What’s Ahead in 2015 for Retailers in Labor and Employment Law? Part I

The recent Ogletree Deakins webinar, “What’s Ahead in 2015 for Retailers in Labor and Employment Law,” featured leaders in the retail industry and labor and employment attorneys—Randel K. Johnson, senior vice president of the U.S. Chamber of Commerce; Kelly Kolb, vice president of government affairs at the Retail Industry Leaders Association (RILA); Hal Coxson, shareholder and chair of Ogletree Deakins’ Governmental Affairs Practice Group, and Brian Hayes, former member of the National Labor Relations Board (NLRB), shareholder, and co-chair of the Traditional Labor Relations Practice Group at Ogletree Deakins. They discussed what retailers can expect from Congress, the White House and administrative agencies, such as the NLRB, the U.S. Department of Labor (DOL), and the U.S. Equal Employment Opportunity Commission (EEOC) in 2015.

In case you missed the webinar, a summary of its key points are provided below and in the next two posts in this three-part blog series.

• Priority Issues For Retailers

According to Ms. Kolb, the top issues that RILA members are watching by topic include:

• Traditional Labor
  • “Micro units” in conjunction with the NLRB’s “ambush election” rules;
  • RILA’s focus on finding solutions for the NLRB’s decision in Specialty Healthcare, which allows unions to gerrymander the workplace by targeting a small subset of employees and which likely will present a huge disruption to the retail industry;
  • RILA’s focus on the NLRB’s new “ambush election” rules for union representation elections; and
  • Specific legislative solutions including the Representation Fairness Restoration Act and the Workforce Democracy and Fairness Act, as well as a Congressional Review Act challenge to overturn the “ambush election” rules.

• Overtime direction from the DOL
  • The DOL is looking at the primary duties clause and the salary threshold. RILA is waiting to see the DOL’s next move.

• West Coast Port Negotiations
  • The ongoing labor battles on the West Coast ports are top-of-mind for RILA members because delivery of goods has slowed down. RILA has been advocating for members of Congress to join the negotiations.
• New Congress—Republican Majorities in the House and Senate

Randel Johnson from the U.S. Chamber discussed the impact of the recent elections on upcoming labor and employment legislation and congressional actions. Mr. Johnson cautioned that a Republican majority “doesn’t mean we are home free.” Republicans will need 60 votes to defeat a filibuster, which means Congress is not likely to get any major pieces of legislation passed. However, the Republican majority has a stronger position in oversight hearings and investigations of administrative agencies. As Mr. Johnson noted, agency employees are conscious of “how things will play on the Hill.” Additionally, the majority will have the ability to approve some appropriation riders with the aim of blocking certain administration efforts with regard to agency regulations. While the impact on the Obama administration’s appointees remains unseen, the majority’s ability to block appointments may lead the White House to nominate more reasonable appointees to federal agencies and the federal judiciary. Alternatively, the White House could decide to make a political issue out of appointments.

Ms. Kolb noted that changes to committee leadership include the retirement of two long-time champions of organized labor’s agenda—Sen. Tom Harkin of Iowa and Rep. George Miller of California—who have been replaced by Sen. Patty Murray of Washington and Rep. Bobby Scott of Virginia. A champion of many issues important to the retail industry, Sen. Lamar Alexander has assumed the role of chairman of the U.S. Senate Committee on Health, Education, Labor and Pensions. Other noteworthy leadership changes include Sen. Roy Blunt’s new role as chairman of the U.S. Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies. Congressman John Kline continues as chairman of the U.S. House of Representatives Education and the Workforce committee. Sen. Blunt maintains a great working relationship with Congressman Tom Cole, the chairman of the U.S. House of Representatives subcommittee on Labor, Health and Human Services, Education, and Related Agencies.

• The White House Agenda

In the recent State of the Union address, President Obama set forth a “bold, progressive agenda” proposing significant changes in labor and employment law. President Obama called for an increase in the minimum wage, paid leave protections, expansion of equal pay, and promotion of stronger unions. As Hal Coxson stated, many of the agenda items will be “dead on arrival” with the Republican-held Congress.

• Paid Leave Legislation

The proposed federal legislation, H.R. 1286, the Healthy Families Act, may seem like a no-brainer for the business community with its provision of seven days of paid leave. However, Mr. Johnson advised that the provision for leave is but a small part of the whole bill, which also includes DOL enforcement and private causes of action. Proposals for paid leave have been floating around Congress for 10 years, yet not even a Democratic majority Congress has passed such a bill. Mr. Johnson also noted that some Senators might be looking to the business community to find compromise or alternative solutions to issues such as paid leave and pay equity with approximately 24 Senate seats up for re-election in the next cycle

• Immigration Reform

One area of potential compromise may be immigration reform. The House is close to taking up a security enforcement bill, and enforcement legislation must be addressed by the House before other parts of immigration reform, such as employment verification are discussed. Notably, President Obama’s expansion of deferred action can place employers in a difficult position. Employers may now face a scenario where an employee reports that he or she is undocumented and intends to apply for the new program, leaving the employer with questions of what to do next and what legal liability may arise.

• Executive Orders

President Obama is not backing off on plans to create new Executive Orders and Memoranda. An important recent Executive Order is the “Fair Pay and Safe Workplaces,” E.O. 13673, which requires federal contractors and subcontractors/suppliers to report all “violations” of or “settlements” involving 14 federal labor and employment laws and equivalent state laws over the previous three years. The violations must be self-reported and are “taken into account” by agency contracting officers in awarding government contracts creating the potential for “government contractor blacklisting.” Mr. Coxson highlighted serious problems with the Executive Order particularly with its undefined terms:

• What are “administrative determinations”? Notably, Lafe Solomon, Senior Labor Compliance Advisor at the DOL, said that complaints filed by the NLRB against companies are violations that have to be reported.
• What are “serious, repeated, willful, or pervasive” violations?
• What does “take into account” mean?
• What “other information” can be provided by unions, activists groups, and business competitors?

Additionally, the Executive Order makes “violations” anywhere within the company reportable regardless of whether the violations occur where government contracts are performed and whether the “violations” have been finally adjudicated.

The Executive Order also bans pre-dispute arbitration agreements for certain alleged violations of Title VII and common law claims and requires employers to inform employees why they are classified as “exempt” or “non-exempt” for overtime purposes under the Fair Labor Standards Act and why they are classified as “independent contractors” rather than employees.

Employers should expect the notice and comment period for DOL “guidance” and the Federal Acquisition Regulatory to begin soon with issuance and implementation of the final rule expected in 2016.

This blog post is part one in a three-part blog series summarizing the key points addressed in the recent Ogletree Deakins webinar, “What’s Ahead in 2015 for Retailers in Labor and Employment Law.” Stay tuned for parts two and three.