For several years we have been providing updates on the Obama-era National Labor Relations Board’s rather employer-unfriendly joint employer standard.  We have yet another. We believe the final episode in this saga should be good news for employers.  We’re just not sure whether the good news will come from the Courts, from the regulatory process, or both.

This may be hard to follow, but stay with us…

To recap, in 2015, the Obama Board issued a decision in Browning-Ferris Industries of California, and vastly expanded the situations in which a franchisor or a source employer could be deemed a joint employer with its franchisee or with a supplier of a contingent workforce.  All that needed to be shown under this new standard was some reserved ability by the franchisor or source employer to potentially control the terms and conditions of the other entity’s employees. To the relief of employers, Browning-Ferris quickly appealed this decision to the United States Court of Appeals for the D.C. Circuit.

As we reported in the Spring of 2017, the Board’s new standard appeared to receive a cool reception from the Court of Appeals during oral argument. We waited and waited, but no opinion came from the Court.

Then, in December 2017, the Trump Board decided Hy-Brand Industrial Contractors, and announced that it would return to the prior standard that required proof of a joint employer’s actual exercise of control over essential employment terms, rather than merely having reserved the right to exercise control. After Hy-Brand was issued, Browning-Ferris was no longer relevant, so the Court of Appeals remanded that appeal back to the Board.  All appeared to be right in the world.

Alas, this return to normalcy was short-lived.  In late February 2018, the Board issued an Order vacating Hy-Brand based on a determination by the Board’s Ethics Official that one of the three Members who participated in the matter should have been disqualified. With that disqualification no Board quorum existed.  So, what next?  The Board asks the Court of Appeals for a “do-over”: please recall Browning-Ferris and issue a decision. Please?!

On April 6, a divided Court of Appeals granted the Board’s request and recalled Browning-Ferris, and just like 2017, we again await that appellate decision.

But hold on.  There’s more.  Yesterday the Board announced that it is considering rulemaking to address the standard for determining joint-employer status. That would be actual regulations, folks. New Board Chair John Ring’s comments accompanying the announcement are telling: “Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today. The current uncertainty over the standard to be applied…undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be.”

So, stay tuned for more news.  We know it’s coming.  Just not sure which channel will air it first.

On November 3, 2016, the National Labor Relations Board issued a Decision and Order in Trump Ruffin Commercial, LLC, finding that the Trump International Hotel, Las Vegas unlawfully refused to bargain with UNITE HERE International Union after the union won a representation election among the Hotel’s housekeeping, food and beverage and guest service employees.

….In other news, just five days later, Donald Trump was elected President of the United States with the pledges to Make America Great Again, to cultivate more good paying jobs for Americans and to undo much of the agenda of the Obama administration.

Over the past several Presidential transitions, the Human Resources community has become accustomed to the swinging pendulum in the areas of labor and employment law.  We know change is coming.  We’re just not always sure what exactly it will involve.   Everyone remembers the threat of unions being certified on the basis of a card check, right?  That didn’t happen in 2009, but of course quickie elections did.  So making specific predictions on Inauguration Day can be dangerous.   But as the new Administration now has officially taken over, we have to at least try.

Here’s an easy one:  President Trump is unlikely to be appointing what we would call traditional candidates to run the departments and agencies that regulate the American workplace.    While he has nominated some people who have significant governmental service on their resumes, the current list includes a fair share of people with no such experience – – CEOs, philanthropists, investment bankers, a neurosurgeon, even the co-founder of World Wrestling Entertainment.   These appointments do not signal “business as usual” for the federal government, nor did the President who, in his inaugural address, pledged to transfer power from Washington back to the American people.

At first blush, this would portend wholesale rollback of workplace regulations.  Indeed, President Trump’s nominee for Secretary of Labor, fast-food executive Andrew Puzder, has been a critic of substantially increasing the minimum wage and a vocal opponent of the Obama administration’s efforts to make more workers eligible for overtime pay.  And critics have noted similar opposition by other nominees to what has been the recent mission or focus of the agency that they may be leading (See Governor Rick Perry and Betsy DeVos).

But here’s the rub:  a substantial portion of President Trump’s electoral base of support likely will not support the pendulum swinging back in ways that make their workplaces less safe or adversely impact their earnings.  So…this will be a bit more complicated.

What can we say now in January 2017 with confidence?

  • We’re not going to get back all of that time we spent learning the ever changing minutiae of the Affordable Care Act.  But we can certainly anticipate that there will be new regulation impacting employer provided health insurance.
  • We will see change in leadership at the Equal Employment Opportunity Commission.  The current EEOC Chair’s term will end in July 2017, and the new Chair will likely fill the now vacant EEOC General Counsel position.   That new leadership is less likely to retain the current EEOC’s focus upon pay equity issues and seeking to expand gender identity and sexual orientation protections through selective litigation.   And let’s not forget the agency’s proposed regulations that would require employers to provide compensation data and hours for all employees as part of the EEO-1 reporting process.  We think that it is unlikely that these requirements will become effective in March 2018, as currently planned.
  • The NLRB will be looking at the bureaucratic version of Extreme Home Makeover.  Readers of our Annual NLRB Year in Review will recall that the Obama Board has involved itself in everything from revising the representation election timeline, to creating rights to use your email system for organizing activity to uncovering the dastardly hidden meaning of the most innocuous provisions of your employee handbook.  They expanded the concept of joint employment to the point you might have to sit at the bargaining table to discuss wages, benefits and working conditions of people who are not even your employees.  And then when they were done with that, they even tried to get involved in college football!  The party’s soon over at the Board.  President Trump will have the opportunity to fill two current Member vacancies on the Board as soon as he gets down to work.  More critically, by November he will have the opportunity to replace NLRB General Counsel Richard Griffin Jr., an Obama appointee, former union lawyer and spearhead for most of the NLRB’s most aggressive initiatives.
  • OSHA recordkeeping requirements should be reduced.  We know how this has been an area of focus over the past 8 years and has caused more work for employers.  And the new silica rules and anti-retaliation rules that seek to effectively prohibit mandatory post-accident drug testing and safety incentive programs may soon be on the cutting room floor.

So, that’s enough prognostication on Day 1 of the Trump Administration.  Stay tuned!

 

Companies face increased energy cost as the nation’s average gasoline price reached $4.00 per gallon this week spurring a new round of cost cutting measures. Even in prior years, some employers have allowed employees to work alternate workweek schedules, such as four 10 hour days, for summer months. When this schedule is feasible from a production and service perspective, the benefits typically can be two-fold: reduced operational costs for the employer and longer weekends for employees.

As featured recently on the TODAY SHOW, many employers are considering changes to their workweeks as a means of cutting employee commuting expenses and reducing business operational costs. Changes in workweeks can raise legal issues for employers as follows:

  • Overtime. Under the Fair Labor Standards Act and the Pennsylvania Minimum Wage Act, non-exempt employees must be paid for all hours worked in excess of 40 in a workweek. Nevertheless, employers in some industries may have a practice of paying ‘daily overtime’ for work in excess of 8 hours per day. This must be considered in assessing the value of any alternative workweek.  
  • Child Labor Limitations. State laws limit the number of hours that children may work in a day and week depending on the age of the child. Pennsylvania limits the hours of work in a day for children under the age of 18 who are covered by its child labor laws.
  • Unemployment Compensation. Employees who quit because of a change in their hours or schedule generally are not eligible for unemployment compensation. A change from a day day workweek to a four day work week, without any loss of hours, is not likely to be viewed as a ‘substantial change’ that might provide necessitous and compelling reason for someone to quit their employment and receive benefits. 
  • Collective Bargaining.  Absent a clear provisions in a CBA delegating such discretion to the employer, a change in the hours of work would be a mandatory subject of bargaining. As such, most unionized employers would be required to obtain the Union’s assent prior to adopting a "four-10’s" type work week. This may also require addressing and resolving contractual issues involving shift differentials, premium pay and daily overtime in the context of a side letter agreement.

We previously discussed telework as a strategy for addressing similar employee relations issues in our post "Legal Issues in Telecommuting:  Gas Prices make Businesses Reconsider Policies."