Policy Matters Newsletter - March 11, 2022

Biden Administration Pursues Labor Goals From All Angles, Despite Hiccups, With No Sign of Slowing Down. With the PRO Act stalled in the Senate and unlikely to pass in anything close to its existing form, the Biden Administration has come up with several creative ways to advance its labor policy goals, including via federal agency actions, inserting provisions of the PRO Act into otherwise non-controversial legislation, and by issuing executive orders. Below are just some examples of the Biden Administration’s efforts.

Last September, the SEC dipped its toes into the deep pool of investigating employee allegations of sexual harassment, misconduct, and workplace discrimination, traditionally a purview of the EEOC. The SEC has justified such investigations by pointing to potential inaccuracies and omissions on disclosures to investors regarding issues relating to workplace misconduct and discrimination, but the SEC rarely takes on these types of investigations.

As we reported here and as Seyfarth discussed in more detail in a recent blog post, on February 4th, President Biden signed an executive order requiring project labor agreements (PLAs) in federal construction projects over $35 million. The executive order does not require construction companies to unionize, but it does bind contractors’ employees to the terms of a PLA, which must contain guarantees against strikes, lockouts, and similar job disruptions, binding procedures for resolving labor disputes and mechanisms for labor-management cooperation.

On February 1, 2022, as we reported previously, Congresswoman Eddie Bernice Johnson (D-TX) introduced an amendment to the America COMPETES Act currently pending in the House that includes two core elements of the PRO Act that would apply to any employer who receives funds under that law: the card check procedure for unionization (in lieu of a secret ballot election) and binding interest arbitration for first contract negotiations. While the Administration has not publicly taken a position on the amendment, the Administration has registered its support for the COMPETES Act.

On February 10, 2022, the Antitrust Division of the U.S. Department of Justice filed an amicus brief with the NLRB in a case in which the NLRB invited briefs to guide its reconsideration of the standard for independent contractors. In its brief, the Antitrust Division argued for a narrower definition of the term than currently exists to ensure that workers engaged in protected concerted activity receive the benefit of the NLRA’s shield against antitrust liability, which does not normally apply to independent businesses. It is extremely rare if not unprecedented for the Antitrust Division to weigh in on matters of traditional labor law.

On February 17, 2022, the United States Department of Agriculture (USDA) published a Notice of Proposed Rulemaking updating USDA’s Agriculture Acquisition Regulation (AGAR), the agency’s counterpart to the Federal Acquisition Regulation (FAR). In the proposed rulemaking, USDA included a requirement to add two new clauses that would revive and expand the Obama-era “blacklist rule,” requiring contractors to disclose violations of certain labor and employment laws, and certify compliance with labor laws during the term of the contract. This may be an indication that other agencies are planning to issue similar rules.

These are just a few examples of the novel ways in which the Biden Administration is pursuing its labor policy goals via federal agency action, executive orders, and by adding elements of the PRO Act to other pending legislation, showing it is not content to sit by idly while the PRO Act itself is on ice in the Senate. And more are likely to come, given President Biden’s promise to be the most pro-union president in history. Stay tuned.

The Policy World Desires To Move On From COVID, But It Still Lingers. As Seyfarth explained here, as recorded COVID-19 cases continue to fall, the California Department of Public Health published updated guidance to track Governor Newsom’s announcement lifting California’s mask requirements for unvaccinated individuals in indoor settings, downgrading the former requirement to a strong recommendation. The same day, Governor Newsom issued an executive order overriding Cal OSHA’s Emergency Temporary Standard as it relates to indoor masking. California has consistently required the most stringent indoor masking protocol, and its loosening of the masking rules parallels local actions taken by Government units throughout the country. While, as we noted here, California continues to require paid sick leave for COVID-19-related reasons, most states are permitting their own paid sick leave programs to expire. But, our nation remains a hodge-podge of varying COVID-19 requirements depending upon locale. For example, the State of Florida recently extended its own COVID-19-related liability shield, but other states that passed liability shields at the onset of the pandemic remain in limbo, unsure whether it is necessary to extend those shields. Recently, Honore N. Hishamunda from our Atlanta Office joined our podcast to discuss the same; it is worth a listen.

On the Federal side, as Seyfarth summarized here, the CDC issued updated mask guidelines based upon Community Level metrics, significantly reducing indoor masking requirements. Democrats in Congress, seeking to continue federal pandemic aid, included a substantial package of relief funds for COVID-19 within the broader measure to continue funding the government beyond the week. On Wednesday, leadership had to pull that package in light of stark disagreements over appropriate appropriations of COVID-19 funds in order to avoid stalling the pivotal spending measure. After the COVID-19 relief appropriation was removed from the spending bill, Representative Rosa DeLauro introduced H.R. 7007, which would appropriate $15.6 billion in emergency supplemental funding for COVID-19-related reasons. At the same time, the Biden DOJ continues to press the constitutionality of its COVID-19 vaccination mandate for federal employees, enjoined by a District Court Judge earlier this year.

Most Labor Agencies (Not the NLRB!) To See Funding Bump. Under the $1.5 trillion government spending package that was passed by the House this week, most labor agencies, but excluding the National Labor Relations Board, will receive substantial funding increases. The Department of Labor would receive a 14% increase in funding to a total of $14.4 billion for fiscal year 2022. That increase includes an approximately $500 million increase for the DOL’s Employment and Training Administration, nearly $20 million for OSHA, and $5 million for the Wage and Hour Division. As for other agencies, the EEOC would receive a more-than $15 million increase, while the NLRB would stand pat at $274.2 million for fiscal year 2022. The Senate quickly approved the measure with broad bipartisan support and we expect the President to sign it forthwith. 

A Small Piece Of The Collateral Damage Pie: The Effect Of US Sanctions Against Russia On Commercial Real Estate. The most obvious, visual, and quickest economic damage that the war in Ukraine and the resultant sanctions against Russia have caused domestically is the incredible spike at the gas tank. But there are other, slower to come to fruition, damages to our economy that will result from the sanctions. Commercial real estate is a prime example, as Seyfarth explained here. As part of the broad package of U.S. sanctions, the President ordered a prohibition on the transfer, payment, export, withdrawal, or otherwise dealing in certain properties with Russian ties. The potential consequences of violating the order can be severe: there are potential criminal or administrative penalties, even possible prison time, that can result from violations. US persons engaged in real estate should undertake appropriate due diligence to ensure that they do not engage in transactions with blocked companies and persons. A list of currently blocked companies and persons can be found at the Office of Foreign Assets Control’s website.

NLRB Likely To Scrap Standard Enunciated In 2017 Boeing Ruling. The NLRB invited amicus briefs to guide its reconsideration of the Trump-era legal framework for evaluating workplace rules and employee handbooks. The NLRB established that framework in a case called Boeing Co, which overturned a 2004 decision called Lutheran Heritage Village-Livonia, in which the Board held that companies violated the law when they maintained work rules that an employee would reasonably construe to prohibit the exercise of protected rights, even where those rules did not explicitly prohibit or restrict protected activities. The Boeing case instituted a new standard that considered the nature and extent of the rule’s potential impact on rights protected by the NLRA, as well as other justifications for the rule as part of its determination as to whether the rule is lawful. The current Board under President Biden is likely to revert back to a more restrictive standard like that of Lutheran Heritage Village-Livonia, in which the so-called “reasonable employee’s reading” governs. To be proactive, companies should consider whether they need to update their workplace rules and employee handbooks in anticipation of the new standard.

Expansion Of Recent Ban On Arbitration Of Sexual Harassment Claims? It Is Certainly Possible, And There Is Precedent. Recently, we here at the PMN hosted Robert T. Szyba, partner in Seyfarth’s New York office, to podcast on the recently passed H.R. 4445, which, as we noted here, permits persons alleging sexual assault or harassment to do so in court, even if the aggrieved person signed a pre-dispute agreement to arbitrate all claims. Will such a ban extend to other forms of discrimination or harassment? Well, that is what happened recently in California with the passage of SB 331, which Seyfarth discussed here, extending California’s prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex, as was previously the case. Similar movement is already occurring at the Congressional level with the introduction of H.R. 963, which would expand H.R. 4445’s prohibition on arbitration of sexual harassment claims to all forms of disputes between consumers and sellers, disputes that relate to an actual or potential work relationship, alleged violation of antitrust laws, and all disputes alleging violation of antidiscrimination laws. H.R. 963 does not enjoy the bipartisan support that pushed H.R. 4445 to the finish line and this is not likely to pass in the near future, but we will keep our eye on it. Stay tuned.