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Timothy Kraus President & Chief Operating Officer Timothy Kraus President & Chief Operating Officer

Timothy Kraus President & Chief Operating Officer - PowerPoint Presentation

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Timothy Kraus President & Chief Operating Officer - PPT Presentation

Heavy Duty Manufacturers Association Two Ways to Access CVOC Virtually CCJ Magazine live stream at wwwccjdigitalcom Twitter feed at CVOC12 Michael Reilly Chairman amp Chief Executive Officer ID: 636765

diesel fuel cost amp fuel diesel amp cost engine lng medical employee gas oil system 000 disability natural employees

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Slide1
Slide2

Timothy Kraus

President & Chief Operating Officer

Heavy Duty Manufacturers AssociationSlide3
Slide4

Two Ways to Access CVOC Virtually

CCJ Magazine live stream at

www.ccjdigital.comTwitter feed at #CVOC12Slide5
Slide6
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Slide8
Slide9
Slide10
Slide11
Slide12
Slide13
Slide14
Slide15
Slide16
Slide17
Slide18
Slide19
Slide20

Michael Reilly

Chairman

& Chief Executive OfficerRandall-Reilly Business Media & InformationSlide21
Slide22

Jeff Mason

Senior Vice President, Trucking Group

Randall-Reilly Business Media & InformationSlide23
Slide24

Dan England

Chairman, C.R. England Inc. &

Chairman,

American Trucking AssociationsSlide25
Slide26

R. Eugene Goodson (Gene)

Alternative Energy Expert & Former CEO

Oshkosh Truck

CNG / LNG Panel Brief OverviewSlide27

Speakers & Panel Objectives

Dan England

, Chairman, C. R. England

Kennon

Guglielmo

,

President

,

EControls

Robert Carrick

,

Sales Manager

, CNG/LNG Freightliner

ObjectivesSlide28

Some Observations

Liquid petroleum products are still the preferred truck fuel

Where can NG be substituted for non-transport petroleum use now?Transportation prioritiesEmission standards still a challenge

NG fuels offer a cost advantage in certain applications

Use taxes

Crude oil and NG price relationship

Emission standards?Slide29

An Alternative Energy Experience

1977, Rifle, Colorado, Shale oil field

1 mile square trench 300 feet deep by 100 foot wideFracture shale by dynamite, 10% oil in structureHeat square mile by 300 foot structure to release oil at bottom

Refining process expensive – contaminants

Conclusion:

Mining, not usual oil extraction

Shale oil would never be feasible with this process!

Visit with GM peopleSlide30

Other Transportation Energy Sources

Ethanol

MethanolPropane

Coal liquids

ElectricitySlide31
Slide32

Kennon Guglielmo, Ph.D.

President

EControls, LLC

Domestic Heavy-Duty Mobile Natural Gas

History, Technology, and OutlookSlide33

A Snapshot of EControls...

EControls Served OEM Applications:

Complete OEM fuel system provider...

Heavy-Duty On-Road

Industrial

Marine

Electronic Control Modules

Fuel Control

Actuators & SensorsSlide34

A Snapshot of EControls...

100,000+ OEM heavy-duty NG systems on the road today

Installed base of 1,000,000+ engine control systems

Engine development and emissions certification

Engine management systems for NG, LPG, Gasoline, Diesel

But for domestic HD NG... we have been

skeptics

for 15 years!Slide35

Early Domestic NG Struggles

Why have domestic HD NG engines failed to achieve critical mass over the last 2 decades ???

Lack of broad-based

refueling infrastructure

Limited space for long-range

fuel storage

High

cost of tankage

relative to diesel

Insufficient

sustained

relative

cost advantage

of NG to diesel

Proof of this assessment is the fact that

transit buses

and

waste trucks

are currently the only domestic HD NG success stories:

No need for broad-based refueling infrastructure

Plenty of room for tankage for all-day operation

Incremental cost of tankage a small percentage of total vehicle costSlide36

Fuel Cost Economics

Historical Oil & NG Fuel Prices

Oil

$/Barrel

Natural Gas

$/MCF

Oil Price in

$/Barrel

Natural Gas

Price in $/MCF

Domestic shale

production hits its strideSlide37

Fuel Cost Economics

Relative Energy Cost of Oil and Natural Gas

Oil /

NG

$/Btu Wellhead Cost Ratio

Sustainable > 2:1 ratio will

drive market build-out

Domestic shale

production hits its stride

Non-sustainable > 2:1 ratio

triggers 1990’s activity

< 2:1 ratio insufficient for critical massSlide38

Fuel Cost Economics

“We’ve heard it all before”...

“As soon as we commit, NG prices will go up”

“As soon as we commit, oil prices will drop”

Why things are different now

(in the last 4 years):

Domestic (and worldwide)

NG shale plays

Total NG game changer

New fracturing technology allows previously economically inconceivable access to NG

Current production capability massively outstrips demand

Future production will continue to outstrip demand

The U.S. has some of the world’s largest fields

Oil price

escalation is here to stay

Oil prices failed to even keep up with inflation in the 1990’s –

those days are over

China is driving worldwide oil consumption – and will continue to do soSlide39

Critical Fuel System Technologies

Vehicle fuel storage type

CNG = Compressed Natural GasLNG = Liquefied Natural Gas

Engine fuel delivery system

Air / Fuel pre-mix

Direct NG injection

Engine ignition system

Spark

Micro-pilot diesel

Standard diesel

Major Technology AreasSlide40

Vehicle Fuel Storage

CNG = Compressed Natural Gas

(3000+ psi gas)

≈ 5:1 tank dimensions for diesel range (at 3600 psi)

Lower tank price, but more tanks

Least expensive pump delivery price

User-friendly filling

Indefinite fuel storage

LNG = Liquefied Natural Gas

(cryogenic low-pressure liquid)

≈ 2.3:1 tank dimensions for diesel range

Higher tank price, but less tanks

More expensive than CNG at the pump

Filling requires training

Limited time after filling before tank vents (days to weeks)

since tank is essentially a large “thermos” bottleSlide41

Engine Fuel Delivery System

Air / Fuel Pre-Mix

(NG mixed into incoming air stream)Lowest cost and lowest complexity

Low fuel pressures at the engine (similar to gasoline)

Continuous flow possible = high valve durability

Requires throttling = reduced light-load efficiency

Domestic example: Cummins ISLG, ISX12G, ISX15G

Direct NG Injection

(NG delivered in-cylinder like diesel)

Higher cost and higher complexity

High fuel pressures at the engine (cryogenic pumps for LNG)

Must be pulsed injection = finite valve cycle life

No throttling required = increased light-load efficiency

Domestic example: Westport HD 15LSlide42

Engine Ignition System

Spark Ignition

(similar to gasoline engines)

Electronic spark initiates combustion

Lowest cost and lowest complexity

Current systems limited to ≈ 21 bar

bmep

(123

ft-lbs

/liter)

Micro-pilot diesel ignition

(very small common-rail injection)

Small diesel quantity initiates combustion

High cost and high complexity

Ignition system does not limit

bmep

Engine is not true “dual fuel” (i.e. cannot make >10% torque without NG)

Standard diesel ignition

(standard common-rail injection)

Diesel injector initiates combustion

Highest cost and highest complexity

Ignition system does not limit

bmep

– but does pose emissions challenges

Maximum of ≈ ¾ power from NG fuel (remainder from diesel)

True “dual fuel” (i.e. engine can run full power on diesel)Slide43

Truck Cost Considerations

Why are HD NG engines so much more expensive than diesel?

They should be the same or cheaper because...

Spark ignited, pre-mix NG fuel system ≈ diesel fuel system cost

Spark ignited NG engine aftertreatment is much cheaper than Tier4 diesel aftertreatment

But...

Low

volume production by

domestic

manufacturers = higher

cost

Extremely

limited domestic engine competition = higher

cost

Domestic market will currently bear a higher price because NG vehicle buying decisions are driven by fuel cost advantages – not engine cost

What does the fuel storage system cost?

Both CNG and LNG tanks are ≈ $100 / diesel gallon equivalent (DGE) in

high-volume

Mounting brackets and tank to engine plumbing are more expensive than diesel

Fuel heat exchangers usually required on LNG systems, may also be used with CNG

No SCR system required for leading technology spark-ignited systemsSlide44
Slide45

Robert Carrick

Sales Manager

Natural Gas

Natural Gas Market and ProductsSlide46

What’s Driving Natural Gas?

Lower fuel costs and less price volatility

than diesel fuel – quick paybackProduction SolutionsDependable spark ignition engine technology

Simple after-treatment –

NO DPF, NO REGENS

No SCR required

Reduced GHG emissions, 20% average

Noise reduction – ten (10)

db

reduction

vs

diesel

Domestic fuel/energy security

AMERICAN jobs

Renewable fuel technology advances

Infrastructure is

finally

improving

CNG

LNG

Diesel

Diesel

CNG

MPG

6.0

5.4

Miles/Year

80,000

80,000

Fuel Price

$4.04

$1.8

0*

Gallons

/Year

13,333

14,815

Fuel

Costs/Yr

$53,867

$26,618

Annual Fuel Savings

Yrs

Payback @ $40,000 Premium

$27,249

1.47Slide47

Customer Success

Paper Transport (WI)

Swift (AZ)

Sysco (CA)

Suffolk County (NY)

Ryder (CA)

National Grid (NY)Slide48

Customer Success

J.B. Hunt (TX)

Frito Lay (CA)

City of Nashua (NH)

LA County (CA)

City of Santa Monica (CA)

Waste Management (TX)Slide49

Hurdles to Natural Gas Market Development

INFRASTRUCTURE – INFRASTRUCTURE – INFRASTRUCTURE

No longer “Chicken and Egg” discussionNow…Chicken and FEED!Limited power train options… NG is not for everyoneComprehensive training and product support

Facility requirements and improvements – NFPA 30A

Secondary Market – Where will we be in five years?Slide50

2013 & Beyond

2013 Full production units with

ISX12 G – 400HP / 1450 TorqueNAT GAS Act will pass

New engine platforms in development for 2015 – 15 liter and 7 liter

Diesel prices will skyrocket again

Continued infrastructure improvement

Natural gas will equal 20% by 2020Slide51
Slide52

Dan England

Chairman, C.R. England Inc. &

Chairman,

American Trucking AssociationsSlide53

C.R. England LNG ImplementationSlide54

C.R. England Profile

Privately owned and operated since 1920

Currently in the third and fourth generation of leadership

Largest refrigerated carrier in the nation

Annual Revenue $1.2 billion (2012)

England North America

4,200+ trucks

6,500+ trailers

6,200 employees

England Logistics

Non-asset based subsidiary

Top 40 3PL and top 10 freight broker

Licensed international freight forwarderSlide55

C.R. England Service OfferingsSlide56

LNG Profile

Tractor Count: Five

daycab tractorsMake: Kenworth T800, Cummins / Westport 15L

Fuel Type: Liquefied Natural Gas (LNG) & Diesel (ULS)

Fuel Capacity:

LNG

: 70 diesel gallon equivalents (DGE) &

Diesel

: 45 gallons

Mileage Range: App. 350 miles on LNG

Application: Dedicated fleet

Implementation: October 2011

Miles Per Day: 500 miles per day per tractorSlide57

Additional Information

250-mile length of haul, looped freight$80,000 increase in tractor cost

Full-service lease arrangement$0.11 variable charge (maintenance / spare truck)Significant elevation change – reason for 15L engine

LNG fueling stations at both origin and destination

Southern California (Fleet Star) to Las Vegas (Clean Energy)Slide58

Fuel Results

FuelingSimilar timing to fueling a diesel truck

Face shield and gloves requiredLNG stations have less reliability

Fuel economy results

Miles: 235,750

LNG DGE: 36,044; Diesel Gallons: 4,205

MPG: 5.86Slide59

Maintenance Intervals – LNG vs Diesel

LNG

Diesel

Oil and Filter Change

25,000

50,000

Fuel Filter

25,000

50,000

Coolant Filter

25,000

50,000

Valve Adjustment

60,000

500,000

BIT Inspection

90 days

90 daysSlide60

Maintenance Results

MaintenanceSlower maintenance turnaround time than diesel

Engine-related parts availability has been challengingGreater need to stay in-serviceMaintenance results

19 engine-related breakdowns

Several sensor malfunctions and coolant hose issues

10 LNG fuel-related breakdowns

Fuel leaks and sensor malfunctions

Truck downtime

One truck has had the bulk (>50%) of engine and fuel issues

and has been OOS for two consecutive weeksSlide61

LNG Financial AnalysisSlide62

LNG vs

CNG

Varying perspectives on which is preferableMultiple factors influence the decisionFuel distribution / infrastructure

Application specifics

Length of haul

Weight and cube requirements

Cost of LNG, CNG, diesel

Technology advances could impact decisionSlide63

General Observations

Environment & fuel dependence drove decisionNatural gas is new and evolving

Each solution is uniqueOptimistic about 12L engineViability depends on fuel price variances

Existing fuel surcharge scales

Multiple parties are involved:

OEM, fuel provider, carrier, and shipper

Risk should be spread between all stakeholdersSlide64
Slide65

Avery Vise

Executive Director, Trucking Research & Analysis

Randall-Reilly Business Media & InformationSlide66
Slide67

R. Eddie Wayland

Partner

King & Ballow

Employment Law Potholes

in the Road AheadSlide68
Slide69

Discrimination OverviewSlide70

Eleven Protected Categories Under Federal Discrimination Laws

Race

ColorSex

Pregnancy

Age (40 and over)

Religion

Disability

Veteran Status

National Origin

Citizenship

Genetic InformationSlide71

Protected Categories

In 2011, there were

99,947 charges filed with the EEOC, the highest number in the agency’s history. Thee EEOC recovered

$364.6 million

in monetary damages. The following categories were included in the indicated percentage of time:*

Statistics

Race – 35.9% (‘10: 35.9

%) Disability

– 25.8% (‘10: 25.2%)

Sex – 28.5% (‘10: 29.1

%) National

Origin – 11.8% (‘10: 11.3%)

Age – 23.5%( ’10: 23.3

%) Religion

– 4.2% (‘10: 3.8

%)

Retaliation

– 31.4% (‘10: 31.0%)

*

Individual charges can and often do include more than one form of discrimination and/or harassment. Slide72

Discrimination

Inconsistent application of policies;

Inadequate documentation of performance problems;

Reasons for discipline / termination are not believable;

Unfair treatment;

Abusive treatment;

Comments related to protected classes; and

Failing to respond to employee complaints/concerns.

Common Causes of Discrimination Claims:Slide73

Expanded Liability

Staub

v. Proctor Hospital (U.S. Sup. Ct. 2011)“Cat’s Paw”

Suit filed for anti-military status discrimination (USERRA)

Employee alleged supervisor’s hostility toward his military obligations influenced his termination

Supreme Court found employer liable for hostile actions of supervisors under USERRA,

even though VP of HR was unaware of hostility

Lower federal district and appellant courts have applied

Staub

in other contexts (Race / Sex / Age / Disability, etc.)

Take Away:

Properly train supervisors/managers

Conduct independent investigations

before

actingSlide74

Age Discrimination

Prohibits discrimination against employees age 40 or olderApplies to employers w/ 20 or more employees

2011 Statistics:EEOC recorded 23,465 charges of age discriminationTotal monetary benefit of $95.2 millionSlide75

Religion

EEOC Charges at

10-year high in 2011Protects not only people who belong to traditional, organized religions, but also others who have

sincerely held

religious, ethical or moral beliefs.

Title VII concerned with “ultimate ideas” about “life, purpose, and death.”

Social, political, or economic philosophies, as well as mere personal preferences, are not “religious” beliefs protected by Title VII.

Religious Issues:

Prayer at work

Efforts to convert at work

Religious items at work

Leaves of absence for religious reasons

Religious holiday or observance time-off

Religious dress / garmentsSlide76

Discrimination

HYPO: Eve works at a large trucking firm. After 10 years of employment, Eve has a glowing reputation. Eve has recently applied for the big promotion she has always wanted, and it looks as though she is going to get it. However, Eve believes she would be able to bring in more clients as a man in her new position. Not letting genetics keep her down, Eve goes ahead and begins presenting herself as a man in the workplace by legally changing her name to Steve, dressing in suits and ties and taking testosterone pills to make her features more manly. When Eve / Steve’s supervisor finds out about these changes, he tells him / her “the position has been filled.”

Gender Identity and Sex Stereotyping

Does

Eve / Steve

have a claim for

sex / gender

discrimination?Slide77

Discrimination

YES

Macy v. Holder (EEOC – April 20, 2012)Former male police detective

Applied for job as a Male

Sends email informing contractor of gender reassignment

Informed position was eliminated due to budget constraints 5 days later –

given to someone else

EEOC determined that Macy had a claim for discrimination based on sex

Gender Identity and Sex StereotypingSlide78

Criminal Background Checks

April 25, 2012:

EEOC says its unlawful for employers to have a policy or practice of excluding individuals from employment on the basis of conviction records, due to disparate impact on certain protected classesBans the “Yes or No” Box – almost

Defense = “business necessity”

New Factors

Nature and gravity of the offense(s)

Time that has passes since

Nature of the job held or soughtSlide79

Disability IssuesSlide80

Americans with Disabilities Act

Discrimination against qualified individuals with a disability and their associates is prohibited under the ADA.

Applicable to employers with 15 or more employeesImposes a duty to reasonably accommodate Mandates participation in the “interactive process”Slide81

Disability

Individual has a

physical or mental impairment which

substantially limits

one or more

major life activity

“Should not require extensive

analysis”

Includes conditions which are episodic or in remission

Certain conditions will virtually always qualify

Deafness, cancer, cerebral palsy, epilepsy, diabetes, bipolar disorder, post-traumatic stress disorder, HIV, MS, etc.

ADA Amendments Act (ADAAA)

New Focus

“Merits of the case”

i.e., Whether the employer reasonably accommodated the employee

Now, laundry list of activities considered disabledSlide82

Reasonable Accommodation

“Any change or adjustment in the work environment or in the way things are customarily done that would enable a qualified individual with a disability to enjoy equal employment opportunity.”

OngoingInteractive

Employers have a duty to

effectively

remove equal opportunity barriers caused by the disability,

where possibleSlide83

Reasonable Accommodation

Steps:

Meet with the employeeObtain as much information as possible

Discuss available alternatives

Seriously consider employee’s suggestions

Don’t jump to conclusions about undue hardship

Be prepared to revisit if first accommodation is not effective

Document!

Interactive ProcessSlide84

Recent Cases

EEOC v. Celadon Trucking

(S.D. IN filed February 2012)Alleged Celadon policy: subject applicants to medical examinations pre-offer

Failed to hire because of disabilities or perceived disabilities

EEOC: ADA violation – medical examinations only after conditional offer

EEOC v. Old Dominion

(W.D. AR

filed

August 2012)

Employee reported alcohol problem – suspended

Alleged Old Dominion policy: would not return driver to position even up successful rehab

EEOC: Alcohol is a disability; policy is discriminatorySlide85

Medical Exam or Functional Test?

What is a Medical Exam?

Whether the test is: Administered by a health care professionalInterpreted by a health care professional

Designed to reveal an impairment of physical or mental health

Invasive

Measuring an employee’s performance of a task or measuring his or her physiological responses to performing the task

Normally given in a medical setting; and

Used with medical equipment

Indergard

v. Georgia-Pacific Corp.

(

9th Cir. 2009)Slide86

Medical Exam and Inquiries: Pre-Offer

Pre-offer testing rules:

Employers should not conduct a medical examination

or make inquiries of a job applicant as to whether he or she has a disability or as to the nature or severity of such a disability

However,

Employers can inquire into the

ability

of an applicant to

perform job-related functionsSlide87

Medical Exam: Post-Offer

Post-offer testing rules:Employers

can conduct a medical examination after an offer of employment has been made and prior to the start of employment duties

Employers can require the passing of a medical examination as a condition of the offer of employment if:

all other similarly situated employees are subjected to the examination, despite having a disability

the medical information obtained is kept confidential and separateSlide88

Medical Exam: Prohibitions

Prohibited examinations and inquiries:

An employer cannot: Require a medical examination; or

Make inquiries of an employee as to whether he or she is an individual with a disability or as to the nature or severity of the disability,

unless such examination or inquiry is shown to be job-related and consistent with business necessitySlide89

Medical Exam: Post-Offer Validation

Is the Employer Responsible for the Validity of the Medical Exam?

Yes, employers have a responsibility to make “due inquiry”If the employer decides to terminate an employee or applicant because of a failed medical exam, then the employer is under

a duty to investigate

the reasoning behind the physician’s issuance of a disqualifying medical certificate

There must be an analysis or basis for disqualifying the driver

Gaines v. Western Express, Inc.

(

M.D. Tenn. Aug. 22, 2011)Slide90

Medical Exam: Consistency

Merritt v. Old Dominion Freight Line, Inc.

(4th Cir. 2010)The medical exam, functional capacity test, or inquiry must be consistently applied to all similarly situated applicants and employees

Inconsistency in the method of implementing the test and who gets the test may result in employer liabilitySlide91

Garza v. Swift Transportation Company

CLASS ACTION:

TRUCK DRIVER WAGESSlide92

Pay Per Mile and Issues With Pay

Leonel Garza used his truck to haul freight for Swift as an owner-operator and independent contractor

Signed a standard agreement and was entitled to $.82 per dispatched mile loaded and emptyNo one identified what a dispatched mile meant or how it was to be calculated in the contract

Mile calculated using the Rand McNally Household Movers Guide (HMG) – 6.5% less than the actual miles driven on any given trip

Shorted 10-15% more miles than the mileage paid to him by Swift and suedSlide93

Drivers Involved

Three Types of Drivers are Involved in the Case:

Owner-operator drivers paid per mile based on the HMG; Owner-operator drivers paid on a “per mile” basis; and

Employee drivers, who drove as at-will employees and were paid per mile

The Lawsuit

: Involves claims for all three types of drivers:

Breach of Contract

: for failure to pay actual miles driven. Applies to all employee drivers and those with contracts that do not include reference to HMG

Breach of the Covenant of Good Faith and Fair Dealing

: for using and not disclosing that HMG shorts actual mileage, which applies to all driversSlide94

Court Ruling & Takeaways

Who Gets to Be a Part of the Lawsuit?

The courts determined that all three types of drivers could be certifiedTakeaways

Make sure your contracts clearly indicate how your drivers will be compensated

Use a payment system that accurately calculates the language used in your driver contracts

If you pay your drivers according to a particular system, such as the HMG method of payment, ensure that your contract includes exactly how your driver’s will be paid to avoid disputes over “dispatched miles” vs. “actual miles.”Slide95

Independent Contractor Update

Ruiz v. Affinity Logistics Corp.

, (9th Cir. 2012)Contractually agreed drivers were “independent contractors”Agreed to be bound as Georgia law in determining their contract status

9th Circuit applies California law

Factors assessed by Court:

Contrary to fundamental policy; and

Materially greater interestSlide96

NLRB UpdateSlide97

Unionization in America

2011:

16.3 million wage and salary workers in America were represented

by Unions.

14.8 million

actual members of a Union

=

11.8%

of the wage and

salary workforce.

Public Sector unionized workers:

37.0 %

Private Sector unionized workers:

6.9 %Slide98

Unionization by State

Chart 1. Union membership rates by state, 2011 annual averagesSlide99

Unionization on the Downslide?

Employees Represented by Unions

Source:

U.S

. Department of

Labor Bureau

of

Labor Statistics

2011

Number of Employees, in MillionsSlide100

Top Unionized Industries

Private Sector:

Utilities: 25.7%Transportation: 22.1%Telecommunications: 16.4%

Educational Services: 15.5%

Construction: 14.9%Slide101

Transportation

Employees Represented by Unions

*Source: US

Dept

of Labor Bureau of Labor Statistics

+

Source:

unionfacts.com

Number of Employees, in Millions

Transportation*

Teamsters

+Slide102

Union Representation Elections

Source: U.S.

Dept

of

Labor Bureau

of Labor

Statistics

Number of Employees, in Millions

57.2%

59.5%

59.9%

58.9%

64.7%

66.3%

67.6%Slide103

Collective Bargaining: Micro-Units

Old Rule:

Park Manor Care Center (1991): whether the interests of the group sought to be included are “sufficiently distinct from those of other employees” in order to exclude the other individuals

Specialty Healthcare & Rehab Ctr.

: August 26, 2011

Shifts the burden to employers to prove

that the excluded employees share an

“overwhelming community interest”

with the petitioned-for employees

Will

promote smaller bargaining units

that can

more easily be organized

by unionsSlide104

Micro-Units: Impact on the Trucking Industry

May permits Unions to customize the bargaining unit:

Drivers, mechanics, other small groups could all form their own bargaining unitsDifferent bargaining units / unions at different terminals

Employer would have to negotiate different collective bargaining agreements with separate micro / small units

Since Specialty…

Odwalla

:

December 9, 2011

DTG Operations, Inc.:

December 30, 2011

Bergdorf Goodman:

May 5, 2012Slide105

National Labor Relations Act: Section 7

“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in

other concerted activities

for the purpose of collective bargaining or other

mutual aid or protection

, and shall also have the

right to refrain from any or all such activities

...”Slide106

NLRB Expanding Its Interpretation

Banner Health System

(July 30, 2012)Employee disciplined for not following company policy due to safety reasons

Human Resources instructed employee not to discuss investigation into his safety concerns

Employer: prohibition to protect the integrity of its investigation

NLRB: “to justify a prohibition on employee discussion of ongoing investigation, an employer must show that it has a

legitimate business justification

that outweighs employees’ Section 7 rights.”

Legitimate Business Justification

:

Witnesses need protection

Evidence is in danger of being destroyed

Testimony in danger of being fabricated

There is a need to prevent a cover-upSlide107

Social Media: Concerted Activity

NLRB General Counsel Report: August 18, 2011

Post Likely Protected If: The employee discusses the terms and conditions of their employment in a manner that is meant to induce or further group action

Post Not Likely Protected If:

It is best characterized as an individual complaint about working condition specific to the employee, and is not directed to co-workers or meant to induce group action

The comments are “maliciously false”

The comments are offensive or inappropriate about an employer’s clientsSlide108

Social Media: Concerted Activity

Hispanics United Buffalo

: September 2, 2011:Individual action is concerted so long as it is engaged in with the object of initiating or inducing group action; the object of inducing group action need not be express

Knauz

BMW

: September 28, 2011

Post was “logical outgrowth” of prior, concerted activity

Protected content does not shield an employee from discipline based on the unprotected contentSlide109

Social Media: Policy

NLRB General Counsel’s 2nd Report: January 24, 2012

Reviewed 14 recent social medial NLRB decisionsWork-related issues need to be the primary subject of the employee

post / conversation in order to be protected.

Cannot have blanket prohibitions against negative postings and comments about the employer.

Test: could an employee reasonably construe the rule / policy to apply to their communications regarding working conditions?Slide110

Social Media: Policy

NLRB General Counsel’s 3nd Report: May 30, 2012

Reviewed 7 company policies governing social media. 6 violated the NLRA What not to write: “… be sure that your posts are completely accurate and not misleading and that they do not reveal non-public company information on any public site.”

“Offensive, demeaning, abusive or inappropriate remakes are as out of place online as they are offline….”

“Get permission before reusing others’ content or images.”

“[This] Social Media Policy will be administered in compliance with applicable laws and regulations (including Section 7 of the National Labor Relations Act).”Slide111

Access to Social Media Accounts

Maryland Department of Public Safety and Correctional Services

2010: Policy to provide Facebook login and password for applicants and employee recertification for use in background checks

MD Legislative Response

: Approved May 2, 2012: “Labor and Employment – Username and Password Privacy Protection and Exclusions”

Other

state legislation pending

:

California – Minnesota – South Carolina

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Password Protection Act of 2012

Social Networking Online Protection ActSlide112

Questions & AnswersSlide113
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Linda Longton

Senior Vice President, Editorial & Research

Randall-Reilly Business Media & InformationSlide115
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Dr. Frank Luntz

Pollster & Communications ProfessionalSlide117
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Alan Sims

Vice President & Executive Director, Events Division

Randall-Reilly Business Media & InformationSlide119
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