Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

When Congress resumes next week, consideration of the Employee Free Choice Act (EFCA) will likely be pushed aside in favor of healthcare reform. According to an article in the Las Vegas Review-Journal, Senate Majority Leader Harry Reid (D-Nev.) told members of the Las Vegas Chamber of Commerce that senators “have too many other things on our plate” to take up the controversial “card check” bill anytime soon.

As reported in The Hill’s Blog Briefing Room, a few days earlier AFL-CIO Secretary-Treasurer Richard Trumka similarly acknowledged that any deliberation on the divisive bill would not take place until after health reform is dealt with. During a web chat on the blog firedoglake, Trumka claimed that the “President/and [Rahm] Emanuel have both said they dont [sic] intend to bring Employee Free Choice Act up until Health Insurance Reform is done. Which gives us an additional reason to do Health Insurance Reform now!”

While no surprise, these statements are significant in that they are among the first public acknowledgements by supporters that consideration of EFCA will be delayed. However, given President Obama’s upcoming speech at the September AFL-CIO convention, further developments are possible.

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The U.S. District Court for the District of Maryland has upheld the E-Verify Federal Contractor Rule, scheduled to become effective September 8, 2009, that will require federal contractors to enroll in E-Verify within 30 calendar days after being awarded a covered contract and to start using the system within 90 days from the date of enrollment. Continue reading on Littler's Global Immigration Counsel blog.

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On June 15, 2009, the United States Supreme Court granted certiorari in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 548 F. 3d 85 (2d Cir. 2008), cert. granted, 129 S. Ct. 2793 (2009). The question before the Supreme Court is whether an arbitration agreement that is “silent” on the question whether class arbitrations are permitted can ever be construed to permit such arbitrations.

The Second Circuit Court of Appeals had imposed class-wide arbitration on Stolt-Nielsen despite the silence of the underlying agreement to arbitrate on the question whether class arbitrations were permissible. Stolt-Nielsen asked the High Court to decide whether permitting class arbitration even when an agreement to arbitrate is silent on the issue violates the fundamental principle of the Federal Arbitration Act (9 U.S.C. §1 et seq.) (FAA) that courts must enforce arbitration agreements in accordance with their terms. Basically, Stolt-Nielsen argued, if an agreement is silent on something as significant as requiring a party to submit to a class proceeding and class-wide relief, how could that party ever have contemplated such to be the outcome? Silence, Stolt-Nielsen argued, cannot be construed to authorize something that the parties never agreed to, and indeed the FAA forbids courts from writing substantive terms into agreements that the parties did not themselves include.

If the Supreme Court agrees with Stolt-Nielsen, the implications might be far reaching. For one thing, if under the FAA an agreement that is “silent” on the question of class arbitration may not be interpreted as permitting such arbitration, then would the FAA preempt courts from ruling that express arbitral class waivers are unconscionable or otherwise unenforceable? Even if the Court rules that a silent agreement does not prohibit class arbitration, it may also touch on issues related to the enforceability of express class waivers. For example, if a “silent” agreement is open to interpretation, then an agreement containing an express class waiver may leave nothing to the imagination, and if the FAA requires that such an agreement be enforced as written, decisions refusing to enforce express class waivers may be undermined substantially.

Of course, application of the rules of contract interpretation do not necessarily answer the question of contract validity or enforceability, but if the Supreme Court structures its opinion around the mandates of the FAA, principles of federal preemption may require that express class waivers be enforced, contrary state public policies notwithstanding.

This entry was written by Henry D. Lederman.

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The Department of Homeland Security (DHS) has issued a proposed rule (pdf) rescinding regulations instituting safe harbor procedures for employers that receive no-match letters from the Social Security Administration (SSA) or notice of suspect documents letters from the U.S. Immigration and Customs Enforcement (ICE) regarding their employees’ authorization to work in this country. The No-Match rule – which has been enjoined by a lawsuit filed in 2007 and therefore never implemented – provides that No-Match letters be accompanied by a set of procedures for employers to follow to address the flagged identification discrepancies and avoid a finding that they have constructive knowledge of a worker’s illegal status and thus civil and criminal liability under the Immigration Reform and Control Act of 1986. Shortly after this rule was introduced, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) filed a lawsuit challenging, among other things, the sufficiency of the No-Match letter to put an employer on notice of a potential illegal hire. A U.S. District Court in California granted the plaintiff’s preliminary injunction blocking the rule’s enforcement. In 2008, the DHS issued a supplemental final rule clarifying certain aspects of the No-Match rule, but did not change the safe-harbor procedures. Neither the final No-Match rule nor the supplemental final rule have been enforced.

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In anticipation of a resurgence of the H1N1 (“Swine”) flu, the U.S. Department of Health and Human Services’ (HHS) Centers for Disease Control and Prevention (CDC) has issued recommendations and strategies for employers to follow in order to minimize any potential outbreak. The Guidance for Businesses and Employers to Plan and Respond to the 2009-2010 Influenza Season outlines steps employers should take in advance of the flu season, strategies to employ in the event an outbreak becomes severe, and guidelines to use in determining when an employee who is absent from work with the flu should return to the job.

Recommendations include reviewing or establishing a flexible influenza pandemic plan; having an understanding of the organization’s normal seasonal absenteeism rate; instituting more flexible sick-leave and telecommuting policies, especially in the event of school or childcare closings; encouraging seasonal flu vaccinations as well as the H1N1 vaccination when it becomes available; permitting higher-risk employees to work from home; and actively screening employees who report to work if the severity of the outbreak increases. The guidance also suggests that organizations assess their essential business functions to determine the minimum level of staffing needed to remain operational, and plan accordingly.

For more information on preparing the workplace for a flu outbreak, see Littler’s ASAP:
Swine Flu: Preparing the Workplace for a Pandemic  by: Steve McCown and
Donald W. Benson.

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The Equal Employment Opportunity Commission (EEOC) has revised a portion of its Compliance Manual addressing the timeliness of filing pay discrimination claims in light of the Lilly Ledbetter Fair Pay Act, which was enacted on January 29 of this year. This law overturned the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007), which required plaintiffs to file a charge of compensation discrimination within 180 days (300 in jurisdictions that have a local or state law prohibiting the same form of pay discrimination) of the discriminatory act or decision. The new law reinstates the “paycheck rule,” which allows courts to consider the receipt of a paycheck or other benefits stemming from the initial discriminatory pay decision to constitute a separate discriminatory act for statute of limitations purposes. The revised Compliance Manual reflects this shift in section 2-IV C.4, Compensation Discrimination, by stating that the period for submitting a claim of pay discrimination under Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), the Rehabilitation Act or the Age Discrimination in Employment Act (ADEA) begins when any of the following situations occur:

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Last week Senator Jack Reed (D-RI) introduced legislation that would provide employers with an alternative to layoffs. The Keep Americans Working Act (S. 1646) would encourage employers to implement temporary work share programs, and entitle those employees working reduced hours to receive proportionate unemployment benefits. According to Sen. Reed, 17 states already have work share programs in place.

Under the terms of this bill, employer participation in short-time compensation programs would be voluntary. Those participating would need to certify that reducing employees’ hours was a measure taken in lieu of implementing temporary layoffs, and submit written work share plans for state agency approval. If unionized, the employer would also need to provide a written plan describing the short-time compensation program for union approval. In addition, employers would be required to certify that the reduced hours program would not impact the receipt of health or retirement benefits. Employees whose workweeks are reduced by at least 10 percent would be eligible for the pro rata portion of unemployment compensation they would have received if totally unemployed. For a period of two years, the bill would provide states with temporary federal financing for 100 percent of the work share benefits paid to employees for up to 26 weeks.

This bill would not authorize payments to be made for work share programs implemented by employers whose workforce had been reduced by more than 20 percent in the three months leading up to the date the employer submits its short-time compensation plan for approval. Moreover, employers that hire workers on a seasonal, temporary, or intermittent basis, or those currently engaged in labor disputes would be similarly ineligible to participate. The legislation would direct the Department of Labor to establish an oversight and monitoring process for state agencies to ensure that participating employers adhere to the terms of their work share plans. Employers found in violation of their plans and/or act in bad faith by failing to retain their employees would be required to reimburse the state for the amount expended under the program.

This bill has been referred to the Senate Committee on Finance.
 

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Senators Judd Gregg (R-NH) and Edward Kennedy (D-MA) have reintroduced a bill that would provide firefighters, police officers, and emergency medical personnel with collective bargaining rights in states and localities that do not currently provide them. The Public Safety Employer-Employee Cooperation Act (S. 1611) would establish minimum standards for collective bargaining rights for public safety officers, and give the Federal Labor Relations Authority (FLRA) the power to regulate and enforce these rights. The House of Representatives introduced companion legislation (H.R. 413) on January 9 of this year.

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Legislation introduced in both the House and Senate aimed at reducing illegal immigration would expand the E-Verify employment verification system, and require its use by all employers. The Secure America through Verification and Enforcement Act (SAVE Act) (H.R. 3308, S. 1505) was originally introduced in 2007, but died in committee. The current bills introduced by Rep. Heath Shuler (D-NC) and Sen. Mark Pryor (D-Ark.) remain substantially similar to the earlier versions. Essentially, both bills contain three components to curb illegal immigration, the second of which would impact employers. Both bills would mandate the use of E-Verify, although the Senate bill provides for a slightly longer timeframe in which all employers must be in compliance with the Act.

Under the terms of the House version of the SAVE Act, over a four-year period all employers would be required to use E-Verify to check the employment eligibility of their potential and current hires. The Senate version would allow five years for compliance. The federal government, federal contractors, and large employers (those with more than 250 employees) would be required to use E-Verify to check the status of applicants within one year of the bill’s enactment under the House version, and two years for the Senate. Smaller employers would be phased into the system more gradually. Companies employing between 100 and 250 employees would be required to use E-Verify within two years (three under the Senate bill); those with at least 30 but few than 100 employees would have three years to comply with the program under the House bill, and four under the Senate version; all other employers would have to be in compliance within four years (five for Senate SAVE Act) of the bill’s enactment. All employers would also be required to verify the employment eligibility of current employees within four years according to the terms of the House legislation, and five for the Senate’s.

The House version of the SAVE Act has been referred to the House Committees on Homeland Security, Judiciary, Ways and Means, Education and Labor, Oversight and Government Reform, Armed Services, Agriculture, and Natural Resources. The Senate companion bill has been referred to Senate Finance Committee.
 

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On Friday the Senate confirmed the nomination of Alejandro Mayorkas to serve as the director of the U.S. Citizenship and Immigration Services (USCIS), the agency within the Department of Homeland Security responsible for overseeing lawful immigration to this country. In addition to establishing immigration-related policies and services, the USCIS adjudicates the petitions and applications of potential immigrants and guest workers.

President Obama announced his nomination of Cuban-born Mayorkas in April. In July, the Senate Judiciary Committee approved the nomination. In his testimony before the Judiciary Committee, Mayorkas listed as one of his first priorities if confirmed as USCIS Director: “ . . to strive to improve the Agency's fraud prevention and detection operations, increase collaboration with U.S. Immigration & Customs Enforcement (ICE) and other law enforcement agencies to respond to fraud, and improve the efficiency and accuracy of the E-Verify system.”

Mayorkas is currently a litigation partner in a private law firm. Prior to entering private practice, Mayorkas served as the U.S. Attorney for the Central District of California.  At the age of 39, Mayorkas became the youngest U.S. Attorney in the country.  Mayorkas earned his undergraduate degree at the University of California, Berkeley in 1981, and his law degree from Loyola University in 1985.
 

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On Wednesday, Sen. Edward Kennedy reintroduced the Protecting America’s Workers Act of 2009 (PAWA) (S. 1580), a bill that would amend the Occupational Safety and Health (OSH) Act by expanding its coverage, increasing whistleblower protections, and enhancing employer penalties for violations. Sen. Kennedy had introduced this bill twice before, with then-Senator Obama acting as a co-sponsor in 2007. In April of this year, Rep. Lynn Woolsey (D-CA) introduced a companion bill (H.R. 2067) in the House of Representatives.

Highlights of the current bill include the following:

• Increased civil penalties for OSH Act violations
• Removal of the requirement that a workplace death must occur before criminal penalties can attach
• Provision of felony charges for repeat and willful violations that result in a worker’s death or serious injury
• Expansion of OSH Act coverage to include airline and railroad employees, as well as Department of Energy contractors
• Creation of regulations that give workers the right to refuse to do hazardous work
• Requirement that OSHA investigate all cases of death and serious injuries

The Senate version of PAWA has been referred to the Senate Committee on Health, Education, Labor, and Pensions.
 

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Four Senators have introduced a bi-partisan bill that would ban employment discrimination on the basis of sexual orientation or gender identify. The Employment Non-Discrimination Act of 2009 (ENDA) (S. 1584), introduced by Senators Jeff Merkley (D-OR), Susan Collins (R-ME), Edward Kennedy (D-MA) and Olympia Snowe (R-ME), would prohibit employers, employment agencies, labor organizations and joint labor-management committees from firing, refusing to hire, or discriminating against those employed or seeking employment, on the basis of their perceived or actual sexual orientation or gender identity. In June, Rep. Barney Frank (D-Mass.) introduced similar legislation in the House of Representatives.

In a press release, Sen. Collins said of this bill:  “Similar to the current law in several states, including Maine, and the policies of many Fortune 500 companies, the Employment Non-Discrimination Act would close an important gap in federal civil rights laws by making it illegal to discriminate in employment based on sexual orientation.”

Although House versions of ENDA have failed in the past, momentum is building in Congress to enact more expansive civil rights legislation. This latest bill has been referred to the Senate Committee on Health, Education, Labor, and Pensions.

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As anticipated, the Senate by a vote of 68-31 has confirmed the nomination of Sonia Sotomayor to replace Justice David Souter on the U.S. Supreme Court. The floor debate had been largely considered ceremonial, as the Senate Judiciary Committee cleared her nomination last Tuesday by a margin of 13-6, primarily along party lines. Sen. Lindsey Graham (R-SC) was the only Republican to approve her nomination. In recent days, a number of Republican Senators have joined Graham in his support of Sotomayor, which made today’s floor vote somewhat anticlimactic.

Sotomayor will be the first Hispanic woman to hold a seat on the high court. Sotomayor has spent the majority of her career in the public sector, most notably as an appointed judge to the Court of Appeals for the Second Circuit and the District Court for the Southern District of New York. Sotomayor’s opinions in labor and employment matters have tended to favor plaintiffs/employees more often than not. In particular, Sotomayor was part of the three-member Second Circuit panel that affirmed the lower court’s opinion in Ricci v. DeStefano, the reverse discrimination decision that was recently overturned by the Supreme Court. It is expected that Sotomayor will continue what is often termed her predecessor’s moderate to liberal approach to case interpretation as a member of the Supreme Court.

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The Obama Administration has selected Patricia A. Shiu, a public interest employment lawyer, to head the Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP). The OFCCP is the DOL sub-agency charged with administering and enforcing three laws that prohibit discrimination and require federal contractors and subcontractors to implement affirmative action plans.

Shiu is currently the Vice President for Programs at the Legal Aid Society-Employment Law Center (LAS-ELC) in San Francisco. According to biographical information posted by the National Employment Law Association (NELA), Shiu joined the Employment Law Center in 1983, and has focused on employment discrimination and family and medical leave cases. She has also served as the director of the Society’s Work and Family Project, and lobbied for the passage of California’s Family Rights Act and its regulations. In 1993, former U.S. Secretary of Education Richard Riley appointed Shiu to the Department of Education’s Civil Rights Reviewing Authority. In addition, Shiu is a former member of NELA’s Executive Board, and served as one of its vice presidents.

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Last week Rep. Jim McDermott (D-Wash.) reintroduced the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408), a bill that would entitle individuals deemed independent contractors by their employers to petition the Internal Revenue Service (IRS) for a determination of whether they are properly classified as independent contractors, significantly increase employer penalties in the event of misclassification, and make it more difficult for employers to avoid employment tax liability for such misclassification.

Specifically, the new legislation would add a new section to Chapter 25 of the Internal Revenue Code (IRC) that would enable employers to avoid employment tax liability only if they are able to demonstrate that they had no reasonable basis for classifying the independent contractor as an employee. This new Section 3511 would supplant the safe harbor provisions of Section 530 of the IRC. Under the more stringent terms of Section 3511, an employer’s decision would be deemed “reasonable” if the employer reasonably relied on a written determination addressing the employment status of the individual or another individual holding a substantially similar position with the employer, or a concluded employment tax examination that did not find that the individual (or one holding a substantially similar position) should be considered an employee. In addition, the employer or its predecessor must not have treated any other individual holding a substantially similar position as an employee for employment tax purposes for any period beginning after December 31, 1977. The assessment of whether an individual holds a substantially similar position held by another would be made using criteria established by the Fair Labor Standards Act.

Employers that misclassify employees as independent contractors would be subject to the following penalties:

• A minimum of $250 (up from the current $50) per incorrect tax return, up to $3,000,000 (currently $250,000) per year. Lower penalties would be imposed if the returns are corrected within a specified period of time, although the amounts are significantly greater than those currently imposed on employers for misclassification.
• Smaller employers (those with gross receipts not exceeding $5,000,000) would be subject to fines of up to $1,000,000 per year, up from the current $100,000 limitation.
• In the event of intentional disregard for the filing requirement, employers would be subject to a $500 fine per tax return, up from the current $100 amount. The $3,000,000 per year penalty ceiling would not apply in this instance.

If enacted, the provisions of this bill would apply to information returns required to be filed after December 31, 2009. This bill has been referred to the House Committee on Ways and Means.
 

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Pursuant to President Obama’s Executive Order (EO): Notification of Employee Rights Under Federal Labor Laws issued on January 30, 2009, the Department of Labor (DOL) has published in today’s Federal Register a proposed rule requiring government contractors and subcontractors to post notices outlining employees’ rights under the National Labor Relations Act (NLRA). The proposed rule describes what these notices should include, which entities are covered, and explains the sanctions, penalties, and other remedies that may be imposed in the event of noncompliance.

The EO required that most federal departments and agencies include in their contracts a provision requiring contractors and subcontractors to post “in conspicuous places in and about [their] plants and offices where employees covered by the [NLRA] engage in activities relating to the performance of the contract,” notice of an employee’s rights under federal labor law. The EO specifically exempts two types of federal contracts from triggering the new posting: collective bargaining agreements and purchases under the simplified acquisition threshold, currently $100,000. The proposed rule establishes standards and procedures for implementing this EO, to be codified in subchapter D, Part 471 of Volume 29 of the Code of Federal Regulations.

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