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

A recent report published by the Congressional Research Service (CRS) has called into question lawmakers’ claims that the Constitution’s commerce clause provides legislators the authority to enact the Public Safety Employer-Employee Cooperation Act (PSEECA) (H.R. 413; S. 1611, 3194). This bill, which was first introduced in 1995, has been reintroduced in the 111th Congress in the House by Rep. Dale Kildee (D-MI) and in the Senate by Sen. Judd Gregg (R-NH) in 2009, and by Sen. Harry Reid (D-NV) in 2010. In addition, a proposed amendment (pdf) to the 2010 Supplemental Appropriations Bill incorporates the PSEECA into the broader spending measure, which the House is expected to vote on this week.

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This week the U.S. Supreme Court agreed to decide two additional employment-related cases for the next judicial term. On Monday, the Court announced that it will hear arguments in Chamber of Commerce of the U.S. of Am. V. Candelaria, in which the Court of Appeals for the Ninth Circuit upheld (pdf) the Legal Arizona Workers Act, Arizona’s immigration law mandating the use of the E-Verify employment verification system, and permitting the state to suspend or revoke employers’ business licenses if they knowingly hire undocumented workers. The question before the Court is whether these requirements are preempted by federal law, and therefore invalid.

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On June 21, 2010, the United States Supreme Court ruled in favor of Rent-A-Center (“RAC”) in Rent-a-Center v. Jackson. (pdf)  In a 5-4 decision, the Supreme Court reaffirmed that the Federal Arbitration Act (FAA) permits parties to delegate authority to an arbitrator to determine whether the contract at issue is unconscionable.

When he was hired by RAC, Antonio Jackson signed an agreement to arbitrate claims arising from his employment instead of going to court. The agreement also required that any challenges to its enforceability likewise must be submitted to an arbitrator for decision. The agreement expressly stated that:

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Last week, House and Senate committee members agreed to the terms of the Dodd-Frank Wall Street Reform and Consumer Protection Act (H.R. 4173), otherwise known as the “Wall Street” or “Financial Reform” bill. Now that the 2,319-page conference report (pdf) has been filed, both chambers will need to vote on the final measure. While the bulk of this massive overhaul bill deals with banking regulation and consumer protection, it does contain other provisions that impact the workplace. A number of sections address executive compensation regulation, arbitration limitations, and provisions that extend and strengthen current whistleblower protection laws. A summary of these provisions follows.

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On Friday, a federal court judge issued an order (pdf) that will effectively permit the National Mediation Board’s (NMB) final rule (pdf) changing its 75-year-old representation election policy to proceed as planned. On May 17, the Air Transport Association of America (ATA) filed a lawsuit in federal court seeking to prevent the NMB from implementing this change to the election process that will make it easier for unions to organize airline and railroad employees. Under the long-established approach, a majority of employees eligible to vote in representation elections determined the outcome of the election. As a result, employees who chose not to participate are effectively viewed as “no union” votes. The NMB’s new rule changes this policy by basing the voting outcome on the majority of those who actually vote, as is closer to the practice in non NMB-governed industries.

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On Friday, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act (H.R. 3962), (pdf) legislation commonly known as the “doc fix” bill. This measure reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary, targeted funding relief for single employer and multiemployer pension plans that suffered significant losses in asset value due to the 2008 financial downturn. On Thursday, the House of Representatives overwhelmingly approved this measure by a 417-1 vote. The Senate cleared this bill last week after the larger tax extender bill failed to gain sufficient support.

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On June 24, 2010, the U.S. Supreme Court issued a pro-employer opinion in Granite Rock, Inc. v. International Brotherhood of Teamsters, et al., (pdf) providing valuable guidance on the arbitrability of disputes over the timing of the formation of collective bargaining agreements.

The Court (7-2) held that the question of exactly when the parties formed an agreement to arbitrate certain disputes was not itself subject to resolution through arbitration. The Court also declined to recognize Granite Rock’s cause of action under Section 301 of the Labor Management Relations Act (LMRA) against the International Brotherhood of Teamsters’ (IBT) for tortious interference with a collective bargaining agreement. The Court remanded the case to the lower court to allow Granite Rock to proceed against the International on the theory that the local union was acting as the IBT’s agent when it refused to abide by the no-strike clause of the parties’ collective bargaining agreement.

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The Senate on Thursday failed to advance the American Jobs and Closing Tax Loopholes Act (H.R. 4213) (pdf), the “tax extender” bill that would have provided for additional months of emergency unemployment benefits and continued various tax relief programs, among other things. The 57-41 vote fell three votes short of limiting debate and scheduling final floor action on the measure. The latest version of the bill offered by Sen. Max Baucus (D-MT) was introduced on Wednesday in an effort to trim costs and gain enough support to pass it. Previous Senate-passed tax extender legislation would have extended the COBRA premium subsidy and various unemployment programs through the end of the year. In May, the House approved this legislation once COBRA premium subsidy extensions were dropped. Earlier this month, the Senate introduced a substitute version of the bill that lacked certain defined contribution pension plan fee disclosure provisions. After it became evident that he did not have enough votes to limit debate on the bill, Baucus introduced a scaled back version that ultimately – like the latest edited version – failed to gain sufficient approval. At this point, Senate passage of the bill in any form appears unlikely.

Photo credit:  MBPHOTO, INC.

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The National Labor Relations Board’s (NLRB) general counsel (GC) has issued guidance (pdf) to the agency’s regional officers and directors on how to process unfair labor practice (ULP) charges involving employee class action waivers in mandatory arbitration agreements. The GC explained that questions have arisen “regarding the validity of mandatory arbitration agreements that prohibit arbitrators from hearing class action employment claims while at the same time requiring employees to waive their right to file any claims in a court of law, including class action claims.” In essence, the GC concluded that such class action waivers do not per se violate the National Labor Relations Act’s (NLRA) provisions allowing employees to engage in protected, concerted activity, but that certain principles must be followed.

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The Department of Labor’s Wage and Hour Division (WHD) has issued an administrative interpretation providing guidance on who may take time off under the Family and Medical Leave Act (FMLA) to care for a sick, newly born or adopted child when that person has no legal or biological attachment to that child. The FMLA typically permits employees to take up to 12 weeks of unpaid leave during any 12-month period for the aforementioned reasons, among others. The regulations extend these FMLA rights to those who stand in loco parentis – “in the situation of a lawful parent by assuming the obligations incident to the parental relation.” The administrator interpretation issued by Nancy J. Leppink, deputy administrator of the WHD, clarifies that an individual falling into this category is not required to establish that he or she provides both day-to-day care and financial support to the child, thus covering those who fall outside of the “traditional” parent category.

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On Tuesday, the Senate officially confirmed (pdf) the nominations of Mark Hayes and Brian Pearce to be members of the National Labor Relations Board (NLRB). The two were included in a package of more than 60 nominees confirmed by voice vote. President Obama previously gave recess appointments to Pearce and Craig Becker, whose nomination failed to advance in the Senate. Controversial nominee Craig Becker, whose recess appointment expires at the end of 2011, was not among those nominees confirmed today. With the addition of Hayes, the Republican nominee, the current composition of the Board and the duration of the members’ terms are as follows:

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On Friday, the Senate unanimously approved the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act, (pdf) a bill that reverses a 21 percent payment cut for doctors in Medicare and TRICARE, updates the physician payment formula through November 30, 2010, and provides temporary funding relief for single- and multi-employer pension plans that suffered significant losses in 2008. With respect to the pension relief provisions, according to a summary, (pdf) employers that elect the relief would be required to make additional contributions to the plan if they pay compensation to any employee in excess of $1 million, pay extraordinary dividends, or engage in extraordinary stock buybacks during the first part of the relief period. Additional relief would be available to certain plans sponsored by charitable organizations. The legislation now needs approval by the House.

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On Friday, the Occupational Safety and Health Administration (OSHA) launched its Severe Violators Enforcement Program (SVEP), an initiative that “focuses enforcement efforts on employers who willfully and repeatedly endanger workers by exposing them to serious hazards.” The agency issued a directive in April that outlined the SVEP’s procedures and enforcement actions against employers that are found to have committed willful, repeat, and failure-to-abate violations of the OSH Act in one or more of the following circumstances: (1) a fatality or catastrophe situation; (2) in industry operations or processes that expose employees to the most severe occupational hazards and those identified as “high-emphasis hazards,” as defined in the SVEP; (3) exposing employees to hazards related to the potential release of a highly hazardous chemical; or (4) all egregious enforcement actions.

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On June 16, 2010, Nancy J. Leppink, Deputy Administrator of the U.S. Department of Labor, Wage and Hour Division, issued the second in her inaugural series of Administrator's Interpretations. Unfortunately, this newest interpretation (pdf), like the first, seems to reflect a continued effort by the Wage and Hour Division to reject certain key interpretations of the Fair Labor Standards Act (FLSA) issued during the Bush Administration. 

In the latest interpretation, the Administrator examines whether protective equipment worn by union employees can be considered "clothes" for purposes of section 203(o) of the FLSA and whether clothes changing covered by section 3(o) constitutes a principal work activity.  Continue reading this entry at Littler's Wage & Hour Counsel blog. 

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The Office of Federal Contract Compliance Programs (OFCCP) has issued a directive on its verification procedures under Executive Order (E.O.) 13496, Notification of Employee Rights under Federal Labor Laws. (pdf) This E.O. mandates that all government contracting departments and agencies include a provision in government contracts covered by the order stipulating that contractors and subcontractors post a notice “in all places where notices to employees are customarily posted both physically and electronically,” informing them of their rights under the National Labor Relations Act (NLRA). The Department of Labor’s Office of Labor Management Standards (OLMS) published a final rule (pdf) implementing this E.O. last month. The OFCCP is responsible for investigating complaints, performing compliance evaluations, conciliating compliance issues, and referring violations to the OLMS for enforcement. The directive published online this week outlines the processes and procedures it will use to perform these tasks.

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On Thursday, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing – Leveling the Playing Field: Protecting Workers and Businesses affected by Misclassification – to address issues relating to the misclassification of employees as independent contractors. During the hearing, HELP Committee Chairman Tom Harkin (D-IA) quoted a study indicating that nearly 10.3 million workers in this country are classified as independent contractors, and that as many as 30% of businesses have misclassified their workers as independent contractors. Consequently, both Congress and the Department of Labor (DOL) have shown a great deal of interest in this area in recent months.

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The federal government and nurses unions have recently increased their focus on nurse-to-patient ratios and providing nurses – and nurses’ unions – with greater influence on nurse staffing levels. Earlier this month a federal agency used its website to advocate increasing hospital nurse-to-patient ratios. Nurses unions also have been rallying, striking, and marching on Washington to push for nurse-staffing legislation and provisions in collective bargaining agreements. Concurrent with these efforts, legislation was introduced in both the House and Senate this week that would require Medicare-participating hospitals to establish staffing plans for nursing services, provide certain whistleblower protections for employees and patients, and subject employers in violation of the bill to monetary penalties.  Continue reading this entry at Littler's Healthcare Employment Counsel blog.

Photo credit:  SmithMaxfield
 

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Potentially invalidating hundreds of National Labor Relations Board (NLRB or “Board”) decisions, the U.S. Supreme Court has held that the National Labor Relations Act (NLRA) requires that the NLRB must operate with at least three members in order to exercise its full authority. In New Process Steel v. NLRB, (pdf) the Court rejected the argument that the NLRA’s delegation and quorum clauses enable the Board to act with only two members, which it had done from January 2008 through March of this year when President Obama used the recess appointment process to add members Craig Becker and Mark Pearce to the two-member panel.

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As anticipated in Littler's Workplace Privacy Counsel's blog post describing the oral argument before the U.S. Supreme Court in City of Ontario v. Quon (pdf), the Court declined today to make any broad pronouncements concerning employee privacy rights in electronic communications using employer-issued equipment. The Court reserved expressing an opinion given the newness and evolving nature of cell phone and text message communications. Instead, the Court held that the City of Ontario Police Department did not violate the Fourth Amendment rights of a SWAT team member, Sgt. Jeff Quon, by reviewing text messages sent and received by Quon on a department-issued pager because, even assuming that Quon had a reasonable privacy expectation, the City’s review of his text messages was motivated by a legitimate work-related purpose and was not excessive in scope. Notwithstanding its narrow and fact-specific nature, the Court’s ruling still provides useful guidance for private employers.  Continue reading this entry at Littler's Workplace Privacy Counsel blog.

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On Tuesday, the House of Representatives failed to approve the Work-Life Balance Award Act (H.R. 4855), a bill that would have established an award for employers that develop and implement work-life balance policies. The measure was considered under a suspension of the rules, a procedure usually reserved for non-controversial bills that requires the approval of two-thirds of the House to forgo debate and pass the bill. The vote failed by a 249-163 margin.

In April, a hearing was held to discuss this bill. During the hearing, a number of panelists offered praise for the measure, including representatives from the Equal Employment Opportunity Commission (EEOC), Society for Human Resource Management (SHRM), and the National Partnership for Women. In a statement, Reps. George Miller (D-CA), chair of the House Education and Labor Committee, and Lynn Woolsey (D-CA), chair of the Workforce Protections Subcommittee, expressed dismay over the bill’s failure: “We are disappointed that Republicans fail to understand the importance of recognizing businesses that offer family-friendly policies,” adding: “Encouraging workplaces to develop these policies go to the heart of how we value our nation’s families and our economic competitiveness. Employers that recognize the value of helping their employees achieve a work-life balance should be recognized and copied.”

Photo credit:  MBPHOTO, INC.

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Employers have anxiously awaited the release of the interim final rules (pdf) relating to “grandfathered” health care plans under the Patient Protection and Affordable Care Act (PPACA). The regulations have garnered a significant amount of controversy in the past couple of days, as a leaked draft version indicated that more than half of employer-sponsored plans would not qualify for the grandfathered status. Under PPACA, health plans that were implemented before the Act was signed into law on March 23rd are exempt from many, but not all, of the law's consumer protections. The regulations seek to clarify how plans may qualify for and/or lose the grandfathered status.  Continue reading this entry at Littler's Healthcare Employment Counsel blog. 

Photo credit:  MBPHOTO, INC.

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The Internal Revenue Service (IRS) has made available on its website a revised Form 941, (pdf) the Employer’s Quarterly Federal Tax Return, which can be used to claim the HIRE Act’s payroll tax exemption for wages paid to qualified employees. Signed into law on March 18, the Hiring Incentives to Restore Employment (HIRE) Act, among other things, relieves certain employers from their obligation to match the OASDI (Social Security) portion (typically 6.2% on the first $106,800 of wages for the calendar year) of FICA tax for certain workers hired after February 3, 2010 and before January 1, 2011, on wages paid March 19 through December 31, 2010. Those hired must attest that they have been “substantially” unemployed for at least 60 days prior to the date of hire.  The IRS has also provided instructions (pdf) for the new Form 941 to explain how this exemption can be claimed on the second quarter return.

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On June 9, 2010, the National Labor Relations Board (NLRB or “Board”) made a move wholly consistent with its anticipated commitment to implementing “significant change.” Specifically, the Board revealed that it is exploring the future use of electronic and internet voting in representation elections. Pursuant to longstanding secret ballot election standards, no such electronic or internet means for casting votes (remote or otherwise) in a Board-conducted election is recognized as permissible. As the controversial and newest Board Members Craig Becker and Mark Pearce start getting situated among their two sitting colleagues, the NLRB’s efforts to alter well-settled Board election standards seem to be in full swing.

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The Employee Benefits Security Administration (EBSA) has issued a final rule clarifying certain issues relating to the timing and order of domestic relations orders under section 206(d)(3) of the Employee Retirement Income Security Act of 1974 (ERISA). According to a summary published in the Federal Register, the rule provides guidance to plan administrators, service providers, participants, and alternate payees on the qualified domestic relations order (QDRO) requirements under ERISA. The rule is being issued in response to a specific statutory directive contained in the Pension Protection Act of 2006 (PPA).

In essence, the rule clarifies that a plan administrator cannot disqualify a domestic relations order (DRO) that otherwise meets ERISA’s QDRO standards solely because the order is issued after, or revises, another domestic relations order or QDRO. Similarly, a DRO that otherwise meets ERISA’s requirements to be a QDRO will not be disqualified because of the time at which it is issued, such as after the parties divorce, or after the death of the participant. Moreover, the rule stipulates that these DROs are subject to the same requirements and protections that apply to all QDROs under section 206(d)(3) of ERISA.

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As a result of the NLRB’s June 3, 2010 decision (pdf) refusing to review a regional director’s ruling that the interns and residents at St. Barnabas Hospital in the Bronx, New York, are employees, the ballots they cast in a union election on June 18, 2009 will shortly be counted. The results of the vote will determine whether the hospital’s interns and residents will be joining the Service Employees International Union (SEIU). The central issue presented by the election petition filed by an SEIU local in 2009 was whether the hospital’s interns and residents were “employees” with the right to organize, or students not covered by the National Labor Relations Act (NLRA).  Continue reading this entry at Littler's Healthcare Employment Counsel blog. 

Photo credit:  Steve Debenport Imagery

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On Tuesday, the Senate resumed consideration of the American Jobs and Closing Tax Loopholes Act (H.R. 4213) (pdf), also known as the “tax extender” or “jobs bill” that would extend emergency unemployment compensation and other tax break programs, as well as provide temporary pension funding relief. Although the Senate passed a tax extender bill in March, the House of Representatives on May 28 narrowly cleared a scaled-back version of this legislation that omitted a number of the original provisions, including an extension of the premium COBRA subsidy. The revised Senate bill unveiled this week, which has been offered in the form of a substitute amendment, does not contain the defined contribution plan fee disclosure provisions that would have required the creation of rules relating to fees incurred in connection with defined contribution plans (such as 401(k) plans) for plan administrators and plan participants. A COBRA subsidy extension was not among the changes included in the Senate substitute either. A summary of all of the changes made by the Senate amendment can be found here. (pdf)

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The New York Regional Office of the National Labor Relations Board (NLRB) has dismissed a petition filed by the Graduate Student Organizing Committee (GSOC/UAW Local 2110) seeking union recognition for NYU graduate student teaching and research assistants. According to a press release, (pdf) the dismissal was based on the Board’s 2004 finding in Brown University (pdf) that graduate student assistants are not statutory employees subject to the National Labor Relations Act (NLRA). The regional office’s decision now leaves the door open for the union to seek Board review of the Brown decision “on the basis that it was wrongly decided both as a matter of law and policy.” Given the new composition of the NLRB following President Obama’s recess appointments in March, a reversal of the earlier decision is entirely possible.

In addition to potential Board action, legislation has been introduced in both the House and Senate this term that would reverse the Board’s decision in Brown. The Teaching and Research Assistant Collective Bargaining Rights Act (H.R. 1461, S. 813) would effectively allow private university students who serve as teaching and research assistants to form or join a union.

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The Department of Labor (DOL) has announced plans to conduct web chats this month on issues involving workplace safety and benefit plan responsibilities. The Occupational Safety and Health Administration (OSHA) will host a web chat on workplace hazards associated with combustible dust on June 28, 2010. According to a notice (pdf) to be published in Monday’s edition of the Federal Register, the information gathered in response to the web chat will be used in the development of a proposed standard for combustible dust. The chat will focus on major issues related to a proposed rule such as scope, balance between performance and specification-based requirements, economic impacts, and definitions.

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Ronald Meisburg, General Counsel (GC) to the National Labor Relations Board (NLRB), plans to leave the Board eight weeks shy of the end of his term in order to enter private practice. A former management-side lawyer, Meisburg was seated via recess appointment as a Board member in 2004, and as General Counsel in 2006. Meisburg, after the Senate confirmed his nomination in August 2006, was to serve as GC until August 14, 2010. His vacancy will allow President Obama to appoint his own choice to fill this position, which has been held by a Republican since 2001. In March, Obama used the recess appointment process to seat Democrats Craig Becker and Mark Pearce as NLRB members.  Republican nominee Brian Hayes was not similarly seated, and has yet to receive a Senate confirmation. The sole remaining Republican member, Peter Carey Schaumber, will complete his term on August 27, 2010.

Although a significant amount of controversy surrounded Obama’s choice of former union general counsel Becker as an NLRB member, the general counsel pick could be equally contentious, given the enforcement power that accompanies the position. The NLRB traditionally makes changes to labor law through its rulings and the general counsel determines which cases are put before the NLRB. Therefore, which cases the general counsel chooses to pursue are a critical component with regard to what issues the NLRB will have an opportunity to decide. The selection of the person who determines which cases will be considered is likely to be as controversial as the selection of individuals who ultimately will decide those cases. At this point, however, there is no clear front-runner as Meisburg’s replacement. In a letter to NLRB employees, Meisburg announced that Deputy General Counsel John Higgins will take over any new cases presented to the Board.

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