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Punching In: The Latest on Overtime and Epstein

March 11, 2019, 10:31 AM

Monday morning musings for workplace watchers

Sharpening Knives on Overtime| Weingarten on Acosta | Rolling Dice on NLRB Confidentiality

Chris Opfer: Fire up your typewriter if you’ve got a stake in the overtime debate. The Labor Department raised the curtain on its proposal to expand overtime pay eligibility Thursday, perhaps just a tad earlier than some of us were expecting. The department wants to raise the salary level under which workers are automatically eligible for overtime pay to $35,000 from about $24,000. The proposed rule’s publication in the Federal Register starts the 60-day public comment period.

Here are a few things to keep in mind as the process moves forward.

  • Lawsuits Are Coming: Groups that are likely to challenge the proposal in court can’t do so until the department issues a final rule, per the Administrative Procedure Act. Once it does, I’ll bet everyone a cold one that we see at least one lawsuit from worker groups who say the Trump administration hasn’t done the analysis to justify backing away from the Obama administration’s more aggressive overtime proposal. That proposal is still on hold in the Fifth Circuit. Overtime rule critics might find a road map for challenging the rule in a recent decision by a federal judge finding that the Trump Office of Management and Budget didn’t justify blocking Obama separate pay data disclosure requirements.
  • Small Business Concerns: We may also see litigation by from advocates for small businesses, nonprofits, and academic institutions that may have a tougher time keeping up with payroll costs than larger employers.
  • About That 5th Circuit Case: A Texas federal judge’s 2017 decision killing the Obama rule is still on appeal by the Trump administration. The department will likely wait until the new rule is finalized and then drop the appeal. The AFL-CIO is also still trying to intervene in the case and will presumably try to keep it going if the DOL bows out.

Bloomberg Law’s Robert Iafolla spoke with former National Labor Relations Board Member William Gould about the board’s approach to worker classification, in this week’s Punching In podcast.

Jaclyn Diaz: Last week CNN and The New York Times published op-eds calling for Labor Secretary Alex Acosta’s resignation, adding to the editorial pile on. This of course stems from Acosta’s role in giving Miami hedge fund manager Jeffrey Epstein a controversial plea deal 10 years ago when Acosta was a federal prosecutor and Epstein was facing teen sex trafficking charges.

Interestingly, however, there’s been a noticeable hesitance from most influential labor and businesses stakeholders to broach the topic on the record.
That silence isn’t because Acosta has many friends in organized labor but more that people from both business and labor are afraid of who might replace him, according to sources.

As one person told me, “It’s better to have the devil you know.”

Even the AFL-CIO, the world’s largest labor organization, is reticent about calling for Acosta’s departure. And that’s after a judge ruled Feb. 21 that Acosta and other prosecutors violated federal law by keeping the plea deal secret. The prosecutors didn’t tell Epstein’s alleged victims—36 were identified, ranging in age from 14 to 19 years old—about the agreement until after a judge approved it.

Not everyone in organized labor is staying on the fence. I caught up with Randi Weingarten, president of the American Federation of Teachers, at an Axios event on job training last week.

“We feel in this instance Secretary Acosta should resign,” Weingarten told me. “I understand others may differ from it. I’m perfectly fine with people doing it on a union by union basis.”

Acosta and the Justice Department should have told the victims about the deal being given to the “miscreant,” she said. “We need adults to fight for children,” she said.

The AFT is the nation’s largest higher education union and one that disproportionately represents women teachers and nurses, so you could say Weingarten and her members have skin in the game on this one. Weingarten says she’s also “a survivor.” In 2014, she published a personal essay about being assaulted as a junior in college.

CO: One complaint we’ve been increasingly hearing from the management bar is that there’s wide variance in how cases are handled by the Labor Department and the National Labor Relations Board based on which regional office you’re in. Although NLRB General Counsel Peter Robb has taken steps to standardize both case processing and the board’s approach to certain legal issues, some labor lawyers say not all of it is trickling down into the regions.

One common example: confidentiality requirements in settlement cases. When a union or worker files an unfair labor practice complaint against an employer, the cases are often settled with the employee being paid to take a hike. Management-side lawyers often also push for the agreement to include some limits on what the worker can say publicly about the case and how it was resolved. NLRB officials in some regions are continuing to approve those agreements, while others won’t sign off on any deals that include gag pacts, labor lawyers say.

We’ll have more this week on a related question: When can companies force workers to keep sexual harassment and other investigations confidential?

In other NLRB news, sources tell us that Deputy General Counsel John Kyle is leaving Half Street and intends to retire at the end of the month.

JD: The overtime rule release last week overshadowed the news that a proposal to re-establish annual reporting requirements for union trusts, an issue championed by conservative groups is undergoing White House review. The T-1 Form proposal seemed to get as much attention as a band nerd in high school.

The proposal mirrors a policy from the George W. Bush administration that faced legal challenges from labor groups and was eventually overturned altogether during the Obama era. It’s very likely this edition will face the same kind of opposition.

The proposal has at least one die-hard fan in Florida Republican Rep. Francis Rooney, however. He told me he’s been regularly calling on Acosta to make the move, but until last week hadn’t seen much hustle from the secretary. So Rooney introduced his own version of the Form T-1 rule in the House last month. The Union Transparency and Accountability Act essentially codifies the union financial disclosure proposals the DOL is mulling. It also would establish civil fines for labor organizations that don’t publicly disclose their finances. Rooney introduced the same bill last year, but it didn’t go anywhere.

Rooney says he’s also been unimpressed with the DOL’s work on investigating worker centers. We reported late last year that the DOL’s investigations into those organizations resulted in just one completed probe since 2017. Conservative groups have been calling for more results.

Rooney said Acosta is expected to get in front of the Education and Labor Committee for a hearing sometime soon. The congressman plans to hold the secretary’s feet to the fire on these topics.

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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To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com