Dan England Chairman C R England Inc Chairman

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Dan England Chairman, C. R. England Inc. & Chairman, American Trucking Associations

Dan England Chairman, C. R. England Inc. & Chairman, American Trucking Associations

CNG / LNG Panel Brief Overview R. Eugene Goodson (Gene) Alternative Energy Expert &

CNG / LNG Panel Brief Overview R. Eugene Goodson (Gene) Alternative Energy Expert & Former CEO Oshkosh Truck

Speakers & Panel Objectives • Dan England, Chairman, C. R. England • Kennon Guglielmo,

Speakers & Panel Objectives • Dan England, Chairman, C. R. England • Kennon Guglielmo, President, EControls • Robert Carrick, Sales Manager, CNG/LNG Freightliner • Objectives

Some Observations • Liquid petroleum products are still the preferred truck fuel – Where

Some Observations • Liquid petroleum products are still the preferred truck fuel – Where can NG be substituted for non-transport petroleum use now? – Transportation priorities – Emission standards still a challenge • NG fuels offer a cost advantage in certain applications – Use taxes – Crude oil and NG price relationship – Emission standards?

An Alternative Energy Experience • 1977, Rifle, Colorado, Shale oil field – 1 mile

An Alternative Energy Experience • 1977, Rifle, Colorado, Shale oil field – 1 mile square trench 300 feet deep by 100 foot wide – Fracture shale by dynamite, 10% oil in structure – Heat 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 people

Other Transportation Energy Sources • Ethanol • Methanol • Propane • Coal liquids •

Other Transportation Energy Sources • Ethanol • Methanol • Propane • Coal liquids • Electricity

Domestic Heavy-Duty Mobile Natural Gas History, Technology, and Outlook Kennon Guglielmo, Ph. D. President

Domestic Heavy-Duty Mobile Natural Gas History, Technology, and Outlook Kennon Guglielmo, Ph. D. President EControls, LLC

A Snapshot of EControls. . . • EControls Served OEM Applications: Heavy-Duty On-Road •

A Snapshot of EControls. . . • EControls Served OEM Applications: Heavy-Duty On-Road • Industrial Marine Complete OEM fuel system provider. . . Electronic Control Modules Fuel Control Actuators & Sensors

A Snapshot of EControls. . . • 100, 000+ OEM heavy-duty NG systems on

A Snapshot of EControls. . . • 100, 000+ OEM heavy-duty NG systems on the road today • • Installed base of 1, 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!

Early Domestic NG Struggles • Why have domestic HD NG engines failed to achieve

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 cost

Fuel Cost Economics Historical Oil & NG Fuel Prices Oil Price in $/Barrel Natural

Fuel Cost Economics Historical Oil & NG Fuel Prices Oil Price in $/Barrel Natural Gas Price in $/MCF Oil $/Barrel Natural Gas $/MCF Domestic shale production hits stride

Fuel Cost Economics Relative Energy Cost of Oil and Natural Gas Oil / NG

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 Non-sustainable > 2: 1 ratio triggers 1990’s activity < 2: 1 ratio insufficient for critical mass Domestic shale production hits stride

Fuel Cost Economics • “We’ve heard it all before”. . . – “As soon

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 so

Critical Fuel System Technologies Major Technology Areas • Vehicle fuel storage type – CNG

Critical Fuel System Technologies Major Technology Areas • Vehicle fuel storage type – CNG = Compressed Natural Gas – LNG = Liquefied Natural Gas • Engine fuel delivery system – Air / Fuel pre-mix – Direct NG injection • Engine ignition system – Spark – Micro-pilot diesel – Standard diesel

Vehicle Fuel Storage • CNG = Compressed Natural Gas (3000+ psi gas) – –

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” bottle

Engine Fuel Delivery System • Air / Fuel Pre-Mix (NG mixed into incoming air

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, ISX 12 G, ISX 15 G 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 15 L

Engine Ignition System • Spark Ignition (similar to gasoline engines) – Electronic spark initiates

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)

Truck Cost Considerations • Why are HD NG engines so much more expensive than

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 Tier 4 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 systems

Natural Gas Market and Products Robert Carrick Sales Manager Natural Gas

Natural Gas Market and Products Robert Carrick Sales Manager Natural Gas

What’s Driving Natural Gas? • • • Lower fuel costs and less price volatility

What’s Driving Natural Gas? • • • Lower fuel costs and less price volatility than diesel fuel – quick payback Production Solutions Dependable 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 CNG 6. 0 5. 4 Miles/Year 80, 000 Fuel Price $4. 04 $1. 80* Gallons/Year 13, 333 14, 815 Fuel Costs/Yr $53, 867 $26, 618 MPG Annual Fuel Savings Yrs Payback @ $40, 000 Premium $27, 249 1. 47

Customer Success Paper Transport (WI) Sysco (CA) Ryder (CA) Swift (AZ) Suffolk County (NY)

Customer Success Paper Transport (WI) Sysco (CA) Ryder (CA) Swift (AZ) Suffolk County (NY) National Grid (NY)

Customer Success J. B. Hunt (TX) City of Nashua (NH) City of Santa Monica

Customer Success J. B. Hunt (TX) City of Nashua (NH) City of Santa Monica (CA) Frito Lay (CA) LA County (CA) Waste Management (TX)

Hurdles to Natural Gas Market Development • • INFRASTRUCTURE – INFRASTRUCTURE No longer “Chicken

Hurdles to Natural Gas Market Development • • INFRASTRUCTURE – INFRASTRUCTURE No longer “Chicken and Egg” discussion Now…Chicken and FEED! Limited power train options… NG is not for everyone Comprehensive training and product support Facility requirements and improvements – NFPA 30 A Secondary Market – Where will we be in five years?

2013 & Beyond • 2013 Full production units with ISX 12 G – 400

2013 & Beyond • 2013 Full production units with ISX 12 G – 400 HP / 1450 Torque • NAT 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 2020

Dan England Chairman, C. R. England Inc. & Chairman, American Trucking Associations

Dan England Chairman, C. R. England Inc. & Chairman, American Trucking Associations

C. R. England LNG Implementation

C. R. England LNG Implementation

C. R. England Profile • Privately owned and operated since 1920 – Currently in

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 3 PL and top 10 freight broker – Licensed international freight forwarder

C. R. England Service Offerings

C. R. England Service Offerings

LNG Profile • • Tractor Count: Five daycab tractors Make: Kenworth T 800, Cummins

LNG Profile • • Tractor Count: Five daycab tractors Make: Kenworth T 800, Cummins / Westport 15 L 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 tractor

Additional Information • • • 250 -mile length of haul, looped freight $80, 000

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 15 L engine LNG fueling stations at both origin and destination – Southern California (Fleet Star) to Las Vegas (Clean Energy)

Fuel Results • Fueling – Similar timing to fueling a diesel truck – Face

Fuel Results • Fueling – Similar timing to fueling a diesel truck – Face shield and gloves required – LNG stations have less reliability • Fuel economy results – Miles: 235, 750 – LNG DGE: 36, 044; Diesel Gallons: 4, 205 – MPG: 5. 86

Maintenance Intervals – LNG vs Diesel LNG Diesel Oil and Filter Change 25, 000

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

Maintenance Results • Maintenance – Slower maintenance turnaround time than diesel – Engine-related parts

Maintenance Results • Maintenance – Slower maintenance turnaround time than diesel – Engine-related parts availability has been challenging – Greater need to stay in-service • Maintenance 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 weeks

LNG Financial Analysis

LNG Financial Analysis

LNG vs CNG • Varying perspectives on which is preferable • Multiple factors influence

LNG vs CNG • Varying perspectives on which is preferable • Multiple factors influence the decision – – – • Fuel distribution / infrastructure Application specifics Length of haul Weight and cube requirements Cost of LNG, CNG, diesel Technology advances could impact decision

General Observations • • • Environment & fuel dependence drove decision Natural gas is

General Observations • • • Environment & fuel dependence drove decision Natural gas is new and evolving Each solution is unique Optimistic about 12 L engine Viability 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 stakeholders

Employment Law Potholes in the Road Ahead R. Eddie Wayland Partner King & Ballow

Employment Law Potholes in the Road Ahead R. Eddie Wayland Partner King & Ballow

Discrimination Overview

Discrimination Overview

Eleven Protected Categories Under Federal Discrimination Laws • Race • Disability • Color •

Eleven Protected Categories Under Federal Discrimination Laws • Race • Disability • Color • Veteran Status • Sex • National Origin • Pregnancy • Citizenship • Age (40 and over) • Genetic Information • Religion

Protected Categories Statistics In 2011, there were 99, 947 charges filed with the EEOC,

Protected Categories Statistics 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: * Race – 35. 9% (‘ 10: 35. 9%) Disability – 25. 8% (‘ 10: 25. 2%) Sex – 28. 5% (‘ 10: 29. 1%) 11. 3%) National Origin – 11. 8% (‘ 10: 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.

Discrimination Common Causes of Discrimination Claims: • • Inconsistent application of policies; Inadequate documentation

Discrimination Common Causes of Discrimination Claims: • • 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.

Expanded Liability • Staub v. Proctor Hospital (U. S. Sup. Ct. 2011) – “Cat’s

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 acting

Age Discrimination • • • Prohibits discrimination against employees age 40 or older Applies

Age Discrimination • • • Prohibits discrimination against employees age 40 or older Applies to employers w/ 20 or more employees 2011 Statistics: – EEOC recorded 23, 465 charges of age discrimination – Total monetary benefit of $95. 2 million

Religion • • EEOC Charges at 10 -year high in 2011 Protects not only

Religion • • EEOC Charges at 10 -year high in 2011 Protects 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 / garments

Discrimination Gender Identity and Sex Stereotyping HYPO: Eve works at a large trucking firm.

Discrimination Gender Identity and Sex Stereotyping 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. ” Does Eve / Steve have a claim for sex / gender discrimination?

Discrimination Gender Identity and Sex Stereotyping YES • Macy v. Holder (EEOC – April

Discrimination Gender Identity and Sex Stereotyping 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

Criminal Background Checks • April 25, 2012: EEOC says its unlawful for employers to

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 classes Bans 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 sought

Disability Issues

Disability Issues

Americans with Disabilities Act Discrimination against qualified individuals with a disability and their associates

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 employees • Imposes a duty to reasonably accommodate • Mandates participation in the “interactive process”

Disability • Individual has a physical or mental impairment which substantially limits one or

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, posttraumatic 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 disabled

Reasonable Accommodation “Any change or adjustment in the work environment or in the way

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. ” – Ongoing – Interactive • Employers have a duty to effectively remove equal opportunity barriers caused by the disability, where possible

Reasonable Accommodation Interactive Process Steps: 1. 2. 3. 4. 5. 6. 7. Meet with

Reasonable Accommodation Interactive Process Steps: 1. 2. 3. 4. 5. 6. 7. Meet with the employee Obtain 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!

Recent Cases • EEOC v. Celadon Trucking (S. D. IN filed February 2012) –

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 discriminatory

Medical Exam or Functional Test? What is a Medical Exam? • Whether the test

Medical Exam or Functional Test? What is a Medical Exam? • Whether the test is: – – – Administered by a health care professional Interpreted 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. (9 th Cir. 2009)

Medical Exam and Inquiries: Pre-Offer • Pre-offer testing rules: – Employers should not conduct

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 functions

Medical Exam: Post-Offer • Post-offer testing rules: – Employers can conduct a medical examination

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 separate

Medical Exam: Prohibitions Prohibited examinations and inquiries: • An employer cannot: 1. Require a

Medical Exam: Prohibitions Prohibited examinations and inquiries: • An employer cannot: 1. Require a medical examination; or 2. 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 necessity

Medical Exam: Post-Offer Validation Is the Employer Responsible for the Validity of the Medical

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)

Medical Exam: Consistency Merritt v. Old Dominion Freight Line, Inc. (4 th Cir. 2010)

Medical Exam: Consistency Merritt v. Old Dominion Freight Line, Inc. (4 th 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 liability

Garza v. Swift Transportation Company CLASS ACTION: TRUCK DRIVER WAGES

Garza v. Swift Transportation Company CLASS ACTION: TRUCK DRIVER WAGES

Pay Per Mile and Issues With Pay • • • Leonel Garza used his

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 empty No one identified what a dispatched mile meant or how it was to be calculated in the contract Mile calculated using the Rand Mc. Nally 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 sued

Drivers Involved • Three Types of Drivers are Involved in the Case: – Owner-operator

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 drivers

Court Ruling & Takeaways • Who Gets to Be a Part of the Lawsuit?

Court Ruling & Takeaways • Who Gets to Be a Part of the Lawsuit? – The courts determined that all three types of drivers could be certified • Takeaways – 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. ”

Independent Contractor Update Ruiz v. Affinity Logistics Corp. , (9 th Cir. 2012) •

Independent Contractor Update Ruiz v. Affinity Logistics Corp. , (9 th Cir. 2012) • • Contractually agreed drivers were “independent contractors” Agreed to be bound as Georgia law in determining their contract status 9 th Circuit applies California law Factors assessed by Court: – Contrary to fundamental policy; and – Materially greater interest

NLRB Update

NLRB Update

Unionization in America 2011: • 16. 3 million wage and salary workers in America

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 %

Unionization by State Chart 1. Union membership rates by state, 2011 annual averages

Unionization by State Chart 1. Union membership rates by state, 2011 annual averages

Unionization on the Downslide? Employees Represented by Unions Number of Employees, in Millions Source:

Unionization on the Downslide? Employees Represented by Unions Number of Employees, in Millions Source: U. S. Department of Labor Bureau of Labor Statistics 2011

Top Unionized Industries Private Sector: • Utilities: 25. 7% • Transportation: 22. 1% •

Top Unionized Industries Private Sector: • Utilities: 25. 7% • Transportation: 22. 1% • • • Telecommunications: 16. 4% Educational Services: 15. 5% Construction: 14. 9%

Transportation Employees Represented by Unions Number of Employees, in Millions Transportation* Teamsters+ *Source: US

Transportation Employees Represented by Unions Number of Employees, in Millions Transportation* Teamsters+ *Source: US Dept of Labor Bureau of Labor Statistics + Source: unionfacts. com

Union Representation Elections Number of Employees, in Millions 57. 2% 59. 5% 59. 9%

Union Representation Elections Number of Employees, in Millions 57. 2% 59. 5% 59. 9% 58. 9% 67. 6% 64. 7% 66. 3% Source: U. S. Dept of Labor Bureau of Labor Statistics

Collective Bargaining: Micro-Units • Old Rule: – Park Manor Care Center (1991): whether the

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 unions

Micro-Units: Impact on the Trucking Industry • May permits Unions to customize the bargaining

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 units – Different 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, 2012

National Labor Relations Act: Section 7 “Employees shall have the right to self-organization, to

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. . . ”

NLRB Expanding Its Interpretation Banner Health System (July 30, 2012) • Employee disciplined for

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-up

Social Media: Concerted Activity NLRB General Counsel Report: August 18, 2011 • Post Likely

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 clients

Social Media: Concerted Activity • Hispanics United Buffalo: September 2, 2011: – Individual action

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 content

Social Media: Policy NLRB General Counsel’s 2 nd Report: January 24, 2012 • Reviewed

Social Media: Policy NLRB General Counsel’s 2 nd Report: January 24, 2012 • Reviewed 14 recent social medial NLRB decisions • Work-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?

Social Media: Policy NLRB General Counsel’s 3 nd Report: May 30, 2012 • Reviewed

Social Media: Policy NLRB General Counsel’s 3 nd 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). ”

Access to Social Media Accounts • Maryland Department of Public Safety and Correctional Services

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 Delaware Illinois Michigan – Minnesota – New Jersey – New York – Pennsylvania – South Carolina – Texas – Washington State Password Protection Act of 2012 Social Networking Online Protection Act