New ESG Final Rule, Finally. About a year ago, in this very space, we discussed the Department of Labor's proposed rule to permit managers of employee benefits plans under ERISA to consider environmental, social, and governance ("ESG") factors when selecting vehicles for investment opportunities; this proposed rule would roll back regulations put in place in October 2020 by the Trump Administration that did not outright ban ESG-related investments, but certain provisions often discouraged plan fiduciaries from taking ESG factors into account when investing. Well, more than a year later, the DOL issued final regulations on ERISA fiduciary duties as it relates to ESG when investing plan assets, as Seyfarth noted here (the piece is worth the read, especially for anyone interested in the evolution of DOL guidance as it relates to this issue). While the final regulation permits consideration of ESG in investing, the DOL made sure to emphasize that the final rule does not sway from the following, "longstanding principles": (1) ERISA's duties of prudence and loyalty require ERISA fiduciaries to focus on risk and return factors when investing plan assets; and (2) an ERISA fiduciary's duty to manage plan assets includes exercising rights associated with those assets (e.g., proxy voting).
Looman To Head W&H Division. After the fairly public sinking of the nomination of David Weil as Administrator of the Wage and Hour Division at the DOL, this Administration decided to stick with the tried-and-true by nominating then-"Acting" administrator Jessica Looman to the role, which the Policy Matters team podcasted about here. While Dr. Weil's nomination surprisingly garnered the "no" votes of three democratic Senators, Jessica Looman's nomination, conversely, pulled not only the entire Democratic Caucus, but also Senators Susan Collins of Maine and Lisa Murkowski of Alaska. Jessica Looman never appeared hindered by her "Acting" title, but the division now carries the political heft of Senate confirmation at the top of the organizational chart, which tends to lend to smoother agency action.
NLRB Ups the Ante...Again...And Again.
- In a precedent-shifting 3-2 decision, the NLRB reversed a Trump-era ruling that lowered the bar for employers to expand units past unions' proposed bounds, i.e., making it easier for unions to secure representation elections for bargaining units that are narrower than a facility's full workforce. The ruling essentially puts the ball in the workers' court to determine the composition of the bargaining unit. The ruling restores a 2011 Obama-era standard that requires employers seeking to broaden bargaining units to show that workers outside the union's proposed group have an "overwhelming" common interest with included employees.
- The NLRB has issued a Notice of Proposed Rulemaking that would rescind a rule finalized in spring 2020 (when the Board was still under republican control) that angered organized labor, which argued that the new rule made it easier to disband, and harder to organize, unions. The proposal would do a few thing to make organizing easier. First, the rule would permit regional directors at the NLRB to issue an order delaying votes when a union or other party accuses employers of election interference. Second, it would remove the ability of a single worker to challenge the formation of a union in cases where an employer agrees to voluntary recognition. And finally, it would reduce some of the up-front evidentiary requirements placed on unions before they could engage in a bargaining. Comments to the Notice of Proposed Rulemaking must be received by the Board on or before February 2, 2023.
- As Seyfarth noted here, General Counsel Jennifer A. Abruzzo issued Memorandum GC 23-02, announcing her intention to "vigorously enforce extant law" as it relates to what she describes as "intrusive or abusive" electronic monitoring and algorithmic-driven management practices that might interfere with employees' Section 7 rights under the National Labor Relations Act. The goal is to encourage the Board to consider the prevalence of new tracking technologies by instituting a burden-shifting "framework" where an employer will be found to have presumptively violated the Act where its "surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee in engaging in activity protected by the Act."
- Expect more from the NLRB. The flurry of activity is somewhat surprising, but, at the same time, the current president has pledged to be the most union friendly president in the history of the Republic. To that end, Chairman Lauren McFerran and General Counsel Jennifer Abruzzo have sent a letter to congressional appropriators asking for additional funding to support the ever-increasing case load. Stay tuned.
SPEAK Out Act. Earlier this month, somewhat under the radar, and certainly not to the same (deserved) fan-fare as the passage of the Respect for Marriage Act, President Biden signed the " SPEAK Out Act," which renders unenforceable any "predispute" non-disclosure and non-disparagement clauses ("NDA") related to allegations of sexual assault and/or sexual harassment. Previously-considered language would have only applied the restriction to NDAs signed before a lawsuit; the final signed language expanded that period to apply to any NDA signed "before the dispute arises." A "dispute," unlike a lawsuit, is a much broader term, that can encompass internal corporate grievances or simple demand letters. The bill was inspired by Gretchen Carlson's experience at Fox News, wherein she signed an NDA upon entering employment and was thus not permitted to speak to the sexual harassment she endured. This follows on the heels of the "Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021," which we discussed here. One thing is clear: despite all the talk of polarization, when it comes to preventing sexual harassment / assault, there seems to be strong bipartisan agreement.
LA Fair Work Week Ordinance. Your friendly reminder, at the end of an eventful year, that local legislation can lead to hefty exposure, and that local legislation often reverberates to other policy making bodies. To that end, as Seyfarth summarized here, the City of Los Angeles recently introduced a Fair Work Week Ordinance, which, if passed, would join cities such as San Francisco, San Jose, and Emeryville that have already passed predictive scheduling laws (Berkeley has also introduced a similar ordinance, but it has not yet passed). The ordinance will require employers to provide estimates and advance notice of schedules as follows: Good Faith Scheduling Estimate & Notice, 10 Day Notice, Right To Request Changes, 14-Days Advance Notice of Changes, and a Right to Decline Schedule Changes.
Happy Holidays. We here at the PMN wish all of our readers a very happy holiday season. It has been a busy year, with more legislation, and more agency rulemaking even than we expected at the beginning of this year. Please come back on the 30th for a wrap on the Federal Government's accomplishments this year, and what is on tap in 2023.
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