Beltway Buzz, February 10, 2023

Biden’s SOTU, Part II. This week, President Biden delivered his second State of the Union (SOTU) address to a joint session of the U.S. Congress. (Over the years, the Buzz has been quite candid with our feelings about the annual political spectacle.) In a speech that many consider to have been a soft launch of his reelection campaign, President Biden took the opportunity to extol the Federal Trade Commission’s (FTC) proposed ban on noncompete agreements and urge Congress to pass the Protecting the Right to Organize (PRO) Act, as well as paid family and medical leave legislation. Of course, it is highly doubtful that the Republican-controlled U.S. House of Representatives will be receptive to these legislative asks.

Walsh Walks (Skates) Away. Multiple media outlets have reported this week that Secretary of Labor Marty Walsh, who served as the “designated survivor” during the State of the Union address (i.e., Walsh, a member of the president’s Cabinet, was chosen to remain away from the proceedings to ensure continuity of government in the event of a catastrophe at the Capitol), will soon resign his position as labor secretary. Walsh will reportedly move back to his hometown of Boston, Massachusetts, where he will be putting on the foil to have a go at National Hockey League (NHL) owners and management as executive director of the NHL Players’ Association, the collective bargaining representative for all current NHL players. Deputy Secretary of Labor Julie Su—who will assume the role of acting secretary of labor with Walsh’s departure—will be left (at least temporarily) to navigate the U.S. Department of Labor (DOL) through what is expected to be a busy year. The agency is preparing to finalize a permanent COVID-19 standard in the healthcare industry, as well as a revised test for independent contractor status under the Fair Labor Standards Act (FLSA). Further, a proposal to change the FLSA’s implementing overtime rules is expected in May 2023.

Noncompete Update. The FTC’s recent foray into the noncompete policy waters continues to have ripple effects in Washington, D.C. Here is the latest:

• First, the FTC announced that it would hold a virtual public forum on its proposal to ban noncompete agreements on February 16, 2023, from noon until 3:00 p.m. EST. Described as a “supplement” to the Commission’s solicitation of public feedback on its proposal, the forum will consist of a “series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes.” The forum “will be webcast on the FTC’s website, transcribed, posted online, and included as part of the public record.”
• Second, a bipartisan group of federal lawmakers has reintroduced the Workforce Mobility Act in both the U.S. Senate and U.S. House of Representatives. The bill would ban noncompete agreements, which it defines as “an agreement … between a person and an individual performing work for the person, that restricts such individual, after the working relationship between the person and individual terminates, from performing—

(A) any work for another person for a specified period of time;

(B) any work in a specified geographical area; or

(C) any work for another person that is similar to such individual’s work for the person that is a party to such agreement.”

The bill contains exceptions in certain instances relating to the purchase of a business entity, the dissolution of corporate partnerships, and trade secrets. The bill gives enforcement authority to the FTC, DOL, and state attorneys general, and it allows for a private right of action. The bipartisan support behind the bill will perhaps provide this effort with a little bit of attention, though passing anything in this Congress will be a very challenging task.

OFCCP FOIA Objection Deadline Extended. If you are a federal contractor, Lauren Hicks has you covered on the continually evolving situation regarding the Office of Federal Contract Compliance Program’s (OFCCP) potential release of EEO-1 Type 2 (Consolidated) data pursuant to a Freedom of Information Act (FOIA) request. OFCCP has compiled a list of contractors that did not file objections to the agency’s release of EEO-1 data and is giving these contractors—in limited circumstances—a final opportunity to object to the release of this data. This final opportunity was recently extended, and objections must now be filed with OFCCP by February 17, 2023.

IRS Seeks Feedback on New Tip Reporting Program. On February 6, 2023, the Internal Revenue Service (IRS) issued proposed guidance that would establish the Service Industry Tip Compliance Agreement (SITCA) program, “a voluntary tip reporting program between the IRS and employers in various service industries.” According to the announcement, “[t]he proposed SITCA program is designed to take advantage of advancements in point-of-sale, time and attendance systems, and electronic payment settlement methods to improve tip reporting compliance.” Participating employers would “receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.” The program, which would not apply to the gaming industry, would be the sole tip-reporting compliance program for employers in the service industry and replace the following programs: the Tip Rate Determination Agreement (TRDA), the Tip Reporting Alternative Commitment (TRAC), and the Employer designed TRAC (EmTRAC). Stakeholders have until May 7, 2023, to submit comments on the proposed guidance.

Celebrating CMB. Carol Moseley Braun is an attorney and politician who served as U.S. senator from Illinois from 1993 to 1999. Moseley Braun is a woman of many “firsts.” She was the first African American woman to serve in the U.S. Senate, the first African American senator from the Democratic Party, and the first female senator from Illinois. During her one term in the Senate, Moseley Braun earned the reputation as a champion of civil rights. She famously led the effort to reject a design patent renewal request from the United Daughters of the Confederacy because the design contained the Confederate flag. Of the flag, Moseley Braun stated, “It has no place in our modern times, place in this body, place in our society.”

Moseley Braun lost her reelection bid in 1998 to Republican Peter Fitzgerald (who also only served one term, losing reelection in 2004 to an Illinois state senator named Barack Obama). She subsequently served as the U.S. ambassador to New Zealand and Samoa from 1999 to 2001. On January 23, 2023, President Biden announced his intention to nominate Moseley Braun to be the chair of the United States African Development Foundation.