Labor Law Articles

Employer’s Duty to Report Union Payments Under LMRDA

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            For many years employers have been required to annually file reports with the U.S. Department of Labor outlining any payments made to unions, union officials, or labor relations consultants. Labor-Management Reporting and Disclosure Act, 29 U.S.C. §§ 401, et seq. The Department historically has been lax in enforcing the requirement, but recently issued new enforcement guidance clarifying disclosure obligations.

NLRB Finds Confidentiality Policy Violates National Labor Relations Act

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            The National Labor Relations Board recently found a company’s confidentiality policy violated section 7 of the National Labor Relations Act, which permits employees to organize. Cintas Corp. and UNITE, 2005 NLRB LEXIS 309, June 30, 2005. Cintas, with some 27,000 workers, included the following fairly typical statement in its employee handbook: “We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters.” The company uses the term “partners” to mean employees.

Subcontracting and Relocating Union Work

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Issue

            What must companies do when eliminating union operations, subcontracting union work to third parties, or relocating work from organized facilities, and how can they minimize their obligations and legal exposure?

Brief Answer

            Companies should avoid contract language that restricts their ability to reduce work at unionized locations. Assuming no contractual bar, companies can always unilaterally close all or part of their business. Conversely, they will normally be required to bargain over subcontracting and relocation decisions. Recent case law, however, has eliminated bargaining obligations in some subcontracting and work relocation situations where the decision can be characterized as a core entrepreneurial right falling outside the scope of mandatory bargaining.   Even when decision bargaining is not required it may still be prudent to avoid charges that the decision was motivated by anti union animus. Bargaining over the decision's impact on affected employees will be required, even when decision bargaining is not.  Issues not unique to union facilities such as partial plan terminations, WARN, and COBRA obligations are not addressed in this memo.


 

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