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Labor & Employment Bulletin - March 2014



Should Employers Care if College Football Players Want to Unionize?

College football players at several private schools, with the help of the Steelworkers, have formally asked the National Labor Relations Board to hold an election to allow players to decide if they want to be represented by a union. It seems farfetched, at least at first blush. Why would football players feel like they need a union? Any why would the Steelworkers want to help them? These are not just interesting questions. They are relevant issues for employers, particularly in the South.

Why do some college football players want a union? The players offer the same reasons employees give for wanting a union:

1.    A Voice.   Some college athletes feel they are not given an opportunity to be heard and to have their concerns addressed. They feel exploited. College football is big money. Some players think they should share in the proceeds.

2.    Safety.   In football, concussions are getting a lot of attention. The players want more protection.

3.   Benefits.   The players seeking to unionize do not believe their medical insurance is adequate. They believe they should be covered after their playing days are over.

4.   Pay.   Some college athletes do not think their scholarships are adequate and that they should be paid to play; free tuition, room and board are not enough.

Sound familiar? It should. Same union message; different context.

What’s in it for the Steelworkers? It is hard to imagine a university deducting union dues from its athletes’ tuition checks, but that day could come. I suspect, however, that the Steelworkers are more interested in the exposure. While unions have many obstacles to overcome before we see a Steelworkers patch on an SEC football jersey, the exposure gained in the effort may be the goal. Unions have not enjoyed large numbers in the South where football fans are fanatics and college football players are idolized. Having big-time college athletes sign a union card is a nice endorsement for the Steelworkers and would certainly raise that union’s profile—and union awareness in general—in this part of the country.

The NLRB is certainly trying to do its part to help unions. It recently reintroduced its “ambush election” regulations. We have written about the impact of these rules in previous Bulletins. The Board is also trying to make it significantly harder for employers to obtain legal advice during a union election through its new “persuader” rules. It has also decided that unions should be allowed to determine the size and makeup of the group of employees they will represent without the employer being able to have meaningful input.

Staying union-free is going to be much harder. What should employers who want to remain union-free do? In short, do not give your employees a reason to want a union.

1.    Give your employees a voice.   The standard open-door policy is not enough. Employee surveys and meetings to address concerns and allow input would be good additions.

2.      Education.   Educating front-line supervisors on how to recognize union activity is more important than ever. It has always been a union strategy to ambush employers. Unions want their election petition to be the first clue the employer has of union interest. When a union is successful in keeping the organizing effort “on the down low,” the employer starts from a deep hole with little time to climb out. The battle will get even harder if the NLRB is successful in shortening campaign time.

3.     Non-Solicitation Policy.   A policy that prohibits solicitation in the workplace becomes important in a union election. If an employer has allowed employees to sell Girl Scout cookies at work, it may also have to allow employees to promote the union message at work. This principle of non-discrimination also applies to the use of company bulletin boards and email.

With raises getting smaller and less automatic, many employees are becoming more willing to listen to the union message and give a union a try. Some employees feel like they have nothing to lose. Hearing that these athletes – whom many of us arrange our weekends around – are signing union cards is only going to increase employees’ interest in unions.

We think employers would be wise to take note of what is going on here. The issues that make employees interested in a union exist in every workplace. All employers should be proactive to avoid a union election. Unions win most elections. The goal should be to never have one. Our labor and employment lawyers are available to help our clients stay union-free.

-- Trip Umbach


Workplace Bullying: The New Battleground For Employers?

The nation’s most popular spectator sport recently shined a bright light on the issue of bullying in the workplace. The story of former Miami Dolphins offensive lineman Jonathan Martin teaches a valuable lesson for all employers. Martin walked off his job after a co-worker (i.e. teammate) allegedly bullied him on at least several occasions. A recent report alleges that Martin’s supervisors (i.e. Dolphins’ coaches) at least knew about the harassment and may have even requested it. From the news coverage, to the message boards and even the old-fashioned water cooler, Americans everywhere had discussions about workplace bullying.

Employers already face legal claims associated with bullying when the bullying conduct is related to an employee’s race, disability, religion, sexual orientation, age, etc. The potential causes of action which arise from such bullying commonly include discrimination, harassment and retaliation. Employees often assert these claims under various federal and state employment statutes. However, there is a growing movement to attempt to hold employers liable for the conduct of their employees that does not violate Title VII, the ADA, the ADEA or other federal employment statutes.

Presently, employers can cite to federal cases which hold that federal employment statutes are not meant to be a civility code. In other words, there is no federal right to a nice boss or friendly co-workers. However, there is a growing sentiment that one can no longer go to work, act like a beast and get away with it. Creative lawyers have already found ways of re-characterizing mean-spirited behavior as unlawful harassment based on a protected characteristic. For example, in EEOC vs. Boh Brothers Constr. Co., 731 F.3d 444 (5th Cir. 2013), the EEOC brought a Title VII action on behalf of a male iron worker who claimed that his employer's crew superintendent engaged in “same-sex” harassment against him by referring to him in raw homophobic epithets and lewd gestures. KerryWoods, an iron worker and structural welder, claimed that his supervisor subjected him to verbal and physical harassment because Woods did not conform to the supervisor’s view of how a man should act. Evidence indicated that some of his teasing originated from Woods's use of Wet Ones instead of toilet paper, which his supervisor viewed as not manly. Frequently, Woods was subjected to very foul language and referred to by graphically derogatory names. When Woods would bend over to perform a task, the supervisor would get behind Woods and simulate a sex act, among other things.

Following a jury trial, judgment was entered in favor of Woods. The employer appealed. The en banc 5th Circuit identified the crucial issue as whether Woods’ harassment was because of his sex, as required by Title VII. The Court then held that gender-stereotyping evidence could be used to show that same-sex discrimination occurred “because of sex.” The Court agreed that a plaintiff can satisfy Title VII's because-of-sex requirement with evidence of a plaintiff's perceived failure to conform to traditional gender stereotypes.

Some employers have put into place anti-bullying policies, but advocacy groups want to go even further. They have urged states to give legal rights to workers who do not already fit into a protected class based on race, gender or national origin. More than a dozen states have considered anti-bullying laws in the past couple of years that would allow litigants to pursue lost wages, benefits and medical expenses and to compel employers to prevent an “abusive work environment.” However, none have passed—yet.

Being bullied at work can be a miserable experience for the employee and the employer. The cost to employers due to bullying is real. It is no surprise that studies show that bullied employees tend to be less productive than other workers. Other consequences include high employee turnover, excessive absenteeism and more frequent schedule change requests, all of which add to an employer’s human resources responsibilities, disrupt production, affect employee morale and hurt efficiency. Some employers believe their insurance premiums have increased due to more claims filed on behalf of bullied employees.

For all of these reasons, employers can (and should) proactively protect themselves against the legal risks of workplace bullying. The first step for many employers is to craft an employment policy under which bullying is defined and expressly prohibited. This policy should include an easily understood reporting process for employees to assert internal complaints of bullying. Employers should also assure their employees, in writing, that retaliation for raising a complaint is also prohibited, that all complaints will be taken seriously, and that confidentiality will be maintained to the extent it does not interfere with the employer’s investigation.

Additional measures employers may take include conducting anti-bullying training sessions for their workforce, internal audits of bullying complaints and background checks for potential new hires who may have a history of workplace violence, harassment, or other bullying behavior. These proactive steps can help employers minimize the occurrence and effects of bullying in the workplace.

-- Alfred H.Perkins, Jr.


Impact of Supreme Court's Heightened Pleading Standard
on Discrimination Claims at Summary Judgment

In 2007 and 2009, the U. S. Supreme Court issued two decisions that heightened the pleading standard required in order to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Bell Atlantic Corp. v. Twombly, 550 U. S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). Following these two decisions, plaintiffs are now required to allege a "plausible" claim for relief, stating "a formulaic recitation of a cause of action's elements will not do." Twombly, 550 U. S. at 545. This change has brought about both strong support and strong criticism. Supporters believe the shift will filter out low-merit cases and the plaintiff win rate at the summary judgment stage should rise. Critics posit that the heightened standard will cause courts to dismiss high-merit cases where the employer holds the information necessary for plaintiffs to plead their claims, thus leading to a decline in the plaintiff win rate at the summary judgment stage.

A recent study by the Law & EconomicsCenter with George Mason University School of Law evaluated the effects of Twombly and Iqbal on the quality of non-ADA employment discrimination cases that survive to the summary judgment stage. The researchers compiled "randomly sampled" non-ADA employment discrimination cases from October 2005 to June 2006 (pre-Twombly) and October 2009 to June 2010 (post-Iqbal), selecting only those discrimination cases in which a defense summary judgment motion was adjudicated and no pro se plaintiff was involved.

The results showed that discrimination plaintiffs won summary judgment on all challenged claims in 17.3% percent of cases pre-Twombly and in 17.1% of cases post-Iqbal. The results in cases in which plaintiffs won at least one challenged claim were comparable, with a 36.6% win rate pre- Twombly and a 38% win rate post-Twombly. According to the researchers, the results are statistically insignificant and reflect no appreciable change in the merit of employment discrimination cases that face defense summary judgment motions following the Twombly and Iqbal decisions. Thus, critics and supporters may have been both wrong or both equally right, resulting in an offsetting effect. Regardless of the reason, it appears that Twombly and Iqbal have surprisingly not produced any appreciable effects on the overall quality of discrimination cases that survive Rule 12(b)(6) motions to dismiss.

-- Alexandra S. Terry


President Obama Instructs DOL To Expand Eligibility For Overtime Pay

On March 13, 2014, President Obama signed an executive order instructing the Department of Labor to revise the Fair Labor Standards Act regulations relating to and defining the white collar exemptions. In other words, President Obama has ordered the Department to revise the rules to make millions of more workers eligible for overtime compensation when they work more than 40 hours in one week. The proposed revisions are intended to limit an employer’s ability to claim exemptions for broad categories of employees and would dramatically increase the number of employees who qualify for overtime compensation.

The Fair Labor Standards Act was originally passed by Congress in 1938. In 2004, President GeorgeW.Bush used his authority under the Act to revise the exemption standards. Since that time, an employee can be classified as exempt—and therefore, ineligible for overtime—if he or she receives a salary of more than $455 a week ($23,660 a year) and performs job duties qualifying as executive, administrative, or professional.

Although the President’s directive did not provide any details regarding specific revisions to the regulations, he did instruct Labor Secretary Thomas Perez to come up with a plan that would expand the number of workers eligible for overtime pay; therefore, it is clear that President Obama’s directive would increase the salary level required for exemption [1] and would likely adjust the definition of “primary duty,” making it harder to prove that an employee’s primary duty is exempt. For example, the new rules could require that employees perform a minimum percentage of exempt work before they can qualify for exemption under the FLSA.

President Obama’s signing of this executive order will have no immediate effect on the FLSA regulations. It could take as long as 12-18 months for the Department to come up with the new proposed rules. Then, the Department’s proposed revisions to the regulations will be subject to public comment before the revisions can receive final approval by the Department. Given the current political climate surrounding this executive order, it is likely that strong opposition from the business community and Republicans could influence President Obama to scale back his proposal along the way. Once the proposed revisions are finalized, they will be put into effect by the Department of Labor’s wage and hour administrator, which has been vacant since President Obama took office. Currently, DavidWeil, a professor at Boston University School of Management, is awaiting confirmation.

Although the revisions to the regulations are not immediate, it is important for all employers to begin to survey their workforce with the impending changes in mind. Once the changes are implemented, millions of workers are likely to be affected. It will be critical that employers understand and comply with the new rules promptly. Lawsuits related to the exemptions under the Fair Labor Standards Act have been rapidly on the rise and this directive by President Obama will only add fuel to that fire. We will continue to monitor the process of the creation and implementation of the proposed revisions and will keep you updated on any significant developments.

-- Breanna H.Young


Businesses Face Uncertain Disclosure Requirements
in the Wake of Potential Data Security Breaches

Google, Sony, Neiman Marcus, Target. In addition to having some of the most recognizable name brands in the world, these companies have all recently suffered data breaches. The media’s coverage of the Target incident, which some reports indicate could impact over 100 million customers, put a spotlight on the potential exposure all companies face for data breach liability. While the aforementioned companies are obviously huge, multi-national corporations, a data breach can potentially occur at any business that maintains its individual customer’s identifying information. Indeed, an estimated 40% of data breaches occur at the small business level.[2]

The data breach at Target also highlights another problem in this area for companies who do business across state lines. Even though a business may only be physically located in one state, each state’s disclosure law is triggered depending on where the affected customer resides. There is currently no federal data security breach law that governs when a business is required to give disclosure to its affected customers or how it must do so. Currently, forty-six states and the District of Colombia all have different state statutes that govern the disclosure. Alabama is not one of them.

Even though many states do have a data breach notification statute, the requirements of each varies from state to state. For example, whether the statute applies depends largely on whether a certain type of an individual’s information was accessed by an unauthorized user. The definition of the threshold type of “information” that would trigger disclosure requirements can vary from state to state. Moreover, the method and content of disclosure also varies among states. Further, some states (like Florida) have specific deadlines for disclosure. Others require notification to be given to state law enforcement. New Jersey requires state law enforcement to be notified before giving notice to potentially affected customers. Additionally, if enough customers are impacted, some states also require the business to report the breach to national credit reporting agencies.

This patchwork of state laws creates a potential legal minefield, and has led to a renewed call for a national standard. Attorney General EricHolder recently joined this effort in a video statement he sent to Congress urging a national standard that would include exemptions for harmless breaches. The benefits of a national standard are obvious. How to actually implement the standard, however, is and will continue to be a topic of debate. Consumer groups are advocating for the adoption of state laws with the strongest protections, like those in California. Business groups, led by retailers, fear a standard that would be too burdensome to comply with and argue that requiring too much notification will water down the impact on consumers. Thus, one very important issue Congress will have before it is what sort of breach will trigger disclosure requirements.

How can businesses be proactive? Create a data breach notification policy that tells customers how they will be notified if a data breach occurs. If a breach has potentially occurred, quickly gather information regarding the facts of the situation. Seek assistance of outside counsel to help identify which laws may be affected. If disclosure is required, follow your data breach notification policy. Most state statutes have an exception for businesses that provide disclosure in accordance with their pre-existing policy as long as the time requirements of the policy comply with state law. Additionally, many insurance carriers also now offer coverage for potential exposure related to data security breach incidents.

We will continue to monitor developments in this rapidly expanding area of the law and keep you updated of significant developments.

-- Chris Vinson



[1] California and New York already have similar rules in effect. In California, an employee cannot be denied overtime unless he makes over $640 a week. The threshold in New York is $600. Furthermore, under recently passed laws, in 2016, the California threshold will rise to $800 a week and the New York threshold will increase to $675 a week.

[2] http://www.bbb.org (citing 2013 Verizon Data Breach Investigations Report).



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