Monday morning musings for workplace watchers.
WHD Working Until Close | NLRB Still Thryving
Rebecca Rainey: In the closing weeks of the Biden administration, the US Labor Department’s wage division has closed a flurry of cases involving employer retaliation, violations of overtime pay, and illegal child labor.
Since Dec. 1, the agency has announced the closure of cases resulting in the recovery of more than $7 million in backwages and damages for violations of overtime pay, tip credit, and other provisions of the Fair Labor Standards Act. The wage division also assessed roughly $516,000 in fines during this time, according to a Bloomberg Law review of the agency’s litigation announcements.
That includes $1.9 million in backwages and damages for 853 healthcare workers at Rhode Island’s second largest hospital, who had to work through their breaks during the Covid-19 pandemic but weren’t properly paid overtime, according to a settlement announced by the division Jan. 3. Kent County Memorial Hospital in Warwick, R.I., reached an administrative settlement with the division after its investigation found the hospital automatically deducted 30-minute breaks from hours employees worked, despite the staff never taking those breaks.
A construction contractor in Massachusetts was also required by a court to pay $35,000 in punitive damages plus interest for retaliating against employees “by instructing them not to cooperate with investigators from the department’s Wage and Hour Division and threatening to report to law enforcement employees who spoke with investigators,” the agency said in a Dec. 17 press release.
Another wage division investigation, announced on Dec. 12, found a Nampa, Idaho ice cream company, Stella’s Ice Cream, violated federal child labor and tip-credit rules at four different locations. The company allowed dozens of children “to operate industrial mixers, drive a delivery van” and allowed 14- and 15-year olds to work past 10:30 p.m., the agency said, duties and hours that are illegal for kids under federal law. The division also discovered that the company was operating an illegal tip-pool that included managers and supervisors.
The wage division assessed $321,015 in civil money penalties for the child labor violations and sought nearly $80,000 in backwages and damages for the impacted workers.
In a statement, Stella’s said it accepts “full responsibility for addressing the concerns identified,” but also that it disagreed with the final ruling. It said in part that “discrepancies and contradictions between state and federal labor laws created significant challenges for understanding and compliance. For example, state regulations allow teenagers to work certain hours that directly conflict with federal rules.”
Robert Iafolla: Despite the NLRB recently suffering a blow to its remedial power, the boundaries of the board’s authority to make employers pay for their labor law violations remains up for grabs as multiple courtroom fights proceed.
That legal debate centers on the National Labor Relations Board’s 2022 decision in Thryv, Inc. That ruling said the board’s standard make-whole remedies must compensate affected workers for “all direct or foreseeable pecuniary harms” that they suffer as a result of an unfair labor practice.
Although the NLRB will likely overturn Thryv after President-elect Donald Trump’s Republican appointees gain majority control of the board, courts’ views on that precedent could impact future efforts to bolster the agency’s power.
The US Court of Appeals for the Third Circuit on Dec. 27 nixed an NLRB order directing Starbucks to pay a Thryv remedy, saying that the board’s remedial authority is limited to what the company unlawfully withheld.
The Pittsburgh Post-Gazette’s publisher cited that ruling to support its bid to escape an NLRB regional director’s petition for a court injunction seeking the reimbursement of workers’ health-care costs resulting from its alleged surface bargaining with a union.
“Thryv is not the law in this judicial district,” PG Publishing Inc. told a Pennsylvania federal judge.
Not so fast, an NLRB lawyer responded. Even as the Third Circuit put the kibosh on a broad Thryv remedy, it backed the board’s authority to require payment to restore benefits of a labor contract that were withheld due to unlawful conduct, the attorneys said.
Judge Cathy Bissoon, an Obama appointee, apparently agreed with the agency, allowing it to amend its petition to comport with the Third Circuit’s ruling.
More appellate court decisions on Thryv loom, as at least five other circuit courts have pending cases that challenge NLRB consequential damage orders.
Of particular note is the Ninth Circuit’s consideration of Macy’s Inc’s appeal of a Thryv order. The three-judge panel ordered additional briefing on potential impact of the US Supreme Court’s 2024 decision holding that the Securities and Exchange Commission’s enforcement of securities fraud laws trigger a defendant’s right to a trial by jury.
The NLRB said SEC v. Jarkesy has no effect on the case, while Macy’s said it invalidates the Thryv remedies at issue.
At least two other Ninth Circuit cases have been paused pending a ruling in the case involving Macy’s, including a challenge to the NLRB’s landmark decision in Cemex Construction Materials Pacific LLC.
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