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The following article is a guest post taken from the 2023 Labor Activity in Transportation Report, written by A.Jack Finklea and Donald J. Vogel, both Partners with Scopelitis, Garvin, Light, Hanson & Feary, PC. Mr. Finklea regularly counsels employers on labor matters including compliance with the National Labor Relations Act, reactions to picketing and organizational activity, the defense of unfair labor practice charges, and union avoidance techniques. Mr. Vogel is a partner who represents management and individuals in the defense of Title VII, ERISA, Multi-Employer Pension Plan Amendment Act claims, and related employment/wrongful discharge/ discrimination claims in state and federal courts. This article will explain the transportation & logistics industry labor challenges facing organizations in 2023.
Cameras, both forward-facing and even driver-facing, have grown increasingly popular with motor carriers in recent years. Along with algorithm-based behavioral predictive technology, cameras provide an endless array of data sets to help improve driving and to defend against specious claims by motorists coming in contact with a motor carrier’s trucks. Newly-added features include audio capabilities to more closely monitor what is being said and heard in the cab. Without question, such monitoring devices have value to the carrier, and, in many cases, help protect drivers. Drivers, of course, may chafe with increased monitoring, and in this driver market, driver opinions can carry significant weight. The Board’s General Counsel, Jennifer Abruzzo, recently added to the list of motor carrier concerns when she announced her office would be coming after carriers and other employers regarding excessive monitoring.
On October 31, 2022, Abruzzo issued a General Counsel Memorandum (GC 23-02) expressing her concerns about employee monitoring. Abruzzo cites, among other things, employer efforts to keep tabs on drivers using GPS tracking devices and cameras. In the Memorandum, she posits that intense monitoring techniques can unlawfully prevent union organizing and other protected activity from even starting. She, therefore, promises an aggressive push to force an adjustment between the interests of management and labor, requiring employers to justify an actual intrusion on employees’ protected activity and even monitoring that merely may have a tendency to discourage drivers from engaging in protected activity.
Ultimately, the Board will decide how far to push Abruzzo’s proposals. That being said, the General Counsel’s priorities are often the Board’s priorities. Employers can take proactive steps in order to avoid potential liability by limiting audio capabilities where practical, ensuring cameras are not operational when drivers are off-duty, and notifying drivers of the monitoring techniques being used.
Since the start of the pandemic, union activity has been on the rise. Union membership in the private sector has nevertheless continued to fall, recently reaching a low of 6%. Presumably, in response to low membership, Abruzzo has called upon the Board to require employers to recognize a union if the union shows the employer that more than 50% of its workers signed a union authorization card. For nearly 75 years, employers have had the right to refuse to examine cards, thereby forcing a secret ballot election for employees to decide on unionization. Abruzzo seeks a change.
Abruzzo cites the need for card-check recognition due to the failure of the current remedial scheme to deter unfair labor practices committed during the election period. The card signing process has been criticized as potentially involving improper coercion to get employees to sign. The secret ballot process, on the other hand, has been a foundational principle of our governmental system. Favoring card check over a secret ballot election may bring about more problems than it solves. The Board has not signaled when its decision may be forthcoming.
Abruzzo has also called upon the Board to end the practice of employers conducting mandatory meetings on company time to sway employees to vote against unionization. (GC Memo 22-04). Such “captive audience” meetings, according to Abruzzo, inherently involve an unlawful threat that employees will be disciplined for failing to attend. She further contends that such meetings deny an employee’s right to refrain from engaging in activities involving unionization (or, here, anti-unionization). She instead promises to advocate for a system in which employee attendance at employer speeches against unionization be voluntary. She will further advocate for a written notice from the employer promising no reprisals will occur if an employee declines to participate in an employer meeting.
As we await Board decisions in these two areas, employers would be well-served to preemptively communicate the company’s position on unionization and, if appropriate, the dangers of unionization. Doing so prior to an organizing campaign may keep the union from gaining a foothold in the first place.
The transportation industry relies heavily on interaction between business entities to accomplish the freight movement process. In such business relationships, the industry must constantly balance the need to comply with controls required by U.S. DOT regulations against necessary independence of the relationships in order to avoid being treated as a joint employer and becoming subject to liability for each other’s labor law violations. In 2023, the Board may swing the pendulum toward a finding of joint employer relationships.
The Board has issued a notice of proposed rulemaking to rescind and replace the 2020 final rule on joint-employer status under the National Labor Relations Act. The proposed rule eliminates the requirement of “direct and immediate” and “actual” control and instead declares entities are joint employers if they “possess the authority to control (whether directly, indirectly, or both), or to exercise the power to control (whether directly, indirectly, or both), one or more of the employee’s essential terms and conditions of employment.” In other words, an entity could be found to be a joint employer if it has the authority to exercise control indirectly over an essential term of employment, regardless of whether it actually does. As such, the proposed rule, as currently written, could negatively affect the transportation industry to the extent that the right to communicate even basic service details and/or real-time monitoring of freight location may be characterized as indirect control.
The Board’s proposal nevertheless describes the new rule as an attempt to provide clarity and guidance to employers and to reconnect with established common-law agency principles. Two members of the Board have issued a dissent, which argues the new rule will actually decrease clarity, as the proposed rule is so vague that much will be left to case-by-case adjudication to determine joint employment status. A final version of the proposed rule could come as early as March or April 2023.
The Board has always been vested with the authority to order remedial action when a party, usually the employer, commits an unfair labor practice. Such remedies include back pay for wrongfully discharged employees as well as interest on back pay amounts. The Board, however, has historically rejected the idea that it was vested with the authority to award “consequential damages,” including those indirect costs associated with being off work.
On December 13, 2022, the Board issued a decision expanding the scope of damages available to employees. The Board cited recovery not only for back wages but possibly also for indirect amounts such as out-of-pocket medical expenses, credit card debt, penalties for early withdrawal of retirement funds, and loss of a car or home due to the inability to make payments.
The Board’s decision unquestionably raises the stakes for employers charged with an unfair labor practice. Damages, in some instances, could be massive. As a result, employers should be hyper-diligent in evaluating employment decisions that may lead to the filing of unfair labor practice charges. In short, the best way to avoid a large damage award is to ensure sound decision-making from the outset. Of course, decisions are not always amenable to a bright-line determination – a perfect set of facts is hardly the norm. Careful consideration can nevertheless reduce the risk in many cases.
Employers are not alone in dealing with the prospect of significant damages associated with protected, concerted activity. Currently, before the U.S. Supreme Court is a case involving damage allegedly caused by concrete truck drivers as they went out on strike. The damage occurred when drivers walked off the job while some concrete trucks were laden with wet concrete. Due to the strike, the company allegedly could not get the concrete delivered, and it hardened in the trucks.
The concrete company sued in state court for damages, asserting the union intentionally timed the start of the strike to cause the damage, likening the matter to vandalism by the union. The Washington Supreme Court eventually dismissed the case, holding that the Board had sole jurisdiction to determine federal labor disputes. The case is now at the U.S. Supreme Court to determine if, in fact, the state court should have decided the substance of the complaint or whether, instead, the Board had sole jurisdiction over the dispute.
In oral arguments, some Justices seemed at times sympathetic to the prospect of assessing damages for the type of behavior alleged in this case. However, some Justices also seemed concerned with a potential inability to draw an effective line between conduct that lies within the exclusive sphere of the Board and that which is actionable in state court. The decision will come this Spring or Summer, and a decision in favor of the company would be significant, as it could open the door to additional state court lawsuits, along with the deterrent effect such a consequence could have on strike timing or conduct altogether.
As far as major unionized transportation companies go, it took Congressional action to avoid a rail strike. Next up is the prospect of UPS and Teamster negotiations for a new contract. The current contract expires July 31, 2023, and negotiations are tentatively set to begin soon.
Last year, Teamsters President, Sean O’Brien, ran a campaign devoted to getting tough with companies in order to usher a return to the days of Teamster power and increased membership. According to O’Brien, the way to increase unionization and membership involves fighting hard for lucrative union contracts. By refusing to back down and fight for favorable contract provisions, non-union operations, and employees would see the value in going union. The upcoming UPS negotiations provide O’Brien with the first major opportunity to further his agenda.
A hard-line approach from the Teamsters seemingly increases the odds of a strike. Such a strike would be the first since 1997, and it could conceivably be one of the largest strikes ever, with consequences that reverberate expansively. To the extent the Teamsters are successful in gaining the contract they seek, it may very well encourage increased union activity in the transportation industry. We will therefore be keeping a close watch on the negotiations.
Additional points that are compelling for 2023:
Labor issues in the transportation and logistics industry place a heavy burden on human resources professionals, who are already constantly training to meet the next challenge. Getting out ahead of issues is often the key to success. Doing so as we progress through this year is particularly important, and much can be accomplished by knowing your workforce (and perhaps more important, them knowing you). In addition, educating your workforce in a way that prevents potential problems from ever becoming actual problems is crucial.
Download the full version of the 2023 Labor Activity in Transportation Report by clicking here.
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