Fall 2018 Unified Agenda Forecasts Several Significant Employment-Related Regulatory & Deregulatory Actions

By: Mark M. Trapp and Aaron R. Gelb

On October 17, 2018, the Trump Administration released its Unified Agenda of Regulatory and Deregulatory Actions (“Agenda”). Reports such as these, usually issued twice a year, set forth each federal agency’s forecast of its anticipated actions and rulemaking priorities for the next six-month period. It also provides estimated timelines for completion. This regulatory to-do list provides insight into the administration’s upcoming priorities. The current Agenda emphasizes the Trump Administration’s efforts to deregulate industry, but also includes several regulatory items of importance to employers.

Here is a summary, broken down by department, of the most significant employment-related items addressed in the Agenda.

Department of LaborFall 2018 Agenda_DOL_3

Wage and Hour Division

Joint Employment. The Obama administration took a much broader view of “joint employment” – situations in which a worker may be considered an employee of two or more separate employers. Following the lead of the NLRB, which last month issued its own proposed rule re-tightening the standard for joint employment, the DOL announced its intention to “clarify the contours of the joint employment relationship to assist the regulated community in complying with the Fair Labor Standards Act.” A notice of proposed rulemaking is scheduled to issue as early as December 2018 and will hopefully modernize the method for determining joint employment in today’s workplace.

White Collar Overtime Exemption. The DOL has listed as a priority its long-awaited rule to update the salary level for the exemption of executive, administrative and professional employees under the FLSA (the so-called white-collar exemption). It is expected to raise the threshold exemption for such employees from the historical level under the FLSA ($23,660 annually), but not as high as the former rule adopted by the Obama administration, which would have more than doubled the minimum salary level but was enjoined by a court. The timeframe is somewhat unclear and has been pushed back twice already. The Agenda states it is now expected in March 2019.

Regular Rate. Under the FLSA, employers must pay covered employees time and a half their regular rate of pay for hours worked in excess of forty hours in a workweek. The DOL has stated its intent to amend its regulations “to clarify, update and define the regular rate requirements under the FLSA.” The new proposal is expected in December 2018.

Tip Regulations. In March of 2018, the omnibus budget bill amended the FLSA and addressed rules affecting tipped employees and so-called “tip pooling.” The DOL is expected to issue a proposed rule this month to clarify and address the impact of the 2018 FLSA amendments.

Occupational Safety and Health Administration

Tracking of Workplace Injuries and Illnesses. OSHA proposed to amend its recordkeeping regulation to remove the requirement to electronically submit to OSHA information from OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) for establishments with 250 or more employees which are required to routinely keep injury and illness records. Under the proposed rule, these establishments would be required to electronically submit only information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). OSHA also proposed to add the Employer Identification Number (EIN) to the data collection to increase the likelihood that the Bureau of Labor Statistics (BLS) would be able to match OSHA-collected data to BLS Survey of Occupational Injury and Illness (SOII) data and potentially reduce the burden on employers who are required to report injury and illness data both to OSHA (for the electronic recordkeeping requirement) and to BLS. OSHA is reviewing comments and is expected to publish a final rule in June 2019. Many entities submitted comments regarding the anti-retaliation provisions of the rule, but it is not known whether OSHA will make further changes to that aspect of the rule. Meanwhile, OSHA issued a memorandum on October 11, 2018 with the stated intent of clarifying that the rule does not prohibit workplace safety incentive programs or post-incident drug testing. Action taken under a safety incentive program or post-incident drug testing policy would only violate 29 C.F.R. § 1904.35(b)(1)(iv) if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health. This rulemaking has been moved from the Proposed Rule Stage to the Final Rule Stage. Continue reading

Going Through Withdrawal – Strategies for Minimizing Your Multiemployer Pension Withdrawal Liability, Protecting Your Assets and Saving Your Business

Join Conn Maciel Carey Labor & Employment Practice Group partner, Mark Trapp, on November 14, 2018 when he presents an interactive workshop to help unionized employers understand and analyze what is often the most critical challenge facing their business – multiemployer pension withdrawal liability.  Attendees will learn innovative and aggressive techniques and strategies to address this issue and proactively secure the future of their company. Increasing Money Graph

This workshop will also discuss the current legislative environment for multiemployer pension plans and issues, particularly the work of the Joint Select Committee on Solvency of Multiemployer Pension Plans, charged with preparing a report and recommended legislative language by November 30 to “significantly improve the solvency” of multiemployer pension plans and the Pension Benefit Guaranty Corporation.

Workshop attendees will:

  • Gain a broad understanding of the challenges facing employers who participate in a multiemployer pension plan

  • Discover strategies for assessing and minimizing their withdrawal liability risks through collective bargaining and business planning

  • Examine the status and possibility of legislative relief from the Joint Select Committee on Solvency of Multiemployer Pension Plans

Click here to register.

NLRB Seeks to Change Joint Employer Test by Rulemaking

By:  Mark Trapp

On September 14, 2018, the National Labor Relations Board (“NLRB” or “Board”) published a Notice of Proposed Rulemaking (“Notice”). In its Notice, the Board states its belief that the “rulemaking will foster predictability and consistency regarding determinations of joint-employer status in a variety of business relationships.” At base, the Notice is an attempt to return the Board to its pre-2015 standard, which the Obama-era NLRB overruled in the controversial Browning-Ferris decision issued that year.

If enacted, the rules would provide a stronger degree of clarity and predictability to business owners and tighten the standard for finding one business to be a joint employer of another employer’s employees. Moreover, by enacting the standard through rulemaking, rather than adjudication, the NLRB decreases the likelihood of the standard being overturned by a later Board. Continue reading

At the NLRB, Big Labor’s Clock Has Not Yet Struck Midnight

By: Mark M. Trapp

shutterstock_424794466As part of an apparent package deal to move through the Senate numerous Trump judicial and other nominees, President Trump on Tuesday re-nominated Democratic member Mark Gaston Pearce for another term on the National Labor Relations Board (“NLRB” or “Board”). Pearce, who has served on the Board since 2010 (when he received a recess appointment from President Obama), saw his latest 5-year term expire at midnight on Monday, only to be renominated within 24 hours.

Pearce served as Chairman of the Agency for nearly six years until President Trump installed his own Chairman in early 2017. His renomination by Trump comes in the face of sharp criticism from the business community and Republicans, upset that in his more than eight years on the NLRB, Pearce was a consistent vote for pro-union outcomes, including the controversial Browning-Ferris joint-employer decision in 2015. An August 17th editorial in the Wall Street Journal summarized the business community’s complaints against Pearce as follows:

Among other labor hits, Democrats allowed graduate students to unionize; required employers to disclose to unions the names, phone numbers and email addresses of workers; and protected workers who vilify their employers on social media. Mr. Pearce also ruled that employees who had resigned their union membership after their labor contract expired could be dunned for back dues. A D.C. Circuit Court of Appeals panel overruled his decision in June. As chairman, Mr. Pearce snubbed Republican colleagues. GOP member Brian Hayes told a member of Congress in 2011 that Mr. Pearce wasn’t sharing information and public comments on the board’s “quickie election” rule that trampled employers’ due process rights. Mr. Pearce then accused Mr. Hayes of threatening to resign to deny the board a quorum, which prompted an investigation by the board’s Inspector General. Mr. Hayes was exonerated, but Mr. Pearce jammed through the election rule anyway without letting him vote. A federal judge appointed by Mr. Obama blocked the rule because the board lacked a quorum.

If confirmed by the Senate, Pearce will not upset the recent 3-2 Republican majority on the NLRB, which is traditionally staffed by three members of the president’s party and two members of the minority party. But many Republicans and business advocates remember the precedent set during the Obama presidency, which repeatedly left open Republican seats when those members’ terms expired, including once for a full two years. This allowed the Obama-era Board to utilize lengthy 3-1 Democrat advantages to reverse over 4,500 years of NLRB precedent, according to one study.

Now with Trump in office, many business owners and Republicans hope to reverse as many as possible of the Pearce-led changes, a task which would become much easier were Pearce’s seat to remain vacant. Many cases are decided by random three-member panels, and if the Board is 3-1 Republican, no such panel will have a Democratic majority, and cases decided without dissent can move more quickly through the NLRB’s internal processing. In addition, the Democrats have been pushing to force the recusal of Republican members John Ring and William Emanuel on the joint-employer issue. A Pearce confirmation combined with the recusal of these two Republicans would give the Democrats a 2-1 majority on perhaps the biggest issue to many business owners.

It will be interesting to see whether Pearce can make it through Senate confirmation as, for now, it does not appear that the nomination is a “done deal” in that Chamber. In the meantime, the Board will operate with four members. Many employers and business owners large and small would like to see this period extended as long as possible, even if Pearce is ultimately confirmed. If and when Pearce is again confirmed, he would serve until August 27, 2023.

Of course, we here at Conn Maciel will be keeping an eye on this issue of importance. For now, for employers it’s “four-speed ahead!”

Free In-Person OSHA and Labor & Employment Client Briefing in Chicago – September 25, 2018

Join Conn Maciel Carey for an In-Person OSHA and Labor & Employment Briefing in Chicago on Tuesday, Sept. 25, 2018, and stay for a reception to celebrate the launch of our Chicago Office.

This complimentary program will feature panel discussions with representatives from EEOC, NLRB, and OSHA addressing key policy trends and regulatory developments.  They will be joined by senior corporate counsel from multinational corporations and Conn Maciel Carey’s own Labor & Employment and OSHA specialist attorneys.  There will also be moderated breakout roundtable sessions covering issues of concern to various industry segments.


Agenda

1:00 PM – Registration and Networking

1:30 PM – OSHA Panel

  • Angie Loftus (OSHA Area Director – Chicago North Area Office)
  • Nick Walters (Former OSHA Regional Administrator – Region 5) Continue reading

With New General Counsel, NLRB Will No Longer “Robb” Employers from Implementing Sensible Work Rules

By: Mark M. Trapp

On December 14, 2017, two days before the term of then-NLRB Chairman Philip A. Miscimarra expired, the existing Republican majority-Board issued its decision in The Boeing Company, 365 NLRB No. 154 (December 14, 2017). As readers of this blog learned not long after, the Boeing case illustrated “the profound difference in the way the Board under new General Counsel Peter B. Robb intends to evaluate employer rules and workplace policies versus the perhaps overzealous and less employer-friendly approach of the Obama-era Board.”

Employee Handbook 2This statement has been borne out in Robb’s recent issuance of Memorandum GC 18-04, Guidance on Handbook Rules Post-Boeing. As Robb notes in the new memorandum, Continue reading

SCOTUS Approves Class Action Waivers in Employment Arbitration Agreements

By:  Kara Maciel and Dan Deacon

The U.S. Supreme Court ruled on Monday that class/collective action waiver clauses in employment agreements that compel employees to settle disputes individually with a third-party arbitrator are enforceable.  In a landmark 5-4 ruling, the Justices in the majority rejected the National Labor Relations Board’s position and held that a class/collective action waiver in an arbitration agreement – which effectively prohibit employees from joining together in a class or collective action lawsuit to settle disputes – do not violate the Federal Arbitration Act (“FAA”) or the National Labor Relations Act (“NLRA”).

Background

Arbitration agreements – requiring employees to submit claims to an arbitrator instead of filing in court – are relatively common in the workplace.  Many employers favor arbitration because it tends to lower the cost of litigation and streamlines a resolution.

The legal issue that percolated through the federal Courts of Appeals over the past several years was whether a class/collective action waiver in an arbitration agreement is enforceable.  An arbitration agreement that includes a class/collective action waiver benefits an employer because it prevents employees from banning together to file costly class or collective actions and it forces employees to utilize the arbitration process rather than filing a lawsuit.  Thus, the only form of redress for an employee is a single action that must be worked out before a neutral, third-party arbitrator.

Over the past five years, the Courts of Appeals issued conflicting opinions on whether class action waivers are enforceable.   Notably, between 2013 and 2014, employers were provided favorable opinions from the U.S. Courts of Appeals for the Fifth, Second, and Eleventh Circuit which concluded that the NLRA does not invalidate class action waivers in arbitration agreements.  In contrast, in 2016, the U.S. Courts of Appeals for the Ninth and Seventh Circuit adopted the NLRB’s position that class and collective action waivers violate Section 7 of the NLRA.

The Supreme Court’s Decision

The Supreme Court’s ruling brings finality to an issue that sparked years of debate and caused significant uncertainty for employers.  Oral arguments took place in October 2017 with the justices appearing split along ideological lines – except for Justices Clarence Thomas and Neil Gorsuch who did not speak at all during the session.  Interestingly, however, it was Justice Gorsuch who wrote the opinion – which was his first major opinion since joining the Court last spring.

As alluded to in our prior blog post, President Trump’s ability to fill Justice Scalia’s vacancy was ultimately a deciding factor in what appears to have been a partisan showdown.  Speaking for the conservative wing on the bench, Justice Gorsuch explained that the law is clear that Congress in enacting the FAA instructed federal courts to enforce arbitration as written, including those terms calling for individualized proceedings, and that the “decision does nothing to override” what Congress has done.  In a lengthy dissent, Justice Ginsburg criticized the majority for overturning 80 years of NLRB precedent.  Justice Ginsburg commented that the majority’s decision is “egregiously wrong” and expressed concerns that many employees with small claims, such as minimum wage and overtime violations, will be disinclined to pursue potential claims individually.

The expected fall-out and the future of this ruling now rests with Congress.  Congress certainly has the ability to revise the FAA and the NLRA through legislation.  Given the deep split amongst party lines, however, it is unlikely that Congress will act any time soon.

Take Aways for Employers 

In light of the Court’s decision, employers should immediately review their practices and policies governing employment agreements with arbitration clauses.  For those employers who do not require arbitration of disputes, now may be the time to reconsider whether to implement such an agreement with current employees.  For those employers who have arbitration agreements in place already, now is the time to ensure the agreement contains an enforceable class/collective action waiver, especially for wage and hour disputes.  Employers may want to evaluate whether to restrict class/collection actions for other types of disputes, such as discrimination or harassment cases.  Importantly, any arbitration agreement must be drafted with the company culture in mind.

In short, employers now have the ability to utilize a new forum to resolve legal disputes on an individual basis.  In some circumstances, especially for class/collection claims, an arbitration may be less expensive than lawsuits, take less time, and do not typically result in years of appeals.  Ultimately, the Supreme Court’s decision is welcome news for employers.  Employers can proactively mitigate litigation risk through carefully drafted employment agreements and more effectively manage legal disputes.