Punching In: UPS Deal Delivers Problems for Teamsters

Monday morning musings for workplace watchers

“Big Brown’s” Labor Beef | Regulating Regular Rates | Waiting for Noel

Chris Opfer: It’s late October, which means ice skating rinks and holiday shopping bazaars are already starting to pop up. The good news is that if I hear “Do They Know it’s Christmas” playing in the grocery store before Halloween, I can use the straight jacket I’ll need to be fitted for to go trick-or-treating as Hanibal Lecter.

Holiday season is big business, including for the swarms of package sorters and delivery drivers at UPS. The calendar will certainly be on everyone’s mind when company officials meet with Teamsters representatives today to talk about collective bargaining. How the two sides sort out a suite of contracts covering some 250,000 workers will not only set out those employees’ pay rates, benefits, and other terms, but could also determine the fate of Teamsters’ President James Hoffa and his leadership unit.

A slim majority of workers who voted in September rejected a five-year deal hatched by UPS and Teamsters negotiators. Critics slammed that deal for creating two tiers of UPS employees, including a second class of driver-sorters who don’t get the same pay rates and protections as their co-workers.

But Teamsters leaders said they would go ahead and finalize the contract anyway. They cited union bylaws that require a two-thirds vote against a contract to block it in situations, such as this one, where fewer than half of bargaining unit members actually cast a ballot.

Today’s meeting is supposed to be about next steps on a separate contract for UPS freight workers. Those workers also rejected the first deal presented to them in September, but with the two-thirds vote needed to make it stick. Negotiators might also want to chat about the bigger, national agreement while they’re at it.

In the meantime, UPS employees are working under an earlier agreement that was set to expire in September but has since been extended. Many are also giving the stink eye to Hoffa, who won a closely contested election in 2016, for arguably allowing the union to ignore the will of the workers it represents.

Bloomberg Law’s Andrew Wallender is keeping an eye on the negotiations.

In other labor news, Hassan Kanu chats with Epstein Becker attorney Paul DeCamp about some of the wage and hour items in the latest Trump regulatory agenda. Terminal readers can find it here: {NSN PGYQFE6JIJUO }

Jaclyn Diaz: It’s Monday, but—like Hassan and Paul—I’m still thinking about the regulatory agenda from last week.

The new efforts to expand overtime pay and limit joint employer liability grabbed the spotlight, but the proposal on “regular rate” under the Fair Labor Standards Act is also getting a lot of interest from wage and hour practitioners. It’s been a perplexing issue for employers and workers alike. The business community especially is looking forward to an update, currently set to be released in December.

For those confused about what regular rate even is (And who isn’t?): The FLSA requires employers to pay covered employees at least one-and-a-half times their regular base pay for hours worked in excess of 40 per week. An employer that doesn’t properly calculate the regular rate—it’s not necessarily just salary—is looking at a possible lawsuit from workers shortchanged on overtime.

The Wage and Hour Division plans to issue a proposed rule to clarify the types of compensation included in calculating that rate. The current rules exclude payments that aren’t for hours worked from the regular-rate calculation, such as holiday gifts and benefit contributions.

The goal is to provide guidance on “modern” forms of compensation and benefits given to employees. These days that could mean employee discounts, gym memberships, or tuition reimbursement.

Acting Wage and Hour Administrator Bryan Jarrett has experience in this topic. Jarrett, who’s in charge of overseeing the rulemaking, defended Best Buy in a case that could play into how the rule is shaped. A federal court in that case said employee discounts didn’t count as part of retail workers’ regular rate of pay for determining their overtime pay rates.

Business advocates still want the Labor Department to make a little more clear what is and what isn’t included in pay rates when calculating overtime.

CO: Jaclyn is heading off to find a ten-gallon hat and rope some steer down in Austin for a few days, so I’ll wrap this week’s edition up with a quick update on what I think is the most interesting labor and employment case that could go before the Supreme Court this term.

The Justice Department has until Wednesday to weigh in on a gender identity discrimination lawsuit originally filed by the Equal Employment Opportunity Commission. EEOC lawyers last year convinced a federal appeals court that a Michigan funeral home violated a ban on sex discrimination by firing Aimee Stephens after she told supervisors she was transitioning to a woman. But the DOJ handles government litigation in the high court. The department has taken the position that the sex discrimination ban in Title VII of the 1964 Civil Rights Act doesn’t prohibit sexual orientation and gender identity bias.

Solicitor General Noel Francisco has successfully asked SCOTUS to push back the filing deadline twice, so we may be in for more of the waiting game. Still, with cert petitions pending on two other LGBT discrimination cases, and a new case in Texas challenging the EEOC’s position on the law, Justice Department lawyers are likely going to be forced to pipe up sooner or later. If the high court decides it also wants to hear from the EEOC—the agency’s role is to enforce Title VII—the Trump administration could find itself in another “awkward” situation.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, free to reach out to us: copfer@bloomberglaw.com and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer and @JaclynmDiaz.

See you back here next Monday.

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