Symbolic Initial Victories, Difficult Hurdles Ahead

President Barack Obama took office just over a year ago, and promised to support changes in a number of laws affecting the American workplace-from ways in which unions organize workers, to equality in pay, and increased penalties for workplace safety law violations. By July 2009, the defection of Republican Sen. Arlen Specter to the Democratic Party and the certification of Sen. Al Franken, D-Minn., as the victor in the race for Minnesota’s Senate seat provided President Obama with a filibuster-proof supermajority and appeared to pave the way for his legislative agenda in the Senate.

However a year into his term, many of the president’s lofty workplace goals have been supplanted by more pressing legislative priorities and jeopardized by the cross fire of ongoing political skirmishes. With the election of Scott Brown, R-Mass., to the Senate seat held by the late Edward M. Kennedy, and House members and senators increasingly turning their attention to the 2010 mid-term elections, the president’s ability to push through aggressive labor and employment initiatives is in real doubt.

Legislative Results

In 2009, President Obama signed just four pieces of legislation that directly changed federal workplace law. Two of the four bills were passed as part of larger appropriations bills, ultimately gaining more than two-thirds support in the Senate. The other two changes were more partisan, with votes mostly along party lines. The four bills are discussed below in greater detail.

In addition, President Obama signed bills extending unemployment compensation benefits and COBRA health insurance subsidies to jobless Americans. As a result, the 65 percent COBRA health subsidy was extended from nine to 15 months for individuals who have lost their jobs.

The Lilly Ledbetter Fair Pay Restoration Act

President Obama’s agenda got off to a quick start on January 29, 2009, with the first piece of legislation he signed into law: the Lilly Ledbetter Fair Pay Restoration Act (S. 181). Named for the female plaintiff on the losing end of Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007), the legislation reversed the Supreme Court’s determination that a Title VII plaintiff must bring a discriminatory pay action within 180 days of the actual discriminatory pay decision at issue. A similar bill had stalled in the Senate in April 2008, but Senate Democrats easily defeated a filibuster attempt and attracted five Republican votes for final passage by a margin of 61-36.

Under the new law, a Title VII plaintiff may bring a claim within 180 days of receiving any paycheck affected by a discriminatory pay decision, no matter how far in the past an act of discrimination allegedly occurred. The new law also applies to pay discrimination claims brought under the Age Discrimination in Employment Act, Americans with Disabilities Act and Rehabilitation Act. The bill applies retroactively, as if enacted on May 28, 2007, the day before Ledbetter was decided.

So far, the Lilly Ledbetter Act may not be as broad in its sweep as some predicted. For instance, the D.C. Circuit recently held that the Act did not apply to otherwise time-barred failure-to-promote claims that impacted an individual’s paycheck in future years. The court held that the phrase “ ‘discrimination in compensation’ means paying different wages or providing different benefits to similarly situated employees, not promoting one employee but not another to a more remunerative position.”  See Schuler v. PriceWaterhouseCoopers, LLP, 595 F.3d 370, 375 (D.C. Cir. 2010).  The court added, “That the Congress drafted and passed the [Act] specifically in order to overturn Ledbetter, which strongly suggests that the statute is directed at the specific type of discrimination involved in that case and not to other unspecified types of discrimination in employment.”  Id.

Military Leave

On October 28, 2009, President Obama signed the National Defense Authorization Act for Fiscal Year 2010 (H.R. 2647). Approved in the Senate by a 68-29 margin, the law expanded Family and Medical Leave Act (FMLA) provisions connected to military-related leave. As a result, employers will need to modify their FMLA policies to reflect the additional qualifying events and benefits.

In 2008, the FMLA was amended to permit a “spouse, son, daughter, parent, or next of kin” to take up to 26 work weeks to care for a member of the armed forces due to a serious injury or illness. The 2008 amendments also enabled an employee to take leave for “any qualifying exigency” arising out of a spouse, son, daughter or parent serving active duty.

The new law extended “qualifying exigency” leave to active duty members. The term “qualifying exigency” covers a number of events, including issues arising from a service member’s short notice deployment; military events and related activities; childcare and related activities arising from active duty; attention to financial or legal arrangements to cover for the family member’s absence; attendance at counseling; rest and recuperation arising from active duty; and other events that the employer and employee agree is a qualifying exigency.

The new law also allows military caregiver leave to family members of veterans who are “undergoing medical treatment, recuperation, or therapy, for a serious injury or illness,” as long as the veteran served in the Armed Forces at any time during the five years preceding the treatment in question. Such leave may be taken for up to 26 work weeks in a 12-month period.

Laws Restricting Use of Mandatory Pre‑Dispute Arbitration Agreements

Many Democrats and employee rights advocates have long derided employers’ use of agreements requiring employees to bring workplace legal challenges to a private arbitrator, rather than in court. In the past year, President Obama signed into law two pieces of legislation restricting employer use of mandatory pre-dispute arbitration agreements.

The 2010 defense appropriations legislation prohibits agreements with employees or independent contractors requiring the arbitration of claims under Title VII of the Civil Rights Act of 1964 or any tort related to, or arising out of, sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment or negligent hiring, supervision or retention. The new provision applies to contracts over $1 million that are awarded more than 60 days after the effective date of the Act. The bill allows the secretary of defense to waive this prohibition if necessary to avoid harm to the national security interests of the United States. The Department of Defense has adopted a new clause for insertion in government defense contracts and will require contractors to certify that its subcontractors are in compliance with the arbitration-related provisions by June 17, 2010, in order to receive any additional fiscal year 2010 funds.

Similarly, the American Recovery and Reinvestment Act (ARRA), the $787 billion stimulus package, includes limitations on the right of private or public employers that receive a contract, grant or other payment from stimulus funds (including subcontractors) to enforce mandatory employment arbitration provisions. In particular, the ARRA includes whistleblower provisions that protect employees against retaliation by being discharged, demoted or otherwise discriminated against for reporting corruption or waste of federal stimulus funds. Potential remedies include reinstatement, back pay, compensatory damages and attorney’s fees. Complaints may be filed with the relevant federal agency inspector general, who then has 180 days to conduct an investigation and report the findings. Judicial review of an agency’s decision may be sought directly in the Court of Appeal for the circuit where the reprisal allegedly took place.

Rights under the ARRA may not be waived, and the ability to arbitrate disputes arising under the ARRA is severely limited. The ARRA also provides that a pre-dispute mandatory arbitration clause is not valid or enforceable if it requires arbitration of a dispute arising under section 1553 of the ARRA. However, an exception is contained in the Act for arbitration of disputes pursuant to collective bargaining agreements.

Likely Areas of Focus In 2010

Heading into the November 2010 mid-term elections, much work remains to fulfill President Obama’s ambitious legislative agenda concerning regulation of the workplace. Against a background of dipping approval ratings, a persistently high unemployment rate, the drawn out legislative process that resulted in the passage of health care reform, and anxious Democrat lawmakers running for re-election in the wake of the stunning results in Massachusetts, the prospects for bold change on the legislative front are very slim in the near term. Below, we address the prospects of the most significant legislative initiatives.

The Employee Free Choice Act (EFCA)

By far the most controversial piece of labor and employment legislation on the president’s agenda has been the Employee Free Choice Act, or the so-called “card-check” bill. Introduced in both houses on March 10, 2009 (H.R. 1409; S. 560), EFCA would fundamentally rewrite labor-management relations by (1) allowing a union to become the certified bargaining representative without a secret ballot election by obtaining signed authorization cards from a majority of employees in a proposed bargaining unit; and (2) imposing mandatory “interest arbitration” procedures to ensure that employers and unions actually reach an initial collective bargaining agreement. In addition, the bill would increase the fines and penalties for employers who commit unfair labor practices during union organizing campaigns.

While it is possible that some variant of labor law reform will emerge in the coming year, EFCA as initially introduced is on life support. The business community has made EFCA-and in particular, the card-check and mandatory arbitration provisions-the rallying point in its campaign to oppose the infringement of employer rights. In 2009, the card check provision was opposed by several Democrat senators, including Sens. Thomas Carper, D-Del., Blanche Lincoln, D-Ark., Ben Nelson, D-Neb., and Arlen Specter, D-Pa., with Sens. Lincoln and Specter stating that they would not vote to end a filibuster. In addition, Sen. Diane Feinstein, D-Calif., also indicated that she will not support EFCA in its current form. In September 2009, Senate Majority Leader Harry Reid, D-Nev., stated that EFCA was off the table for now due to other issues on the Senate’s agenda. While AFL-CIO President Richard Trumka predicted in January 2010 that EFCA would pass in the first quarter, there appears to be virtually no chance of this happening in the foreseeable future.

Although the House bill has majority support, EFCA supporters simply lack the votes to move the legislation in the Senate, where 60 votes will be required to overcome a certain Republican filibuster effort. While Sen. Specter was once viewed as the White House’s best chance of securing the 60th vote on a compromise bill that did not include card check, the election of Scott Brown, R-Mass., combined with the unwillingness of many senators to alienate important constituencies in advance of the mid-term elections, upends this calculation.

Given the shifting tide of the electorate and potential erosion of the Democrat Senate majority in the 2010 elections, it remains to be seen whether union leadership will shift gears and seek the best deal possible now, or stick to “card check,” the centerpiece of EFCA. If they choose compromise-assuming they remain united-Senate Democrats will still have to find at least one moderate Republican to join their cause.

Reversal of Recent Supreme Court Decisions

There are several bills pending that would reverse recent Supreme Court decisions. As evidenced by the recent controversy over the Supreme Court’s campaign contribution limits decision, the White House and congressional Democrats are growing increasingly dissatisfied with the Supreme Court’s conservative majority. As a result, the Lilly Ledbetter Act may be just the first of several laws aimed at reversing Supreme Court law.

Pleading Requirement Revisions

Introduced by Sen. Specter on July 22, 2009, the Notice Pleading Restoration Act seeks to overturn two recent Supreme Court decisions raising the bar for plaintiffs to survive a Rule 12(b)(6) motion to dismiss. In the antitrust case Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), the Court held in a 7-2 vote that a complaint must contain facts that “plausibly” entitle the plaintiff to relief instead of mere conclusory statements. The Court’s 5-4 decision in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), extended this standard to all civil complaints. The Act would restore the more lenient notice pleading standard articulated in Conley v. Gibson, 355 U.S. 41 (1957), which held that a court could dismiss a complaint only if it appeared without a doubt that a plaintiff would be able to prove “no set of facts” in support of his/her claim.

Although somewhat esoteric, this bill is a favorite of plaintiffs’ lawyers groups, a significant contributor to Democratic campaign coffers, and, thus, may gain traction in 2010. The Senate Judiciary Committee held a hearing on the bill on December 2, 2009. If the legislation is passed, it will no doubt have a marked effect on federal civil litigation, as the Twombly and Iqbal decisions have been heavily cited and relied upon by the federal courts in motion to dismiss proceedings.

Pre-Dispute Arbitration Agreement Prohibition

The Arbitration Fairness Act (S. 931, H.R. 1020) would amend the Federal Arbitration Act (FAA) to prohibit pre-dispute mandatory arbitration of employment claims unless provided under the terms of a collective bargaining agreement. The Act would make mandatory arbitration clauses in employment, consumer and franchise agreements unenforceable. The Act also would overturn the Supreme Court’s recent unanimous decision in 14 Penn Plaza v. Pyett, 129 S. Ct. 1456 (2009), and would not permit employees covered by a collective bargaining agreement to waive the right, on a pre-dispute basis, to take constitutional or statutory claims to court.

Given the trend in anti-arbitration legislation started in 2009, the prospects for the Arbitration Fairness Act look reasonably good. Its passage would signal the end of employers requiring employees to accept arbitration agreements of statutory or common-law claims as a condition of employment and effectively limit employment arbitration to contract matters arising under collective bargaining agreements.

Age Discrimination

Bills introduced in the House and Senate last year would amend the Age Discrimination in Employment Act of 1967 (ADEA) to clarify a plaintiff’s burden of proof in lawsuits brought under the statute. The Protecting Older Workers Against Discrimination Act bills (H.R. 3721, S. 1756) were introduced in response to the Supreme Court’s June 18, 2009, decision in Gross v. FBL Fin. Servs. Inc., 129 S. Ct. 2343 (2009), a 5-4 decision that held that a plaintiff bringing an ADEA disparate treatment claim must prove that age was the “but for” cause of the adverse employment action. The Gross Court held that mixed-motive instructions are never proper in an ADEA case.

This legislation would ensure that the standard for proving unlawful disparate treatment under the ADEA and other anti-discrimination and anti-retaliation laws mirrors the standard under Title VII of the Civil Rights Act of 1964, including amendments made by the Civil Rights Act of 1991. Passage is less than certain pro-business groups plan to fight hard against the bill.

Other Civil Rights Bills

There are additional pending bills that would augment employee rights and remedies. Perhaps the most likely to pass is the Paycheck Fairness Act (H.R. 12, S. 182), which expands damages available under the Equal Pay Act, including compensatory and punitive damages where an employer acted with malice or reckless indifference. The legislation also would make it more difficult for employers to establish the affirmative defense that a pay disparity is due to a bona fide factor other than sex by requiring the employer to demonstrate that such factor is (1) not based upon, or derived from, a sex-based differential in compensation; (2) job-related with respect to the position in question; and (3) consistent with business necessity. The House passed its bill on January 9, 2009, by a vote of 256-163. On March 11, 2010, the Senate HELP Committee held a hearing on pay equity in the workplace. A floor vote may come in the spring.

The Employment Non-Discrimination Act (ENDA) (S. 1584, H.R. 3017) would prohibit discrimination on the basis of an individual’s actual or perceived sexual orientation or gender identity. Sexual orientation would become similar to a “protected class” under Title VII. ENDA would apply to employers with 15 or more employees, but the proposed bills contain exemptions for religious employers and the military. Many states and localities currently have similar prohibitions in place. Several different versions of the bill were introduced in the House and the Senate in 2009, and the Senate Health, Education, Labor and Pensions Committee held a hearing on the bill in November. At least one Republican, Sen. Susan Collins, R-Me., supports passage of ENDA. We expect civil rights advocates and trial lawyer groups to push hard for passage, but the bill may be too controversial in a tough election year for Senate Democrats.

Employee Leave Legislation

A number of bills introduced in 2009 would require employers to provide paid leave or would expand on existing employee leave policies.

Given the bipartisan support for troops and their families, the Military Family Leave Act of 2009 (H.R. 3257, S. 1441), may be the most likely bill to pass. The Act would entitle employees to two weeks of leave each year for each family member (spouse, child or parent) of the employee who is in the military and either receives notification of an impending call or order to active duty, or who is deployed in connection with a contingency operation.

The Family and Medical Leave Inclusion Act (H.R. 2132) would expand coverage of the FMLA to include leave to care for a same-sex spouse, domestic partner, parent-in-law, adult child, sibling or grandparent who has a serious health condition. Although no hearings have been held since the bill was introduced in April 2009, this legislation could see movement in 2010, as it is likely less controversial than other gay rights legislation involving the “Don’t Ask, Don’t Tell” military service policy and the Employee Non-Discrimination Act discussed above.

Given the current unemployment rate and focus on job creation, other pending bills requiring employers to offer paid leave face an uphill battle. For example, the Health Families Act (H.R. 2460, S. 1152), would require employers with at least 15 employees who work at least 30 hours a week to provide up to seven days of paid sick leave for care of family members and other individuals “whose close association with the employee is the equivalent of a family relationship.” Other paid sick leave bills, such as The Pandemic Protection for Workers, Families, and Businesses Act (H.R. 4092, S. 2790) and the Emergency Influenza Containment Act (H.R. 3991), are even less likely to pass as concerns of influenza outbreaks subside.

The prospects of other FMLA-related legislation are unclear, as all impose burdens on business to some extent.

The Family and Medical Leave Enhancement Act of 2009 (H.R. 824) would expand the FMLA in several ways, including (1) allowing leave for participation in, or attendance at, educational and extracurricular activities; (2) authorizing leave to attend to routine family medical needs and to assist elderly relatives; (3) narrowing the employer exclusion from 50 to 25 employees; (4) permitting substitution of accrued vacation, personal or sick leave for FMLA leave; and (5) requiring seven days’ notice or “as much notice as is practicable” in order to use the FMLA leave. The Domestic Violence Leave Act (H.R. 2515) would extend FMLA coverage to allow employees to take leave to address domestic violence, sexual assault or stalking and their effects.

The Family Leave Insurance Act of 2009 (H.R. 1723) would create a federal insurance benefits fund administered by the secretary of labor to provide employees with 12 weeks of paid family and medical leave. Most employees would contribute 0.2 percent of their annual earnings, and employers would match employee payments. Benefit amounts would be tiered progressively according to income level and indexed for inflation under the Social Security wage index. Given the economic environment, this bill would appear to be a non-starter.

Finally, the most sweeping proposed legislation is the Balancing Act (H.R. 3047), a comprehensive bill to aid employees in balancing work and home life. The bill combines provisions of the Family Leave Insurance Act, the Family and Medical Leave Enhancement Act, the Domestic Violence Leave Act and the Healthy Families Act, as well as provisions for expansion of child care and school assistance programs and a pilot program to encourage teleworking.

Worker Safety Legislation

The Protecting America’s Workers Act (H.R. 2067) and a similar Senate bill (S. 1580) would extend OSHA coverage to state, local and federal employees and would enhance coverage for employees in certain industries, such as the airline and railroad industries. The bill would also increase penalties for repeated and willful violations, including the possibility of felony charges when an employer’s repeated and willful violations result in serious injury or death. Under the proposed legislation, workers and their families would also have the right to challenge reductions in fines and other penalties. The House Workforce Protection Subcommittee of the House Education and Labor Committee held a hearing on the bill on March 16, 2010.

Layoff Notice Legislation

The FOREWARN Act (H.R. 3042, S. 1374) would amend the Worker Adjustment and Retraining Notification (WARN) Act by expanding notification requirements and enforcement provisions. Notification obligations would be imposed on employers with 75 or more employees, rather than the current 100-employee threshold, and cover closings affecting 25 or more employees at a work site rather than the current 50-employee minimum. The bill would extend the written notification period to 90 days instead of the current 60-day period. The bill would require the employer to send notification to the secretary of labor and the governor of the state where the plant closing or mass layoff is to occur, and provide the U.S. Department of Labor with administrative enforcement authority over the WARN Act. Finally, the bill would increase penalties from a single day of back pay for each day of a violation to two days of back pay for each day of a violation. No hearings have been held yet on this bill.

Immigrant Worker Legislation

According to Department of Homeland Security Secretary Janet Napolitano, immigration reform legislation will be a major priority for the Obama administration in 2010. The administration’s agenda will likely include backing legislation that would strengthen financial sanctions against employers who hire undocumented workers, mandate the use of E-Verify, an Internet-based system that allows employers to verify employees’ work eligibility, and reform laws to remove barriers to employers hiring highly skilled foreign workers. It is unclear if Congress will move on either of the bills described below.

Enjoying bipartisan support, the Secure America Through Verification and Enforcement (SAVE) Act of 2009 would mandate employer use of the E-Verify program. The legislation phases in mandatory use of E-Verify, requiring immediate use of E-Verify by federal agencies, federal contractors and employers that employ more than 250 individuals in the United States. Within four years of its passage, the bill would require all employers to confirm the employment eligibility of newly hired and current employees through E-Verify.

The Employee Verification Amendment Act of 2009 (H.R. 2679) would extend the federal government’s E-Verify pilot program until September 30, 2014. Similar legislation passed the House in the 110th Congress by a vote of 407-2, but did not make it out of committee in the Senate.

The Department of Labor (”DOL”) has announced that it is planning to put the onus on employers to demonstrate compliance with wage and hour, safety and health, and other laws overseen by DOL.  It is not clear whether or when the initiative will come to fruition, or the form the initiative will ultimately take.  However, it is clear that the Department is laying the groundwork for changes that may impose substantial new compliance burdens on employers.  

In remarks on April 29, 2010 to the Center for American Progress, Deputy Labor Secretary Seth Harris noted that the DOL’s spring regulatory agenda, released on April 26, was the first step in a new strategy to ensure the burden of compliance with labor laws is on the employer.  This strategy, dubbed by Harris as the “Plan, Prevent, Protect” strategy, seeks especially to target those employers that DOL believes employ a cost-benefit analysis before deciding to comply with the labor laws.  Specifically, “Plan, Prevent, Protect” would require employers to: (1) formulate a plan to comply with specific labor laws; (2) enhance prevention by executing the plan and performing an analysis on its effectiveness; and (3) protect workers by making sure employers follow through by requiring disclosure of the plan to both workers and the government. 

While Harris anticipated applying these principles in a number of contexts including safety regulations under OSHA and MSHA, he repeatedly discussed their application in the context of independent contractor misclassification issues.  Driven in large part by a desire to rein in what it sees as calculated non-compliance by employers in the area of classifying workers as independent contractors, DOL intends to require employers to prepare a written plan for why certain workers are classified as independent contractors.  Employers would have to disclose this plan to their workers.  Harris further noted that DOL plans to implement a misclassification initiative aggressively, including working with the IRS and state labor agencies to target employers who are not classifying workers properly. 

Independent contractor classification has been an area of increased interest for legislators and regulators in recent years.  In addition to the DOL initiative, several states have recently passed laws that seek to tighten the definition of independent contractor, including Connecticut, Nebraska, New Jersey, Maryland, Minnesota, and Illinois.  Other states, such as Vermont, have recently launched initiatives targeting employers who misclassify employees as independent contractors. 

Federal legislation has been also introduced recently in Congress aimed at addressing these issues.  On April 22, 2010, the Employee Misclassification Prevention Act (S. 3254, H.R. 5107) was introduced in both the House and the Senate.  In addition to imposing civil penalties for misclassification and directing the DOL and state unemployment insurance agencies to perform misclassification audits, this bill would require employers to keep records concerning their classification of individuals as independent contractors and notify those individuals of their classification, along with information on what to do if they feel they have been incorrectly classified.  Additional pending legislation, such as the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (S.2882), which proposes amending the tax code to make classifying workers as independent contractors more arduous, also seeks to address this issue.

A rule implementing the use of “Plan, Prevent, Protect” has yet to be proposed, so any official implementation of DOL’s initiative is likely at least a year in the future.  Nevertheless, Harris signaled that “Plan, Prevent, Protect” is an important component of DOL’s enforcement strategy.              

A proposed rule published in the Federal Register on April 14, 2010 would no longer allow federal contractors to claim reimbursement from the government for costs incurred in persuading employees regarding union organizing and collective bargaining. The proposed rule was issued under Executive Order 13,494, Economy in Government Contracting, signed by President Obama on January 30, 2009. The order was intended to maximize government efficiency by cutting certain costs “not directly related to the contractors’ provisions of goods and services to the Government.” Costs of activities that were aimed at influencing employees and thus would no longer be reimbursable under the proposed rule include:  preparing and distributing materials, hiring or consulting legal counsel or consultants, holding meetings, including paying the salaries of those attending the meetings, and planning by managers, supervisors, or union representatives during work hours.

While the executive order disallows reimbursement to the employer for “activities undertaken to persuade employees” regarding their decision to form unions or engage in collective bargaining, the order allows reimbursements for costs “incurred in maintaining satisfactory relations between the contractor and its employees,” including the costs of labor-management committees and employee publications.

Although it has not received much attention, part of the Patient Protection and Affordable Care Act, the health care reform bill signed into law by President Obama on March 23, contains an amendment to the Fair Labor Standards Act (”FLSA”) that requires employers to provide nursing mothers unpaid break time to express milk. 

Under this amendment to section 7 of the FLSA, employers are now required to provide “a reasonable break time” for an employee to express breast milk for a nursing child ”each time such employee has need to express the milk.”   The amendment also requires provision of a “place, other than a bathroom, that is shielded from view and free from intrusion” in which to take these breaks. These breaks are mandated for up to a year following the birth of a child and do not need to be compensated by the employer. 

All employers will be required to comply with these new break requirements, except those who employ less than 50 employees if compliance for these employers would “impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employee’s business.” The amendment also makes clear that it does not preempt more protective state laws.  The Department of Labor has not yet issued any guidance concerning this new amendment.

On March 27, 2010, President Obama announced the recess appointments of 15 administration nominees, including all of his nominees for vacant Equal Employment Opportunity Commission (”EEOC”) positions. These appointments included three Commissioner vacancies: (1) Jacqueline Berrien, who the President has indicated he will designate as EEOC Chair, (2) Victoria Lipnic, and (3) Chai Feldblum.  The President also appointed  P. David Lopez as General Counsel. The Senate Committee on Health Education Labor and Pensions (”HELP”) previously approved of all of these nominees on December 10, 2009.

Ms. Berrien, a Democrat, has served as Associate Director-Counsel of the NAACP Legal Defense and Education Fund since 2004. She was previously a staff attorney with the Lawyers’ Committee for Civil Rights and the American Civil Liberties Union. 

Ms. Feldblum, a Democrat, is a Professor of Law at the Georgetown University Law Center. She helped draft the Americans with Disabilities Act of 1990 and is an advocate of disability rights, lesbian, gay, bisexual and transgender rights, and AIDS-related issues.

Ms. Lipnic, a Republican, is of counsel to Seyfarth Shaw in Washington, D.C. She previously served as U.S. Assistant Secretary of Labor for Employment Standards and as Workforce Policy Counsel to the House Republican members of the Education and Labor Committee

Mr. Lopez has a long history with the EEOC. He currently serves as a Supervisory Trial Attorney at the EEOC’s Phoenix District Office and previously worked as a Special Assistant to then-EEOC Chair Gilbert F. Casellas.

Berrien, Lipnic, and Feldblum join Acting Chair Stuart J. Ishimaru, who will return to status as a Commissioner, and Commissioner Constance Barker to round out the five-member Commission. Under of the rules of recess appointments, Berrien, Lipnic, Feldblum and Lopez will be eligible to serve through the end of 2011, when the next Senate finishes its term.

On March 27, 2010, after the Senate went out of session for the Passover and Easter holidays, President Obama announced 15 recess appointments, including two appointments to the NLRB.  The President used recess appointments to place Democratic lawyers Craig Becker and Mark Pearce on the NLRB, after their nominations have lingered for more than eight months.  The Senate HELP Committee had previously voted both nominations out of committee, but the nominations remain stalled in the Senate.

The appointments come on the heels of President Obama’s legislative victory on health care and resolve an impasse stretching back more than two years that has left the Board with only two of its five slots filled.  The term of one of those Board members, Peter Schaumber, is also set to expire on August 27, 2010, which would have left the Board with only one member. 

Becker, associate general counsel for the Service Employees International Union (SEIU), has drawn fire from business groups and Senate Republicans who have alleged that he is unduly pro-labor and intends to use his post to administratively implement the Employee Free Choice Act (”EFCA”), which has floundered in Congress.  In February, in a rare nominations hearing before the Senate HELP Committee, Becker explicitly denied any intention of administratively implementing EFCA, but his testimony failed to assuage Senate Republicans and a cloture vote on his nomination failed on February 9, 2010.

Pearce, a labor lawyer in private practice in Buffalo, New York, has not drawn significant opposition, but his nomination had been held up by the impasse over Becker’s nomination. The  Senate’s longstanding practice of considering NLRB nominees together in a package has effectively prevented the nominations of Pearce and Republican Senate staffer Brian Hayes, who was also nominated in July 2009, from reaching the Senate floor.  Hayes did not receive a recess appointment.

In making the recess appointments, President Obama cited a multitude of holds and procedural delays by Senate Republicans and accused Senate Republicans from “refus[ing] to exercise” their responsibility to allow his nominees an up-or-down vote. Appointments to fill the NLRB vacancies are particularly timely following last week’s Supreme Court oral arguments in New Process Steel L.P. v. NLRB, which will resolve the legality of hundreds of two-member Board decisions. At oral argument on March 23, Chief Justice Roberts appeared to suggest that the impasse over the depleted Board could be resolved by recess appointments.

On March 24, 2010, the Wage and Hour Division (WHD) of Department of Labor announced that the Administrator will no longer issue definitive fact-specific opinion letters submitted by individuals and organizations. WHD will now issue Administrator Interpretations intended to be “general interpretations of the law and regulations, applicable across-the-board to all those affected by the provision in issue.” In response to requests for opinion letters, WHD will provide “references to statutes, regulations, interpretations and cases that are relevant to the specific request but without an analysis of the specific facts presented.” 

In its first such Interpretation, the Deputy Administrator concluded that issued that mortgage loan officers do not qualify as administrative employees exempt from the provisions of the Fair Labor Standards Act (FLSA). The Interpretation states that the “primary duty” of mortgage loan officers is sales and therefore, “mortgage loan officers perform the production work of their employer,” namely, selling financial products akin to loan officers, who are consistently described as outside sales people. This Interpretation does not address whether the sales duties of any particular loan officer fall within the outside sales exemption or are limited to inside sales.

The Interpretation also withdrew Wage and Hour Opinion Letter FLSA 2006-31 (Sept 8, 2006) and other with the same analysis. The 2006 opinion letter misinterpreted 29 C.F.R. §541.203(b) by assuming that an alternative standard for the administrative exemption applied to the financial services industry. The regulation is intended only to provide an example distinguishing financial sector employees whose primary duties are related to management or general operations with those who sell financial products.

On March 19, 2010, the Department of Labor (DOL) published a notice of proposed rulemaking (NPRM) under Executive Order 13495, “Nondisplacement of Qualified Workers Under Service Contracts.” Once regulations take effect for this order, employees working on federal service contracts and subcontracts of $100,000 or more will generally be entitled to an offer of employment on the contract or subcontract if it is awarded to a successor and the work is to be performed in the same location. Existing employees of the original contractor, not including managers or supervisors, will be given a right of first refusal under the new contract. The deadline for submitting comments for this NPRM is May 18, 2010.           

Executive Order 13495 effectively revokes a Bush administration order and reinstates an order put in place by President Clinton, Executive Order 12933. While the Obama administration order tracks the Clinton order, it is broader in scope. For example, the NPRM covers all contracts above $100,000, instead of only covering contracts for the maintenance of public buildings. The Obama order also eliminates exemptions found in the Clinton order, including exemptions for the military, NASA, the Veterans Administration, and the Postal Service.

Other modifications to the Clinton order include definition of the terms managerial and supervisory employees, and a requirement that contractors include in their subcontracts a term requiring the subcontractor to agree with the nondisplacement provisions. While subcontractors below the $100,000 threshold are excluded from the order, if a contractor above the threshold discontinues the services of a subcontractor, it would have to offer the right of refusal to the subcontractor’s employees.

On February 18, 2010, the Equal Employment Opportunity Commission (EEOC) issued a notice of proposed rulemaking (NPRM) to amend its regulations to more clearly define the “reasonable factors other than age” (RFOA) defense under the Age Discrimination in Employment Act (ADEA). This proposed rulemaking seeks to address the scope of the RFOA defense under EEOC’s proposed regulations concerning disparate impact under the ADEA, which were published on March 31, 2008.

This NPRM follows two important Supreme Court cases on the RFOA defense - Smith v. City of Jackson, 544 U.S. 228 (2005) and Meacham v. Knolls Atomic Power Laboratories, 128 S. Ct. 2395 (2008). In Smith, the Supreme Court allowed disparate impact claims of discrimination under the ADEA and, following the Court’s decision, EEOC has said that the “reasonable factors other than age” test is the appropriate standard for determining the lawfulness of a practice that disproportionately affects older individuals. Subsequently, in Meacham, the Supreme Court held that an employer bears both the burden of production and the burden of persuasion for a RFOA defense in an ADEA disparate-impact claim.

EEOC’s proposed rules clarify that the applicability of the RFOA defense turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts. This standard is lower than Title VII’s business-necessity test, but it is higher than the Equal Pay Act’s “any other factor” test.

Relying on the “reasonable person” principles of tort law, EEOC proposed a non-exhaustive list of relevant factors including, among others, 1) the extent to which the employment practice is a common business practice; 2) the severity of the impact of the practice on individuals within the protected age group, both in degree of injury and scope of impact; and 3) the extent to which the employer took steps to assess and ameliorate the adverse impact of the practice on older workers.

The proposed regulations carry a 60-day public comment period. Written comments should be submitted by April 19, 2010, to Stephen Llewellyn, Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, 131 M Street, NE, Suite 4NW08R, Room 6NE03F, Washington, D.C. 20507. Comments may also be submitted electronically at www.regulations.gov.

On February 12, 2010, the Department of Labor (DOL) published a new rule regarding the H-2A temporary agricultural worker program. This rule will strengthen worker protections for both U.S. and foreign workers and ensure the integrity of the H-2A program. Major features of the rule include: 

• Requires documentation from employers showing compliance with the prerequisites for bringing H-2A workers into the country. Employers can no longer simply attest compliance.
• Returns to the USDA Farm Labor Survey, instead of the Occupational Employment Statistics Survey, as the basis for the determining the Adverse Effect Wage Rate;
• Reinstates the requirement that State Workforce Agencies inspect and approve employer-provided housing before the Department issue H-2A labor certification;
• Creates a national electronic job registry for all H-2A job orders to improve US worker access to agricultural jobs;
• Requires employers to provide workers with copies of the job orders before departure and to display a poster describing employee rights in a language common to the workers at the work site;
• Prohibits the use of multi-area itineraries by H-2A labor contractors

            The rule will become effective March 15, 2010.