Pautsch, Spognardi & Baiocchi Legal Group LLP
Monday Morning Minute
In This Issue
Seventh Circuit Rules Courts Must Decide Arbitrability of Class Actions
ANSWERS- Quiz on Labor Relations
                  November 5, 2018


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The Seventh Circuit Court of appeals recently vacated a multi-million dollar collective action award, ruling that the question of whether a class or collective action was arbitrable under an arbitration agreement must be decided by the courts, not the arbitrator.  Herrington v. Waterstone Mortgage (7th Cir., 10/22/18).
The Seventh Circuit stated that "the availability of class or collective arbitration is a threshold question of arbitrability" that must be decided by the district court.  The question of whether class or collective actions are to be decided in the arbitral forum was a "gateway matter," similar to the question of whether the parties have a valid arbitration agreement in the first instance.   Accordingly, the Seventh Circuit vacated the award, and ordered the district court to conduct a threshold inquiry as to whether class or collective actions were allowed under the arbitration agreement, or whether they had been waived under the arbitration agreement and only one-on-one arbitration was permitted. 
The Seventh Circuit's decision is consistent with the decision of the Circuit Courts of Appeals for the Fourth, Sixth, Eighth, Ninth, and Eleventh Circuits.  Contact any PSB attorney is you are considering mandatory arbitration of workplace disputes with one-on-one arbitration, and waivers of class or collective actions.
Tomorrow's mid-terms may bring about further changes particularly as over the past few years, states across the Midwest have considered and approved right to work legislation and election results may harken a challenge to the relatively new status of several of the states as "right-to work". It has been our experience that many employers and employees are unfamiliar with the important concepts and laws impacting this process, including decertification. This would not be of concern except for the fact that not knowing the law, and coincidentally, your rights and those of your employees, can have significant consequences. Here are the answers to a short quiz we developed to highlight some of the more often overlooked points:
1. A decertification petition to oust an incumbent union can only be filed when there is no contract in place between the employer and the union.

FALSE. There are also "window periods" DURING the period that the contract is extant. In most situations a petition can be filed in the period from ninety(90) to sixty(60) days before the contract expires, and once the contract has lasted more than three(3) years.
2. A "right to work" law such as was recently passed in West Virginia and Missouri, makes it illegal for employers to agree to a contract to check-off union dues and send them to the union.

FALSE.  'Check-off' provisions remain legal. It is "union shop" security provisions that are made illegal. See answer to question 5.

3. Counting Indiana and Wisconsin, there are only 11 states that have 'right to work' laws and all of the rest of these 'right to work' states are in the South.

FALSE. The number of states with such laws is much higher-----twenty-eight (28) and rising.  And many of the states are in the Midwest and the Far West, and not just the "South".

4. "Right to work" laws make it possible for a union to be decertified at any time.

FALSE. These laws have no effect on the 'timing' rules that the NLRB has established for challenges to the recognition of a union at a particular workplace.


5. A 'right to work' law strips a company and its certified union from their right to enter into a binding "union shop" agreement.


TRUE. A binding "union shop" agreement requires an employer to terminate an employee, who has been employed for thirty(30) or more, who fails to join the union or make dues payments.


6. Through  filing  and voting favorably on a de-authorization election petition, employees covered by a collective bargaining agreement can bring "right to work" to their own workplace, even in non-right to work states such as California and New York.


TRUE. This is a little known right that can be very effective in restoring this important worker right to a particular workplace.

7. To obtain an election to determine whether a union should be certified, a union must collect authorization cards from at least 50 percent of employees in an appropriate unit.

FALSE. Only 30 per cent is required.


8. An appropriate unit for an election on union representation can consist of just one employee.

FALSE. A unit must consist of at least two(2) employees. In fact, when a unit dwindles down to one(1) employee recognition can be withdrawn.


9. An appropriate unit for an election on union representation can cover employees at many different locations the employer operates throughout the United States.

TRUE. If functional integration can be shown, multi-location units can be established. Sometimes this is in the employer's best interest, so with some pre-planning the employer can make a case for this should the union seek to represent only one location.


10. An appropriate unit for an election on union representation can cover employees at one location and not the other locations an employer operates in the same city even though the employees are doing exactly the same work.

TRUE. Again it all depends on an analysis of functional integration.


11. Illinois is considering adopting a law which would provide for 'right to work' zones within the state.

ALSE. This law was considered but was rejected. Tomorrow's election may have it considered again.


12. A case is pending in the US Court of Appeals in Chicago which would decide whether counties or municipalities within a state could become 'right to work' areas when the rest of a state is not. 

FALSE. This case was decided in September by the 7th Circuit which rejected the notion that entities smaller than a state or territory could adopt "right to work" legislation. However the 6thCircuit has ruled otherwise, setting up the possibility that the Supreme Court will take this case and decide the issue, resolving the "conflict".


13. The United States Supreme Court decided a case which provides that all private sector employees enjoy a right to choice on whether to join a union or not.

FALSE. Unfortunately, it has never ruled on that point. Instead section 14(b) of the National Labor Relations Act, gives states the right to pass laws prohibiting forced union membership/due payment. See answer to #12 for possibility that the Supreme Court may extend this right to political subdivisions of a state.


14. The United States Supreme Court decided a case which provides that all public sector employees enjoy a right to choice on whether to join a union or not.

TRUE. In the Janus case, decided last term, the Court ruled that payment of dues or union membership can not be required of public employees as this sort of compulsion would violate the First Amendment.
Let us know if you need more information of any of these critical points. 

PAUTSCH, SPOGNARDI & BAIOCCHI LEGAL GROUP is a law firm dedicated to finding common sense, affordable solutions for businesses to labor, employment, human resource and general business needs. With over 75 combined years of experience among its 3 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues.  And as litigators, who combined have over thousands of trials  "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner. 


For more information on the firm, please go to our website at or Lisa at