Policy Matters Newsletter – December 7, 2020

A — Somewhat — Special Edition.  This iteration of the Policy Matters Newsletter will track — with a little stimulus sweetener — the topics discussed in a webinar presented by Seyfarth’s Government Relations and Policy Group. Seyfarth presented the Webinar last Friday.  A recording of the same can be found here.

The NLRB Will Look, And Act, Much Differently Under A Biden Administration.  Joe Biden has reiterated, again and again, that supporting organized labor will sit atop his agenda. The board is currently operating with a vacant seat with a term set to expire in august 2023, and the general counsel’s term expires in a year. Kent Hirozawa, Gwynne Wilcox, and Dave Prouty, have all been rumored as potential board members; former acting general counsel Jennifer Abruzzo has been rumored to fill that slot. Before any significant change can happen at the NLRB, a Biden administration would need to fill the two open seats. Even then, since the NLRB is mostly a case-deciding body, cases with the right factual predicate must come before the board to reverse any precedent from the Trump-era NLRB. Unless cases carrying the proper factual predicate are luckily already awaiting decision, the new GC would need to establish priorities and new charges must be filed. Should the right cases present themselves to the Board, employers should rest assured that employees will receive more protection from the Biden Board for their workplace outbursts and other misconduct than is currently the case. Note as well that there is discussion as to whether the Biden Administration has the authority to replace General Counsel Robb before his term ends.  An opinion authored by now Chief Justice Roberts in 1982,  buried in the Reagan Presidential Library, suggests that Robb can be replaced by the new administration.

OSHA — A Pretty Important Agency During A Pandemic.  First and foremost, OSHA may be acting for the first time in a long time with formal political leadership in the Assistant Secretary role — a role that has gone empty throughout the Trump Administration. Unions have discussed some possibilities for OSHA Assistant Secretary, including Jim Frederick, who retired last year after 24 years as the United Steelworkers’ assistant health and safety director, and Chris Cain, safety and health director at North America’s Building Trades Unions. Doug Parker, head of CalOSHA, is on the transition team and Julie Su, head of the Cal Department of Labor, is on the short list for Secretary of Labor.  Either will bring a strong OSHA enforcement strategy to the federal positions.  Long on the Speakers wish list, and as provided in the House-passed HEROES Act, we’ll see a COVID-19 ETS get going early in a Biden presidency. Look to CDC guidance, CA, VA, MI, and OR as templates for an OSHA ETS.  Former Assistant Secretary of Labor at OSHA under Barack Obama,  Dr. David Michaels has made his belief in publicity as deterrence well known. Expect a Biden Administration to up its publicity game when OSHA enforces a violation.

Speaking of OSHA, We Should Quickly Detour to California’s New Emergency Temporary Standard. As Seyfarth summarized here and here, Cal/OSHA’s Emergency Temporary Standard (ETS) was adopted at the Standards Board’s November 19, 2020 meeting; the California Office of Administrative Law  approved the ETS the evening of November 30, 2020. The central requirement of the ETS is that employers must prepare, implement, and maintain a written COVID-19 Prevention Program, which is nearly duplicative of the already-required Cal/OSHA’s Injury Illness Prevention Program. The day after the ETS’ effective date, the Department of Industrial Relations issued FAQs intended to clarify the confusing obligations found in the ETS. At its most recent meeting, the Board also indicated it would convene a stakeholder committee to suggest updates to the ETS to address the top concerns from employers—information on this committee is still forthcoming. Stay tuned to this space.

Wage and Hour Division. David Weil, the WHD administrator during President-elect Joe Biden’s Vice Presidential tenure, noted that “enforcement procedures must send the consistent message that persistent, egregious, and workplace-wide infractions of the law will be met with significant consequences.” Expect a Biden WHD to bring a similar ethos when it comes to enforcement. The WHD will continue its pursuit of using predictive analytics — proper use of  data to develop a profile for, e.g., the most likely violative restaurant, will be a central theme of the division under the new administration. Probably more controversial than data-based case selection will be the increased use of publicity as deterrence, a strategy that can also broaden the reach of enforcement agencies with limited resources.

Compliance With FLSA Changes Will Be Crucial Under A Biden Administration. Expect a Biden administration to be active in the following spaces, with the specific goal of reversing Trump era policies on: (1) the DOL’s new proposed rule for independent contractor (“IC”) classification; (2) the new Joint Employer Regulation; and (3) salary thresholds for exempt status.

1. Seyfarth summarized the DOL proposed rule concerning classification here, here and here. Expect the DOL under a Biden administration to not only reverse the currently proposed rule, but also to up enforcement of improper classifications. Should the Democrats win the Senate, we would expect a Biden administration to press legislation as restrictive as California’s controversial ABC Test, which Biden has expressly endorsed.
2. Seyfarth summarized the DOL’s recent proposal regarding joint employment here, and the Judiciary’s treatment of the same here. Joe Biden has pledged to codify the Browning-Ferris Industries joint employer definition, and restore the broad definition of joint employment, as the House of Representatives envisions. 
3. Late last year, the DOL issued a final rule increasing the salary threshold for employees exempt under the executive, administrative, and professional exemptions (the “white collar exemptions”) from $455 per week (or $23,660 annually) to $684 per week (or $35,568 annually). Labor advocates were disappointed the rule did not go as far as an Obama era rule, that would have increased the salary threshold to $47,476. A new overtime regulation, similar to the Obama administration’s final rule, will likely be a central component of a Biden administration: it will have a higher salary threshold, exempting fewer employees, and be indexed to some measure, so that it is not eroded by inflation.

The Upcoming Tension within Federal Discrimination Litigation: Which Road Will the EEOC Take? Religious protections look to take center stage on the EEOC docket. On the eve of Thanksgiving, the Supreme Court, in Archdiocese of Brooklyn v. Cuomo, signaled a shift towards increased protection of religious practice. As Seyfarth’s analysis of the decision notes, unlike houses of worship, employers are not immediately impacted, but should remain cognizant of the tension they face in keeping their workplaces safe while not inadvertently violating other laws. Immediately following Thanksgiving weekend, the EEOC announced that it was seeking public input on its newly updated Compliance Manual on Religious Discrimination. The EEOC believes that a number of recent Supreme Court cases have altered protections for employees against religious discrimination in the workplace and enhanced protections for religious employers under Title VII of the Civil Rights Act. The proposed EEOC Compliance Manual on Religious Discrimination, available for public input until December 17, 2020, reflects these changes. While the EEOC Guidance does not have the force of law, it does provide insight on the EEOC’s enforcement priorities.

Speaking of priorities, as we noted in our Election 2020 Special Report, the EEOC will remain under Republican control for the initial period of the Biden Administration, which may portend an uptick in religious discrimination enforcement, especially in the wake of SCOTUS recent decision. Things will get a little complicated, though. The current EEOC Chair is Janet Dhillon, a Republican. The President, however, has the power to appoint  one of the Democrat Commissioners as chair. There is strategy here: according to former EEOC attorney Carolyn Wheeler, if the future Democratic chair wants lawsuits filed, the chair can tell the General Counsel to instruct the district office to file the suit and not submit the cases for a commission vote. Different types of discrimination appeal to each party, however. When Democrats had control of the EEOC during the Obama administration and the first years of the Trump administration, the EEOC was known for its aggressive enforcement of anti-discrimination laws protecting the rights of minority workers, including those who identify as LGBT. Whereas the current EEOC General Counsel, Sharon Gustafson (R), has focused her efforts on eradicating religious discrimination in the workplace. Gustafson can remain as General Counsel until 2023. If agendas remain party-aligned, we could see some tension within the EEOC ranks in the coming years as the next Democratic chair will have to work with a Republican majority and General Counsel. This was precisely the situation which ran from January, 2017 to August, 2019 when Vicki Lionick was Acting Chair but the majority remained democratic.

About Face: President-Elect Biden’s Task of Rescinding Trumpian Immigration Policies.  President-Elect Biden has indicated that he will seek to completely overhaul the current administration’s immigration policies, as well rescind the numerous Executive Orders issued by President Trump to enforce those policies. As we discussed in our Election 2020 Special Report, Biden supports expanding guest-worker programs, maintaining family preferences, giving a green card to everyone who earns a doctorate from an American university, increasing refugee admissions, and expanding employment-based visas. Biden, however, will have his work cut out for him, not only in the amount of X-marks he’ll have to scribe — according to the Migration Policy Institute, the Trump administration took over 400 executive actions on immigration between January 2017 and July 2020 — but also in flexing his powers as chief executive of the heavily-bureaucratic, 19,000-employee USCIS office, and a 20,000-employee ICE office. So it should come as no surprise that, as noted recently in the Washington Post, some shifts could take time. But some shifts could also be expedited: Seyfarth’s Angelo Paparelli and Stephen Yale-Loehr presented “four fresh ideas” in a recent blog post addressed to the incoming administration that it could take within the first few months of office — none requiring congressional action. We encourage the read. An additional speedbump in Trump’s immigration agenda was recently raised when a federal judge in California on Tuesday struck down the administration's policies narrowing eligibility and raising minimum salaries for foreign employees on H-1B work visas. The court found that the administration failed to properly follow transparency procedures and that its claims that the changes were an emergency response to the pandemic’s economic fallout were unsubstantiated. For more information on this topic, be sure to tune into Seyfarth's webinar slated for this afternoon,  How Will Immigration Change under the Biden-Harris Administration?

The Affordable Care Act: It All Hinges On Georgia.  President-elect Biden has pledged to, first, reverse the disastrous Trump era strategy of death by a thousand cuts and, second, strengthen the ACA by, inter alia, getting rid of the “family glitch,” including a government-run health insurance option similar to Medicare, expanding the availability of ACA subsidies to additional income brackets, making ACA premium tax credits (PTCs) more generous, rescinding recent rules on non-ACA coverage, funding outreach and navigators, funding state-based reinsurance or subsidy programs, and rescinding recent guidance on state waivers under Section 1332.

On March 26, 2019, the House passed the Protecting Preexisting Conditions and Making Health Care More Affordable Care Act of 2019, the contents of which foretell Bidenesque priorities when it comes to the ACA. However, passage of such a measure will all depend on the January 5th Senate run-offs in Georgia. If the Democrats fail to win back control of the Senate, Joe Biden will be much more limited in his ability to strengthen the ACA. Through executive action, though, a Biden presidency could expand the enrollment period, limit deceptive marketing practices of other limited benefit plans and eliminate double billing. But most importantly, he can increase advertising to ensure the public that that healthcare.gov is not only running smoothly, but is also is a viable option for obtaining insurance

Isn’t This Newsletter Supposed To Focus On Stimulus?  Admittedly, the recent election-related respite has been a decent distraction from the fact that the Coronavirus is ravaging the economy with no state safe from the exponential uptick, and the “will they won’t they” stimulus negotiation roaring back to the top of the news. Well, here we are again, with the same story repeating itself: a small crack of sunlight emerges, only for the door to be slammed shut by one of the negotiation parties.

So where do we stand now? Well, on Tuesday, once his transition began in earnest after blessing from the GSA, Joe Biden called on Congress to pass a robust stimulus package. At around the same time, a bipartisan group of Senator introduced $908 billion stimulus plan. The legislative package is the brain child of several centrist senators — including Bill Cassidy (R-La.), Susan Collins (R-Maine), Angus King (I-Maine), Joe Manchin III (D-W.Va.), Mitt Romney (R-Utah) and Mark R. Warner (D-Va.) — as well as members of the bipartisan House Problem Solvers Caucus. The proposal is somewhat light on details, but includes $300 a week in federal unemployment benefits for roughly four months, $160 billion in funding for state and local governments, as well as a temporary moratorium on some coronavirus-related lawsuits against companies and other entities that is certainly something, but is not as protective as some previously announced liability shields.

Both Nancy Pelosi and Chuck Schumer have uniformly messaged that this package should be used as a baseline for additional negotiations.  Indeed, earlier this week Nancy Pelosi and Chuck Schumer sent Senator McConnell a “private proposal” in an attempt to grease the negotiating wheel. The democrats embrace of the bipartisan deal, and their own private proposal, perhaps signals a retreat from their intransigent position that everything should come through one large package, a position that has angered a number of moderate democrats. Despite the compromise from the left flank, and in keeping with historical fashion, the bipartisan measure is still in doubt since Mitch McConnell has rejected it up to now. Despite almost uniform agreement that additional stimulus is necessary — including from Fed. Chair Jerome Powell — the standstill remains. Reason for this issue to continue to fill white spaces remains, however — House Majority leader Steny Hoyer expressed optimism that Congress could get a package to the President by last weekend. As of this morning, however, there was no reported progress on the negotiation.

 

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The Policy Matters newsletter is a publication of Seyfarth's Government Relations & Policy Practice and is authored by Leon Rodriguez, Scott Mallery, and Samuel Sroka. Leon Rodriguez is a Partner in Seyfarth's Washington, DC office and chairs the firm's Government Relations & Policy Practice Group (GRPG); Scott Mallery is Counsel in Seyfarth's Sacramento, CA office; Larry Lorber is Counsel in Seyfarth's Washington, DC office; and Samuel Sroka, J.D. is a Proposal Manager in Seyfarth’s New York City office.