Punching In: LGBT Week at the Supreme Court

Monday morning musings for workplace watchers

Talking Sex Discrimination | EEOC to NLRB: Don’t Bogart Joint | Scalia Sorts Out Recusals

Jaclyn Diaz: A funeral home, a skydiving company, and the government of Clayton County, Ga. all have something in common: they, and their former employees, are the players involved in three landmark U.S. Supreme Court cases that will test the scope of sex discrimination protections under federal law.

The cases are Altitude Express v. Zarda and Bostock v. Clayton County, Georgia, which deal with sexual orientation protections, and R.G. & G.R. Harris Funeral Home v. EEOC, which revolves around gender identity. The common question is whether a federal ban on workplace sex discrimination prohibits LGBT bias. The justices on Tuesday will hear oral arguments in all three cases.

The legal question has split federal courts and Trump administration agencies. Last year, the Justice Department told the Supreme Court that businesses can discriminate against workers based on their gender identity without violating federal law. Solicitor General Noel Francisco told the high court at the time that Title VII of the 1964 Civil Rights Act, which bans sex discrimination on the job, doesn’t cover transgender bias. The Equal Employment Opportunity Commission has an opposing view, arguing that LGBT bias is inherently a form of sex discrimination.

Even if the court doesn’t decide in the workers’ favor, there are several efforts already in place that are meant to protect workers from bias surrounding gender identity or sexual orientation. Laws in 20 states and Washington, D.C. ban employment discrimination based on sexual orientation and gender identity.

White House executive orders currently in place also ban federal agencies and contractors from discriminating against LGBT workers. Those orders won’t be affected by the court’s decision, unless the Trump administration decides to tinker with them. Some changes are already underway: The Labor Department’s Office of Federal Contract Compliance Programs, which enforces one of those orders, is working on a rule to “clarify” an exemption for faith-based organizations. The OFCCP said it wants to ensure that these organizations can contract with the federal government while maintaining certain sincerely-held religious beliefs.

The Government Accountability Office reported that less than 8% of faith-based organizations, or 9 out of 117 entities, that received federal grant funding or that contracted with the government in 2017 opted to use that exemption. But the OFCCP says the new rule will also apply to “closely held” companies acting in accordance with an owner’s religious beliefs.

Chris Opfer: Much of the recent debate over “joint employer” liability for businesses in franchise and staffing relationships has focused on the DOL and the National Labor Relations Board. That’s because both agencies are working on separate regulations to limit the situations in which multiple businesses can be on the hook for wage and hour violations or unfair labor practices against the same set of workers. The new NLRB rule will also make it harder for workers hired by staffing companies or franchisees to force related companies to come to the bargaining table.

It’s worth keeping an eye on the Equal Employment Opportunity Commission. The EEOC last week sued Johnson Controls and staffing company Manpower, alleging that both are liable as joint employers for sexual harassment at a Johnson Controls facility in Oklahoma. Although Manpower hired the alleged victim, the EEOC said Johnson Controls set her work schedule, location, and job duties.

The EEOC has for more than two decades taken the position that “a client of a temporary employment agency typically qualifies as an employer of the temporary worker during the job assignment, along with the agency. This is because the client usually exercises significant supervisory control over the worker.”

During the Obama administration, at least, the agency said its approach to joint employment in all settings was similar to that articulated by the NLRB in the controversial Browning-Ferris case. That includes allowing companies to be tagged as joint employers even if they don’t exert the control they have reserved over a group of employees or if they exert it indirectly. The new NLRB rule is aimed at overturning the Browning-Ferris approach in exchange for a more limited test requiring actual and direct control. Now that the EEOC also has a Republican majority and general counsel, its not clear whether the agency will do the same.

Ben Penn: The opening weeks for any new labor secretary are traditionally a time to meet and get to know agency leaders and other senior personnel, lay the groundwork with lawmakers on their pet projects, and sit down with outside stakeholders from the labor and employer communities.

For newly minted Labor Secretary Eugene Scalia, it’s that last group that may present some challenges. Any communication he has with dozens of businesses and trade groups could present ethical landmines due to his lengthy list of corporate clients with high stakes involvement in Labor Department regulations, enforcement actions, contract awards, and more.

Scalia’s two year recusal in DOL matters involving Gibson Dunn—where he worked as a partner for more than a decade—and his former clients comes with many ambiguities that are highly technical and open to interpretation.

By all accounts, Scalia has the integrity of someone inclined to be cautious and savvy enough to ensure compliance with his ethics pledge, and the DOL’s team of ethics lawyers has a reputation for being among the best and toughest in federal government. Plus, as secretary, he’ll still be able to wade into plenty of policies that affect his former clients without violating his conflict-of-interest commitments. Still, the transition from the business community’s go-to labor lawyer to the head of the entire Labor Department is going to require vigilance from Secretary Scalia and his gatekeepers.

CO: Next week marks two months until the end of NLRB Member Lauren McFerran’s (D) term at the NLRB. It remains unlikely that McFerran will be tapped for a second term before the end of the year, but that doesn’t necessarily mean the board’s only current Democrat member will be leaving NLRB headquarters come December.

There has been some push back in certain Republican corners of Capitol Hill about leaving both of the board’s two Democrat seats unfilled, sources tell me. Although the Obama administration kept the board’s then two GOP seats open for about eight months, the idea of overhauling federal labor law without someone from the minority party at least filing a dissent is apparently rubbing some folks the wrong way.

That means McFerran may not have to wait until Republican Member Marvin Kaplan’s term is up at the end of August to be nominated and confirmed for another five-year stint on the board. The two nominations will still likely be paired, but Kaplan could get his ticket to another term punched early. In the meantime, sources say there is talk that McFerran could be shifted to a non-member attorney position at the NLRB while she waits out the process.

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: copfer@bloomberglaw.com, bpenn@bloomberglaw.com, and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer, @BenjaminPenn, and @jaclynmdiaz.

See you back here next Monday.

Bloomberg Law® helps labor and employment law practitioners provide rapid, accurate, and complete advice to clients by bringing together trusted, market-leading Bloomberg Industry Group content like Daily Labor Report® and treatises like Covenants Not to Compete: A State-by-State Survey and The Developing Labor Law, with a fully integrated, innovative legal research platform. Click here to request a free trial.