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The United States Court of Appeals for the Eighth Circuit issued an interesting opinion recently allowing a union trust fund to expel employers from the fund for lawfully using subcontractors to perform bargaining unit work. In Borntrager v. Central States Pension Fund, the Fund expelled employers for violating the fund's "adverse selection" rule by replacing some of their employees with subcontractors. The Fund had previously issued a memorandum regarding the "adverse selection" rule which attacked employer practices resulting in reduction of employees and, hence, trust contributions. The Fund determined that the employers' gradual shift to the use of independent contractors violated the rule since the amount of trust fund contributions had been falling over a 10–year period. Read the full article.

The Labor and Employment Practice Group of Williams Kastner continues to see a growth of investigations and lawsuits involving alleged mischaracterization of employees as "independent contractors." In one case, the Illinois Department of Employment Security determined that delivery couriers working for a messenger service were employees and that the company was therefore liable to make state unemployment fund contributions on their behalf. The employer relied on a prior determination by the Department that the couriers were independent contractors since they were responsible for delivery results, set their own hours, were free to accept or reject delivery requests, and were free to work for other delivery brokers. The couriers also owned their own delivery vehicles. Read the full article.

One of the popular alternatives utilized by public sector employers to avoid layoffs in this economic downturn has been to furlough employees. Under these programs, employees are required to take unpaid leave on a regular schedule or for a designated duration; in essence, all employees work fewer hours in order to avoid laying off any employees. Not surprisingly, some employees and their unions have struck back under a variety of arguments and courts have found some merit with these arguments. Several courts have struck down furloughs as violating the duty to bargain with unions before unilaterally modifying collective bargaining agreements. More recently, in California, the Service Employees International Union successfully argued that the California Insurance Code foreclosed the option of furloughs. Read the full article.

The Washington Court of Appeals recently enforced mandatory arbitration of wage and hour disputes under an employment contract and granted the employer's motion to stay litigation pending arbitration. However, the Court found two provisions "unconscionable" and severed them from the agreement in Walters v. A.A.A. Waterproofing, Inc. The two provisions at issue required that: (1) the loser pay the winner's attorneys' fees and (2) the arbitration for the Washington employee take place in Denver, Colorado. With regard to the first requirement, the Court noted that attorneys' fees are only available to prevailing employees under state law (not prevailing employers) and that this contracted provision would therefore deter employees from pursuing their statutory wage and hour rights under the agreement. The second provision was similarly found unenforceable based on the costs associated with the out–of–state forum. The Court therefore severed both provisions but affirmed the judicial stay on the trial court action pending arbitration. Read the full article.

While not necessarily breaking news, a recent administrative law judge decision in Trump Marina Associates, serves as a reminder that formal or informal employer rules proscribing employee discussions with the press, violate the National Labor Relations Act. The employee handbook at issue prohibited employees from releasing statements to the news media without prior authorization. Despite the rule, an employee, at the union's urging, issued a press release commenting on a legal action against the Company. When the Company learned of the press release, it asked the employee whether they had volunteered the statement, advised the employee that the communication violated its handbook policy and implied that the employee would be disciplined for future violations. The employee was not disciplined at that time. Read the full article.

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