PUNCHING IN: Labor Nominee Votes—Take Two


Monday morning musings for workplace watchers 

By Chris Opfer and Ben Penn


Senate to HELP Staff Up Labor Dept. | Good Things for Giggers? | Who Lands Randy?

Ben Penn: The Senate HELP Committee was apparently so eager to advance a package of Labor Department nominees back to the floor that it announced a vote was taking place Jan. 11, before the White House had even made the renominations official.

All the same, one has to imagine that Pat Pizzella (deputy secretary), Cheryl Stanton (wage and hour administrator), Scott Mugno (assistant secretary of occupational safety and health), and William Beach (commissioner of labor statistics) will all be OK’d on party-line votes when the Republican-majority committee meets Thursday.

What happens after that is far harder to predict.

Some of the same competing priorities that kept the full Senate from voting on these nominees in 2017 remain factors this year. The tax bill’s done, but a DACA fix and government spending negotiations are still poised to delay the confirmation votes into February or later.

Tyrone Richardson and I will be breaking down what that means for agency operations, later this week. 

Despite Senate inaction on nominees, Labor Secretary Alex Acosta continues to round out his team with political appointments that don’t require congressional approval.Robert O’Quinn started last week as the DOL’s chief economist, a department spokesman tells Punching In. O’Quinn arrived from the House Ways and Means Committee, where he also held the chief economist title. He has a long background in economics on Capitol Hill and at the Heritage Foundation.

Chris Opfer: Two recent moves by Congress and the Trump administration might make life a bit easier for gig workers. A tax break and health benefits could be on the horizon for Uber and Lyft drivers, Instacart grocery shoppers, and TaskRabbit home repair people, not to mention the millions of workers in more traditional jobs who are also classified as independent contractors.

First, the new tax law allows independent contractors to shave 20 percent off their revenue for tax purposes. The only catch to this “pass through” provision is that the person has to incorporate as an LLC or other type of business. 

Some gig workers have argued with a smidge of success that they’re employees, not contractors. That means they’re protected by wage and hour and workplace safety laws, are due workers’ compensation and unemployment benefits, and have the right to bargaining collectively, among other things. That argument probably goes out the window for giggers that incorporate. 

Still, the tax savings may be attractive to some contractors. Businesses also like not having to pay Social Security and Medicare taxes for nonemployees. But some folks are concerned that a sea change in employment relationships will water down workers’ rights on the job.

On the health front, the Labor Department announced last week that it’s taking steps to make it easier for small businesses and sole proprietors to join together to create association health plans. The move is primarily meant to make it easier for smaller employers to offer health benefits to their workers while also steering clear of Obamacare requirements. But It also appears to give gig workers the ability to join together to create their own health plans

James Conigliaro, the founder of the Independent Drivers Guild, said the group is already exploring whether it can create an associated plan for rideshare drivers. The IDG has brought in Kevin Hill, a former Oxford health plans executive, as an adviser.

“We believe it can be a good solution for our 75,000 drivers, but it's unclear how these plans will be regulated and whether such plans could be distributed in a way that would allow members to qualify for credits under Obamacare,” Conigliaro said. “An association plan couldn’t compete with a highly subsidized plan. On the other hand, drivers have special needs, and an association plan could be tailored to meet those needs and be very powerful. Either way, we're considering a range of options.”

The guild in a recent survey found that more than a quarter of its members want health insurance but aren’t currently covered.

BP: We’re still waiting to hear which of Washington’s elite management-side labor and employment firms lands Randy Johnson. The powerhouse labor lobbyist is fresh off an exit from 20 years heading labor policy at the U.S. Chamber of Commerce. We reported last week that it’s an apparent two-horse race for Randy between Littler Mendelson and Seyfarth Shaw.

Smart money says Johnson winds up joining his pal Larry Lorber atSeyfarth, where he’d have more autonomy and could open up his own lobbying shop. Johnson has no shortage of contacts at Littler. But if he joined the firm’s Workplace Policy Institute, he’d be sharing the spotlight with the big personality of a man some of you are familiar with – WPI co-chair Michael Lotito

After our story ran, Littler reached out to clarify a point on Johnson’s status. “Littler withdrew its offer to Mr. Johnson on December 19 and does not have any offer outstanding to Mr. Johnson,” the firm’s co-directors Jeremy Roth and Tom Bender said in a statement. “We wish him well in his future career path, whether that's with Seyfarth Shaw or elsewhere."

Littler declined to comment when I asked if that means Randy Johnson’s services wouldn’t be welcomed at the megafirm were he to express interest. 

With or without Johnson, the prospect of Seyfarth entering the exclusive fray of workplace law practices with a full-time lobbying arm is intriguing. Littler is somewhat of a pioneer in this concept. Ogletree Deakins has a labor-focused government affairs division as well. But as far as I can tell, that’s it. That’s the list.

The big shot L&E firms have been reluctant to devote resources to lobbying, preferring to focus on the constant revenue stream of billable hours for legal representation. But there’s growing competition from Littler and Ogletree, plus more employer clients are seeking law firms with direct access and influence in Washington. Perhaps Jackson Lewis, Fisher Phillips, and other leading workplace firms will be inclined to follow suit. 

Finally, with Johnson gone and some members of his old team reportedly pondering similar moves, will the Chamber still be a force in labor policy? The answer, according to a well-connected trade association source, is decidedly yes. What we don’t know is whether the Chamber continues to task in-house staff to craft legislative and regulatory workplace proposals and legal strategies, or increases its reliance on members.

CO: Some of the central legal questions in the cybersecurity space are unlikely to be resolved anytime soon. Courts are all over the map these days about what, if anything, businesses are required to do to protect their workers’ information from hacks. State laws and new requirements set to take effect in the European Union may eventually create some sort of baseline, but for now judges are largely left to fend for themselves.

Last week, the Third Circuit agreed to give Coca-Cola more time to respond to the latest round of legal filings in a proposed class action against it. The litigation stems from a Coke IT worker’s theft of company laptops that included personal information from some 70,000 employees. Even the lawyers suing the company aren’t expecting a decision in the near future. That’s because they want the Third Circuit to wait for the Pennsylvania Supreme Court to clarify state contract and negligence law in a separate case against University of Pittsburgh Medical Center. Fraudsters allegedly stole UPMC workers’ information from the hospital and used it to file false tax returns. Lower courts in both cases said neither Coca-Cola nor UPMC should be on the hook for the data breaches, but those decisions seem to raise more questions than answers at this point.

I’ll have more on the state of cybersecurity in the workplace for subscribers this week.

BP: As expected shifts in policy and enforcement stall without the more senior personnel in place, Acosta remains reluctant to make any major moves. From a good government perspective, it’s probably prudent to avoid rocking the boat before the appointees entrusted to run the offices below you arrive.

However, I’m told some segments of the D.C. trade association community are growing increasingly impatient with the secretary. The question being asked by business groups around town is how much longer do we need to stay patient before going public with criticism over lack of change? 

I’m not sure fear of public pressure would sway Acosta to act. Remember his words at the American Bar Association last November – persuade me like a lawyer, not a lobbyist.

Acosta recently issued a regulatory message that when lobbyists fail to support the validity of their claims, their words will be disregarded by this Labor Department.

Late last Friday, many of you might have missed a DOL announcement that an Obama-era rule on disability benefit claims would still kick in on April 1, despite calls from the from insurance carriers to revamp or further delay the regulation. 

For more of the nuts and bolts on this rule, subscribers can check out the coverage from Bloomberg Law’s Kristen Ricaurte Knebel. But the decision to defy opposition from insurers lends itself more broadly to this administration’s review of other regulations. 

A source with knowledge of the rulemaking tells me that despite industry stakeholders promising to submit data on the excessive compliance costs of this rule, the DOL wound up receiving fewer than five substantive comments with quantitative data. The results that were provided by the insurance industry showed annual cost increases amounting to less than $1 per participant. This wasn’t exactly the type of compelling proof that the labor secretary was looking for.

In other words, looking ahead to other regulatory reviews (hint – overtime, fiduciary) – the talking points around town better be backed up with hard evidence, or else advocates’ message again will fall on deaf ears. 

CO: We’re punching out. Daily Labor Report subscribers can check in during the week for updates. Subscribers who missed the return of DOL wage-and-hour opinion letters last week can also catch up there. In the meantime, feel free to reach out to us: copfer@bna.com and bpenn@bna.com, or on Twitter: @ChrisOpfer and @BenjaminPenn. 

There’s a pot battle brewing between the feds and the states, now that the Obama administration policy of noninterference with state marijuana law has gone up in smoke. Bloomberg Law’s Martin Berman-Gorvine is looking at what that means for employers in weed-friendly states. Jon Steingart tells us a court in Philadelphia on Tuesday will hear arguments in the battle over a city ban on salary history inquiries. 

See you back here next week.

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