Labor News on Tap
Monday morning musings for workplace watchers
Trumped | Overtime Litigation Heats Up | Class Action Waiver Questions
Chris Opfer: Well, that escalated quickly. Business community types shifted seamlessly from shock over Donald Trump’s upset White House win to optimism about sticking a big ol’ fork in a wide range of Obama era labor initiatives. Just how they go about doing that remains to be seen, but what we know is that the GOP and its allies are looking to move swiftly.
“We’ve been down this road before,” the Chamber of Commerce’s Randy Johnson told me the day after the election. “When Bush took over after Clinton, we talked to the administration and gave them a list of things we’d like to see repealed and we expect to do that again.”
Republicans are also likely to put together a long wish list of updates to federal labor, wage and hour and employment laws. Any thoughts about what might be on it? Drop us a line over e-mail: email@example.com and firstname.lastname@example.org, or on Twitter: @ChrisOpfer and @BenjaminPenn.
Ben Penn: First things first. Before The Donald moves into town, the outgoing administration will have its day in court to protect what Obama declared as "the single biggest step I can take through executive action to raise wages"–the DOL’s overtime rule. We’ll be paying close attention to a courthouse in Sherman, Texas, on Wednesday. A judge there (who was appointed by Obama) hears oral arguments on whether to enjoin the rule before some 4 million Americans become newly eligible for time-and-a-half pay two weeks later.
CO: Ah, Texas: the place where Obama administration initiatives often go to die. It was a federal court in Brownsville that first pumped the brakes on the outgoing president’s plan to expand deportation protections for undocumented immigrants. Another judge in Lubbock also put the DOL’s persuader rule on ice over the summer. This week could be a Texas twofer: A judge in the state’s northern district will consider a lawsuit challenging the Labor Department’s fiduciary rule for retirement brokers on Thursday.
BP: I’m told the parties in the overtime case have received an assurance from Judge Amos Mazzant that he’ll decide on the preliminary injunction before the rule’s Dec. 1 effective date, but he hasn’t committed to an exact date. I don’t know what type of poker face Mazzant has, but for everybody’s sanity, let’s hope he indicates this week that we won’t be held in suspense until late night Nov. 30.
BP: Bottom line: this lawsuit from a coalition of business groups and 21 Republican state attorneys general is considered highly unlikely to stop the regulation altogether. But there is a scenario in which Mazzant or an appellate judge could be persuaded to set aside the part of the rule that updates the new salary threshold every three years. The plaintiffs went for the whole shebang, but if they can even thwart just the so-called auto-escalator, the Chamber of Commerce will be popping the finest Texas bubbly. Also, the fact that we’re talking about a Trump White House has me second-guessing everything, so maybe Mazzant does put the kibosh on the whole rule!
Assuming the overtime rule takes effect as scheduled, how the Trump administration handles it is far from settled. Employers have been planning for most of this year to comply, and some have already begun lifting salaries above the new $47,500 threshold to avoid overtime liability. Repealing the regulation wouldn’t do them many favors. And that’s the exact political hurdle the DOL intended to create for a possible President Trump when it set the Dec. 1 effective date.
Read into this what you will, but Trump’s transition organization chart leaked to the media last week reveals business lobbyist Steve Hart is heading up the incoming labor review team. Hart has been lobbying this year on the overtime rule on behalf of the International Association of Amusement Parks and Attractions, and has reached out to Congress about a bill to revise the regulation by phasing in the new salary threshold over three years. The IAAPA is part of a business coalition that is fighting to stop or weaken the rule.
Trump will be pressed by the employer community to consider a variety of avenues for curbing overtime—Congressional Review Act, appropriations, outright repeal, delay, small-business carveout, and removing the indexing measure. What the president-elect does here is still anybody’s guess, but remember this—the working-class wing of his supporters living on the margins won’t share the business lobbyists’ views on removing overtime access from employees earning less than $47,500 per year. Trump’s response to the overtime rule and his DOL priorities more generally should be a litmus test for how his administration intends to reconcile the blue-collar base with the GOP establishment.
CO: The Texas courts won’t get all the action. Bloomberg Law’s Lawrence Dube reminded us that we’re still waiting to see if the Supreme Court takes up one of several disputes over whether employers can require their workers to sign class action waivers. The Labor Board says those provisions violate the National Labor Relations Act, but the Fifth Circuit disagreed. The question for the justices—should they choose to answer it—is whether the provisions interfere with workers’ rights to act collectively.
Meanwhile, the Seventh Circuit will later this month hear oral arguments over whether federal discrimination law already protects workers against sexual orientation bias on the job. Bloomberg Law’s Kevin McGowan tells us this is a case to watch as courts continue to grapple with the question of whether the ban on sex discrimination includes sexual orientation discrimination. The Seventh Circuit has previously said LGBT workers are not protected by the Civil Rights Act, but the Equal Employment Opportunity Commission begs to differ.
The case takes on even more importance for folks who are concerned about how the Trump administration will approach civil rights. Bloomberg Law’s Jay Anne Casuga dropped by my neck of the Crystal City office to mention that there’s already some murmuring in the federal contractor community that Trump could try to do away with an executive order banning discrimination and requiring contractors to take affirmative action in hiring and employment decisions. That one’s still a long shot, but it’s safe to say no one’s really sure what the 45th president will do when he gets to the Oval Office.
BP: On that note, it’s probably a good time for us to punch out. Daily Labor Report subscribers can check in with us during the week. Look for our colleague Patrick Dorian’s upcoming story on how companies can protect themselves from lawsuits by training managers to be proactive on accommodations for workers with disabilities.
See you back here next Monday morning.
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