Daily Labor Report®

Punching In: Trump Administration’s Overtime Clock Is Ticking

March 25, 2019, 10:00 AM

Monday morning musings for workplace watchers

Amazon in the City | Solicitor Staffing |The Dissent Doesn’t Rest

Jaclyn Diaz: What’s that noise? That ticking ... Oh yes, it’s the sound of the big clock now facing the Labor Department as it tries to cement its new overtime proposal.

The public can now submit their (many, many) thoughts on the proposed version of the rule, which would make anyone earning less than $35,000 a year automatically eligible for overtime pay. But the department is still a long way long from the finish line. The DOL has to go through what will likely be thousands of comments, potentially make changes to the proposal as a result, and respond to those comments before it can finalize the regulation.

The ticking will get louder as we close in on the 2020 election, which is just around the corner (if you can’t tell from the dozens of Democrats announcing their candidacy).

Tammy McCutchen, a Littler Mendelson attorney who was a Wage and Hour Division administrator under George W. Bush, explained last week why there’s a need for speed.

Let’s say President Trump loses in November 2020 and a Democratic president takes the White House, she said at a Society for Human Resource Management event. That would mean new leadership in the Labor and Justice departments. And those officials might be interested in restarting litigation in federal court to defend the Obama administration’s overtime proposal, which is still very much active in the Fifth Circuit. A new administration can also choose to put the kibosh on the Trump administration’s proposal before it’s finalized.

That’s why the DOL is aiming to make the new rule effective by January 2020, according to McCutchen. But is that realistic?

McCutchen was at the Labor Department in 2004 when it last updated overtime pay requirements. It took the DOL 13 months to go through all the public comments and publish a final rule. The Obama administration turned its final rule around in 10 months, which was later blocked by a federal judge in Texas.

Apparently, this DOL is feeling frisky and thinking it can get comments reviewed and finalized in eight to 10 months. Because of the tight deadline, the DOL isn’t likely to grant requests to extend the time for public comment beyond the May 21 deadline, McCutchen said. This is risky. To make the rule legally defensible, the DOL has to show it responded to each of these comments and considered each submission.

“The quicker they go, the more vulnerable they will be to legal challenge,” she said.

If the department is looking seriously for a January 2020 finalized date (McCutchen put her bet for March 2020), employers and their workers are also looking at a very short time period to implement salary and overtime changes.

Chris Opfer was on Bloomberg Radio this morning discussing DOL’s overtime proposal as well as minimum wage legislation in Congress.

Chris Opfer: The bad blood between Amazon and the Retail, Wholesale, and Department Store Union is showing no signs of dissipating more than a month after Jeff Bezos & Co. tore up their plans for a new headquarters campus in New York City. The union last week filed an unfair labor practice complaint against the company, alleging that Amazon fired a worker at a Staten Island warehouse for participating in a public rally opposing the expansion into Queens.

Meanwhile, it appears that some of the city’s biggest labor groups aren’t exactly on the same page when it comes to Amazon.

Hector Figueroa, president of 32BJ Service Employees International Union, last month said some labor and other progressive groups claiming victory over the Amazon decision were “cutting off our nose to spite our face.” Figueroa and the leaders of the New York AFL-CIO, the United Federation of Teachers, and another SEIU local (1199), also signed on to a recent full-page New York Time ad calling for Amazon to come back to the bargaining table. Noticeably absent from that open letter: RWDSU.

I spoke with David Mertz, RWDSU’s New York City director, at a March 7 anti-Amazon rally in Manhattan. His was the only union involved in the event, organized with progressive allies like ALIGN and Make the Road. I asked Mertz what he made of the grumbling that his union may have pushed too hard for concessions from Amazon.

“I’m not sure what our critics would expect us to do,” Mertz said. “As folks in the labor movement, at the very least, we have a responsibility to stand up and speak out when workers are being abused anywhere and I would hope that permeated the entire labor movement.”

Mertz also poured cold water on talk that RWDSU had demanded that Amazon commit to neutrality in union organizing and card check authorization.

“There wasn’t a demand for neutrality, take it or leave it,” Metz said. “From the very get-go, we had concerns about how this deal was done and whether or not it was appropriate to be offering these kind of subsidies to a wealthy corporation with such a troubling record in so many different areas when it comes to workers’ rights.”

JD: I recently wrote about the Labor Department’s use of aggressive enforcement and litigation in this administration, which for some business folks has been a bit of a surprise.

Apparently the DOL Solicitor’s Office has continued this hard line on enforcement with a smaller staff than the Obama administration had in its final year. Data I recently obtained through a Freedom of Information Act request shows there’s been a nearly 10 percent decrease in staffing in the Solicitor’s Office, down from 727 to 657 employees, from 2016 to 2018.

The SOL had a presence in 18 states, Washington D.C., and at least one foreign country in 2018, up from 15 states and D.C. in 2016. The biggest losses in staffing were in Pennsylvania and Tennessee, which each lost more than a dozen people. The DOL says those changes were due to retirements or workers quitting. But it doesn’t look like the department is rushing to fill the vacancies as a DOL spokeswoman said the current staffing level remains at approximately 660.

Michael Felsen, a retired regional solicitor for Boston, said the department needs to consider seriously about bumping up those numbers. Felsen comes from the perspective that there’s never enough personnel in the Solicitor’s Office. To do its enforcement job well, the DOL needs to staff up as much as possible. Right now, staff are just spread too thin, and they have been for years, he said.

CO: Writing a dissent in a National Labor Relations Board decision often strikes me as the legal equivalent of screaming into a pillow or strapping on a straightjacket and bouncing yourself off of some padded walls. Let it all out, by all means, but don’t expect to convince anyone to change their minds.

On the other hand, today’s dissent can be tomorrow’s majority decision. That’s already been the case in some high-profile Trump NLRB decisions overturning precedent set by the Democratic majority board in the Obama era. Former board member Phil Miscimarra (R) may have moved on to some better-appointed digs in Morgan Lewis’ Pennsylvania Avenue office, but his ghost still lingers at the board. As a vocal and often colorful dissenter in many Obama administration decisions, Miscimarra charted road maps for the board’s Republican majority to change course on many of those rulings.

I reported last week that NLRB General Counsel Peter Robb wants the board to overturn its 2015 Banner Health decision and give employers more latitude to require employees not to talk about ongoing harassment and other misconduct allegations. If the board eventually takes Robb’s cue, it may well adopt much of Miscimarra’s approach in his Banner Health dissent.

Miscimarra argued that general confidentiality restrictions don’t necessarily affect workers’ rights under federal labor law. That’s particularly true in the Banner case, he said, where a hospital employee alleged he was instructed to use hot water from a coffee machine to sterilize surgical equipment. In the confidential hospital investigation that ensued, Miscimarra noted that the employee wasn’t blocked from discussing the situation with a union rep or denied the opportunity to have a rep present. He also said the request wasn’t targeted at any specific rights protected by federal labor law and that the employee wasn’t disciplined for exercising any of those rights.

Businesses and their lawyers who expect the NLRB to reconsider the Banner Health decision may want to draft their investigation policies accordingly.

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; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

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