Punching In: Janus Jitters? Forced Wellness

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By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Fare Thee Well(ness) | D.C. Decides on Tipped Workers | The Future Is Now for These Lobbyists

Ben Penn: The supremes are running out of time on Janus. Perhaps today will be the day the Supreme Court allows us to exhale by issuing a decision that in all likelihood will kill public sector unions’ right to “fair share” fees. The labor movement has been bracing for this outcome for quite some time now, and I’m guessing management attorneys, business groups, and free market think tanks have had some fine bubbly on ice for a few weeks. With or without Janus v. AFSCME, a new batch of Supreme Court rulings arrives at 10 a.m. EST.

In case you’re wondering how Randi Weingarten, president of the American Federation of Teachers, is feeling these days, she offered some passionate rhetoric on Thursday about the decision that will squarely affect her 1.7 million membership base.

“We assume we’re going to lose, but, I would say that this process that we’ve gone through will make us stronger,” said Weingarten, who’s been strategizing for several years around an anticipated high court-induced blow to her treasury. “Don’t get me wrong--we don’t want this case, but don’t count us out,” she said at the Labor and Employment Relations Association annual meetings in Baltimore.

Weingarten joined a panel of labor law experts who laid out a preview of the post-Janus battleground--not just to retain and recruit new members, but to prepare for the National Right to Work’s next litigation frontier.

At the Janus oral arguments in February, a longtime crusader against public sector unions, Justice Samuel Alito, seemed to target not only the legality of agency fees collected from nonmembers, but the very nature of exclusive representation in collective bargaining, Weingarten said. In essence, he was “trying to set up this twofer,” she said.

Weingarten didn’t mention it, but perhaps she heard the rumors last fall that the Trump DOL and DOJ amicus brief in the case would go beyond agency fees and also urge the justices to declare it unconstitutional for unions to serve as the exclusive bargaining representative for employees, including nonmembers, in a public sector workplace.

That didn’t happen but it’s quite possible the government scrapped this portion of the brief after the Supreme Court denied review in a separate case, Hill v. SEIU, last November that addressed this very issue. Before the denial, the National Right to Work Foundation, representing the plaintiffs in both Janus and Hill, wanted the high court to consolidate the cases to deal an even more severe blow to labor.

The exclusivity issue will heat back up the moment Janus comes down. I’d imagine that within seconds after the justices rule, NRTW attorneys will conduct a control-F search for the word “exclusive” to see if Alito tees up their next challenge.

The sophisticated, heavily financed, decadeslong movement behind Janus won’t be disbanded after a win. The next round of litigation drafting begins the moment SCOTUS rules as we all expect it to.


Chris Opfer: We talked two weeks ago about how political squabbling over President Trump’s picks for the Equal Employment Opportunity Commission have left the EEOC’s regulation of employee wellness plans in limbo. A finalized rule, which is already on hold, essentially turns into a pumpkin at the stroke of midnight on New Year’s Day. A federal judge gave the EEOC until Jan. 1 to clarify the percentage of health-care premiums an employer can cover in exchange for participation in a wellness program. The agency initially said employers can cover up to 30 percent as an incentive without making participation effectively mandatory. But the judge said the agency didn’t fully explain how it landed on that figure and ordered the rule to be vacated in January if the EEOC doesn’t revise it before then.

Commissioner Chai Feldblum (D) told me last week that she doesn’t expect the EEOC to hit the deadline if the Senate doesn’t confirm Republican nominees for two open seats on the commission soon.

“I certainly don’t see anything happening until there’s more of a full commission,” Feldblum said. “That’s a big thing. On regulations, you want to issue it with a full commission.”

If the EEOC doesn’t update the rule, the agency will return to its previous guidance on wellness plans. The EEOC in that guidance took the position that any financial incentive beyond de minimis makes wellness plan participation required and therefore violates the Americans with Disabilities Act.

Mike Eastman, an employment lawyer with NT Lakis, told Bloomberg Law the courts will likely be forced to sort out case by case whether wellness plan incentives violate federal disability discrimination law if the EEOC doesn’t come up with a new rule. The question generally is whether employers can offer a financial incentive to those who are willing and able to participate in the programs.

“It’s going to be a little bit like the Wild West,” Eastman said.

BP: As anyone who’s frequented a D.C, restaurant or watering hole in recent months surely knows, tips are on the ballot in the nation’s capital tomorrow. Voters can say yes or no on whether to ban the tip credit in Washington, as is already the case in seven states. The measure would require employers to pay tipped workers a full minimum wage, on top of gratuities earned, that will gradually rise to $15 per hour by 2025.

The debate has turned ugly and personal, as evidenced by the infighting among restaurant workers. Some of the higher-earning servers and bartenders don’t want their current tipping system messed with, while other employees favor the initiative as a means of stable hourly earnings to supplement their erratic tipped income.

Before criticizing me for thinking too locally, bear in mind that this is a bellwether vote for a similar measure in Michigan in November. New York, Massachusetts, Missouri, and other states and localities could be next, either through ballots or via legislation.

That’s why Restaurant Opportunities Centers United and its industry-aligned foes at consulting firm Berman & Co. have so much at stake on Tuesday in D.C. Both sides are accusing the other of misleading the public.

“The first thing it’s going to say on your ballot is that if you pass this, it’s going to raise D.C.’s minimum wage to $15 per hour,” Berman & Co. VP Michael Saltsman told me. “The real point of this is to eliminate the tip credit.” Saltsman insists virtually all tipped workers want to keep the tip credit, but others say the employees who support the initiative have been less vocal because they fear retaliation.

Restaurant-funded mailers and signs hanging up in seemingly every D.C. establishment declare, “Save Our Tips.” ROC United, the architect of the national One Fair Wage Campaign, is returning the fire.

“The campaign is called save our tips. It should be called save our profits,” Diana Ramirez, deputy director of ROC, said at the LERA conference on Thursday. The tip credit allows restaurants to pay employees who get gratuities as little as $2.13 per hour, depending on the jurisdiction.

I could flip a coin on how D.C. will vote tomorrow. But the amplifying cross-messaging is bound to cause at least some of my fellow constituents to show up to the polls more confused on tips than before the campaign began.

A yes outcome would mean this battle will spread and intensify across the country, so hopefully D.C. voters show up to the polls educated on the initiative.

CO: So that much anticipated Labor Department survey on gig work didn’t exactly make the splash some were expecting. The DOL found that the number of full-time contingent workers dropped slightly over the past decade or so. Still, as Tyrone Richardson reported last week, the new data isn’t likely to dampen interest in Congress on updating labor and employment laws for the future of work. I wouldn’t expect lawmakers to all land on the same page about how to address gig jobs and automation in the workplace anytime soon. But they’re thinking about it.

A pair of employer advocates are gearing up to try to shape the future of work debate. Littler Mendelson and Prime Policy Group are launching an “employer-based” coalition to consider issues like the displacement of workers by technology. “The Coalition will directly engage policymakers,” according to a report being released by Littler and Prime today, in an effort to “to shape policy through thought leadership and advocacy.”

Littler, which bills itself as the world’s labor and employment law firm, represents a wide variety of big corporate names, including some major players in the gig economy. Uber, Postmates, Tesla, Amazon, Boeing, Wal-Mart, FedEx, Handy, and Salesforce are among current and previous clients. Littler is one of two L&E firms that also has a federal lobbying shop.

Prime, led by longtime Washington lobbyist Charles Black, is a heavy hitter in the government relations world. The firm has lobbied Congress on behalf of Google, IBM, AT&T, Airbus Americas, Archer Daniels Midland, GlaxoSmithKline, and Chrysler, among other companies.

The report details what the groups call “TIDE,” the technology-induced displacement of employees. Littler and Prime say automation offers all kinds of potential benefits for businesses and consumers, but that rapid enhancements in technology could also put plenty of folks out of jobs. The report echoes concerns expressed by a wide array of research, advocacy, corporate, labor, and government groups about training workers for the new and different jobs that may be coming soon.

The frustration for observers who have listened to the broad future of work discussion in recent years is that so far there don’t seem to be many answers about who bears the responsibility to train for the TIDE: businesses? government? workers? unions? Once that’s settled, there’s also not a lot of agreement about how to identify the skills need for the jobs of the future and train workers appropriately.

Littler and Prime, like other future of worker watchers, say it has to be a joint effort. But they also say employers shouldn’t wait for help from the outside.

“America’s employers and other organizations dependent upon human talent” must “take it upon themselves to work together to put themselves and their workers in the best possible position to prepare for the TIDE, adapting and adjusting to the sweeping changes that emerging technologies promise to bring,” the firms say.

The report details a couple of potential policy responses, including the creation of a third worker classification for people who fall somewhere between the employee and independent contractor categories; the “universal income” approach popular in certain lefty circles; and the socialization of health care and other benefits.

Littler and Prime aren’t putting their stamp of approval on those ideas. But two areas they definitely want policymakers to take a look at are beefing up mid-career training opportunities and offering tax credits for worker relocation. They’re also warning against any legislation that gets in the away of advancing automation and other technology.

BP: We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.comand bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

Monitoring the DOL’s work on calculating regular rates for overtime purposes? I’ll have some insights for you this week. Worker advocates have long warned of the scourge of “wage theft,” but now some prosecutors are treating pay violations as actual crimes. Chris will have more on that this week. Jaclyn Diaz is headed over to the House on Thursday for a Education and the Workforce subcommittee hearing on “developments and trends” in the American labor market.

See you back here next Monday.

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