Olympia Business Watch

The Union Gag Rule Hidden in EFCA

Even casual OBW readers know the extent to which we've fought, and so far held off, imposition in Washington of the onerous union gag rule, unconstitutionally prohibiting employers from communicating with employees, on the employer's time and premises, about labor unions. 

This piece in today's Wall Street Journal looks at an implict gag rule in the exquisitely mis-named "Employee Free Choice Act," the legislation formerly known as card-check.  (I say "formerly" because labor's campaign in Congress to deny the secret ballot to employees in union elections has apparently been beat back, for now). 

According to a former general counsel of the National Labor Relations Board, John Irving:

Today, according to the National Labor Relations Act—as amended in 1947—employers are permitted to express themselves to their employees with “views, argument, or opinion . . . if such expression contains no threat of reprisal or force or promise of benefit.” Of course, this leaves unclear just what constitutes lawful opinion versus unlawful threats or promises. And over the years, the shifting composition of the NLRB—and of the courts—has caused disagreements over what permissible free speech is.

For example, employers who might sincerely assert to their employees that “unions cause plant shutdowns” or “could cause loss of customers” may or may not be exercising lawful free speech, depending on the views of the labor board at the time. If employers fall afoul of the law today, they face only nonpunitive “make-whole” and “cease and desist” sanctions.

But EFCA dramatically escalates these penalties. Under the new bill, the employer could be subject to a $20,000 fine for each questionable statement, and to near-automatic injunction proceedings based on union-filed unfair labor practice charges. [snip]

... Faced with these draconian penalties, employers—particularly smaller employers—will be forced to remain silent. EFCA’s penalty provisions deserve careful scrutiny in light of statutory and constitutional free speech protections. Their net effect will be to deny free speech to employers and to deprive employees of the advantages of meaningful debate before they make important choices affecting their livelihood.

New law expected to help wineries, breweries and consumers

Collectively, they’re known as Tied House Laws, and they date to the end of Prohibition.

Washington, like other states, adopted laws in the early 1930s aimed at preventing a “house,” or drinking establishment, from becoming “tied” to an alcohol manufacturer or distributor.

By erecting a wall between manufacturers and retailers, lawmakers hoped to avoid the kinds of problems that historically came from close connections -– like breweries bribing barkeepers, and Al Capone-style gangsters building empires by controlling which brands of booze were sold at bars.

That was fine, then.

But plenty has changed in the ensuing decades, including the birth and rise of a Washington wine industry that was not contemplated by the 1933 legislation known as the Steele Act.

Lawmakers have made a number of changes in the laws over the years to accommodate the changing times, but probably none as significant as this year’s adoption of House Bill 2040.

The new law, which went into effect July 26, ends the state’s prohibition against alcohol manufacturers and distributors holding a financial interest in retail establishments, making Washington the first state in the country to open up investing among the so-called “three tiers” (manufacturers, distributors and retailers).

New Laws Go Into Effect Sunday

Sunday marks the 90-day point from the April 26 adjournment of the Legislature, and so is the day our state constitution sets aside for the vast majority of the nearly 600 new laws passed in 2009 to go into effect.

Rachel La Corte, the AP's statehouse reporter, catalogs some of them here, leading with the new law making public breastfeeding a civil right under our state's Law Against Discrimination.   

As described in an earlier OBW post, this particular new law doesn't affect employment as such, although there is pending legislation in Congress that could extend the protection to employees.

Another new law that could affect the workplace is the so-called "everything but marriage" law regarding the rights and responsibilities of state-registered domestic partners.  It is subject to a referendum which has until Saturday to turn in 121,000 valid signature petitions to put the measure to a vote.  If Referendum 71 lacks sufficient signatures, the measure goes into effect.  Its workplace impacts would be felt most directly in the area of family leave, employee benefits, and workers' compensation.

Finally, while not affecting the workplace per se, another new law effectively abolishes the employee-only restroom in retail establishments.  My colleague Jason Hagey took a look at it here, back when it was signed into law.  I was reminded of this new law whilst dining last week at a favorite downtown Olympia spot, which on that day had two prominent handwritten signs on the door saying "No public restrooms."  Not anymore.

UPDATED: Washington Attorney General: "Worker Privacy Act" Invalid

No, this is not a re-run.  Well, sort of.

As regular OBW readers know, one of the most hotly contested pieces of legislation in the 2009 session was the so-called "Worker Privacy Act," organized labor's top priority and a gag rule that would prohibit employers from engaging in legitimate, federally protected communications with employees about labor organizing and collective bargaining. 

Its abundantly justified demise last session provoked a series of jeremiads from the state labor council, culminating in last week's release of their legislative wrap-up, the common take-away being this misguided and generally unprovoked legislative attack on Washington employers isn't going away anytime soon.

In 2009, aunified business community resisted the proposal on the grounds it is unnecessary, unworkable, and not least of all, unconstitutional insofar as it would be pre-empted by federal law.  Before the bill died in a series of eventsbest characterized as Grisham-esque, our legal argument was confirmed in an informal opinion letterfrom Attorney General Rob McKenna's office.

Yesterday afternoon, McKenna's office released the formal Attorney General Opinion (2009 AGO No. 3) confirming the same conclusion its informal opinion reached: the "Worker Privacy Act" is pre-empted by federal law.  If our Legislature were to pass it, a court would likely reject it.

Interestingly, after Washington's legislative session adjourned in April, Oregon became the first state in the nation to pass a functionally identical version of the gag rule, and Governor Kulongoski signed it into law on June 30, with an effective date of January 1, 2010.  As this useful summaryfrom CCH Workday describes, the measure will almost certainly face a legal challenge on pre-emption grounds. 

Expect AG McKenna's contribution to the debate in Washington to resonate in the legal challenge to our south as well.

UPDATE (1:10pm): Senators Mike Hewitt (R-Walla Walla) and Janea Holmquist (R-Moses Lake), the original requestors of the Attorney General Opinion during session, released a statement calling it "the right decision at the right time."

Wash. Supreme Court Sides with Employees In Punitive Damages Case

One of the few areas where Washington law allows the imposition of punitive damages is in employment law, where an employer may be found liable for double damages and attorney's fees when he or she "wilfully and with with intent to deprive the employee of any part of his wages" fails to pay the employee all the wages he or she is due.  This law also one of the few areas that "pierces the corporate veil" in that corporate officers are personally (as opposed to corporately) liable for the damages.

So it's a big deal. And there has been some uncertainty over what the law means by a failure to pay wages that is "wilful" and "with intent to deprive."  Our Supreme Court has previously held that a struggling employer's financial inability to pay wages owed is no defense to a finding of willful withholding.

This morning, the Supreme Court extended that principle to hold that a legal inability to pay wages is also no defense.  In Morgan v. Kingen, the court held 6-3 that an employer's involuntary chapter 7 bankruptcy proceeding, in which its assets are under court supervision and it lacks any legal ability to pay wages, still counts as failing to pay wages "wilfully and with intent to deprive."

Oregon becomes first state to pass union "gag rule" bill

Oregon became the first state in the nation** to pass the national AFL-CIO's model "Worker Freedom Act," the gag rule bill known in Washington the last several sessions as the "Worker Privacy Act."  It purports to rebalance federal labor law in unions' favor by restricting employers' ability to effectively communicate with employees about labor issues during organizing and bargaining campaigns.  The Oregonian reports here, with statehouse coverage here.

The bill now heads to Governor Ted Kulongoski, who the Oregonian reports is expected to sign it.  After the Washington version of this proposal died last session, Governor Gregoire was quoted as saying she would have vetoed it had it passed.

With good reason.  If the measure is signed, expect a court fight.  One of the reasons it took national unions so long to find a state willing to pass the bill is its extremely dubious legality. Especially in light of the U.S. Supreme Court broadly striking down a similar California measure aimed at employer speech about unions, these proposals have been viewed as attempting to take away rights that employers clearly enjoy under federal labor law -- something states are pre-empted from doing.

** The Oregonian imprecisely implies Oregon joins New Jersey in passing this bill.  New Jersey passed a version in 2007 that did not include the provisions related to employer speech about unions.  No other state has passed this full version of the model "Worker Freedom Act" bill.

Mandatory Paid Sick Leave Ordinance Struck Down in Milwaukee

We have been following the national debate over a bill in Congress mandating employers provide paid sick days to employees, and noting implications of the debate for employers in Washington (most recently, here and here). 

Interestingly, while no state has passed such a requirement (Senator Karen Keiser, D-Des Moines, introduced a version in Washington in 2006 but it died in committee), three municipalities have adopted paid sick leave ordinances: San Francisco, Washington D.C., and Milwaukee. 

Milwaukee's ordinance, which was adopted by referendum last November, was struck down last Friday.  A Circuit Court judge declared the law invalidly enacted and unconstitutional in a challenge brought by the local chamber of commerce. 

Both legal defects stemmed from the insertion of mandatory time off for victims of domestic violence, sexual assault, or stalking, which the judge found to be neither reasonably referenced in the referendum's ballot title nor reasonably related to the underlying purpose of the ordinance.

The Milwaukee ordinance was somewhat unique in this regard.  The "Healthy Families Act" pending in Congress does not include a domestic violence provision.  And while Washington, in 2008, joined a relatively small handful of states requiring time off for victims of domestic violence, sexual assault, and stalking, there is no requirement that time be paid. 

Paid leave proponents in Milwaukee how vowed an appeal.  Whether the ruling stands, and has more than merely local signifcance to the overall debate about mandated paid leave, remains to be seen.

Putting Together a Social Media Policy

Jason Hagey posted this morning about some of the risks and rewards of business embracing social media, with some thoughts and recommendations derived from a seminar earlier this week by attorneys at AWB member law firm Perkins Coie in Seattle.  

Recommendation number one is "develop a social media policy and enforce it."  What should a social media policy say?

Here is one HR professional's take, writing at the social media wesbite Mashable.com: 10 Must Haves For Your Social Media Policy.  It includes as examples social media policies from a couple different companies.

Take a look.

Social media offers businesses potential profits - and pitfalls

Sure, your company is experimenting with social media.

But does it have a social media policy? And are you taking steps to minimize the potential public embarrassment -- and worse, legal liability -- that it could bring?

To help make sense of the social media phenomenon from a business perspective, three attorneys from the Seattle office of Perkins Coie law firm put on a seminar this week entitled “Critical Legal Questions for Companies Participating in Social Media.”

The program included practical suggestions for how to make the most of the various social media while still protecting your business.

 “Social media is changing the way we do business,” attorney Tom Bell said.

Among the suggestions:

Breastfeeding at Work?

From law firm Stoel Rives's World of Work law blog: US Senator Jeff Merkley, D-Oregon, has announced his sponsorship of the Breastfeeding Promotion Act (BPA) in the U.S. Senate, following introduction of a companion in the U.S. House yesterday.  The measure would amend the anti-discrimination provisions of the Civil Rights Act of 1964 to:

• protect breast-feeding in the workplace;
• provide tax incentives for employers that establish private lactation methods in the workplace;
• establish minimum safety standards for breast pumps;
• make breast feeding equipment tax deductible; and
• create time and privacy for working mothers to express milk.