United States: EEO-1 On Appeal. (Beltway Buzz, August 23, 2019)

Last Updated: August 27 2019
Article by James J. Plunkett

The Beltway Buzz is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what's happening in Washington, D.C. could impact your business.

EEO-1 on Appeal. Earlier this week, the U.S. Department of Justice (DOJ) filed its appeal of the March 4, 2019, district court decision that reinstituted the 2016 EEO-1 wage and hour reporting scheme. The DOJ argued to the U.S. Court of Appeals for the District of Columbia that the plaintiffs did not have standing to bring the suit in the first place because they could not demonstrate harm, and that the district court exceeded its authority by specifically directing the Equal Employment Opportunity Commission (EEOC) to proceed with the collection of information in a particular manner. A coalition of business groups is expected to file an amicus brief, as the concerns of the business community are not addressed by the parties to the litigation. Of course, no matter the eventual result of the appeal, it is not expected to impact the current September 30, 2019, reporting deadline.

Fluctuating Workweek Reg? Since being named acting secretary of labor in July 2019, Patrick Pizzella hasn't wasted any time in moving the U.S. Department of Labor's (DOL) regulatory agenda forward. For example, a regulatory proposal from the DOL's Wage and Hour Division concerning overtime pay and fluctuating workweeks took a giant step forward this week when it was sent to the Office of Information and Regulatory Affairs (OIRA) for review. The proposal, which had previously been categorized as a "long-term action," is intended to "grant employers greater flexibility to provide additional forms of compensation to employees whose hours vary from week to week." Though we don't know how long the OIRA review process will take, we could see a notice of proposed rulemaking on this matter in a matter of weeks, even though we weren't expecting anything until the spring of 2020. Alfred B. Robinson, Jr., has the details.

DOJ on LGBTQ. Representing the EEOC, this week the DOJ filed its brief in a high-profile case that the Supreme Court of the United States will hear this term concerning transgender protections in the workplace. Though as a party to the case, the EEOC maintained that Title VII of the Civil Rights Act of 1964 prohibits discrimination against transgender workers, the DOJ's brief argues that "Title VII's prohibition on 'discriminat[ion] * * * because of * * * sex,' 42 U.S.C. 2000e-2(a)(1), does not bar discrimination because of transgender status." Oral argument in the case will take place on October 8, 2019, along with two other consolidated cases that address whether Title VII bars discrimination based on sexual orientation. Of course, the Buzz will be watching to see how these cases impact the political prospects of the Equality Act, which passed the U.S. House of Representatives in May 2019.

Unions for All. Building on its Fight for $15 campaign, this week the Service Employees International Union (SEIU) launched a new program: Unions for All. By its very terms, the program aims to increase union membership rolls. To do so, the SEIU advocates for sector- or industry-wide bargaining that would establish master contracts covering multiple employers within the same industry. The plan would also remove National Labor Relations Act preemption in order to allow states to enact their own labor laws. The Buzz expects to report more on the Unions for All campaign, especially as we approach the 2020 elections.

The Footnote That Keeps on Giving the Whole Year. The Buzz has been tracking the DOL's rulemaking that would clarify what types of remuneration must be included in the regular rate for purposes of calculating employees' overtime pay. It is perhaps no surprise that the DOL is undertaking this effort, as stakeholders remain confused about the regular rate. Indeed, this confusion is evident in a recent U.S. Court of Appeals for the Third Circuit ruling on whether incentive bonus payments made by third parties must be included in the regular rate. The court held that "incentive bonuses provided by third parties may or may not be remuneration for employment, depending on the understanding of the employer and employee." Even more interesting is that as part of its reasoning, the court cited to a rather unique authority (at footnote 6) for this proposition:

As for common sense, we cite no less an authority than Clark W. Griswold. In the classic movie National Lampoon's Christmas Vacation, the plot revolves around Clark's anxious anticipation of his Christmas bonus. See National Lampoon's Christmas Vacation . . . (Really, you should see it.). When the regular bonus does not arrive and instead Clark receives a jelly-of-the-month club membership, he berates his boss, saying, "Seventeen years with the company, I've gotten a Christmas bonus every year but this one. You don't want to give bonuses, fine. But when people count on them as part of their salary, well[.]" Id. Unlike the Christmas lights on his house, Clark doesn't seem to be overly bright, but he at least understands how a course of dealing can lead to an expectation that could be viewed as a meeting of the minds about remuneration for employment. In other words, it is common sense that labels alone do not control. And, of course, the required agreement between employer and employee need not be explicit. It may be implied through an employer's significantly facilitating regular compensation that reaches the employee. Walling v. Richmond Screw Anchor Co., 154 F.2d 780, 784-85 (2d Cir. 1946). Whether an agreement is fairly implied is discussed further herein. See infra at II.B.

As a fan of the Vacation movies, the Buzz thinks that this is a pretty effective argument. And at least the court didn't cite Cousin Eddie (hat tip to Vin Gurrieri).

The Buzz will be on vacation next week but will return on September 6.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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