United States: Agency Heads Discuss Changes In Regulatory Direction During Federalist Society Panel

Last Updated: November 20 2017
Article by Michael J. Lotito and Ilyse W. Schuman

The current leaders of the Department of Labor, Equal Employment Opportunity Commission, and National Labor Relations Board addressed transitions and regulatory plans at their respective agencies at a November 16 forum. The Federalist Society, a conservative think-tank, sponsored the panel discussion during which the speakers advocated a more common-sense approach to rulemaking, and supported the Trump administration's efforts to rescind or scale back some of the prior administration's more onerous rules.

Labor Secretary Alexander Acosta kick-started the discussion by criticizing the Obama administration's practice of using sub-regulatory guidance to change the law. He said he was against using "administrative fiat" to implement significant policy changes. He cited as an example the prior administration's joint employer and independent contractor guidance, which the current DOL has rescinded. According to Secretary Acosta, any change in substantive law should be made by Congress, not by interpretive guidance that is issued without the benefit of notice and comment.

In determining which rules are ripe for deregulation, the Labor Secretary proposed adding a new layer of analysis. When deciding which regulations to roll back, he said the agency should not merely perform a cost/benefit analysis, but should evaluate whether revoking the rule is necessary to preserve liberty. Secretary Acosta advocated using qualitative analysis or value judgment. As an example, the Secretary pointed to the DOL's enjoined persuader rule, which would have required employers to file public reports with the DOL when they use consultants (including lawyers) to provide labor relations advice and services that have the purpose of persuading employees regarding union organizing or collective bargaining. This rule, Secretary Acosta explained, would have infringed on the attorney-client privilege.

In addition, the Secretary pointed to the tip credit rule, which is on the agency's chopping block.1 Issued in 2011, the rule restricts allocating tips to non-tipped employees when the employer does not take a tip credit. According to Secretary Acosta, this rule bars agreements for sharing tips between front-of-house and back-of-house employees in certain instances. There is a circuit split regarding the legality of the DOL's authority to regulate this issue. Secretary Acosta said this issue also involves principles of liberty—specifically, freedom of contract.

Nicholas C. Geale, the DOL's Chief of Staff and Acting Solicitor, mentioned other items the DOL is currently working on and/or re-examining. His list included revising the H-1B visa forms to increase transparency, reforming the H-2B visa program, proposing rules regarding the use of Association Health Plans, proposing an 18-month delay in the fiduciary rule's prohibited transactions exemptions, making changes to the ancillary provisions of the beryllium rule, reviewing the Occupational Health and Safety Administration's rule allowing union officials to join workplace inspection "walkabouts," and revising the overtime regulations, among others.

Acting Chair of the EEOC ,Victoria A. Lipnic, similarly provided an update on Commission personnel and policy, and discussed what the Commission would be working on in the near future. Lipnic noted that the Commission has directed significant attention to reducing the backlog of pending charges filed with the EEOC. According to the Acting Chair, the Commission has reduced this backlog by 16%—the most significant reduction in 10 years. Other agency accomplishments can be reviewed in the Commission's FY 2017 Performance and Accountability Report, released on November 15.

In terms of EEOC policy, for the past month, "we have been living in the sexual harassment moment," she said. The Acting Chair said she and Commissioner Feldblum spearheaded a select task force to study harassment in the workplace, and that revised guidance on harassment has been sent to the Office of Management and Budget for approval before it will be released publicly.

Among the proposed recommendations issued last year, Acting Chair Lipnic remarked, was the provision of bystander intervention training as well as workplace civility training. The Acting Chair said she wanted to get the NLRB on board with the need for employer-enforced civility. She noted that the NLRB in recent years has found employers in violation of the National Labor Relations Act when they implement civility policies or codes of conduct and discipline employees for any violations of these policies.

Wellness is another area the Commission will focus on in the coming months, the Acting Chair said. After the EEOC issued its wellness regulations under the ADA and GINA, the Commission was promptly sued for its explanation of what constitutes a "voluntary" wellness plan, among other issues. A federal court remanded the rule for the EEOC's reconsideration, but did not vacate the rule.2 According to Lipnic, the "the EEOC will be spending another few years on wellness plans."

Finally, Acting Chair Lipnic said the Commission, once the new members are confirmed, will be taking another look at the revisions to the EEO-1 form, which had been amended to require the reporting of compensation data. The revised form has been suspended indefinitely.3

Waiting for a full complement of Commission members is the biggest delay in making policy headway, she explained. As the sole Republican member on the Commission, Lipnic cannot effect significant policy change. Two Republican nominees currently are awaiting Senate confirmation. In addition, the president has not yet nominated a new EEOC general counsel, which "is a very critical position at the EEOC." Although she and her three Democratic colleagues enjoy a good working relationship, "it makes a difference if you don't have the votes."

The NLRB, on the other hand, is currently working with a full five-member Board, although Chairman Philip A. Miscimarra's term will end in December. He considers this "an important transitional year" for the Board. During the panel, he reviewed some of the seismic policy shifts the Board has undergone during the past eight years, including the implementation of the revised election representation rules, and the increasing tendency of the Board to find neutral employment policies and work rules in violation of the NLRA. Chairman Miscimarra also found fault with the Board's position that merely requesting that employees maintain the confidentiality of ongoing investigations violates federal labor law. The Board's decisions in recent years have "made it difficult for parties to figure out what the law requires," he said.

The president has not yet announced his choice for Miscimarra's replacement. Until that replacement is nominated and confirmed, starting in mid-December, the Board will comprise two Democrats and two Republicans.

The panel discussion made clear that all three agencies, the DOL, EEOC, and NLRB, are poised to redirect their regulatory focus in the coming months.

Footnotes

1 See Eli Freedberg, DOL Announces Intent to Rescind Rule Restricting the Allocation of Gratuities to Non-Tipped Employees When the Employer Does Not Take a Tip Credit, Littler Insight (July 27, 2017).

2 See Russell Chapman, EEOC Must Reconsider its Wellness Regulations, Littler ASAP (Aug. 23, 2017).

3 See David Goldstein and Ilyse Schuman, New EEO-1 Report Suspended Indefinitely, Littler ASAP (Aug. 29, 2017).

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