Punching In: Why Industry Wants in on Joint-Employer Litigation

June 15, 2020, 10:01 AM

Monday morning musings for workplace watchers

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Ben Penn: The business community’s bid last week to butt into the lawsuit over the Labor Department’s joint-employer rule was motivated by factors that could influence decision-making around other regulatory lawsuits in the run-up to the presidential election.

The business coalition had lobbied heavily to get the Trump administration to take an industry-friendly approach to joint-employment liability, so it shouldn’t have come as a surprise that it would file a motion to intervene as a co-defendant and help defend the rule against a blue-state challenge. But past experience and future political possibilities guided the strategy, according to two sources familiar with the motion’s planning.

Business groups want to intervene to ensure there’s still a party to the case supporting a narrowed interpretation of joint-employment liability when the litigation stretches into 2021, as it inevitably will.

The Chamber of Commerce, International Franchise Association, and four other groups seeking intervenor status weren’t necessarily betting that President Donald Trump will lose in November when they hired Littler Mendelson to get them added to the case. But they know the Justice Department in a Biden administration would be much less likely to keep defending the Trump DOL regulation in court.

Industry heavyweights sent their motion to the Southern District of New York on Wednesday, a day after another workplace policy challenge received a death blow. The D.C. Circuit on Tuesday dismissed an appeal of the reinstatement of the EEOC’s collection of race and gender pay-data from employers.

The timing was a coincidence, but it served as a fitting reminder within the D.C. trade association scene of what happens when businesses don’t have a seat at the table in litigation.

The court tossed the EEO-1 case at the urging of the federal government, which agreed with equal-pay groups that the lawsuit was rendered moot because the agency already finished collecting the data and wouldn’t require businesses to hand it over in the future. In business circles, the case’s outcome illustrated a missed opportunity to press the litigation onward by serving as an intervenor.

Don’t think there wasn’t an element of fool me twice, shame on me involved in planning the motion to intervene in the joint-employment litigation, the sources said.

Trade associations won’t have the resources to hire Littler Mendelson or the like to intervene in every possible regulatory challenge against Trump administration employment policies. Plus, they may want to hold their fire for the most consequential cases to avoid deluging judges with briefs and risk damaging their reputation.

But keep an eye on how the business community responds if the National Labor Relations Board appeals a district court ruling that struck down major portions of the union election rule.

Ian Kullgren: The AFL-CIO plans to file an en banc petition to the D.C. Circuit this week in a last-ditch attempt to get the court to force the Occupational Safety and Health Administration to issue an emergency temporary standard to protect workers against the novel coronavirus, a federation official told Bloomberg Law.

A three-judge D.C. Circuit panel on Thursday denied the AFL-CIO’s petition, which seeks a uniform standard that would require all workplaces under OSHA’s jurisdiction to develop plans to safeguard workers against transmission of the virus. The panel said the agency’s decision not to issue an emergency temporary standard is “entitled to considerable deference,” adding that OSHA “reasonably determined” that such a step is not necessary.

While an en banc review might seem like a long shot, it’s not hopeless. The order last week came from two Republican-appointed judges and one Democrat. But Democrats hold a 7-4 edge on the court overall, so the AFL-CIO could still have a path to victory if the court grants the request.

Labor Secretary Eugene Scalia has said the Occupational Safety and Health Act’s “general duty clause,” which requires workplaces to be free of known hazards, is the better enforcement tool for handling pandemic-related safety concerns.

The dispute could become a campaign issue. Former Vice President Joe Biden weighed in Friday, telling American Federation of State, County and Municipal Employees members during a conference call that he would expand OSHA protections to all public workers and “dramatically” increase the number of inspectors.

Jaclyn Diaz: The House Education and Labor Committee will hold a virtual briefing Thursday focused on relaunching America’s workforce. If past is prologue, the session could underscore the political challenge inherent in devising legislative solutions to the problem.

The committee’s Republican members have not taken an active role in previous virtual briefings, including one on union elections during the pandemic and another on building a contact-tracing workforce.

Republican members view the briefings, which are recorded but not live-streamed like traditional committee hearings, as an opportunity for Democratic members to focus on Democratic-led legislation or policy priorities du jour. Republicans also have criticized House Democrats’ reluctance to return to Capitol Hill to resume normal operations during the pandemic.

If the broader topic of Thursday’s briefing doesn’t spur Republican participation, it will provide the latest example of why many political insiders believe Congress will have a much more difficult time reaching consensus on another big-ticket virus-relief package than they did in passing the CARES Act in March.

“The House has long established procedures for information gathering: hearings. Those procedures respect the majority and minority and ensure that both sides are represented,” a Republican committee spokesman said in an emailed response. “Republicans fundamentally disagree with the course of action Democrats have chosen to follow, and we have not engaged in their process in hopes that they will return swiftly to congressional precedent,” the statement added.

Still, rebooting the American workforce is a pressing issue for the panel to consider. New research by Bloomberg Economics predicted 30% of U.S. job losses from February to May were the result of a “reallocation shock,” meaning they could be lost for good as businesses—and, in some cases, entire sectors—suffer lasting damage.

One of the witnesses slated to take part in Thursday’s briefing, Nicole Sherard-Freeman, executive director of workforce development for the City of Detroit, told me she plans to emphasize the need for lawmakers to invest in workforce systems at the state and local level.

The economic disruption caused by the coronavirus combined with the social reckoning occasioned by George Floyd’s death when a Minneapolis police officer held his knee on Floyd’s neck for nearly nine minutes open the door for political leaders and policymakers to think more broadly about how to restart the country’s economy and workforce, she said.

Detroit has been particularly affected by the pandemic, both in terms of disruption to an economy that’s struggled to bounce back after the Great Recession, and in the disparate impact in the majority-black city of a virus that has disproportionately affected communities of color, she said.

The CARES Act provided some states with workforce development funds, but none of that funding made its way to Detroit, Sherard-Freeman said. Congress must respond to Detroit’s and other cities’ workforce investment needs by supporting a $15 billion commitment to workforce development, she said, in keeping with the Relaunching America’s Workforce Act, a proposal introduced by committee Chairman Bobby Scott (D-Va.).

“We have to be smart as to how we assess the need,” for aid to help workers find new jobs and to bridge the skills gap many workers will face in a changing economy, Sherard-Freeman said. "$15 billion was a good place to start, but I don’t know that we’ve done the kind of assessment we need nationally to understand the real gap.”

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. See you back here next Monday.

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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