appeal now pending in the D.C. Circuit. In addition, the Supreme Court will decide in January whether to review the DirecTV case involving the joint-employer standard. We have also recently filed amicus briefs in two other cases involving this issue.

Handbook Policies

In another 3-2 victory, the Board ruled in The Boeing Company case that the company’s no-camera rule at the workplace did not interfere with employee organizing, collective bargaining or other labor rights. The NAM’s Manufacturers’ Center for Legal Action filed an amicus brief in this case calling for this result. The ruling established a new test for determining whether a facially neutral policy, rule or handbook provision potentially interferes with the exercise of employee rights under the National Labor Relations Act (NLRA). It rejected a previous ruling that would have determined the legality of the workplace rule by considering whether employees would “reasonably construe the language to prohibit” protected activity. Instead, it delineated three categories of employment policies, rules and handbook provisions and how to analyze them for legality. For facially neutral workplace policies, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the policies. This action promises to provide far greater clarity and certainty to employees, employers and unions and to eliminate conflicting and arbitrary decisions in the future.

Health Care Benefit Changes

Also on December 15, the NLRB released its decision in Raytheon Network Centric Systems. It ruled that a company may modify employee health care costs and benefits annually without that being considered a “change” that would trigger an obligation to bargain with the union representing affected employees. The Board overruled its prior decision in the DuPont case and found that a company has the right to take the same actions it has taken in the past, even though a collective bargaining agreement has expired, without negotiating with the union. The new ruling is grounded on the “long-understood, commonsense understanding of what constitutes a ‘change’ . . . .”

The close votes on all of these cases signals a continuing difference of opinion among political appointees and management and labor over how to structure shop floors to allow U.S. manufacturing employees to achieve the best workplace terms and conditions of employment while also producing high-quality products that can profitably compete around the world. We are hopeful that these latest decisions will clarify the rules and facilitate cooperation and progress toward the shared goals of everyone who makes things in America.

Administration Shoehorns Modern Problems into Antiquated Laws

By | Briefly Legal, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main | No Comments

The federal government is now routinely using laws passed before the invention of the fax machine to control dynamic information systems like cloud computing and broadband access. These efforts to regulate and police the innovation economy will loosen constitutional privacy protections and chill technological innovation.

For example, relying on the Electronic Communications Privacy Act of 1986, the Department of Justice has recently sought to search Microsoft customers’ e-mails. Microsoft has pushed back, alleging that the Justice Department’s orders violate its customers’ privacy and infringe on its right to free speech. Many of these demands prohibit Microsoft from informing customers that their information is being investigated.

Most laws governing government searches were written before the widespread use of digital communications. At that time, if the government wanted to execute a search warrant to look through one’s files, notice was necessary since a search would require entering a home or office to access documents. Now that many Internet users store their information in the cloud, rather than locally on their computers, the government can bypass notification of the customer by directly contacting providers such as Microsoft. Therefore, simply because the location of information has changed, users now experience different legal protections. Microsoft argues this is unconstitutional because Fourth Amendment protections on the reasonableness of searches should not discriminate based on how a citizen stores his or her information.

The privacy and free speech implications of the government’s actions have significant consequences for the greater business community and the innovation economy. When the government treats those who store their information at home differently than those who use the cloud, individuals are less inclined to use this potentially transformative new technology to protect their privacy. When individuals forgo cloud-computing services, innovative manufacturers will lose customers.

The National Association of Manufacturers will continue its fight to uphold proper constitutional protections and promote balanced and reasonable resolution through the courts.

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