Punching In: Congress, the Supreme Court, and the Trump Administration

Monday morning musings for workplace watchers

EEOC to Congress: Make It Rain |DOL Looking at Arbitration Agreements |LGBT Cases: Take Two Likely

Chris Opfer: Congress is back to work this week, with a couple of big items on lawmakers’ to-do list before they head out for the holidays. That includes passing a farm bill and securing funding for the government agencies that aren’t part of the combined spending measures President Donald Trump signed earlier this year.

A dispute about required job training for food stamp recipients has put something of a hitch in lawmakers’ dash to move the agriculture legislation. But it’s the remaining agency funding bills—covering the Equal Employment Opportunity Commission and Department of Homeland Security, among others—that labor and employment policy watchers may want to keep an eye on.

A Senate version of the Commerce, Justice, Science bill approved in committee over the summer would keep EEOC funding flat at $379.5 million. The agency last year saw its first budget increase in nearly a decade, thanks to a $15 million-plus spending bump. But the White House has asked lawmakers to trim nearly the same amount from the EEOC this time around. That kind of cut would handcuff the agency at a critical juncture in the wake of the #MeToo movement, former EEOC Chairwoman Jenny Yang (D) told me.

“Additional funds have been critical to hire more investigators,” Yang said. “The demand for the agency’s resources has been increasing and the budget has been flat or declining before this past year. The agency budget was shrinking and that meant we couldn’t hire the investigators we needed to get ahead of some of the issues.”

There’s also been a grumble or two about DHS funding including a policy rider updating one or more visa programs. Anyone who wants to shed some light on that possibility knows where to find me.

Tyrone Richardson will be keeping an eye on the House, where Democrats will vote on whether to nominate Rep. Nancy Peolsi (Calif.) as the next Speaker. Meanhwhile, Hassan Kanu has more on the week ahead in the latest edition of the Punching In podcast.

Jaclyn Diaz: Just a few days until the start of December. Do you know what that means? 1. In my book it’s officially OK to start playing holiday music. 2. A pair of major DOL rules are scheduled to be dropped in the next 31 days. It’s unclear what the exact dates are, but the fall regulatory agenda said December 2018. Keep these two on your radar: a proposed joint employer rule and a new regulation on the “regular rate.”

Joint Employer Rule(s)

The Labor Department is set to publish a regulation on the question of shared employer liability in franchise and staffing arrangements. The policy would govern when multiple businesses share legal responsibility for minimum wage and overtime violations by their partners, affiliates, franchisees, contractors, etc. The National Labor Relations Board is working on its own rule as it pertains to collective bargaining and unfair labor practices.

As I reported in October, there’s already controversy surrounding what form this regulation will take and to what extent the DOL has legal authority to touch it. We’ll be watching to see what happens.

Regular Rate Irregularities

This confusing issue is set to get a modern touch next month.

The regular rate is a worker’s typical rate of pay, which is multiplied by 1.5 to calculate the overtime premium pay for hours worked beyond 40 in a week. The DOL’s Wage and Hour Division is proposing a modified rule to “clarify, update, and define regular rate requirements.” The rule was previously set for a September release but the WHD’s October agenda bumped it to December. There’s a question of whether the department will meet its deadline this time.

“Clarifying this issue will ensure that employers have the flexibility to provide” compensation and benefits to their employees, the DOL said in its October agenda, adding that it believes the changes “will facilitate compliance with the FLSA and lessen litigation regarding the regular rate.”

That’s a very timely issue. Attorneys I spoke to said some unique benefits provided to workers could be at risk (if they’re deemed part of the regular rate for overtime pay purposes under the Fair Labor Standards Act) because of litigation currently making its way through the courts.

CO: A trio of cases testing current protections for LGBT workers is in the mix when the Supreme Court goes to conference on Friday. The question percolating through the courts is whether a federal ban on sex discrimination on the job includes bias based on sexual orientation and gender identity. The ongoing debate has already divided two agencies within the Trump administration.

Among the cases the justices have been asked to consider is a Second Circuit decision finding that a Long Island, N.Y., skydiving company violated Title VII of the 1964 Civil Rights Act when it fired an instructor who told a client he was gay. The Eleventh Circuit came down on the other side last year, when it ruled that a local government worker in Georgia who said he was fired because of his sexual orientation couldn’t sue under Title VII. The third case on the conference schedule challenges a Sixth Circuit decision finding that a Michigan funeral home wrongly fired a transgender worker after she announced she was transitioning to a woman.

The folks who watch the high court closely say that it wouldn’t likely grant review in any of these cases the first time they’re set for conference. Instead, if the justices granted review, it would probably be during a second conference session, perhaps sometime in December. If the court decides not to take up any of the cases, we could know as soon as next Monday.

JD: This week I’ll be taking a look into the world of arbitration agreements.

Earlier this month, Google changed its policy on sexual misconduct and mandatory arbitration agreements after thousands of employees walked out to protest big payouts given to executives accused of harassment. Arbitration is now optional for individual sexual harassment and sexual assault claims at Google. Mandatory arbitration clauses have also been criticized by politicians at the state level in light of the #MeToo movement. The attorneys general of all 50 states issued a rare joint letter in February urging legislation to ensure that victims of sexual harassment aren’t bound by arbitration.

While mandatory arbitration is sharply criticized for harassment, there isn’t the same brouhaha over arbitration for discrimination or wage and hour claims.

“The movement to eliminate forced arbitration was grounded in the #MeToo movement and the idea that companies shouldn’t be able to secretly arbitrate serious claims,” said Ryan Bates, with Hunton Andrews Kurth in Washington, D.C. “The same considerations aren’t there for wage and hour claims.”

It seems that more people are fans of arbitration for wage and hour. If anything, arbitration agreements on those issues are gaining in popularity, Bates said.

Now it also appears that Kate O’Scannlain, the Labor Department’s chief legal officer, wants to take a closer look at arbitration agreements. In a recent memo to DOL regional solicitors’ offices, O’Scannlain said the front office leadership should be informed of proposed enforcement actions where the Department would litigate on behalf of employees who have agreed to arbitration with their employer.

I’m looking to see what O’Scannlain has in mind. Is this just to track cases involving arbitration agreements or will those agreements end up being a factor in whether the DOL takes a case?

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us on any and all labor and employment news: copfer@bloomberglaw.com, and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer and @JaclynmDiaz.

See you back here next Monday.

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