Management Update

Tying Federal Contractor Hands: DOL to Require Public Identification of Employer Lawyers During Union Organizing

By: E. Fredrick Preis, Jr., Rachael Jeanfreau, Philip Giorlando

The Federal Department of Labor (“DOL”) has issued a proposed form revision that would require Federal contractors to publicly identify whether they use attorneys to inform their workforce about the realities of union organizing. Making no effort to hide the pro-union and anti-employer impact of this proposed revision, the DOL goes so far as to label an employer’s counsel as “persuaders” and called it an “unethical employer activity.” Such public identification can have a chilling effect on Federal contractors’ use of attorneys because it can reduce the Federal funding provided to the contractor; can be used by unions to spread division between employers and employees; and can increase the likelihood of union organizing efforts in Federal contracting industries where unions are already widespread.

Despite the DOL’s mischaracterization, an employer’s counsel before and during union organizing efforts is absolutely necessary and can be extremely beneficial for the employees as well as the employer by developing effective employee-relation programs that make union organizing efforts unnecessary for employees. With counsel as a guide, the employer can implement policies and practices that work in the best interest of employees and provide the best legal defense plan in the event of union organizing efforts.

Vulnerability to Union Organizing

Even before union organizing begins, legal counsel for a Federal contractor is crucial. The most important aspect to ensure that your employees do not want a union is consistent, positive employee relations. Companies vulnerable to organizing efforts are those with high turnover due to poor work conditions or compensation issues and higher numbers of complaints from employees regarding treatment by supervisors. Company management should regularly communicate with supervisors and managers who work directly with first-level employees to determine what complaints employees have and how the company can address them. Employers should also periodically conduct compensation reviews to determine whether their compensation and benefits are competitive in the industry and internally consistent and defensible.

Implementing Policies and Practices

Employees often turn to a union for representation when they feel as though the employer provides no avenue to be heard, and no procedure for how to address employee complaints. To ensure that employees are heard and complaints resolved, employers need to implement written policies and procedures in a company handbook that spells out the expectations of employment, the company’s open-door philosophy, and provides practical steps that employees can take to have workplace complaints resolved. Employers should then provide training to its supervisors and managers, as well as the employees, explaining the company’s handbook, how employees can relay complaints to management, and how management will resolve those complaints promptly and thoroughly. After these foundational policies and practices are implemented, the company then needs to periodically review its employee relations to determine that the policies and practices are properly executed by its supervisors and managers and resolve any issues that arise.

Developing a Legal Defense Plan

Just as employers have contingencies in the event of a catastrophic storm, plans need to be made to deal with the advent of union organizing. There are specific issues that need to be explored before a union drive including which employees might be part of any bargaining unit, what will be done to protect its confidential information, and how the supervisors will be trained to communicate and act in a legal fashion. The plan should be developed as much as possible with attorney-client privilege.

As union organizing efforts continue to spread across the country and the Federal government continues in its pro-union activity, every employer (especially Federal contractors) should pay attention and ask whether employees are being heard and are satisfied with their work conditions—because unions are continuing to receive encouragement to increase organizing efforts and employers must be prepared.

What Law Applies to Your Louisiana Non-Compete Agreement?

By: Jude C. Bursavich

The validity of non-compete agreements in Louisiana is controlled by a single statute. La. R.S. 23:921, Louisiana's controlling statute, begins with a general prohibition against any agreement whereby anyone is restrained from exercising a lawful profession, trade, or business, unless one of the narrow exceptions to the general prohibition contained therein has been satisfied. It provides:

Every contract or agreement, or provision thereof, above which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this section, shall be null and void.

This opening paragraph of La. R.S. 23:921 reflects Louisiana's strong public policy against these agreements. The exceptions to the general prohibition, for the most part, are based upon relationships. They include the employer/employee relationship, the sale of the goodwill of the business, the dissolution of a partnership, the Franchisor/Franchisee relationship and Employer/Computer Employee relationship. Additional exceptions added by the Louisiana Legislature in recent years are again based upon relationships. They include the Corporation/Shareholder relationship, the Partner/Partnership relationship, without consideration of any possible dissolution, and the Limited Liability Company/Member relationship.

Because these agreements are in derogation of the common right to earn a living, Louisiana jurisprudence has strictly construed these exceptions to the general prohibition. To fall within these exceptions, most Louisiana courts have required non-compete agreements to list the area of prohibition by parishes, municipalities, or parts thereof, together with a term of no longer than two (2) years from the date of termination of the relationship.

Because of Louisiana’s restrictive law on non-compete agreements, employers often attempt, with a choice of law provision, to apply another state’s law to govern their Louisiana non-compete agreements. Will that work? Will Louisiana law allow an employer to utilize another state’s law to govern its non-compete agreement? No --- for the reasons explained herein.

Choice of law provisions in an employment agreement containing non-compete provisions are unenforceable, unless the employee knowingly and voluntarily agrees to and ratifies the choice of law provision after the occurrence of the incident which is the subject of a civil action. In other words, once an issue arises under the non-compete agreement, the employee has to ratify the employer’s choice of law again. If the employee refuses to do so, the choice of law provision is unenforceable, with Louisiana law instead applying to the agreement.

La. R.S. 23:921 A(2) provides:

The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other person or entity includes a choice of forum clause or choice of law clause in an employee’s contract of employment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clause in any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action.

Attempting to use another state’s law for Louisiana non-compete agreements with employees is not a good strategy. The better approach is to meet all requirements of La. R.S. 23:921, Louisiana’s single statute governing the enforceability and validity of non-compete agreements in Louisiana.

Louisiana Workforce Commission Renew Partnership to Protect Workers from Misclassification

The U.S. Department of Labor’s Wage and Hour Division renewed a Memorandum of Understanding with the Louisiana Workforce Commission. The memorandum provides opportunities for federal and state staff cross-training as well as sharing investigation and audit information to increase the identification of labor violations in the state.

“By renewing this agreement, the department and Louisiana Workforce Commission will continue to work together on important issues such as the misclassification of employees as independent contractors. Our partnership improves our ability to enforce wage violations at both the state and federal level,” said Wage and Hour District Director Troy Mouton in New Orleans.

Read the full press release from the U.S. Department of Labor here.