PUNCHING IN: State of Labor

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By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Mr. Trump Goes to Capitol Hill | Looking for Labor Judges? | Robb Re-envisions Regions

Chris Opfer: President Trump is scheduled to address Congress tomorrow in his first State of the Union speech. Trump’s televised chat with lawmakers around the same time last year was technically considered a “joint address.” Whatever you want to call his remarks this time around, it will be interesting to see how the latest chapter in Trump’s on-again, off-again relationship with Congress plays out. What type of tone will the president strike with lawmakers just one week removed from a government shutdown and nine days before Uncle Sam’s current funding runs dry?

All eyes will be on immigration, and what sort of deal Trump might make to land a long-term funding deal in exchange for protections for undocumented immigrants who came to the country at a young age. Bloomberg Law’s Laura Francis tells us the White House is sending a proposal to lawmakers today, but details have started to trickle out and folks on both sides of aisle are already griping. Conservatives don’t like that the plan would offer legal status and eventual citizenship for 1.8 million undocumented immigrants, much more than the roughly 700,000 covered by the Deferred Action for Childhood Arrivals program. Progressives are not exactly over the moon about proposed cuts to family-based ("chain") immigration and diversity visas.

We’re also watching for some potentially big news about Trump’s plans for the federal workforce.

There’s chatter around town of a “big shakeup” over at the Office of Personnel Management, one former agency official recently told me. Trump, in his SOTU address and/or upcoming budget request, is expected to propose changes to make it easier to fire federal civil servants and implement a possible pay freeze, according to the source. That sounds like a plan with White House labor adviser James Sherk’s fingerprints all over it.

Ben Penn: Buried deep beneath the surface of the DOL’s vast bureaucracy is a five-member judicial panel handing out consequential employment law decisions. The Administrative Review Board was established to give a legal voice to the labor secretary on cases the secretary is simply too preoccupied to tend to.

Oddly, even though ARB judges serve at the pleasure of Labor Secretary Alex Acosta, they were picked by his Democratic predecessor, Tom Perez.

All five members, who some attorneys say tend to interpret the law in a way that’s more philosophically aligned with Perez, can be replaced at any time by Acosta. One possible reason we haven’t seen any shakeups thus far is that the panel reports to the deputy secretary, and there isn’t one. Longtime Trump nominee, Pat Pizzella, is still waiting for clearance. He passed another Senate procedural hurdle earlier this month, and his arrival at the DOL now hinges (again) on the GOP leadership finding time to schedule a floor vote, or the Democrats allowing a vote to proceed without using up the 30 hours of allotted debate.

Whenever Pizzella does arrive, a review of ARB personnel will represent just one page in a tall to-do stack waiting on his desk. A niche community of attorneys are invested in ARB cases, which most frequently pertain to whistleblowing laws, with some immigration, child labor, and employment discrimination issues sprinkled in. The panel hears cases that arise when a party appeals a decision from a DOL administrative law judge.

Although many ARB cases don’t make news, the board is now mulling a matter that has gained national headlines: whether the DOL can force Google to turn over more employee salary data as part of an ongoing investigation into alleged pay disparities at the tech giant’s California headquarters.

Check back in with us for updates. A DOL source tells me there could be a fair bit of turnover ahead at ARB and elsewhere in the civil service ranks. Don’t count on the ARB website to inform you of any changes. The site still lists an ARB member (Anuj Desai), who left late in the Obama administration, and neglects to mention two active ARB judges, late-term Perez-appointees Leonard Howie and Tanya Goldman.

CO: Now that the smoke has cleared – at least temporarily – on the news that NLRB General Counsel Peter Robb (R) is thinking about overhauling the regional director system, it’s probably a good time for a run-down of what we know. Here’s a quick timeline:

  • Jan. 11: Robb in a conference call with all 26 NLRB regional directors says he’s considering changes, which may include eliminating or combining certain regions, stripping RDs of their senior executive status, and installing district directors to more closely oversee the regional directors’ work.
  • Jan. 11-17: At some point, the Regional Director Committee sends a letter to Robb, expressing “grave concerns” about the proposed restructuring. The Committee is comprised of four regional directors: David Leach (Newark, NJ), Peter Sung Ohr (Chicago), Mori Rubin (L.A.), and Nancy Wilson (Pittsburgh). Particularly notable is that the directors say in the letter that Robb told them the move has nothing to do with any looming budget cuts. “You informed us that the restructuring you envision would take place regardless of budgetary considerations,” they wrote.
  • Jan. 19: Members of the American Bar Association Practice and Procedure Committee broach the topic with Robb and Chairman Marvin Kaplan (R) during a meeting at NLRB headquarters. Robb tells the group that the proposal is simply one of several options for cost-cutting in response to expected budget cuts. Kaplan, during a stretch of the meeting in which Robb was not in the room, tells the group the board will have to approve any restructuring plans. He also suggests that the public should have an opportunity to weigh in.

Whether and when any changes actually happen remains to be seen. We’re hearing that Robb may specify his proposal by the end of next month.

Some folks on the left have painted the restructuring as a power grab by Robb to push through a more employer-friendly agenda. Randy Johnson, the former Chamber of Commerce lobbying chief who just landed at Seyfarth, says that’s not necessarily a bad thing.

“It’s important that the general counsel tell regional directors it’s time to take a more balanced approach to these cases,” Johnson told me last week. “Vindicate employee rights, but don’t bludgeon employers.”

BP: The DOL’s tip pool controversy continues to hold the title of most surprising Trump regulatory rollback move to amass lasting controversy. And it’s only continuing to pick up steam. As Bloomberg Law readers learned last week, worker attorneys are strategizing a legal challenge and other opponents may now try to make hay out of what they see as poor optics on this rulemaking related to the labor solicitor and her father, the judge.

The issue’s staying power was unexpected because the Obama DOL’s tipping regulation was seen as a technical rule that was never really part of the broader discussion on bold worker-friendly regs from the Tom Perez days. To the folks tuning out of this discussion because they’re not interested in the hospitality industry, please be patient.

The left’s reaction to the tip-pooling process is a signal of how labor groups will behave throughout the next three (or seven) years of a GOP-controlled executive branch. The “arbitrary and capricious” claim that’s being considered to stop the tip pool reg may be a trial balloon of sorts (pun very much intended) for further litigation on a number of labor regulatory moves.

Democrats witnessed business groups and management attorneys often successfully stall the Obama DOL regulatory agenda with litigation. The Chamber of Commerce, Associated Builders and Contractors, and other trade groups frequently took the DOL to court far away from Washington, in the more business-friendly confines of the federal courts in Texas. Employee-side litigators eager to at resist the dismantling of progress are treating the Trump department with a return fire.

So about that theory being floated to block the new tip credit rule. Who better to run it by than the man who was counsel of record on seemingly every single business group legal challenge to the Obama DOL and NLRB: Littler Mendelson’s Maury Baskin.

“Their argument that you just described—it seems like a stretch,” Baskin told me, without elaborating. If anyone knows what is arbitrary and capricious, it’s Baskin.

One might think that Baskin was such a frequent tormenter of the previous White House’s labor agenda that he’d have been hoping for a third Obama term. Does the Trump administration’s gentler treatment of employers now put Baskin’s practice out of business?

“I have the feeling that we haven’t seen the last of rules we don’t like,” he said. Baskin didn’t name it, but I have to imagine an Acosta overtime rule with an auto-indexer would be right up his alley.

What Baskin did detail is that his practice’s regulatory litigation focus is now pivoting to the states.

“We are advising or assisting with state and local regs and laws dealing with a wide range of issues, including joint employers, gig economy, predictive scheduling, home care worker payment questions, arbitration agreements, and others,” he said.

In other words, no need to send donations to his family. Maury’s doing just fine.

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@bloomberglaw.com and bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

New OFCCP Director Ondray Harris is making the rounds this week, talking to stakeholders about the course he plans to chart for the federal contractor watchdog. Harris will chat with a group of contractors on Tuesday. He’s then scheduled to meet separately with civil rights representatives and contractor business organizations Wednesday. Bloomberg Law’s Porter Wells, the newest addition to the labor and employment team, has more on that here.

Those of you looking for clarity on worker classification issues in the gig economy might want to take a quick gander at a recent decision out of Philadelphia. A panel of Pennsylvania judges ruled last week that unemployed workers who pick up some cash by driving for Uber can get jobless benefits at the same time. OK, so maybe that doesn’t exactly clear up the question of whether gig workers are employees or independent contractors. It is, however, the latest development in the ongoing debate.

See you back here next week.

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