On May 7th, the federal appeals court in Washington, D.C. struck down the National Labor Relations Board new rule requiring companies to post a notice advising employees of their rights under federal law, that included an employee’s right to join a union. In the decision, Judge A. Raymond Randolph said that the poster rule made an employer’s failure to post the notice an unfair labor practice. He went on to state that federal law “protects the right of employers (and unions) not to speak”. “This is why, for example, a company official giving a noncoercive speech to employees describing the disadvantages of unionization, does not commit an unfair labor practice if, in his speech, the official neglects to mention the advantages of having a union”, Randolph said. The court said that if the rule was upheld, it would have required nearly 6 million employers, many of them small businesses, to conspicuously display the emplyee-rights poster.

Similarly, a federal trial court in South Carolina also recently held that that, with regard to the new poster rule,  the NLRB lacked the authority to promulgate the posting rule. That case in on appeal and is pending in the U.S. Court of Appeals for the Fourth Circuit.

A recent decision by the Seventh Circuit Court of Appeals (Teed v. Thomas & Betts Power Solutions,L.L.C.) held that even though the defendant , a purchaser of the assets only of an alleged bankrupt company , claimed to be exempt from FLSA liabilities alleged against the seller company, the court found that the purchaser could not escape liability based upon the asset purchase agreement. Judge Posner stated that “…we suggest that successor liability is appropriate in suits to enforce federal labor or employment laws-even when the successor disclaimed liability when it acquired the assets in question-unless there are good reasons to withhold liability”. The court gave some examples of “good reason”, such as: the successor lacking any notice of potential liability, or when there has been a flurry of frivolous lawsuits just before a bankruptcy filing, in hopes of substituting a solvent successor. In Teed, the court found no such exceptions. Therefore, the lesson here for potential purchasers of the assets of another company, is that they should engage employment attorneys to perform a detailed due diligence of potential employment liabilities as a contingency to closing the purchase deal. Otherwise, the successor/purchaser may buy more than they bargained for in the asset purchase.

On June 18, 2012, the U.S. Supreme Court ruled 5-4 in Christopher v. SmithKlineBeecham Corp., that sales reps for GlaxoSmithKine were not entitled to overtime pay under federal law because they fell within an exemption for “outside sales.”  The majority opinion noted that pharmaceutical reps, who are well-compensated, are not the kind of employees the Fair Labor Standards Act was intended to protect.  The decision relieved the pharmaceutical company from a possible judgment in the billions of dollars, and may be applicable to other industries.

Effective May 4, 2012, Massachusetts law places new obligations on employers’ access to and use of criminal offender record information (“CORI”) of applicants and current employees.  The changes include: 

-employers must have a written CORI policy

-employers must comply with new rules for obtaining CORI information, including a requirement that they provide applicants/employees with copies of their CORI information, and comply with recordkeeping and destruction requirements

-employers must track any CORI information they disseminate

A previous change in the law, effective November 4, 2010, prohibits employers from asking about an applicant’s criminal record on the intial written employment application.

On February 21, 2012, the U.S. Supreme Court decided in Marmet Health Care Center v. Brown that a state may not categorically prohibit agreements to arbitrate personal injury or wrongful death claims against nursing homes.  There, the Supreme Court of West Virigina held that such agreements were unenforceable as a matter of public policy.  The U.S. Supreme Court vacated the decision, concluding that the state’s public policy was preempted by the Federal Arbitration Act.