PUNCHING IN: Senate Parting Gift, Mixed Signals from Labor Board


PUNCHING IN

Monday morning musings for workplace watchers 

By Chris Opfer and Ben Penn

DOLFU

Nominee Shuffle | Purple Surprise? | Tip Debate Still on Menu 

Ben Penn: While many folks were distracted escaping town last week, the Senate confirmed a trio of Labor Department nominees. The chamber also sent back to the White House for renomination Trump’s picks for deputy labor secretary, Wage and Hour Division administrator, and others.

Read more from Tyrone Richardson here.

Interestingly, Pat Pizzella, who has been in the queue for the DOL’s No. 2 since June, could’ve proceeded more efficiently had Senate Democrats waived his nomination into the next congressional session. Perhaps concerns about Pizzella’s lobbying ties to Jack Abramoff are causing the foot-dragging. 

Getting lost in the noise here is that labor solicitor Kate O’Scannlain was approved by the Senate, meaning the department will now start 2018 off with its third-ranking official. The solicitor serves as chief legal officer overseeing hundreds of attorneys, and plays an instrumental role in framing policy and reviewing regulations. The solicitor’s outsized importance is often disguised behind the scenes. 

Even with the missing deputy secretary nominee (who is not a lawyer), legally-minded Labor Secretary Alex Acosta must be thrilled with the Senate for gifting him O’Scannlain as his prosecutor just in time for Christmas. 

Chris Opfer: Last week, we described the dizzying final days of the NLRB’s Miscimarra era, in which the labor board used its fleeting GOP-majority to peel back several high-profile decisions from the last administration. Worker advocates are dismayed, saying the board moved quickly to stifle employee rights and tip the scales in favor of big business. Last week, they got one small glimmer of hope that the board won’t undo everything from the Obama years.  

NLRB General Counsel Peter Robb (R) is defending the board’s 2014 decision giving workers the right to use work email off hours for organizing purposes. At least for now. The Purple Communications decision was expected to be one of those on the chopping block during Miscimarra’s last stand. But Robb and a group of board lawyers last week told the Ninth Circuit that the decision “is reasonable and consistent with the Act.”

Of course, that doesn’t mean the board can’t issue a new ruling in another case to restrict email use in a way that Robb also finds acceptable under the law. The board’s lawyers argued elsewhere in the brief that the board has wide discretion to overrule decisions and create new legal standards. Still, folks fearing the worst from the new board and its top attorney may want to take small victories where they can find them.

BP: Over at the Labor Department, I’m wondering what the strategy is to fend off a mobilization effort by worker advocates around what they’re rebranding as the “tip theft” rule. Just as the Trump DOL was about to put a wrap on year one without any notable controversies, will this seemingly technical debate mushroom? I’d welcome your thoughts.

The proposal to rewind a 2011 regulation that said tips are the property of employees is three weeks old, but the pushback from the Restaurant Opportunities Centers United and a coalition of other groups isn’t subsiding. DOL already acceded to one of the worker groups’ demands by extending the public comment period one month. Still, restaurant employee protests, social media attacks, and outrage over the lack of economic analysis persist. 

Supporters of the DOL’s rescission proposal point out that the 2011 rule also came without an economic analysis. However, the Obama administration intended that regulation to clarify a preexisting legal interpretation rather than to cause a major disruption to service industry compensation. 

As you might recall, the DOL is now characterizing this as a worker-friendly move to boost the wages of traditionally non-tipped back-of-house workers, like cooks and dishwashers. The department also argues that the prior administration never had the legal authority to issue its rule to begin with. 

All the same, by not including a full breakdown of the estimated costs and transfers from a proposal that doesn’t prevent employers from retaining the tips for themselves, the department is catching some heat. In addition to workers organizing around this issue, the tip rule generated strong admonition from a certain Obama DOL official.

“I think it is simply a statement of fact that Secretary Acosta and the people in the political side of the Labor Department who pushed that rule, which was a wonderful Christmas present to the National Restaurant Association, didn’t want the public to understand what kind of transfer we’re talking about,” David Weil, the WHD chief from 2014-2017, told me. Weil called an outside analysis from the Economic Policy Institute finding that the new regulation would transfer $5.8 billion a year from workers to employers a “very reasonable and conservative estimate.”

Weil scoffed at the proposition that the change was meant to beef up compensation for untipped workers. “The other part of the argument that is just fallacious is dressing this up as a way for restaurants to be able to pay more to their back-of-house workers. If I was giving an economics 101 exam and someone gave an answer like that to me, I would give them no credit on that particular question,” said the former econ professor and current dean at Brandeis University.

Time will tell whether the opposition to the tip pool proposal continues to gain traction and if the DOL muffles the complaints by adjusting the final version to appease ROC and others.

But for the controversy-averse labor secretary, this is certainly not an issue that’s going away. 

CO: The labor board’s position change on micro-units is among the recent rapid fire of decisions that’s getting lots of attention. Still, I’m not sure about the move's ultimate impact on collective bargaining.

SHDATA

When the Democrat-majority board ruled six years ago that a group of certified nursing assistants could unionize, critics said it would lead to a wave of election petitions for small, splintered groups within a larger workforce. The NLRB data above, however, show that bargaining units in union elections haven’t changed much in size in recent years. On the other hand, union win rates are on the uptick as the total number of workers organized each year is falling. Check out these stats from our friends behind the NLRB Election Statistics Reports.

Anyone involved in the union drives at VW in Tennessee may have a different point of view on the micro-units issue altogether. 

BP: The lead player in galvanizing workers against the aforementioned tip pool proposal, ROC United, is also at the center of a separate contentious issue facing the Labor Department.

If Secretary Acosta is feeling vengeful, the department could try to weaken the influential worker center ROC United by treating it as a traditional labor organization. The U.S. Chamber of Commerce and some Republican lawmakers have been pleading with the DOL’s Office of Labor-Management Standards to redefine alt worker centers, which don’t engage in traditional collective bargaining, as unions. This could bury ROC and dozens of other organizations with burdensome new paperwork requirements.

But the long game for the business community is more likely to get the DOL to pass the baton on this cause over to the National Labor Relations Board. If the proper case presented itself, the board could try to classify at least some worker centers as unions, thereby blocking them from the secondary boycotts that have been their key mode of leverage. 

Acosta did recently state that the worker center issue is something the DOL is taking a look at, but he hasn’t provided any firm signals that he’s willing to embark on this battle. I asked the controversial lobbyist turned PR exec Richard Berman – yes that Berman – to read the tea leaves.

Berman said he’s encouraged that Acosta saw a need to scrutinize “these worker centers that are basically Potemkin unions, and his understanding that this is a phenomenon that’s avoiding the National Labor Relations Act by setting these groups up.” 

Acosta’s never gone as far as Berman did in his description of worker centers. Plus, what about the fact that the secretary hasn’t had jurisdiction over the NLRA since his short stint on the labor board in the early aughts?

“He doesn’t have authority over the NLRA but he’s got a bully pulpit, too,” Berman responded. “So the administration can certainly signal to the board that they need to be doing more than they were obviously doing under the Obama board. These worker centers have sprung up during an Obama board reign. And now they need to be reined in.” 

I’m not convinced that Berman, a fierce opponent of minimum wage hikes and “union bosses,” will have as much sway on this administration as he did during the Elaine Chao, George W. Bush days. 

If Acosta wanted to pick the fight with worker centers, he could have appointed Nathan Mehrens as head of OLMS, and not – as we’ve reported – a more moderate conservative lawyer in Arthur Rosenfeld.

For more on what to expect out of OLMS in 2018, the agency outlook is available here.

CO: 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@bna.com and bpenn@bna.com, or on Twitter: @ChrisOpfer and @BenjaminPenn.

Here’s to what may very well be the slowest week of the year on the labor and employment front. It’s been a bit of a barn burner over the past 12 months, so now’s a good time to grab some ginger bread, ladle some egg nog, and catch a breather. If past is prologue, we’ll all need to be well rested going into 2018.

Happy holidays. See you back here next week/year.

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