Policy Matters Newsletter - February 4, 2022

What SCOTUS Justice Stephen Breyer’s Retirement Portends For The LE World. The biggest news to come out of Washington D.C. in recent weeks is unquestionably the formal announcement of Supreme Court Associate Justice Stephen Breyer’s retirement, and the inevitable replacement parlor game that has followed (we acknowledge guilt for partaking in that game). Justice Breyer’s most famous opinion in the labor and employment space is likely the holding in National Labor Relations Board v. Noel Canning, in which Justice Breyer penned the unanimous opinion holding that then President Barack Obama lacked the authority to make three appointments to the National Labor Relations Board under the recess appointments clause. Unlike many of the “more liberal” justices, Breyer was not known for his hostility to the business community, consistently bringing a law and economics perspective to the bench, especially in the Antitrust context. Justice Breyer was an intellectual power house, a consensus builder, and an incrementalist.

Will the White House name a replacement with a similar reputation? Well, one rumored replacement, Associate Justice Leondra Kruger of the California Supreme Court is similarly known as an incrementalist. But employers should not jump for joy at the possibility of Judge Kruger making her way east. As any management-side attorney in the golden state will tell you, the CA Supreme Court is often where bad employment policy gets the judicial seal of approval. Indeed, Justice Kruger just this month penned a unanimous decision expanding the standard for maintaining whistleblower retaliation suit, making easier for employees to allege retaliation  and avoid summary judgment. The other front runner, Ketanji Brown Jackson (United States Court of Appeals for the District of Columbia Circuit), has her own decisional history of supporting labor unions against management. Other jurists rumored to be in the running include, J. Michelle Childs (S.C. District Court Judge), Candace Jackson-Akiwumi  (United States Court of Appeals for the 7th Circuit), and Eunice Lee (United States Court of Appeals for the 2nd Circuit).

COMPETES Act Amendment More Than Meets The Eye. The America COMPETES Act of 2022, currently under consideration in the House of Representatives, seeks to fund and further American advancements in science and technology, with a particular focus on reducing reliance on Chinese manufacture of semiconductors. Recently, Chairwoman Eddie Bernice Johnson (D-TX) of the House Committee on Science, Space and Technology introduced an amendment to the bill that includes two core elements of the PRO Act that would apply to any employer who receives funds under the COMPETES Act.  First, it contains the PRO Act’s so-called card check provision, which requires employers to recognize a union based solely on signature cards as opposed to requiring workers to vote in a private ballot election conducted by the National Labor Relations Board. It also includes the binding first contract interest arbitration provision from the PRO Act, which requires interest arbitration if the union and employer cannot reach a first contract in as short as 120 days following commencement of bargaining. Additionally, employers receiving funds under the bill must ensure that their subcontractors also comply with these provisions. The amendment is expected to pass and be part of the House bill, which is also expected to pass. It is unlikely to succeed in the Senate absent modification to the filibuster rules. This is yet another example of legislative attempts to incorporate aspects of the PRO Act into other, seemingly unrelated legislation, especially now that BBB, and the PRO Act have essentially died in the Senate.

BBB Breakdown: Smaller, Single-Issue Bills Once Again Take Congressional Priority. As we noted earlier this month, and Senator Joe Manchin confirmed this week, the prospects of BBB passing as a monolith are all but dead, so policy observers are left following which pieces will proceed as smaller measures. Despite all signs pointing in the opposite direction, House Majority Leader Steny Hoyer remains optimistic that Democrats will pass Build Back Better, in some form or another. The more forceful of the competing narratives, though, is that BBB will be broken down into its component parts. The plan to break it up has received some pushback from unions and the Progressive Caucus, but it is likely that the break down is the only path forward to accomplish passing any portion of the Administration’s domestic legislative agenda.  While BBB might lie motionless on the Senate Floor, government business continues to proceed. For example, while BBB would have drastically increased OSHA civil penalties, almost to a draconian extent, the penalties will still increase in 2022 (just nowhere near as high) as a matter of course; Seyfarth summarized those penalty increases here.

HB 4445 and SB 2342 provide no better example of the return to prominence of individual measures now that BBB is all but dead. In a nutshell, the measures would essentially void any agreement that requires arbitration of sexual harassment claims. The House Judiciary Committee’s report on the bill notes that it is intended to increase transparency that is often lacking in arbitral proceedings: “due to the secretive nature of this system, these disputes are often shielded from public scrutiny.” The administration full-throatedly endorses the bills. Both measures were introduced in July; the House version was recently reported out of the Judiciary Committee by voice vote, 27-14 (one Republican subsequently asked that his vote be changed to yes). The Senate version draws bipartisan support from both Senators Kirsten Gillibrand (D-NY) and Lindsey Graham (R-SC). The bill actually has bipartisan support and received GOP votes in the House and Senate. Getting 10 GOP Senators to pledge an “aye” vote will be an uphill battle, despite the measures’ clear bipartisan support, but this appears to be the legislative vehicle that might make it past the finish line.  

NLRB Plans To Increase Use Of Injunctive Relief Powers During Union Organizing.  The NLRB announced on Monday, January 31st, that it plans to start aggressively pursuing injunctive relief “in organizing campaigns where the facts demonstrate that employer threats or other coercion may lead to irreparable harm.”  Section 10(j) injunctions, as they are called, are typically only used in extreme situations that cannot be addressed by the NLRB’s standard processes and remedies, and they are often referred to as the NLRB’s most powerful weapons.  Section 10(j) of the National Labor Relations Act permits the Agency to go into federal court and seek injunctive relief where it would be “just and proper.” The NLRB further announced Monday that "[f]ield offices are thus instructed to quickly investigate alleged threats or other coercion made during an organizing drive and promptly submit those cases for consideration of injunctive relief."  Employers should be aware that NLRB Regional Offices will be quick to pursue and investigate unfair labor practices filed during an organizing campaign, and they should be cautious not to cross the line into unlawful conduct when engaging in campaigning in the face of an organizing drive. 

Despite A Valiant Effort, OSHA Calls It Quits on “Vax or Test.”  As Seyfarth wrote here, shortly after SCOTUS issued its decision reinstating the stay of the OSHA ETS, which we wrote about here, OSHA announced the withdrawal of its COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”). The Federal Register posted an advanced copy of the notice for public inspection ahead of its official publication on January 26, 2022. By operation of law, the ETS would have expired on May 5, 2022, leaving little time to conclude merits proceedings before both the Sixth Circuit and SCOTUS. As such, it would have likely been a fruitless endeavor to continue to press the matter on the merits. Notably, though, OSHA explicitly advised that it “is not withdrawing the ETS as a proposed rule,” meaning it could continue to pursue a broad, permanent COVID-19 or infectious disease standard, but that would take months of protracted notice and comment, and likely more contentious litigation, all while COVID-19 numbers are dropping precipitously.

While the ruling was good news for most employers in the immediate, it does not take OSHA out of the COVID compliance game, not by a long shot. For example, OSHA will use its existing regulations and the general duty clause to cite employers for alleged COVID-related safety and health violations. Indeed, the Labor Department and Secretary Walsh are pursuing other avenues to regulate COVID-19 in the workplace. The agency is continuing work on a permanent version of another COVID-19 regulation -- this one governing transmission of the disease in health care workplaces.  The agency could also propose a limited standard to cover "close contact manufacturing" as SCOTUS intimated. Indeed, the SCOTUS opinion expressly left room for the department to increase regulation in certain sectors. The Court wrote that “[w]here the virus poses a special danger because of the particular features of an employee’s job or workplace, targeted regulations are plainly permissible.” Look for the Department of Labor, and OSHA specifically, to increase regulation and oversight of industries particularly susceptible to COVID-19 infection, see e.g., meat packing. Moreover, it should be noted again that while SCOTUS struck down the mandate for private employers, it permitted the CMS standard mandating vaccination for employees of entities accepting Medicaid / Medicare.

It is not just the feds employers need to worry about. While a federal workplace safety COVID-19 ETS is unlikely, the states are free to impose as they please. And California continues to impose. Specifically, California employers must ensure that their COVID-19 health and safety protocols are compliant with Cal/OSHA’s latest COVID-19 Prevention Emergency Temporary Standards. Seyfarth’s outstanding piece on the same is worth the read for the substantive contours of the ETS.

While on the topic of vaccine mandates, it should be noted that the way that legal challenges to EO 14042, COVID-19 workplace safety standards for federal contractors, has proceed through the courts has done nothing more than cause confusion as to what currently is, and is not, stayed. And the courts have been less than helpful on clarifying the issue. Federal contractors are left trying to put together the parts to a very a convoluted puzzle. If you have specific questions, please reach out to your favorite Seyfarth counselor. For now, stay tuned as we will continue to report on this issue as the clouds part.

The 2020-21 Iteration Of The Garden State Was Prevalent In The Legislative LE Space. As Seyfarth summarized here  -- including a summary of bills that were vetoed completely or partially by Governor Phil Murphy -- the 2020-21 legislative session in Jew Jersey saw 11,429 bills introduced and 616 signed, a significant portion of which directly affect employers. For example, New Jersey passed laws that: expand workers’ compensation coverage to employer-provided parking areas; establish prevailing wage rates for longshoremen employed at “waterfront facilities”; exempt certain commercial fisherman from receiving unemployment insurance benefits and paying unemployment insurance taxes; assert a civil penalty of $1,000 or $2,500  where an employer knowingly uses a tracking device in a vehicle used by an employee - personal or otherwise - without first providing written notice to the employee; requires employers with 50 or more employees to provide a “hiring preference” to any employee who was injured in a job-related injury and has reached “maximum medical improvement.” In addition, Governor Murphy extended his own emergency powers, which further delayed the effective date of the extreme amendments to the New Jersey WARN Act, as reported by Seyfarth.

DOL Issues Updated Guidance on Minimum Wage Requirement for Fed Contractors.  The Department of Labor’s Wage and Hour Division issued updated guidance on the minimum wage requirements for federal contractors after the $15.00 minimum wage went into effect last Sunday. That guidance includes frequently asked questions and answers, a training video, and other materials. In addition, the DOL/WHD hosted two virtual seminars recently to provide further instruction to employers. In addition to establishing the $15.00 minimum wage, the final regulation established by Executive Order 14026 allows for the minimum wage to increase annually by an amount determined by the Secretary of Labor, eliminates the tipped minimum wage for federal contractors by 2024, and prohibits federal contractors from paying a sub-minimum wage to workers with disabilities.  Federal contractor employers should carefully review the DOL/WHD’s guidance to ensure their practices are fully in compliance with the DOL/WHD’s final regulation.