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

On Tuesday, the Employee Benefits Security Administration (EBSA), Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) will publish in the Federal Register interim final rules (pdf) under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“the Act” or “MHPAEA”). These interim final regulations replace prior regulations, and make conforming changes to reflect modifications the MHPAEA made to the original Mental Health Parity Act (MHPA) of 1996 definitions and provisions regarding parity in aggregate lifetime and annual dollar limits, and incorporate new parity standards. The interim final regulations are effective as of April 5, 2010, and generally apply to group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010.

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On February 2 at 4:00 pm, the Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing on the controversial nomination of Craig Becker to be a member of the National Labor Relations Board (NLRB). In December, the Senate returned the nomination to the White House for reconsideration after Sen. John McCain (R-Ariz.) put a hold on it. Instead of withdrawing the nomination, President Obama re-nominated Becker last week.

Many in Congress and the business community fear that Becker – who serves as Associate General Counsel to both the Service Employees International Union (SEIU) and the American Federation of Labor & Congress of Industrial Organizations – would try to implement portions of the beleaguered Employee Free Choice Act (EFCA) through rulemaking or Board decisions. Now that EFCA’s chances of passage this term are greatly diminished by the new composition of the Senate, organized labor may look to the NLRB to advance its agenda. A HELP Committee vote could come as early as February 4. In October, the HELP Committee approved Becker’s nomination by a 15-8 vote.  At that time, the HELP Committee also approved the nominations of Mark Pearce and Brian Hayes by voice vote. It is believed that Democrats want to submit all three nominees for a full Senate vote as a package, a move that would place less scrutiny on Becker as an individual.

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The Occupational Safety and Health Administration (OSHA) will publish in tomorrow’s Federal Register a proposed rule (pdf) that revises its current Occupational Injury and Illness Recording and Reporting (Recordkeeping) requirements to restore a column to the OSHA 300 Log that employers would use to record work-related musculoskeletal disorders (MSD). This column for MSD was initially included in the 2001 Recordkeeping final regulation, but was deleted before it became effective. OSHA is seeking to reintroduce this reporting requirement, as it believes that the information generated from the MSD column will, among other things, improve the “accuracy and completeness” of national occupational injury and illness statistics, and “provide valuable and industry specific information to assist OSHA in effectively targeting its inspection, outreach, guidance and enforcement efforts to address workplace MSDs,” in addition to helping employers identify the incidence of such injuries.

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In keeping with a key theme of President Obama’s State of the Union Address, lawmakers introduced a number of bills this week that seek to increase hiring. Sen. Al Franken’s (D-Minn.) bill, the Strengthening Our Economy Through Employment and Development (“SEED” or “Cash For Jobs”) Act (S. 2952), would take $10 billion in existing funds from the Troubled Asset Relief Program (TARP) and re-allocate it to creating jobs in the private and public sectors. This measure would use half of this amount to provide wage subsidies to encourage private sector hiring. Specifically, according to a press release:

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President Obama’s State of the Union Address may be more notable for its omissions than its content. Not once in the hour and ten minute speech did Obama mention organized labor, even though a large portion of the Address was dedicated to job creation efforts. Claiming that jobs must be the “number one focus of 2010,” Obama outlined a number of initiatives to advance this aim, none of which directly promoted union membership.

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Scott Brown’s (R) astonishing win in last week’s Massachusetts special election was made possible, in part, by the state’s union members. According to an article in Politico, 49 percent of union members backed the Republican state senator, while 46 percent cast their vote in favor of Massachusetts Attorney General Martha Coakley (D). By electing Brown as the 41st Republican U.S. senator, organized labor dramatically diminished the chances that their number one legislative priority – the Employee Free Choice Act (EFCA) (H.R. 1409, S. 560) – will pass Congress this year. Now that Senate Democrats no longer have a filibuster-proof majority, it is unlikely that this controversial and increasingly unpopular bill will become law.

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Labor Secretary Hilda Solis has expressed the Department of Labor’s (DOL) view that an opt-in class action suit under the Fair Labor Standards Act (FLSA) and an analogous state law class action can be pursued in the same lawsuit. In the amicus brief (pdf) filed in Parker v. NutriSystem Inc., (3d Cir, No. 09-3545) Solis argues in favor of allowing both state and federal wage and hour claims to proceed in one class action, and takes the position that flat-fee compensation payments that bear no relationship to the cost of the goods sold do not fall under the FLSA’s Section 7(i) retail or service sales exemption.

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The Occupational Safety and Health Administration (OSHA) plans to withdraw its proposed rule (pdf) outlining revised PortaCount quantitative fit-testing protocols it intended to include in Part II of Appendix A of the agency’s Respiratory Protection Standard. OSHA claims the proposed protocols are not sufficiently accurate or reliable, noting that commenters to the proposed rule raised a number of valid concerns regarding the methodology used in testing the effectiveness of the protocols. Moreover, OSHA concluded that the study it used to test the protocols’ effectiveness was not conducted according to accepted experimental design practices and principles and did not properly or fully describe the fit-testing results, among other flaws. Therefore, the agency plans to re-evaluate the protocols, and may resubmit a proposed rule when the review is complete.

Photo credit:  borisyankov

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In a narrowly-held decision that could have a significant impact on the 2010 mid-term elections, the Supreme Court has ruled that restrictions on political spending by corporations and unions are unconstitutional. The 5-4 decision in Citizens United v. FEC (pdf) reverses the Court’s opinion in Austin v. Michigan Chamber of Commerce and parts of McConnell v. FEC that upheld restrictions on such spending to endorse or oppose political candidates. The matter was brought by Citizens United, a conservative nonprofit group that sought to release a documentary critical of then-Senator and presidential candidate Hillary Rodham Clinton during the 2008 campaign. Citizens United challenged Federal Election Commission (FEC) rules that implemented the portions of the Bipartisan Campaign Reform Act (commonly known as the McCain-Feingold Act) that prohibits the broadcast or transmission of “electioneering communications” sponsored by corporations and unions close to elections. The U.S. District Court for the District of Columbia disagreed with Citizens United, ultimately siding with the FEC. On appeal, the Supreme Court initially heard arguments in March of 2009, but ordered a re-argument on whether the campaign finance restrictions violate the free speech clause of the First Amendment, and whether the aforementioned campaign finance cases should be overruled. In deciding these two issues in the affirmative, Justice Anthony Kennedy reasoned: “political speech must prevail against laws that would suppress it, whether by design or inadvertence,” and that “there is simply no support for the view that the First Amendment, as originally understood, would permit the suppression of political speech by media corporations.”

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The United States Citizenship and Immigration Services’ (USCIS) Associate Director for Service Center Operations has issued a detailed memo (pdf) regarding how to determine, when evaluating H-1B visa petitions, whether an employer-employee relationship exists and will continue to exist. The memo, which is addressed to USCIS Service Center Directors, discusses:

• scenarios that do and do not represent a valid employer-employee relationship;
• documentation to establish the employer-employee relationship;
• requests for evidence to establish the employer-employee relationship; and
• regulatory compliance.

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On Wednesday, President Obama re-submitted to the Senate his nomination of controversial candidate Craig Becker to be a member of the National Labor Relations Board (NLRB). Obama announced his intent to nominate Becker, who serves as Associate General Counsel to both the Service Employees International Union (SEIU) and the American Federation of Labor & Congress of Industrial Organizations, in April, and officially nominated him in July.  The Senate Health, Education, Labor and Pensions Committee approved Becker’s nomination – as well as those of Mark Pearce and Brian Hayes – in October.  The belief was that all three nominations would be presented to the Senate as a package, a move that many Republican lawmakers and members of the business community opposed, as doing so would limit the Senate’s ability to evaluate Becker on an individual basis. Becker’s divisive views regarding an employer’s role during a representation election campaign as well as the fear that he would be willing to use Board decisions to effectively institute elements of the proposed Employee Free Choice Act were likely factors causing Sen. John McCain (R-Ariz.) to put a hold on Becker’s nomination. Before the holiday recess, the Senate returned his nomination to the White House for reconsideration.

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A recent presidential directive and piece of legislation seek to ban companies that engage in unlawful practices from receiving federal contracts. On Wednesday, President Obama signed a memorandum ordering the IRS to review the accuracy of certifications submitted by aspiring government contractors attesting to their non-delinquent tax status, and provide him with a report within 90 days. In addition, the memorandum directs the heads of federal agencies to provide recommendations on how to bar tax-delinquent companies from being awarded federal contracts. In a statement, Obama said:

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Republican State Senator Scott Brown’s victory in Tuesday’s special election to fill the late Ted Kennedy’s seat in the U.S. Senate will no doubt have a substantial impact on the labor and employment law agenda of the Administration and many Congressional Democrats. In defeating Massachusetts Attorney General Martha Coakley, Brown is set to become the 41st Republican member of the Senate, eliminating the Democrat’s filibuster-proof 60-seat supermajority. The loss of the seat held for 46 years could derail a number of President Obama’s legislative priorities, including healthcare reform, the Employee Free Choice Act (EFCA), and immigration overhaul, without significant modification and compromise from both sides of the aisle.

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On Friday, the U.S. Supreme Court agreed to resolve whether a court or an arbitrator has jurisdiction to determine if an arbitration agreement is unconscionable, even when the parties to the contract have clearly and unmistakably given such authority to the arbitrator. In Rent-A-Center West, Inc. v. Jackson (No. 09-497), Antonio Jackson entered into an agreement with his employer, Rent-A-Center (RAC), in which both parties agreed to arbitrate claims arising out of the employment relationship. This agreement expressly stated that:

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The Supreme Court has agreed to decide whether the attorney's fees provision in the Employee Retirement Income Security Act (ERISA) permits courts to award such fees to prevailing parties only. In Hardt v. Reliance Standard Life Ins. Co. (No. 09-448), the Fourth Circuit, in an unpublished opinion, held that an employee who filed a claim in district court alleging that her denial of long-term disability benefits was unlawful was not entitled to an award of attorney’s fees. The lower court had agreed with the claimant and remanded the matter back to the insurance underwriter for reconsideration, which eventually granted her the benefits sought. The Fourth Circuit reasoned that only enforceable judgments on the merits and court-ordered consent decrees render a claimant a “prevailing party” for attorney’s fees purposes.

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A reported deal has been reached between the White House and union leaders regarding the proposed 40 percent excise tax on high cost (“Cadillac”) healthcare plans for inclusion in the final healthcare overhaul bill. This tax – first appearing in the Senate version of the legislation – is favored by President Obama, but has been heavily criticized by both House Democrats and organized labor.

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Rep. Joe Sestak (D-Pa.) has introduced a bill (H.R. 4421) that would extend the waiver of required minimum distribution rules for certain retirement plans and accounts through 2010. On December 23, 2008, former President Bush signed into law the Worker, Retiree and Employer Recovery Act of 2008 which, among other things, waived the minimum distribution requirement for 2009 from most employer-sponsored plans. H.R. 4421 would amend sections 401 and 402 of the Internal Revenue Code to extend this waiver an additional year.

This bill has been referred to the House committee on Ways and Means.

Photo credit: Kirby Hamilton

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Two bills introduced yesterday would amend the Internal Revenue Code to provide employer tax credits for hiring. Rep. Bob Etheridge’s (D-NC) bill, the Hiring Incentives to Reinvest and Incentivize New Growth (HIRING) Act of 2010 (H.R. 4437), is designed to promote employment in general. According to a summary of the bill, the HIRING Act would provide a refundable tax credit to any business that expands its payroll by at least 3 percent in 2010 or by at least 5 percent in 2011. Additionally, the bill would provide a credit of 15 percent of additions to payroll in 2010 and 10 percent in 2011. The credit would be based on payroll and businesses would be rewarded for hiring new employees, increasing employee hours, or restoring employee pay. If enacted, the provisions of this bill would apply to taxable years beginning after December 31, 2009. This bill has been referred to the House Committee on Ways and Means.

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While many firms in the financial industry are expected to announce potentially record-setting bonuses this month, members of Congress and the President have unveiled initiatives to curb and/or generate revenue from this sector. On Tuesday, Rep. Peter Welch (D-Vt.) introduced the Wall Street Bonus Tax Act (H.R. 4426), a measure that would levy a 50 percent tax on large bonuses paid to employees of firms that have received financial assistance through the Troubled Asset Relief Program (TARP). This tax would apply to all bonus compensation – both cash and stock awards – exceeding $50,000, and would be used to fund a new direct lending program administered by the Small Business Administration (SBA). According to a press release, this bill mirrors similar measures already taken in Great Britain and France to tax excessive bonuses.

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The DOL’s Employee Benefits Security Administration (EBSA) has created model notices that employers can use to notify current and former health plan participants and beneficiaries of the COBRA premium reduction provided by the American Recovery and Reinvestment Act (ARRA), and extended by the 2010 Department of Defense Appropriations Act (2010 DOD Act). In general, the 2010 DOD Act extends the COBRA premium reduction eligibility period for two months until February 28, 2010, and increases the maximum period for receiving the subsidy for an additional six months (from nine to 15 months). The EBSA’s Fact Sheet explains who is now eligible for the premium reduction, the new period of coverage, and notice requirements plan administrators must provide in light of the extension. The agency has also issued a set of frequently asked questions (FAQs) on the new COBRA premium reduction extension provisions that explain the revised notice obligations. The three model notices – Updated General Notice, Premium Assistance Extension Notice, and the Updated Alternative Notice – are specifically designed for different categories of qualified beneficiaries, and contain information that helps satisfy the notice requirements of both ARRA and the 2010 DOD Act.

Photo credit:  MBPHOTO

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The IRS has issued new guidance (Notice 2010-6) that provides valuable assistance in dealing with nonqualified deferred compensation plans under Section 409A of the Internal Revenue Code (the “Code”). Prior to this guidance, there was no means to correct an incorrectly drafted nonqualified deferred compensation plan (as the documentary compliance “transition period” ended December 31, 2008). This was in contrast to certain “operational errors” for which corrective guidance had been issued by IRS in Notice 2008-113.

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The Employee Benefits Security Administration (EBSA) has issued a final rule, (pdf) to be published in tomorrow’s edition of the Federal Register, that establishes a safe harbor period during which funds received or withheld from employee paychecks as contributions to certain benefit plans will not be considered “plan assets” for ERISA or IRS purposes. An employer is required to deposit these funds into the benefit plans on the earliest date on which the contributions can reasonably be segregated from the employer’s general assets. According to the EBSA, many employers and their advisers are uncertain as to how soon they must forward employee contributions to the benefit plans in order to avoid the requirements associated with holding plan assets. To this end, the final rule creates a safe harbor to “provide a higher degree of compliance certainty with respect to when an employer has made timely deposits of participant contributions to employee benefit plans with fewer than 100 participants.” Under this rule, employers with pension or welfare benefit plans with fewer than 100 participants will be considered to have made a timely deposit to the plan if the participant contributions are deposited within 7 business days. The contributions will be considered deposited when placed in an account of the plan regardless of whether the amounts have been allocated to specific participants or participant investments.

Photo credit: Kameleon007
 

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The U.S. Supreme Court has issued revised Rules of Court that take effect February 16, 2010. According to a Court press release, (pdf) among other changes, the rule revisions:

• reduce the number of words permitted for a Reply Brief on the Merits from 7,500 to 6,000;
• clarify what is to be included on the cover of the Joint Appendix and require that counsel of record include an e-mail address on the cover of every document filed;
• require a descriptive index of the appendices and citations to the United States Code whenever available;
• clarify that only an attorney admitted to practice before the Supreme Court is permitted to file an amicus curiae brief and that extensions of time for amicus curiae briefs at the merits stage will not be allowed.
   

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Speaking yesterday at the National Press Club, AFL-CIO president Richard Trumka predicted that the Employee Free Choice Act (EFCA) (H.R. 1409, S. 560) would be passed in the first quarter of 2010, and signaled that union leaders were going to renew their efforts to push for this legislation. Trumka declined, however, to say whether he would support an amended version of the bill that lacked the “card check” provision allowing the National Labor Relations Board to certify the union as the exclusive bargaining representative if a majority of employees signed authorization cards. Rumors of a so-called “compromise” bill that omits this provision but retains the section calling for binding arbitration in the event a first contract is not reached within a specified period of time—in addition to provisions outlining shorter election periods and greater union access to the workplace during the campaign period—have been floating around for months. Business advocates have long considered these terms to be as problematic and intrusive for employers as the card check provision. So far, no revised version of EFCA has been introduced.

Although Trumka’s statement is a bold one, it is unclear how much Congressional support remains for this controversial bill, especially before midterm elections. In the months following its introduction in March 2009, a number of key senators publicly stated their opposition to EFCA’s impact on secret ballot elections, if not the entire bill itself. Whether these same lawmakers would support EFCA absent the card check provision remains to be seen.
 

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Although there has been no official White House announcement, The New York Times has reported that President Obama plans to re-nominate Craig Becker to be a member of the National Labor Relations Board (NLRB). On December 24, the Senate returned Becker’s controversial nomination to the President for reconsideration.  The choice of Becker, who serves as Associate General Counsel to both the Service Employees International Union (SEIU) and the American Federation of Labor & Congress of Industrial Organizations, has been heavily criticized by members of Congress as well as by business advocates. Becker supports passage of the Employee Free Choice Act (EFCA), and has opined that “employers should be stripped of any legally cognizable interest in their employees’ election of representatives.”

If Obama sends his nomination back to the Senate, the confirmation process would begin again, and, presumably, face the same opposition as it did last year.

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Staff members of the three House committees (Ways and Means, Education and Labor, and Energy and Commerce) involved in crafting the healthcare overhaul bill have put together an 11-page document (pdf) highlighting the similarities and differences between the House and Senate bills. The Senate’s Patient Protection and Affordable Care Act (H.R. 3590) and the House of Representative’s Affordable Health Care for America Act (H.R. 3962) contain some crucial differences that are currently being ironed out in informal talks as opposed to formal conference committee. Resolving the differences this way avoids any anticipated procedural delays in the Senate.

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On Wednesday, the Equal Employment Opportunity Commission (EEOC) released its enforcement and litigation statistics for fiscal year 2009 ending on September 30. This data shows that 93,277 workplace discrimination charges were filed, the second-highest total for the agency, although down from last year’s all-time record of 95,402 charges. Private sector charges alleging disability, religion and/or national origin discrimination reached record highs, while the most frequent charges filed in 2009 alleged discrimination based on race (36%), retaliation (36%), and sex (30%). According to an EEOC press release, the “near-historic” level of total discrimination charges could be due to a number of factors, including greater accessibility of the EEOC to the public, economic conditions, increased diversity and demographic shifts in the labor force, employees’ greater awareness of their rights under the law, and changes to the agency’s intake practices that cut down on the steps needed for an individual to file a charge.

The EEOC’s year-end data also shows that a total of 281 merit lawsuits were filed, resulting in $82.1 million in monetary relief for the plaintiffs. Total monetary relief obtained for claimants totaled $376 million, which includes benefits gained through administrative enforcement and mediation as well as through litigation.

Photo credit:  blackred
 

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Littler is happy to introduce Ilyse Schuman as the newest member of the Firm’s Government Affairs team. Schuman is a shareholder in Littler’s Washington, D.C. office, where she heads up the Firm’s newly-formed Government Affairs practice and serves as main contributor to this blog. A veteran congressional staffer and policy advisor, she brings a wealth of Capitol Hill knowledge and experience to her new roles. We look forward to her insights as the landscape in Washington, D.C. continues to evolve for employers.

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The American Benefits Council (“the Council”), an advocacy organization for voluntary private employer-sponsored benefit programs, has released a document outlining its recommendations to Congress for crafting the final healthcare bill. Lawmakers are in the process of merging the provisions of the Senate’s Patient Protection and Affordable Care Act (H.R. 3590) and the House of Representative’s Affordable Health Care for America Act (H.R. 3962) to create a unified bill. The bills contain many crucial differences, especially with respect to the provisions regulating employer-sponsored coverage and responsibilities. The Council’s recommendations document – Priority Employer Issues for Consideration of House and Senate Health Care Reform Legislation (pdf) – sets forth a number of suggestions related to health coverage and tax issues that would be affected by both versions of healthcare overhaul legislation.

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Employers already face concerns about how to handle employees trash-talking about them on blogs, Facebook and other social media. Now, employers must be cautious of the converse — employee endorsements of their employers’ products and services on social media websites. The Federal Trade Commission (FTC) recently issued updated guidelines aimed at protecting consumers from misleading endorsements and advertising. As these guidelines make clear, employers whose employees use social media like blogs or Facebook to comment on their employer’s products or services face potential liability, even where the employer has not authorized or ratified the employee’s remarks.

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