By: Edward Patton

House Democrats and President Donald Trump struck an agreement to revise a new trade deal with Mexico and Canada, delivering a win for the president on a top legislative priority on December 10, 2019. House Speaker Nancy Pelosi, D-Calif., called the revised trade pact “a victory for America’s workers.”

Congress agreed to the U.S.-Mexico-Canada Agreement (USMCA), sometimes called NAFTA 2.0. The agreement updates the North American Free Trade Agreement, the 1994 pact that governs more than $1.2 trillion worth of trade among the three nations, for the 21st century. The new USMCA will support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America. The agreement is expected to be formally voted on before the end of the year.

The USMCA provides changes to Intellectual Property and Digital Trade protection. These changes would potentially liberalize financial services markets and facilitate a level playing field for U.S. financial institutions, investors and investments in financial institutions, and cross-border trade in financial services. Labor protection and new trade rules of origin will drive higher wages by requiring that 40-45 percent of cars and trucks be made by workers earning at least USD $16 per hour. The USMCA requires Mexico to change its laws to make it easier for workers to unionize.

The United States, Mexico, and Canada have agreed to stronger rules of origin that exceed those of both NAFTA 1.0 and the Trans-Pacific Partnership (TPP), including automobiles and automobile parts and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber. This deal exceeds NAFTA 1.0 and the TPP by establishing procedures that streamline certification and verification of rules of origin and that promote strong enforcement. This includes new cooperation and enforcement provisions that help to prevent duty evasion before it happens. The new rules will help ensure that only producers using sufficient and significant North American parts and materials receive preferential tariff benefits. For example, in the automotive industry, there are big changes in the rules of origin. The goal of the new deal is to have more car and truck parts made in North America. Soon, to qualify for zero tariffs, a car or truck must have 75 percent of its components manufactured in Canada, Mexico or the United States, a substantial boost from the current 62.5 percent requirement.

Finally, unlike NAFTA, the USMCA has a sunset provision meaning the terms of the agreement expire, or “sunset” after 16 years. The deal is also subject to a review every six years, at which point the U.S., Mexico, and Canada can decide to extend the USMCA.

The White House has yet to release a final copy of the USMCA, so not all of the details are known. This deal was first announced in September 2018 but House Democrats have demanded several changes since then. The latest full version of the text, which was released publicly in May, does not include changes negotiated in recent days. The effective date of the agreement is not known.

Attorneys Ken Smith, Veronica Garofoli, and Tim Reid recently secured a defense ruling at federal jury trial in the case Hunt v. Sundquist, et al., Case No, 1:17-cv-01444 in the U.S. District Court, Northern District of Ohio.

The Plaintiff, a county jail inmate, had alleged excessive force and a failure to intervene in the use of excessive force against the two defendant corrections officers. At the close of evidence, the Mansour Gavin team moved for judgment as a matter of law under Federal Rule of Civil Procedure 50 as to their client, the corrections officer accused of not intervening in the alleged use of excessive force. After oral argument, the Court granted the motion thus dismissing all claims against the officer. The jury subsequently found in favor of the other defendant corrections officer,  finding he did not use excessive force against the Plaintiff despite having pled criminally guilty to assault from the same incident involving the Plaintiff.

John Monroe delivered a legal victory for the Queen of the Lakes Manufactured Home Community by taking on the Township of Berlin’s Zoning Board of Appeals in Erie County, Ohio. The manufactured home Community was seeking to expand their Community and as the Community was built before certain zoning changes, it had the status of “Non-Conforming Use.” As a Non-Conforming Use, the Community sought to expand into its “footprint” by adding 22 manufactured homesites. The Berlin Township Board of Zoning Appeals denied the plans for expansion.  Continue reading on the Ohio Manufactured Homes Association’s website.

As we previously reported, we have been awaiting the final rule from the Department of Labor (DOL), raising the salary threshold for those eligible for overtime. Today, the DOL announced the new rule, raising the standard salary level from $455 per week to $684 per week ($35,568 for a full-year worker), which will make approximately 1.2 million more workers eligible for overtime. This new rule, which goes into effect January 1, 2020, will also allow employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level. Additional information about the new rule can be found here.

For questions regarding how the new overtime rule, job classifications, or wage and hour issues may impact your company, contact Mansour Gavin’s Labor and Employment Group.

The National Labor Relations Board (“NLRB”), in a 3-to-1 decision, dealt another setback for Unions and their efforts to improve membership by further eliminating the right of Unions to organize “mini-bargaining units” within a larger facility. This decision further enforces the NLRB’s decision in PCC Structurals, Inc. (2017) in which the Board re-enforced its rejection of the Obama Board’s decision in Specialty Healthcare (2011) which broadened the right of Unions and employees to organize smaller units within a larger facility. In the Court’s new decision, The Boeing Company, the Board clarified the “Community-of-Interest” standard enunciated in PCC Structurals by applying a three-step process for determining whether the proposed bargaining unit is appropriate. The Board determined that:

1.   The proposed unit must share an internal Community-of-Interest. That is, the employees share similar functions, share common supervision, and work in common work areas.

2.   The interests of those within the proposed unit and the shared and distinct interests of those excluded from the unit must be comparatively analyzed and weighed. In other words, instead of focusing on the smaller proposed unit, the focus now switches to whether the “excluded employees have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members.” Said another way, taken as a whole, are the differences between the proposed unit and the excluded unit significant enough to warrant approval of the proposed smaller unit?

3.   Where applicable, there should also be consideration of guidelines that the Board has already established for specific industries with regard to appropriate Union configurations (such as defense contractors).

Under the Obama Board, Unions which did not enjoy the support of a majority of a larger facility would often seek to organize smaller distinct units within a particular facility. This, in turn, would not only lead to a possible situation where the facility was both unionized and non-unionized but often was used as a means of leveraging Union support in other parts of the facility. However, as the Board has made clear in The Boeing Company decision and its earlier decision in Specialty Healthcare, that strategy has been significantly undercut.

For further information on the impact of these proposed rules, please contact members Mansour Gavin’s Labor and Employment Group.

The National Labor Relations Board (“NLRB”) is continuing its effort to undo many of the changes made during the era of the Obama Board through the Board’s rule-changing authority. The latest initiative is the much anticipated proposed changes to the Union election process which was announced on August 12. The three most significant proposed changes include:

1.     Eliminating “blocking charges” from postponing elections. For several years, employees and Unions petitioning for Union recognition often filed unfair labor practice charges shortly before Union elections in an effort to “block” the election until the charge had been completely resolved. The so-called blocking charge became a favorite weapon of Unions, particularly where Union support appeared to be shaky. Under the proposed rule, the NLRB will no longer postpone Union elections based merely on the filing of the charge. Instead, the new rule would permit the election to go forward and the results would be held in abeyance until the unfair labor practice was resolved. This would remove a potentially significant strategic advantage for Unions.

2.      Modified “Voluntary Recognition Bar.” Under the current rules, employers are free to voluntarily recognize Unions in the absence of an NLRB election and employees have no say in the outcome. This is called the Voluntary Recognition Bar. Under the proposed rule, employees are to be given notice of the proposed Voluntary Recognition and offered a 45-day open period for filing an election petition seeking a vote on whether or not to recognize the Union.

3.     “Pre-hire” Agreements in the Construction Industry. Under the current law, pre-hire collective bargaining agreements can be entered into without a showing of employee majority support for a Union and even before it has hired any employees. Under the proposed rule, the Board will now require actual evidence of employee majority support before it will approve a pre-hire agreement.

These proposed rules continue the NLRB’s effort to reconstruct itself into a more employer-friendly Board. This follows, for example, the Board’s decision in Cordúa Restaurants announced just last month permitting employers to require employees to sign mandatory arbitration agreements barring collective actions under the Fair Labor Standards Act even if in response to Section 7 (organizing) activity, which we discussed here.

For further information on the impact of these proposed rules, please contact members of the Mansour Gavin Labor and Employment Group.

In a 3 to 1 decision, the National Labor Relations Board (NLRB) has affirmed the right of employers to require its employees to sign mandatory arbitration agreements prohibiting employees from opting into a collective action in a Fair Labor Standards Act claim for overtime pay. It went even further to grant employers the right to terminate any employee who fails to or refuses to sign such a mandatory arbitration agreement.

In the decision of Cordúa Restaurants, Inc. and Steven Ramirez and Rogelio Morales and Shearone Lewis (August 2019), the employer-friendly board reversed a decision by the administrative law judge who found the employer violated the rights of certain employees who refused to sign mandatory arbitration agreements. In this particular case, the employer required its employees to sign mandatory arbitration agreements which waived the employee’s “right to file, participate or proceed in class or collective actions (including a Fair Labor Standards Act collective action in any civil court or arbitration proceeding).” After a number of employees opted in (joined) a collective action filed against the employer filed by another group of employees seeking damages for violations of the Fair Labor Standards Act, the employer then revised its arbitration agreement to include a prohibition against employees opting in or joining these types of collective actions. Several of the employees refused to sign the mandatory arbitration agreement with the new language and those employees were discharged.

In 2018, the U.S. Supreme Court issued its decision in an Epic Systems Corp. v. Lewis holding that arbitration agreements which contain class and collective action waivers and which further required employment disputes to be resolved by individual arbitration did not violate the National Labor Relations Act. Relying upon the Supreme Court’s decision in Epic Systems, the NLRB reasoned that the “promulgation of such an agreement, even in response to Section 7 activity,…does not violate the Act.” Despite a vigorous dissent by Member McFerran, the Board felt that requiring employees to execute a mandatory arbitration agreement waiving any right to even opt into a collective action did not “chill” the rights of employees from engaging in permitted activity under the NLRA. Moreover, the NLRB reasoned Epic Systems specifically permitted an employer to condition continued employment on employees signing such agreements and thus threatening employees with discharge for refusal to sign was not unlawful.

With the growing number of claims under the Fair Labor Standards Act for unpaid overtime and the prevalence of collective actions, this decision by the Labor Board will be welcomed by many employers and will be certain to cause employers to consider the need for mandatory arbitration agreements. While the decision of the Labor Board may be appealed to the Circuit Court, it is far from certain that the decision will be overturned.

Employers faced with overtime issues should consider the impact of Cordúa Restaurants, Inc. and consult with their professionals about the need for mandatory arbitration agreements.

Our attorneys are always ready, willing and able to meet and discuss any questions you may have. Learn more about Mansour Gavin’s Labor and Employment Group.

By Miles Welo

Canada became the 104th member of the Madrid System for the International Registration of Marks (the “Madrid Protocol”), allowing international brands to utilize the system in Canada beginning on June 17, 2019. The Madrid Protocol provides an efficient and cost-effective process for brand owners to register and protect their marks worldwide, covering 120 countries, and is essential for international trademark owners. (more…)

Cleveland, Ohio (April 24, 2019) John (Jack) Bacevice, Jr. has joined the law firm of Mansour Gavin LPA. He is a seasoned litigator with a focus on federal and state tort defense, specifically constitutional litigation. His practice focuses on federal civil rights, business litigation, and municipal law.

John previously served as an Assistant Director of Law for the City of Cleveland, where he gained considerable knowledge in 42 U.S.C. § 1983 litigation specifically defending Cleveland police officers accused of violating a plaintiff’s or decedent’s constitutional rights under color of law. He has gained extensive experience litigating employment civil rights cases serving as lead counsel in alleged unlawful reverse discrimination cases in federal court.

Mr. Bacevice earned his J.D. from Cleveland-Marshall College of Law and B.S. from John Carroll University.

Mansour Gavin LPA is a 25-attorney law firm founded in 1954 with offices in Cleveland, Chagrin Falls, and Independence, Ohio.

On March 7, 2019, the Department of Labor announced its Notice of Proposed Rule Making to increase the “white collar” overtime exemption threshold from $23,660/year to $35,308/year (or $679/week).

This increase is projected to impact more than one million Americans, making them eligible for overtime compensation for all hours worked over 40 in a workweek. Once the rule is published in the Federal Register, there will be a 60-day public comment period.