Beltway Buzz, June 5, 2020

PPP Fix Enacted. On June 5, 2020, President Trump signed the Paycheck Protection Program (PPP) Flexibility Act into law, just two days after the bill was approved in the U.S. Senate by unanimous consent. As the Buzz discussed last week, the legislative tweak of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s small business loan program will give borrowers greater flexibility, both in terms of how they spend their loans, as well as the length of time they have to spend it.

Congress Heats Up. Aside from the PPP fix, what is on the horizon in Congress for June? For starters, given the significance of the recent national events concerning criminal justice and discriminatory law enforcement, it is possible that policy debates addressing these issues could force congressional leaders to adjust their legislative calendars. As originally planned, the Senate will focus on confirming federal judges as well as the annual defense authorization act. As for the U.S. House of Representatives, there are currently no scheduled votes until the last couple of days of June, though the committees are expected to be active (many of them virtually) throughout the month. Finally, as the Buzz forecasted last week, media reports this week have noted that another coronavirus response from Congress likely won’t begin to take shape until July, as the expiration of the federal Pandemic Unemployment Compensation program draws near.

NLRB Election Changes (Partially) in Effect. The National Labor Relations Board’s (NLRB) December 13, 2019, changes to its union election procedures went into effect on May 31, 2020. Well, some of them anyway. On May 30, 2020, the United States District Court for the District of Columbia struck down five specific provisions of the new rule, reasoning that those changes affect the substantive rights of stakeholders and therefore required the Board to go through notice-and-comment rulemaking, which it did not do. The Board argues—it has stated publicly that it will appeal the decision—that the changes relate only to its own internal procedures for conducting representation elections, which obviates the need for public comment. Harry J. Secaras, Wade M. Fricke, and Samuel H. Ottinger have the details on which provisions are effective and which are not.

Challenge to DOL Joint-Employer Proceeds. On June 1, 2020, the United States District Court for the Southern District of New York denied the Department of Labor’s (DOL) motion to dismiss a legal challenge to its joint-employer rule that went into effect on March 16, 2020. The court ruled that the plaintiffs (18 state attorneys general) had standing to challenge the rule because it could affect state tax revenues and local wage and hour enforcement. The regulation remains in effect while the legal challenge process continues.

Workplace Agency Nominees Advance. On June 3, 2020, the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP) advanced several nominations to fill vacancies at the NLRB and the Equal Employment Opportunity Commission (EEOC).

• The nominees to the EEOC include current Deputy Wage and Hour Division Administrator Keith Sonderling, management attorney Andrea Lucas, and law professor Jocelyn Samuels. If confirmed, Sonderling and Lucas will join Chair Janet Dhillon in the three-commissioner Republican majority, while Samuels and Commissioner Charlotte Burrows will form the Democratic minority (current commissioner Victoria A. Lipnic’s term expires on July 1, 2020, though she could remain on the Commission for the remainder of this Congress if the Senate does not act to confirm her replacement).
• On the labor front, the HELP Committee approved the nominations of two NLRB Board veterans: current Republican member Marvin Kaplan and former Democratic member Lauren McFerran. In addition to Kaplan, the Board currently has two other members, both Republican: Chairman John Ring and Member William Emanuel. If the Senate does not act on Kaplan or McFerran by the time Kaplan’s term expires on August 27, 2020, the Board will lose its quorum. Lastly, it is unlikely that the administration will move to fill the lone remaining Democratic seat.

All the nominees now await a vote by the full Senate.

Keeping Up with the Joneses. The Jones Act went into effect 100 years ago this week as part of the Merchant Marine Act of 1920. Enacted to support U.S. maritime trade and ship building, the Jones Act limits the transportation of goods by water between U.S. ports to ships that are built, owned, and flagged in the United States and operated by U.S. citizens or permanent residents. Over its 100-year lifespan, the Jones Act has come under criticism for unnecessarily inflating shipping costs and hindering trade. For example, because there are no Jones Act compliant tankers outfitted to ship liquid natural gas, Puerto Rico must import it from foreign countries instead of getting it shipped from, say, Louisiana. From time to time, Jones Act restrictions have been waived, such as in 2012, when the Department of Homeland Security waived the act’s restrictions in response to Hurricane Sandy. Only time will tell whether it’s smooth sailing or political rough waters ahead for the Jones Act, but for now, it’s the law of the land and sea.