Policy Matters Newsletter - July 2, 2021

A Summer of Freedom: Happy 4th From Us Here At The PMN. While the White House has acknowledged that the nation will not meet President Biden’s ambitious July 4th vaccination goal, it would be hard to argue the nation as a whole is not better situated to handle the pandemic than it was a year ago. The President plans to invite first responders, essential workers, and military service members and their families on the South Lawn for a cookout and to watch the fireworks over the National Mall. And for the Steven King readers out there (or Stanley Kubrick film watchers), this Fourth of July marks the 100 year anniversary of the of the 1921 Overlook Hotel July 4th Ball. This fully vaccinated author plans to celebrate the nation as intended: in front of a grill.

Infrastructure Update: Uncertainty Still Abounds? Last Thursday, broad swaths of the Country were jubilant at the White House’s announcement of a bipartisan compromise on hard infrastructure, coupled with an even larger package for so-called soft infrastructure that would not require any GOP votes. But, there was a negotiating catch: after the announcement, Biden said that he would not sign the bipartisan infrastructure bill unless the soft infrastructure package also ends up on his desk. Numerous GOP members maintained that they were blindsided by Biden’s announcement linking the two bills. The President spent the weekend trying to quell GOP concerns. While the President walked back his veiled threat, it freed Nancy Pelosi to step in, promising the House won’t take up the bipartisan bill unless and until the Senate passes a larger reconciliation bill.  So, where are on infrastructure? Well, not as close as we were last Thursday evening — when many looked for the mission accomplished banner — but we are not as far as we were before Thursday, if that makes sense.

Top Union Lawyer Announced As Next Biden NLRB Pick.  President Biden announced his next nominee to remake the National Labor Relations Board: David Prouty, General Counsel of Service Employee International Union (SEIU) Local 32BJ, the largest American labor union for property service workers. He was previously the top attorney for the Major League Baseball Players Association. As a member of the Board along with Gwynne Wilcox, who has been nominated but not yet confirmed, Prouty could play an instrumental role in a Democratic majority revisiting Trump-era decisions and actions that favored employers. That would likely include a particular focus on reforming the legal standard by which companies are jointly responsible for labor violations by their franchisees or contractors, as well as Trump-era changes to the NLRB’s procedures for union elections.  If confirmed, he would fill the seat of Republican member William Emanuel, whose term expires in August.

More States Join California In Banning Noncompete Clauses In Employment Agreements.  In 2019, then-California Attorney General (now Secretary of Health and Human Services) Xavier Becerra called on the Federal Trade Commission (FTC) to ban noncompete agreements in employment contracts nationwide, just as California did years before. That call was joined by 19 other attorneys general. The next year, about 3,000 miles to the East, D.C. passed the Ban On Non-Compete Agreements Amendment Act of 2020. Both of these actions were done under the purview of a call from then-President Obama’s “call to action” on such agreements. The legislatures in Oregon, Nevada and Illinois recently joined nine other states either completely banning noncompeting agreements, or banning such agreements only for low wage workers. Lina Kahn was recently sworn in as chair of the federal trade commission; the same Lina Kahn who co-wrote a law review article in 2019 calling for more agency rulemaking on a wide range of anti-competitive business practices, including the use of employee noncompetes.  While the current noncompete craze is relegated to the states, this author would not be surprised if it makes its way into some agency rulemaking or even legislation. Stay tuned.

Where To Organize? Definitely Not Near Agricultural Work Sites, Per SCOTUS. As Seyfarth summarized here, the Supreme Court recently struck down a long-standing regulation in California that required agricultural employers to allow union organizers onto their property for the purpose of meeting and soliciting union membership. The Court held that a physical invasion of real property, even if temporary, can constitute a per se appropriation of property and require just compensation under the Takings Clause. This fight was catalyzed when the United Farm Workers attempted to access the plaintiff’s property in order to solicit membership, but the company blocked them from entering. While this holding is only relevant for agricultural employers, the reasoning employed by the majority may inspire legislation aimed at restricting other property owners’ ability to exclude labor activities from their premises.

While OSHA Managed Only A Zehyr Of An ETS, The Guidance Should Be Heeded By All.  As we noted last week, OSHA finally released the much awaited ETS, but it is relegated only -- and appropriately -- to the healthcare industry. That is, the only real “mandate” OSHA issued was for certain healthcare settings; for all other workplaces, OSHA simply updated its previous non-mandatory guidance. Significantly, OSHA's updated guidance concentrates on protection of unvaccinated and at-risk workers, while significantly loosening recommended protective measures for fully vaccinated workers.

The Congressional Review Act (CRA) Is Real, And Congress Is Using It. As Seyfarth previously reported, the CRA permits Congress to nullify a final rule issued by a federal agency and prevent the agency from reissuing a “substantially similar” rule in the future (unless Congress authorizes it to do so via subsequent legislation). Congress is using the CRA through S. J. Res. 13 to nullify a rule promulgated by the EEOC on January 14 of this year that gives employers more information during conciliation, which is used to resolve discrimination disputes as an alternative to litigation. Democrats criticized the rule, saying it gave employers premature access to information about a worker’s case and increased the risk of employer retaliation. The measure passed the Senate in March by a vote of 50-48; the House in late June by a vote of 219-210. We expect the president to sign it.

More Of The Great Undoing: DOL Also Rescinds Joint Employer Rule. As we noted here, on March 11 the DOL issued a notice of proposed rulemaking to formally rescind the Joint Employer rule that the DOL instituted during the Trump administration. The most significant parts of the Trump joint-employer standard were set aside by a federal judge last year, in a case now before the U.S. Court of Appeals for the Second Circuit. Despite numerous comments imploring the DOL to hold onto the clarifying rule, the DOL has sent the proposal to the White House for review by the White House Office of Information and Regulatory Affairs. It’s not clear how long the White House regulatory office’s review could take, but release of the final rule would likely allow the Biden administration to argue to the Second Circuit that the litigation over the Trump rule’s legality is rendered moot.

Alien Tort Statute: SCOTUS Says Corporations Should Still Worry, But Less Than Before.  The Supreme Court issued an 8-1 decision on whether foreign citizens can bring claims against United States corporations under the ATS even where nearly all of the alleged human rights abuses occurred outside of the US. The Court found that general allegations of corporate decision-making in the US by corporations were insufficient to show that misconduct abroad sufficiently concerned the US under the ATS.  The Court’s opinions highlighted the conflicting views about whether the judiciary could create a private cause of action for aiding and abetting under the ATS.  Absent further action by Congress, this leaves open the specific nature of claims corporations may face under the ATS. this decision is still considered a win for US Corporations as it lessens potential exposure for abuses abroad. However, given the less than concrete opinion, the labor and employment community should expect more cases brought under the ATS. Indeed, Justices Sotomayor, Breyer and Kagan wrote that a judicially created private right of action under the ATS remains a viable theory of recovery. For more in-depth analysis of this decision, see Seyfarth’s recent blog post.