A New Day In The American Workplace: A New Day In The American Workplace: Labor Law Changes in the Obama EraLabor Law Changes in the Obama Era

G. Mark Jodon, Esq.• Shareholder in the Houston office of Littler

Mendelson, the nation’s largest labor and employment law firm.

• Mr. Jodon's practice focuses on employment related litigation before state and federal courts, as well as governmental agencies such as the Equal Employment Opportunity Commission, Texas Workforce Commission, Occupational Safety and Health Administration, National Labor Relations Board, and the Wage and Hour Division of the United States Department of Labor.

• Mr. Jodon is a frequent lecturer at labor and employment seminars and he conducts HR training workshops

Today’s Agenda• Understand how the shape of the Obama

Administration and the New Congress will impact employers

• Peek at what is on the legislative and regulatory horizon from a labor and employment perspective

• Discuss the potential impact of these changes in the workplace

What We are Going to Discuss...

• The New Administration• Legislative Front• Labor Law Agenda• Employment Discrimination Legislation• Work-Family Balance Initiatives• Other Coming Workplace Change

Disclaimer

• The presentation is not intended to be partisan

• The information presented is factual, based on actual legislation and positions taken by President Obama, members of his administration, and Congressional leadership

The Lay of the Land in DC:The New Administration

The Atmosphere in Washington

• Organized Labor, employee advocacy groups, and their allies are very frustrated

• Belief that Bush Administration has ignored workers in favor of companies

• Reduced enforcement and rule-making in key agencies during Bush Administration

• Make up for lost time

The New Secretary of Labor

Hilda Solis Hilda Solis

The New Secretary of Labor• Staunch Union Supporter

– 97% lifetime rating by AFL-CIO for pro-union voting record

– Member of the American Rights at Work Board of Directors

• Strong proponents of EFCA• Workplace Safety• Led by former Representative David Bonier

(D-MI)

– Vocal EFCA proponent

The New Secretary of Labor

• First Public Appearance:– AFL-CIO Executive Council meeting– Quote:

“There’s a new sheriff in town”– Promised to:

• Provide protection to workers in the workplace• Help workers get “family-supporting” jobs• Enforce EFCA

Possible Changes at the DOL

• $2 Billion in additional funding this year

• Solis has spoken in favor of increased OSHA and MSHA funding

• Expect renewed focus on overtime violations and employee misclassification

New Chair of the NLRB: Wilma Liebman

Possible Changes?

• National Labor Relations Board (NLRB)– Increased rulemaking

activity– Employee Free Choice

Act (EFCA)

NLRB Changes

• Three vacant seats on NLRB • Obama’s Democratic nominees:

– Craig Becker (Associate General Counsel, SEIU)– Mark Pearce (Union-Side Labor Lawyer)

• Move to overturn controversial Bush-era rulings:– Temporary Workers– Weingarten Rights for non-union employees– Use of employer e-mail system for union solicitation– Anti-salting cases– Secret-ballot election to reverse card check

Executive Orders Affecting Federal Contractors

• 4 have already been issued:– Notification of Employee Rights

Under Federal Labor Laws– Non-displacement of Qualified

Workers Under Service Contracts– Economy in Government Contracting– Use of Project Labor Agreements

in Federal Construction Projects

EEOC

• Stuart Ishimaru (Acting Chair) and Christine Griffin (Acting Vice Chair)

• Both have lamented the lack of enforcement at the agency

EEOC – What to Expect?

• Genetic Information Non-Discrimination Act (GINA) proposed regulations were introduced

• Final regulations governing genetic discrimination in employment will be issued soon (i.e. prior to November 21, 2009)

EEOC – What to Expect?

• More funding• More enforcement• More regulations / rule-making

The Lay of the Land in DC:The Legislative Front

Setting the Stage in Congress

• Democrats regained control of Congress in 2006 after 10 years of Republican rule

• Senator Arlen Specter has changed to Democratic Party

• Strong belief that “Main Street” was ignored in favor of “Wall Street”

• Perception that workers have fallen behind economically and that protections have weakened

President Obama &the 111th Congress

• Past is prelude . . .– 110th Congress “road-tested” many

of the initiatives we’ll discuss today– Obama vocally advocated for significant

change in labor and employment laws– Many significant initiatives have already

been introduced – and one has passed (Ledbetter Act)

• First 100 Days set the tone• Current economic environment may build

popular support for employee “protections”

• Are employers in store for a sea of change?

What Does History Tell Us?

• Franklin D. Roosevelt’s First 100 Days & Beyond• Political and Economic Situation

– Economic situation and shift in party power very similar to today

– Organized labor’s role instrumental in election of both FDR and Obama

– Congress granted President extraordinary powers to combat Great Depression

– Groundbreaking changes intended to reverse the economic devastation in America – job creation and infrastructure initiatives

– Labor agreed to set-aside its agenda for the good of the economy and the country

What Does History Tell Us?

• Eventual Impact on Employers– Fundamental change in employment laws

designed to protect workers and build the middle class:

• National Labor Relations Act(right to organize, engage in collective bargaining, and take part in strikes)

• Fair Labor Standards Act(established a minimum wage rate, a 40-hour work week, and the requirement to pay overtime)

What is Next?

• 5-Way Battle shaping up between:– Organized labor, advocacy groups,

and their Congressional supporters

– Moderate (DLC/Blue Dog) Democrats and Republicans in Congress

– Moderate influences in the Administration

– Pro-labor Administration members

– Business groups

• Let’s look at what they will be battling over . . .

The Labor Law Agenda: A Second New Deal?

Employee Free Choice Act (EFCA)

• INTRODUCED ON MARCH 10, 2009• Changes the National Labor Relations Act

(“NLRA”) to:– Permit card check authorization in lieu of secret ballot

elections if a simple majority of employees in a selected group signs union authorization cards

– Strict time limits on negotiations for initial collective bargaining agreements

– Requires mandatory mediation and binding arbitration if time limits are not met

– Enhanced penalties for certain violations of the NLRA

What This Means for Employers(if enacted)

• Dramatic rise in union organizing• Employees may unwittingly

unionize• Ability to negotiate a union

contract favorable to the company greatly diminished

• Potential legal exposure under the NLRA will expand dramatically

Will EFCA Become Law?• No crystal ball• 10 current Senators failed to

co-sponsor EFCA this time• Senators who may not vote

for cloture:– Lincoln (D-AR)– Pryor (D-AR)– Feinstein (D-CA)– Bennet (D-COL)– Udall (D-COL)– Carper (D-DEL)– Landrieu (D-LA)– Nelson (D-NE)– Johnson (D-SD)– Specter (D-PA)– Warner (D-VA)

• Not enough votes to end a filibuster as of today!

Possible Compromise?

• Sen. Arlen Specter (D-PA) under pressure from both sides – has explored compromise in the past

• Sen. Specter announced on March 24, 2009 that he will not vote for cloture on EFCA in its present form– Set forth numerous compromise

provisions that he would be willing to consider

– After switching parties, reaffirmed opposition to current version of EFCA

• Feinstein/Specter compromise: mail-in ballots instead of card check

??

Freedom From Union Violence Act of 2009

(H.R. 2537)

• Would impose a fine up to $100,000 and/or prison sentence up to 20 years for anyone who commits an act of violence or extortion during a labor dispute

• Amends the Hobbs Act • Anti-racketeering measure

RESPECT Act

• The Re-Empowerment of Skilled and Professional Employees and Construction Trade Workers ("RESPECT") Act”– Dramatically reduces the number of

employees an employer can designate as supervisors

– All of the new “non-supervisors” would be eligible to organize and join unions

– Potentially large source of new members for unions

Patriot Employers Act

• To qualify as a “Patriot Employer”a company would need to:– Be headquartered in the United

States– Provide heath care benefits– Adopt a neutral stance toward

unionization– Maintain its domestic workforce

levels– Subsidize salaries/benefits of

employees on active duty in the military

– Provide retirement benefits

Other Labor Law Initiatives

• Repeal of Rightto Work laws– Law in 22 states– Prohibits compulsory

payments to unions“Obama and Biden will ensure that his labor

appointees support workers’ rights and will work to ban the permanent replacement of striking workers.”

-From President Obama’s Campaign Website

The Employment Law Agenda

Employment Law Agenda(from the Obama Campaign Website)

• Combat Employment Discrimination

• Create a Better Work / Family Balance

Lilly Ledbetter Fair Pay Act

• Signed into law on January 29, 2009• Reaction to Supreme Court Ruling• Amends the Civil Rights Act of 1964 (applies

to ADA, and ADEA as well)• Codifies “Paycheck Rule”• Significant expansion of potential liability

for discriminatory pay practices• Could significantly increase employers’ record-

keeping burdens

Paycheck Fairness Act(H.R. 12, S. 182)

• Passed the House on January 9; pending on the Senate’s calendar

• Amends Fair Labor Standards Act (FLSA) to allow victims of pay discrimination to potentially recover unlimited punitive and compensatory damages

• Prevents employers from relying solely on the “factor other than sex” affirmative defense; Instead, employers must additionally prove that such factor is “job related”and serves a “legitimate business purpose”

• Employees could rebut this claim by showing that an alternative employment practice exists that could achieve the same business purpose

• Eliminates the requirement that employees work in the same establishment for wage comparison purposes

Employment Nondiscrimination Act of 2007

• Prohibits discrimination based upon actual or perceived sexual orientation

• Based on state and local laws already in place in several jurisdictions

• No affirmative action requirement

• Would not require provision of benefits to unmarried couples

Minimum Wage

Seen as the most direct way to put money in the pockets of the middle classReflection of what is happening in many states

“Raise the Minimum Wage to $9.50 an Hour by 2011:Barack Obama and Joe Biden believe that people who work full time should not live in poverty. Before the Democrats took back Congress, the minimum wage had not changed in 10 years. As President, Obama will further raise the minimum wage, index it to inflation.”– From President Obama’s Campaign Website

WAGES ACT(H.R. 2570)

• Working for Adequate Gains for Employment in Services Act

• Would initially increase tipped employees’ hourly wage from $3.75 to $5.00

• Wages would then increase the following year to be 70% of minimum wage or $5.50/hr (whichever is greater)

Other Civil Rights Initiatives

• Major Changes:– Elimination of caps on jury awards

for discrimination– Greater awards under the FLSA– Allows undocumented workers to

recover damages– Limits mandatory arbitration in

employment agreements– avoids a post hoc justification for an

employment practice that adversely impacts the wages of women

– disparate impact cases under Title VII and ADEA are treated the same

Arbitration Fairness Act of 2009 (H.R. 1020)

• Introduced on February 12, 2009• Would invalidate most employment-

related pre-dispute arbitration agreements

• Passage unlikely, although it had several (39) co-sponsors

• Similar provisions could make their way into civil rights legislation

Servicemembers Access to Justice Act of 2009 (H.R. 1474)

• Introduced on March 12, 2009• Strengthen enforcement of the

Uniformed Services Employment and Reemployment Rights Act (USERRA)– Ban pre-dispute arbitration agreements– Increased employer penalties for violations,

including compensatory and punitive damage awards, and attorneys’ fees

– Clarifies that USERRA prohibits wage discrimination against members of the armed forces

– Defines “successor in interest”

Status of the ADAAA

Took effect January 1, 2009• First: Expands the definition of “major life

activities”• Second: Prohibits consideration of most

mitigating factors in assessing whether an individual is disabled

• Third: Allows employees who are “regarded as”disabled to pursue discrimination claims regardless of whether the perceived impairment limits a “major life activities” (unless the impairment is transitory and minor)– Effective Date: January 1, 2009

Work/Family Balance

Work/Family Balance

• Expand the Family and Medical Leave Act• Encourage States to Adopt Paid Leave• Protect Against Caregiver Discrimination• Expand Flexible Work Arrangements • Expand Paid Sick Days

“Obama and Biden will double funding for after-school programs, expand the Family Medical Leave Act, provide low-income families with a refundable tax credit to help with their child-care expenses, and encourage flexible work schedules.”– From the Obama Campaign Website

National DefenseAuthorization Act

• Signed into law on January 28, 2008

• Includes amendments to FMLA re: Military Family Leave– Military

Caregiver Leave– Qualifying

Exigency Leave• Regs answer open

questions

Expansion/Enhancement of FMLA

Expand the Family and Medical Leave Act: The FMLA covers only certain employees of employers with 50 or more employees. Obama and Biden will expand it to cover businesses with 25 or more employees. They will expand the FMLA to cover more purposes as well, including allowing workers to take leave for elder care needs; allowing parents up to 24 hours of leave each year to participate in their children's academic activities; and expanding FMLA to cover leave for employees to address domestic violence.

– From President-elect Obama’s Transition Website

Working Families Flexibility Act

• Working Families Flexibility Act (H.R. 1274) (introduced March 3, 2009)– Request flexible work options– Interactive process– Denial requires explanation– Employee can file complaint

with the DOL– Penalties and federal court

review

Family Fairness Act of 2009 (H.R. 389)

• Introduced January 9, 2009• Would eliminate the hours of

service requirement under the FMLA

• An employee would still be required to have worked for the employer for at least 12 months to be eligible for FMLA leave

• Practical effect is that more employees – especially part-time employees – would be eligible to take FMLA leave

Family and Medical Leave Enhancement Act of 2009 (H.R. 824)• Introduced on February 3, 2009• Would amend the FMLA to allow employees to

take parental involvement or family wellness leave– Up to 4 hours of leave in a 30-day period, not to

exceed 24 hours in a 12-month period for:• Child’s or grandchild’s school or community organization

activities (play, parent/teacher conference, sports event, cub scouts)

• Routine dental/medical appointment• Attend to needs of an elderly relative (visits to nursing

home)– Applies to employers with 25 or more employees

within prescribed radius, not 50 under current law

Family-Friendly Workplace Act (H.R. 933)

• Introduced on February 10, 2009

• Would amend the Fair Labor Standards Act to permit private-sector employees to choose comp time in lieu of cash wages

• Already in place and popular in the public sector

The Family Leave Insurance Act of 2009 (H.R. 1723)

• Introduced on March 25, 2009• Paid FMLA leave for employees• Administered through a federal

insurance fund• Paid for through employer and

employee payroll taxes• Applies to any employer who

employs 2 or more individuals for more than 20 workweeks

• Employees eligible for paid leave after six months

• Similar law already in effect in California

Expansion/Enhancementof FMLA• The Family and Medical

Leave Expansion Act– Incentive for states to adopt

paid leave laws– Smaller employers would

have to provide FMLA leave– Adds domestic violence as a

cause for taking FMLA leave – Permits a total of 24 hrs of

leave during any 12-month period for a parent to “participate in an academic activity of son or daughter...”

Healthy Families ActExpand Paid Sick Days:

Half of all private sector workers have no paid sick days and the problem is worse for employees in low-paying jobs, where less than a quarter receive any paid sick days. Obama and Biden will require that employers provide seven paid sick days per year.

– From Obama’s Presidential Transition Website

Healthy Families Act

• Healthy Families Act (2007)– Employers with 15

or more employees – Mandatory paid sick leave – Private right of action

for employees – Carryover from year

to year– Posting requirement

Domestic Violence Leave Act(H.R. 2515)

• Would amend the FMLA by extending coverage to domestic partners

• Would permit leave to address acts of domestic violence, sexual assault and stalking

FMLA Final Rules

Effective January 16, 2009• Change to rules for employees who “age into”

eligibility standards• Provides rules for Military Family Leave and defines

“exigencies” for National Guard and Reserve Troops• More specific requirements for Serious Health

Condition• Employer notice requirements increased• Employee notice obligations slightly more rigorous• Substitution of paid leave: employer may require

employee to follow policies and procedures of the applicable leave

Highlights of the Regulatory Changes to the Final Rules

• Certification requirements and process – greater clarification and employer permitted to use non-health care provider, other than supervisor, to contact employee’s health care provider for authorization and clarification

• Perfect attendance awards now permissible• Fitness-for-duty certification rules permit employer to

require certification for employee returning from intermittent leave if there is a risk of harm

• Can settle FMLA claims without DOL or court approval

ARRA of 2009:COBRA Revisions

• American Recovery and Reinvestment Act of 2009 (“ARRA”) significantly revises group health plan coverage continuation provisions of COBRA

• ARRA became effective February 17, 2009, but applies to employees who are “involuntarily terminated” on/after September 1, 2008 and on/before December 31, 2009

Possible Compromise?• Sen. Arlen Specter (D-PA) under pressure from both

sides – has explored compromise in the past• Sen. Specter announced on March 24, 2009 that he

will not vote for cloture on EFCA in its present form– Set forth numerous compromise provisions that he

would be willing to consider– After switching parties, reaffirmed opposition to

current version of EFCA • Feinstein/Specter compromise: mail-in ballots instead

of card check

ARRA of 2009: COBRA Subsidy

• Involuntarily terminated employee may be eligible for a 9-month, 65% reduction in COBRA premiums, provided:– Employee pays 35% of the applicable COBRA premium– Employee otherwise meets the requirements for COBRA

coverage (e.g., not eligible if terminated for “gross misconduct” nor if eligible for other group coverage or Medicare)

– Premium reduction must be repaid by “high income individuals” (phase-in begins at modified AGI of $125,000 and full repayment obligation kicks in if earn $145,000; higher threshold amounts for joint-filers)

ARRA of 2009:COBRA Subsidy

• Once an employee elects COBRA coverage and pays 35% of the premium, the employer must “front” the remaining 65% of the premium

• Employer is reimbursed from the employer’s quarterly federal payroll tax transmittals

ARRA of 2009: What Employers Must Do

• Identify employees involuntarily terminated on/after September 1, 2008

• Employer must notify individuals who have a qualifying event about the COBRA subsidy

• The deadline has passed for notification for those affected prior to February 17th

Other Legislative Changes

FOREWARN Act

• FOREWARN Act of 2007• Changes to WARN:

– Covers smaller employers– Lowers the number of

employees affected to trigger WARN

FOREWARN Act

• Requires an employer to: – Give more notice

to employee and the government

– Notify the Secretary of Labor

– Doubles the penalties for non-compliance

“Blacklisting” ofFederal Contractors

• Has potential to disqualify many businesses as federal contractors

• Potential ways contractors can be “blacklisted”– Unsatisfactory Contractor– Need justification to award contracts

to businesses with 2 or more offenses on record

– Database to track offenses, including settlements

• May be accomplished through Regulations instead

“Blacklisting” ofFederal Contractors

• Typical current “non-issues” that could cause problems under the blacklisting legislation:– NLRB charges– DOL investigations– OSHA inspections– OFCCP Audits– EEOC charges

RAISE ACT(H.R. 2731 and S. 1184)

• Rewarding Achievement and Incentivizing Successful Employees Act

• Would amend the NLRA to permit financial incentives beyond the pay or compensation level set in a collective bargaining agreement

The Most Recent Proposals

• Breastfeeding Promotion Act of 2009 (H.R. 2819; S.1244)

• Wounded Veteran Job Security Act (H.R. 466)

• Truth in Employment Act (H.R. 2808; S.1227)

What You Can Do!

• Be informed . . .– www.littler.com– Littler’s DC Employment Law

Update Blog: www.dcemploymentlawupdate.com

– Transition to a New (Work) Day• Take the time to prepare• Plan for change

For More Information:For More Information:

Mark Mark JodonJodon(713) 652(713) 652-- 47394739

mjodon@littler.commjodon@littler.com

or

Anthony GrijalvaAnthony GrijalvaG&A PartnersG&A Partners

4801 Woodway, Suite 2104801 Woodway, Suite 210Houston, Texas 77056Houston, Texas 77056

(713) 235(713) 235--82808280www.gnapartners.comwww.gnapartners.com

agrijalva@gnapartners.comagrijalva@gnapartners.com

Question & Answer