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Punching In: DOL Chief Installation Could Hinge on Georgia Races

Jan. 4, 2021, 11:16 AM

Monday morning musings for workplace watchers

The Georgia Effect | EEOC’s Late-Term Action | DOL Unions Rule in Jeopardy?

Ben Penn: The Biden transition’s delay in naming a labor secretary shouldn’t linger much longer. By week’s end we may know whether Boston Mayor Marty Walsh or California Labor Secretary Julie Su is tapped to run the U.S. Labor Department.

Regardless of who’s nominated, the outcome of the Georgia Senate runoffs Tuesday will factor into how long it takes for the new labor chief to get sworn into office.

If either of the Peach State GOP incumbents—Sens. David Perdue and Kelly Loeffler—are re-elected, then Sen. Mitch McConnell (R-Ky.) will keep his gavel as majority leader. The Senate labor committee would then be run by a GOP chairman, who’d be inclined to put the president-elect’s labor secretary nominee through an arduous confirmation process. And even if that person clears the panel, there’s no telling how long McConnell could wait to find floor time for a full confirmation vote.

In that scenario, Joe Biden may have to wait until the second half of 2021 for his labor pick to join the Cabinet. Other selections such as heads of the Occupational Safety and Health Administration and Wage and Hour Division could be looking at 2022 arrivals. Trump appointees for those agencies stalled for extended periods, something Republican lawmakers will remember when considering Biden’s nominees.

But if challengers Jon Ossoff and Raphael Warnock both prevail in Georgia, flipping control of the upper chamber to Democrats by the slimmest of possible margins, it would be smoother sailing for Biden personnel.

Either way, passage of major labor and employment legislation like the PRO Act would be a long-shot in this Congress, making timing of agency leaders’ confirmation arguably the most significant workplace policy implication of this week’s special election.

The Biden transition still has a fallback plan of installing acting officials and chiefs of staff at DOL and other agencies to offset Senate delays and address urgent policy priorities.

This approach carries risks, though, several former DOL political appointees have warned. When the Senate confirms a labor secretary and other senior officials, they’ll be inheriting a team they didn’t select, presaging clashes on management and policy.

If Ossoff and Warnock pull off upsets in the traditionally red state, Biden’s team could pump the brakes on the acting administrators plan, allowing nominees to help appoint their team.

Paige Smith: The EEOC isn’t slowing down as Inauguration Day approaches. The workplace civil rights agency is moving ahead to finalize at least two rules this week.

The U.S. Equal Employment Opportunity Commission announced a meeting for Jan. 7 to vote on the final approval of two controversial rules: The first would alter the conciliation process, an alternative method to litigation for resolving workplace bias allegations, and the second would limit how much time union representatives for federal workers may give to worker bias complaints while on the clock.

A third item is also up for consideration: an opinion letter “Concerning Individual Coverage Health Reimbursement Arrangements” under the Age Discrimination in Employment Act, according to an agency notice announcing the meeting.

The timing of these items is crucial because the Biden transition team announced last week that he will follow in the shoes of the last five presidents to pause any regulations not made final by Inauguration Day. The five-member EEOC has a solid Republican majority but the deadline could threaten regulatory items still on the agency’s docket.

One of those items is a policy shift that would strip the agency’s general counsel Sharon Gustafson of her last remaining delegated authority. The agency pulled back some of Gustafson’s authority last year, but this would take it a step further, substantially limiting it.

Ian Kullgren: This late in the Trump administration, it’s fair to ask which rules still in limbo will cross the finish line and which ones will die a quiet death. The latter fate seems in store for a pair DOL regulations that would bolster reporting requirements for unions.

The first rule, proposed in December 2019, would make public-sector mid-level union chapters subject to financial reporting requirements for private-sector unions. Right now, many large public-sector union locals don’t have to file financial disclosure forms with the Office of Labor-Management Standards because they represent only public-sector members. That would change under the proposed rule, which would require many state, regional, and district offices to file disclosures as “intermediate bodies” of a national union that represents both private and public-sector workers.

The second rule, proposed in September 2020, would add reporting requirements for many of the largest unions, including a more detailed accounting of strike funds, investments, asset sales, lobbying expenditures, new organizing, and collective bargaining. The new “long form” LM-2 disclosure form would mostly apply to unions with revenues of $8 million or more.

With just 16 days until Biden takes office, observers say it’s unlikely that DOL will be able to finalize either rule. The long-form LM-2 rule’s comment period just closed Dec. 14; as of last week, a final version hadn’t been sent to the White House.

The intermediate bodies rule has similarly been languishing since the public comment period ended in February 2020. Still, the Trump administration said in its fall 2020 regulatory agenda that both rules would be finalized and released in January 2021. It also planned to propose revisions of another union disclosure form that certainly wouldn’t be finalized by Jan. 20.

Even if the rules are finalized—and that’s a big if—expect them to be swiftly repealed by the Biden administration. The Obama administration already rescinded the intermediate bodies rule in 2010 put in place under President George W. Bush, and Biden would have little trouble doing the same.

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Paige Smith in Washington at psmith@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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