NMEDA Short Circuit Update:

September 22, 2011 – FTC ISSUES CONSUMER ALERT REGARDING AUTO WARRANTIES

The Federal Trade Commission (FTC) has recently stated that it is illegal for a dealer to deny warranty coverage simply because a consumer had routine maintenance or repairs performed by another facility. Routine maintenance often includes oil changes, tire rotations, belt replacement, fluid checks and flushes, new brake pads and inspections. A warranty is a promise, often made by a manufacturer, to stand behind its product, or to fix certain defects or malfunctions over a period of time. The warranty pays for any covered repairs or part replacements during the warranty period.

According to the FTC, an independent mechanic, a retail chain shop or consumers themselves can do routine maintenance and repairs on their vehicle with no impact on that vehicle’s warranty. In fact, the Magnuson-Moss Warranty Act, which is enforced by the FTC, makes it illegal for manufacturers or dealers to claim that a warranty is void or to deny coverage under a warranty simply because someone other than the dealer did the work. There are, however, certain situations where a repair may not be covered. For example, if a consumer or a non-dealer mechanic replaced a belt improperly and the engine is damaged as a result, the manufacturer or dealer may deny responsibility for fixing the engine under the warranty. However, according to the FTC, the manufacturer or dealer must be able to demonstrate that it was the improper belt replacement—rather than some other defect—that caused the damage.

The FTC also stressed that simply using an aftermarket or recycled part does not void a vehicle’s warranty. The Magnuson-Moss Warranty Act makes it illegal for companies to void a warranty, or deny coverage under the warranty, simply because an aftermarket or recycled part was used in a repair. Still, if it turns out that the aftermarket or recycled part was defective or wasn’t installed correctly, and such part causes damage to another part that is covered under the warranty, the manufacturer or dealer has the right to deny coverage for that part and charge for any repairs. The FTC says the manufacturer or dealer must show that the aftermarket or recycled part caused the need for repairs before denying warranty coverage.

September 22, 2011 – FINAL RULE FOR NOTIFICATION OF EMPLOYEE RIGHTS

Background:

The National Labor Relations Board has issued a Final Rule requiring most private-sector employers to notify employees of their rights under the National Labor Relations Act by posting a notice. The rule is scheduled to be posted in the Federal Register on August 30, 2011, and will take effect 75 days later.

Employers should begin posting the notice on November 14, 2011. Copies of the notice will be available on the NLRB website and from NLRB regional offices by November 1.

Similar postings of workplace rights are required under other federal workplace laws. The 11-by-17-inch notice is similar in content and design to a notice of NLRA rights that must be posted by federal contractors under a Department of Labor rule.

The notice of rights will be provided at no charge by NLRB regional offices or can be downloaded from the Board website and printed in color or black-and-white. Translated versions will be available, and must be posted at workplaces where at least 20% of employees are not proficient in English.

Employers must also post the notice on an intranet or an internet site if personnel rules and policies are customarily posted there.

Questions and Answers:

Does my company have to post the notice?
The posting requirement applies to all private-sector employers (including labor unions) subject to the National Labor Relations Act, which excludes agricultural, railroad and airline employers. In response to comments received after the proposed rule was announced, the Board has agreed to exempt the U.S. Postal Service for the time being because of that organization’s unique rules under the Act.

When will the notice posting be required?
The final rule takes effect 75 days after it is posted in the Federal Register, or on November 14, 2011.

There is no union in my workplace; will I still have to post the notice?
Yes. Because NLRA rights apply to union and non-union workplaces, all employers subject to the Board’s jurisdiction (aside from the USPS) will be required to post the notice.

I am a federal contractor. Will I have to post the notice?
The Board’s notice posting rule will apply to federal contractors, who already are required by the Department of Labor to post a similar notice of employee rights. A contractor will be regarded as complying with the Board’s notice posting rule if it posts the Department of Labor’s notice.

I operate a small business. Will I have to post the Board’s notice?
The rule applies to all employers subject to the Board’s jurisdiction, other than the U.S. Postal Service. The Board has chosen not to assert its jurisdiction over very small employers whose annual volume of business is not large enough to have a more than a slight effect on interstate commerce. The jurisdictional standards are summarized in the rule.

How will I get the notice?
The Board will provide copies of the notice on request at no cost to the employer beginning on or before November 1, 2011. These can be obtained by contacting the NLRB at its headquarters or its regional, sub-regional, or resident offices. Employers can also download the notice from the Board’s website and print it out in color or black-and-white on one 11-by-17-inch paper or two 8-by-11-inch papers taped together. Finally, employers can satisfy the rule by purchasing and posting a set of workplace posters from a commercial supplier.

What if I communicate with employees electronically?
In addition to the physical posting, the rule requires every covered employer to post the notice on an internet or intranet site if personnel rules and policies are customarily posted there. Employers are not required to distribute the posting by email, Twitter or other electronic means.

Many of my employees speak a language other than English. Will I still have to post the notice?
Yes. The notice must be posted in English and in another language if at least 20% of employees are not proficient in English and speak the other language. The Board will provide translations of the notice, and of the required link to the Board’s website, in the appropriate languages.

Will I have to maintain records or submit reports under the Board’s rule?
No, the rule has no record-keeping or reporting requirements.

How will the Board enforce the rule?
Failure to post the notice may be treated as an unfair labor practice under the National Labor Relations Act. The Board investigates allegations of unfair labor practices made by employees, unions, employers, or other persons, but does not initiate enforcement action on its own.

What will be the consequences for failing to post the notice?
The Board expects that, in most cases, employers who fail to post the notice are unaware of the rule and will comply when requested by a Board agent. In such cases, the unfair labor practice case will typically be closed without further action. The Board also may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer. If an employer knowingly and willfully fails to post the notice, the failure may be considered evidence of unlawful motive in an unfair labor practice case involving other alleged violations of the NLRA.

Can an employer be fined for failing to post the notice?
No, the Board does not have the authority to levy fines.

Was there a public comment period? What was the response?
The Board received more than 7,000 public comments after posting a notice of the proposed rule in the Federal Register. A detailed description of the comments and the Board’s response to them, including responsive modifications to the rule, may be found in the Preamble to the Final Rule.