Congress Faces Heavy-Hitting Legislation – The Winners and Losers

The U.S. Congress has been busy as of late. Several key issues that have been hotly debated in recent weeks have failed to progress, while others are just making their debut. Below is a summary of the various measures that have a direct impact on employers.

Employee Free Choice Act

After several weeks of furious lobbying on one of the most hotly contested labor bills in over a decade, on June 26 the Senate failed to proceed to consideration of the so-called “Employee Free Choice Act” (EFCA). Although the bill, H.R. 800, was approved by the House, it failed to obtain the support necessary in the Senate to invoke cloture. On a vote of 51-48, the bill fell nine votes short of the 60 required to take the bill to the Senate Floor. Senate leaders decided to bypass committee consideration of the measure, and to take the House-passed bill directly to the Senate Floor.

Armed with a presidential veto threat, the business community, led by the Coalition for a Democratic Workplace (www.myprivateballot.com), lobbied hard against the bill. Organized labor launched a massive campaign to pass the bill, including bringing hundreds of union lobbyists to Washington the week of the vote.

During this same period, the AFL-CIO sponsored its Take Back America 2007 Conference in support of what AFL-CIO President John Sweeney described as labor’s “top priority” and “the key to everything else” on labor’s agenda, including electing more “progressives” to Congress to pass more “progressive legislation.”

The reason the bill is organized labor’s top priority is clear. The measure was intended, even at the sacrifice of employee rights, to reverse the continuing decline in union membership in the United States (which currently stands at 7.4 percent of the private sector workforce).

Specifically, the EFCA would have amended the National Labor Relations Act (NLRA) to provide:

• Union-forced “card check” certification in lieu of a secret ballot election conducted by the National Labor Relations Board (NLRB) for determining union representation;
• Compulsory, government-dictat-ed private sector wages, benefits and other terms of employment for two years imposed through a federally-appointed arbitrator under compulsory binding first contract interest arbitration (if the parties have been unable to reach agreement after 90 days of negotiations and 30 days of federal mediation); and
• Punitive anti-employer sanctions, including triple back pay, mandatory federal court injunctions, and punitive civil fines of $20,000 per violation on top of “make whole” remedies under current law.

Senate opponents of the bill were led by Minority Leader Mitch Mc-Connell (KY), Senate Health, Education, Labor and Pensions (HELP) Committee Ranking Member Michael Enzi (WY), and Senator Orrin Hatch (UT). Senator Hatch, who spearheaded the opposition to the 1977-78 Omnibus Labor Law Reform bill (which died after a 19-day, 6-cloture vote filibuster), described the EFCA as a more radical anti-employee and anti-business change in national labor policy than the 1977-78 bill. Senate Majority Leader Harry Reid (NV) and Senate HELP Commit-tee Chairman Edward Kennedy (MA) urged passage of the bill to “restore the middle class” through increased union membership and collective bargaining.

Earlier this year, the House passed the bill by a vote of 241-185. Thus, although the bill failed in the Senate, labor leaders were able to claim that the bill had majority support in both Congressional bodies (i.e., 51 votes in the Senate; 241 votes in the House). They have vowed to bring the bill back, and to work hard during next year’s elections to produce a filibuster-proof majority in the Senate and to elect a pro-union President who will sign the bill.

Organized labor’s failure to force the bill onto the Senate Floor may be only a temporary setback. The Senate companion bill, S. 1041 (Kennedy, MA), which is pending before the Senate HELP Committee, could still be reported out of committee this year. Although labor barely had the votes necessary to pass the bill, much less the 60 votes needed to stop a Senate filibuster or the 67 votes to override a threatened presidential veto, that does not end the prospects for Senate passage of the EFCA (or an amended version) in this Congress. Senate supporters can continue to offer various changes to the EFCA in the Senate HELP Committee in an effort to find an acceptable version that could attract the necessary 60 votes to permit Senate passage of the bill. Or organized labor may focus its efforts on changing the makeup of Congress and the White House in the 2008 elections.

Immigration Reform

On June 28, after bitter debate, the Senate failed to pass the massive, 300+ page, comprehensive immigration reform proposal (S. 1639). The measure failed by 14 votes (46-53) to gain the 60 votes necessary to get the bill to the Senate Floor for final passage.

The final vote reflected the substantial division in the country concerning such issues as “amnesty” versus “earned legalization” for the estimated 12 million illegal immigrants currently in the United States, and a new “guestworker” program for temporary immigrants who perform unskilled work that U.S. citizens have declined to accept.

Although the House has not acted on its version of the legislation, “Security Through Regularized Immigration and Vibrant Economy Act (STRIVE)” (H.R. 1645, Gutierrez, D-IL), it is unlikely that a comprehensive bill will be enacted this year, and perhaps not for the duration of the 110th Congress (2007-2008) and before the 2008 national elections. There is a possibility that more modest reforms, such as legislation designed to ease shortages of agricultural workers and certain highly skilled professionals still could advance in Congress this year. There also may be stand-alone efforts to beef up border security and interior enforcement, with the latter most likely aimed at employers through a new employment eligibility verification system. However, while there is broad national consensus that the Nation’s current immigration system is “broken,” there is deep division on what needs to be done to “fix” it. That division is unlikely to be bridged until after the 2008 elections.

RESPECT Act

That’s not to say that the congressional workplace agenda will be short of controversial measures. While the EFCA is organized labor’s number one priority, it is not their only priority. The union lobby has a number of legislative issues that it is pushing in the 110th Congress.

Looming on the legislative horizon is another proposal that would also amend the NLRA to increase union organizing. The “Re-empowerment of Skilled and Professional Employees and Construction Tradeworkers (RESPECT) Act,” S. 969 (Dodd, CT)/H.R. 1644 (Andrews, NJ) would limit the definition of a “supervisor” by deleting the words “assign” and “responsibly to direct” employees from the list of supervisory indicia. The measure also would add the requirement that an employee spend a “majority” of work time performing the remaining supervisory duties. While these simple changes may appear to be innocuous on their face, they strike at the very core of the business-related duties and functions performed by a supervisor.

Section 2(11) of the NLRA currently defines a “supervisor” as: “[A]ny individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.”

The classification of “supervisors” under the NLRA has a dual function. The first is to protect the rights of rank-and-file employees in exercising their Section 7 rights to self-organize, and to form, join or assist a union without managerial or supervisory interference. The other is to ensure that supervisors act as agents in the interests of their employers and do not compromise their duty to their employers in labor-management disputes.

Unions see the RESPECT Act as necessary to “correct” what they consider to be the flawed decisions issued last October by the NLRB interpreting the definition of supervisor. In the lead case, Oakwood Healthcare Inc., the NLRB (in a 3-2 decision) issued new guidance for determining who is a supervisor under the NLRA’s definition and found that permanent charge nurses, but not temporary charge nurses, at a Michigan hospital were supervisors. Noting that the NLRB previously had found supervisory status where individuals have served in a supervisory role for at least 10 to 15 percent of their total work time, the majority held that there was “no reason to depart from this established precedent.”

The other decisions involved the supervisory status of registered nurses and licensed practical nurses acting as charge nurses at a Minnesota nursing home, and “lead” workers at a Mississippi window and door manufacturer. (For a detailed discussion of these cases, see the October/November 2006 issue of The Employment Law Authority, at page 1.)

Unions claim that 8 million employees will be reclassified as “supervisors” under the Oakwood Healthcare decisions, thus losing their right to organize, bargain collectively, and engage in concerted activities (such as strikes). Organized labor’s claims about the reclassification of supervisors under the Oakwood Healthcare decisions are wildly exaggerated (just as similar union predictions have been proven false concerning the loss of overtime for 8 million workers as a result of the U.S. Department of Labor’s revisions to the Part 541 “white collar” overtime exemption under the Fair Labor Standards Act). In fact, in the Oakwood Healthcare decisions, the NLRB found that only 12 of the approximately 170 employees who were classified as “supervisors” met the statutory definition; the remaining employees were found not to be supervisors within the meaning of the NLRA.

Business groups suspect that the union support for the RESPECT Act comes from far more self-serving union motivations. They are concerned that the legislation would negatively impact a broad cross-section of employers that employ “supervisors” as front-line managers, and not just employers in the healthcare and manufacturing industries that were involved in the Oakwood Healthcare cases.

A subcommittee of the House Education and Labor Committee held a hearing on the classification of supervisors under the NLRA in early May. Employers should be prepared for organized labor’s arguments that reclassification of supervisory status is merely an innocuous, technical change (which does not involve such “hot-button” issues as denial of secret ballot elections). Thus, those members of Congress who voted against the EFCA now “owe organized labor a vote” in anticipation of the 2008 elections.

The Ledbetter Bill

Finally, the fastest moving employment law legislation in Congress is a measure to reverse the U.S. Supreme Court’s 5-4 decision in Ledbetter v. Goodyear Tire and Rubber Company. Ledbetter limits pay discrimination charges against employers by requiring that such charges be filed within the 180-day statute of limitations un-der Title VII of the Civil Rights Act of 1964, rather than under the “continuing violation” theory.

In support of her Title VII claim, Ledbetter alleged that in years past the company had lowered her performance evaluations because of her gender and that the lower evaluations resulted in lower merit pay increases. She argued that those tainted lower pay increases, in turn, perpetually reduced her compensation (because of her gender). As a result, Ledbetter claimed, she should be able to challenge her employer at any time, even as in this case years la-ter. The Supreme Court dismissed her claims as untimely. (For more on this case, see the April/May 2007 issue of The Employment Law Authority, at page 1.)

Congress was swift to introduce legislation to reverse the Supreme Court’s decision. On June 22, Representative George Miller (D-CA) introduced H.R. 2831, the “Lilly Ledbetter Fair Pay Act,” which would amend several federal employment discrimination statutes to specify that a discriminatory pay decision occurs each time a discriminatory paycheck is issued. The bill would amend Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act and the Rehabilitation Act. If passed, the amendments would be retroactive to May 28, the day before the Ledbetter decision was issued, and apply to all pay discrimination claims pending on or after that date.

During a hastily-called June 12 hearing of the House Education and Labor Committee, the U.S. Chamber of Commerce testified that “the Ledbetter decision recognizes the profound unfairness inherent in a limitations rule that would permit an individual to sleep on his or her rights for years, or even decades, before raising a claim of discrimination.” As the Chamber observed, “limitations periods promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.”

The Ledbetter bill poses a number of concerns for the business community including:

• Effectively eliminating the statute of limitations for any decision that has a link to compensation;
• Creating a springboard cause of action, for example where a former employee receiving an annuity or retirement benefit based in part on compensation could file a charge based on decisions made decades ago – thus involving complicated recalculations of pensions and other benefits;
• Opening the door to “comparable worth” pay schemes by allowing disparate impact compensation claims to be brought;
• Making it far easier to bring “pattern and practice” cases that shift the burden of proof to the employer (which can be especially troubling when dealing with allegations of long-past acts for which documentation may no longer exist or where witnesses have disappeared or died);
• Permitting plaintiffs to piggy back on the claims of other individuals; and
• Giving the Equal Employment Opportunity Commission greater authority to go on fishing expeditions once a pay discrimination claim is filed.

The House Education and Labor Committee voted the bill out of the full committee without a hearing on the bill itself, which is broader than simply reversing the Ledbetter decision. Expect efforts to ram legislation such as H.R. 2831 through the House as a political attack on the Bush-appointed Roberts Supreme Court and as a political appeal to women voters. This may make the legislation hard to stop – at least in the House. As we have seen with the EFCA and the comprehensive immigration bill, passage of legislation is more difficult in the Senate.

Conclusion

These four workplace issues – the EFCA, comprehensive immigration reform, the “RESPECT Act,” and the Ledbetter bill – are merely the tip of the iceberg in Congress. Other issues that may advance include:

• Paid and expanded leave under the federal Family and Medical Leave Act;
• Increased OSHA criminal penalties ($250,000 fines and 10 years imprisonment for willful violations re-sulting in serious bodily injury);
• Additional employment discrimination statutes and causes of action (based on genetic makeup, sexual orientation/sexual preference, and religion);
• Restrictions on mandatory arbi-tration of employment law disputes;
• Government contract debarment for labor and employment law violations;
• Comparable worth and pay equity;
• Restrictions on executive compensation and business mobility; and
• Labor standards on bilateral trade agreements.

Never a dull moment in D.C. Unfortunately, there is little possibility that such pressing national issues as reform of health care, Social Security, Medicare and Medicaid will be acted on in the remainder of this Congress.

Note: This article was published in the June/July 2007 issue of The Employment Law Authority.