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

Senators Richard Blumenthal (D-CT) and Charles E. Schumer (D-NY) have sent requests to the Department of Justice (DOJ) and Equal Employment Opportunity Commission (EEOC) asking them to determine whether the emerging employer practice of requesting job applicants for their social medial login credentials for background check purposes violates federal law. According to Sens. Blumenthal and Schumer, requesting an applicant’s username and password for social media sites such as Facebook is a “disturbing trend” that potentially violates a number of privacy and employment laws.

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The Securities and Exchange Commission (SEC) has published a chart outlining when it intends to issue new rules implementing sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). (pdf)  Notably, within the next six months, the SEC plans to issue a final rule implementing Section 952 of the Dodd-Frank Act, which requires the SEC to adopt new disclosure rules for companies to report the use of compensation consultants and potential conflicts of interest. In addition, this section of the Act directs national securities exchanges/associations (e.g., NYSE, NASDAQ) to establish listing standards requiring publicly traded companies to have their compensation committee participants be members of the board of directors and meet a heightened standard of independence in order for their shares to continue trading on those exchanges. The SEC issued a proposed rule governing § 952 in March 2011.  According to the SEC outline, the agency also plans to adopt the listing standards within a six-month timeframe.

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The same day the National Labor Relations Board (NLRB) released its final rule that radically alters union representation election procedures, Senator Mike Enzi (R-WY), Ranking Member on the Senate Health, Education, Labor and Pensions (HELP) Committee, announced his intention to challenge the rule under the Congressional Review Act (CRA). Pursuant to this law, the House or Senate can introduce a joint resolution of disapproval to prevent an agency from enforcing a rule.

According to Enzi:

The rule issued today by the NLRB will allow union bosses to ambush employers with union elections before employers have a fair chance to learn their rights and explain their views to employees, as required by law. I plan to lead the fight against this onerous rule by introducing a resolution of disapproval under the Congressional Review Act. It is disappointing that union advocates believe their best chance to succeed, when it comes to union elections, is to ensure that only one side of the story is able to get out. Instead of using backdoor political maneuvers to boost anemic union memberships and smother our nation’s struggling economy, this Administration should help America regain its strong financial footing.

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By David Kadela

In an unprecedented development, and by a 2-1 vote, the National Labor Relations Board on November 30, 2011, approved a resolution to prepare a final rule adopting a subset of the controversial election rule amendments the Board published for comment in June 2011. The two-member majority was made up of Chairman Mark Pearce and Member Craig Becker, both of whom come from union backgrounds. The Board's lone Republican, Member Brian Hayes, voted against the resolution, criticizing the proposed amendments and the process by which they had been vetted as fundamentally flawed.

What makes this development unprecedented, and radical in the eyes of many, is that it defies a decades-old practice of the Board, regardless of the political party in the majority. Continue reading about this development here.

Photo credit: ericsphotography

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The Equal Employment Opportunity Commission's Office of Legal Counsel released an advisory opinion on employer use of arrest and conviction records during the hiring process. The non-binding letter provides some insight into the Commission's current enforcement position and suggests the Commission: (1) will continue to differentiate between arrest and conviction records; (2) may not be prepared to adopt a presumption of disparate impact in this context; and (3) will in the event of a finding of disparate impact, closely scrutinize the employer's policy with regard to both how long convictions are disqualifying and whether the underlying criminal conduct is related to the job duties for the position in question. To learn more about the EEOC's advisory opinion and its potential impact on employers, please continue reading Littler's Insight,EEOC Advisory Guidance Offers Insight on the Use of Arrest and Conviction Records, by Rod Fliegel and Jennifer Mora.

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On August 25, 2011, the National Labor Relations Board issued a final rule entitled Notification of Employee Rights under the National Labor Relations Act. The rule mandates that private sector employers subject to the National Labor Relations Act (NLRA) post a notice informing employees of their rights under the NLRA in a "conspicuous place" readily seen by employees and penalizes employers for non-compliance. This new obligation applies to virtually all private sector employers, regardless of whether or not their workforces are unionized and regardless of whether they are federal contractors. The rule was published in the Federal Register on August 30, 2011 and will be effective 75 days later, on November 14, 2011. For more information on this rule and employer requirements, continue reading Littler’s ASAP: NLRB Issues Final Rule Requiring Employers to Post a Notice Informing Employees of Their Rights Under the NLRA by Gavin Appleby and Tracy Stott Pyles.

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On August 4, 2011, the Commodity Futures Trading Commission (CFTC) approved its Final Rule implementing the whistleblower and bounty hunter provisions applicable to the Commodity Exchange Act (CEA) under Section 748 the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The Final Rule establishes a “Commodity Whistleblower Incentives and Protection” program nearly identical to the whistleblower incentive and protection program created under Section 922 of the Dodd-Frank Act, which provides financial incentives for employees to report violations of federal securities laws.

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Rep. Carolyn Maloney (D-NY) and Senator Jeff Merkley (D-OR) have introduced legislation that would afford civil rights protections to breastfeeding employees and expand existing rights to more employees. Specifically, the Breastfeeding Promotion Act of 2011 (H.R. 2758; S. 1463) would amend both the Fair Labor Standards Act (FLSA) and Title VII of the Civil Rights Act to prohibit employers from terminating or otherwise discriminating against an employee who nurses or expresses milk during lunch or break times and entitle many salaried employees to the same benefits given to their non-exempt counterparts under the Patient Protection and Affordable Care Act.

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As one of the final speakers concluding two days of public meetings to discuss the NLRB’s proposed changes to its election procedures, Littler attorney David Kadela stated that the proposed changes “would unduly and severely cut into the time that employers have to communicate with employees during election campaigns, and establish unnecessary procedural requirements that would stack the deck against and increase the burdens upon employers.” Kadela joined more than 60 other participants in the two-day event, many of whom articulated the same profound faults with the proposed expedited election procedures. Although a number of union supporters were on hand to speak in favor of the proposed rule, members of the business community and their representatives urged the Board to reconsider its proposal, which was even the subject of a recent Congressional hearing. Continue reading this entry at Littler's Labor Relations Counsel.

Photo credit: webphotographeer

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Legislation introduced in the House of Representatives would amend the whistleblower incentive provisions created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) by, among other things, requiring employees to first report potential misconduct through the company’s internal reporting system. Under the whistleblower incentive and protection program established by the Dodd-Frank Act, employees who contribute original information that leads the Securities and Exchange Commission (SEC) to recover monetary sanctions of $1,000,000 or more in criminal and civil proceedings are entitled to receive between 10% and 30% of any monetary sanctions that are imposed. The measure also provides a number of anti-retaliation protections for employees that act as whistleblowers. In May of this year, the SEC issued a final rule governing these whistleblower protections.

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The Office of Federal Contract Compliance Programs (OFCCP) is proposing to amend its regulations regarding a contractor’s and subcontractor’s affirmative action and nondiscrimination obligations towards protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). This law prohibits employment discrimination against specified categories of veterans by federal government contractors and subcontractors, and mandates that each covered contractor and subcontractor take affirmative action to hire and promote veterans. According to a summary included in the notice of proposed rulemaking, (pdf) the intended regulatory changes would strengthen these affirmative action provisions, describe specific actions a contractor must take to satisfy its obligations, increase the contractor’s data collection obligations, and require the contractor to establish hiring benchmarks to assist in measuring the effectiveness of its affirmative action efforts.

The proposal addresses two sets of VEVRAA regulations. Those found at 41 CFR part 60-250 generally apply to government contracts of $25,000 or more entered into before December 1, 2003. The regulations found at 41 CFR part 60-300 apply to government contracts entered into on or after December 1, 2003. The threshold amount to trigger coverage by the affirmative action plan (AAP) requirements for this group is a single contract of $100,000 or more, entered into on or after December 1, 2003. Because of the extensive changes to these regulations, the OFCCP is proposing to rescind part 60-250 in its entirety, as the agency assumes that few, if any, unmodified contracts entered into before December 1, 2003 for $25,000 or more currently exist. The agency seeks comment, however, to determine if any such contracts are still, in fact, in effect.

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In an opinion that potentially expands an employer’s liability in discrimination cases, the Supreme Court has found that an employer can be found liable under the Uniformed Services Employment and Reemployment Rights Act (USERRA) for the discriminatory intent of company officials who influenced – but did not make – the ultimate adverse employment decision. In Staub v. Proctor Hospital, (pdf) the Court held that an employer is liable under USERRA “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action,” and that act “is a proximate cause of the ultimate employment action.” Appellate courts have applied varying standards under this “cat’s paw” theory of imputed liability, which holds an employer accountable for the unlawful motives and actions of an official who dupes or influences an unbiased decision maker into acting unlawfully.

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On Wednesday, the full House Committee on Education and the Workforce held a hearing to discuss the policies and priorities of the Department of Labor. Earlier in the week, the agency released its 2012 budget request, which seeks $12.8 billion in discretionary budget authority and 17,848 full-time equivalent employees (FTE). Although the proposal would reduce the Department’s overall discretionary spending by 5% from current levels, the budget would increase funding for the agencies charged with regulating and enforcing worker protections. Several divisions within the DOL – the Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Employee Benefits Security Administration (EBSA), and the Office of Federal Contract Compliance Programs (OFCCP) – would each receive additional funding under a budget that allocates a total of $1.8 billion for DOL’s worker protection agencies. Given President Obama’s plan to freeze all non-security discretionary spending and DOL’s overall discretionary budget reduction, the increase in resources for worker protection demonstrates the Administration’s continued commitment to enhancing the regulation and enforcement of labor and employment laws. For a complete analysis of the DOL’s budget request, see Littler’s ASAP: U.S. Department of Labor's 2012 Budget Shows Increasing Resources Toward Regulation and Enforcement of Employment Laws.

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The Securities and Exchange Commission (SEC) has adopted a final rule (pdf) governing shareholder approval of executive compensation and “golden parachute” compensation arrangements required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the Dodd-Frank Act requires public companies subject to the federal proxy rules to provide their shareholders with a non-binding “say-on-pay” vote on executive compensation and a separate non-binding vote on how often such votes should occur. In addition, shareholders are entitled to an advisory vote on compensation arrangements and understandings in connection with merger transactions, commonly referred to as golden parachutes.

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In a decision that may subject employers to more retaliation lawsuits, the Supreme Court in Thompson v. North American Stainless (pdf) has held that under certain circumstances, a third party has standing to bring a retaliation suit under Title VII of the Civil Rights Act. In this case, the plaintiff and his fiancée worked at the same company. The fiancée filed a charge of sex discrimination against the employer with the Equal Employment Opportunity Commission (EEOC). Shortly thereafter, the company terminated the plaintiff, who subsequently filed suit alleging he had been illegally retaliated against because his fiancée had filed a discrimination complaint. A divided Sixth Circuit Court of Appeals ultimately found that Title VII “does not permit a retaliation claim by a plaintiff who did not himself engage in protected activity.” The Supreme Court disagreed, finding that because he fell within the “zone of interests” protected by Title VII, the third-party plaintiff had standing to sue.

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The DOL’s Wage and Hour Division (WHD) will issue a request for information (pdf) in Tuesday’s edition of the Federal Register regarding the new requirement that most employers provide a reasonable break time for lactating mothers. The Patient Protection and Affordable Care Act (“Affordable Care Act”) amended section 7 of the Fair Labor Standards Act (FLSA) to require employers to provide rest breaks and suitable space for employees who are nursing to express breast milk for up to one year after the child’s birth. The notice to be issued by the WHD includes the DOL’s preliminary interpretations of the new break time amendment, and seeks information and comment on a number of issues that have arisen under the new requirement. The WHD notes, however, that at this point it does not intend to issue regulations implementing the break time provision. The request for information is solely for the purpose of drafting additional employer guidance.

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The Equal Employment Opportunity Commission (EEOC) has posted on its website two new guidance documents on the recently published final rule implementing the employment provisions of the Genetic Information Nondiscrimination Act (GINA). Title II of GINA prohibits the use of genetic information in making employment decisions, restricts acquisition of genetic information by employers and other entities covered by Title II, strictly limits the disclosure of genetic information, and prohibits retaliation against employees who complain about genetic discrimination. The first guidance document provides background information on the Title II rule, while the second focuses on questions that might arise for small businesses.  Both guidance materials are presented in question and answer format, and clarify many of the provisions contained in the final rule.

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Tuesday's historic election radically changed the composition of Congress and the balance of power in Washington. While a few election results are still trickling in, Republicans are projected to gain around 60 seats in the House of Representatives, regaining majority control. Democrats will still control the Senate, albeit with a much slimmer margin. Senate Republicans will increase their numbers from 41 to 47 seats, with the outcome of the race in Washington still uncertain. Whether the shift in power in Congress produces compromise or gridlock remains to be seen. What is clear is that this new political landscape will necessarily alter the Obama Administration's labor and employment agenda. For more information on what employers can expect during the remaining weeks of the 111th Congress and the next Congress, continue reading Littler’s ASAP: How Will the Midterm Election Results Impact Labor & Employment Policy?

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On Friday, the House Committee on Financial Services held a hearing on executive compensation oversight in light of new requirements imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), the sweeping financial overhaul legislation signed into law on July 21, 2010 that contains a number of provisions impacting the regulation of executive compensation in publicly traded companies.  Panelists were asked their views on whether the compensation-related provisions would be effective in revising corporate incentive pay structures to reduce the incidence of risk-taking, and what federal regulators should take into consideration in drafting rules to implement these provisions. Although most of the witnesses focused on the Act’s impact on financial services companies only, one did address how the executive compensation provisions would impact all publicly traded companies.

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The National Labor Relations Board on August 27, 2010, issued its long-awaited decision in a trio of cases involving the use of stationary banners by unions to advertise secondary boycott activity to the public. In a 3-2 decision split along partisan lines, the Board majority (Chairman Liebman and Members Becker and Pearce) concluded that bannering, when conducted peaceably and independent of other, possibly coercive, conduct, does not violate Section 8(b)(4)(ii)(B) of the National Labor Relations Act ( the “Act”). The decision in United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506, 355 NLRB No. 159 (2010) has the practical effect of broadening the arsenal of weapons organized labor can bring to bear to force a primary employer in a labor dispute to yield to union demands. As a result, the decision may signal an increase in the frequency of secondary boycott activity and the embroiling of neutral employers in labor disputes not of their own making.

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