Punching In: Watching the Labor Board Throne, Waiting for Waivers

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By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Ring Bring Surprise Shift at Labor Board | Will SCOTUS Nudge Self-Reporting? | Senate Tries Hand at Tribal Labor

Chris Opfer: John Ring is slated to start this week as the newest member of the National Labor Relations Board. The former Morgan Lewis attorney is getting his feet wet at a precarious time for the board, thanks to ethics disputes and some internal hand-wringing about possible budget cuts and moves to revamp the NLRB’s regional office and case processing operations. Oh, by the way, Republican Ring is also the board’s new chairman.

The White House announced last week that Ring would take the reins from Marvin Kaplan (R), who served in the leadership role for an eventful four months. That makes Kaplan only the second NLRB chairman to be stripped of the title without a change in the party controlling the White House in the board’s 83-year history. Here’s a tip of the hat to any Punching In-ers out there who had Philip Ray Rodgers (R) as the answer to the Jeopardy question about the other chairman to be relieved of his duties (he’s the question to the answer, in appropriate Jeopardy form). Rodgers was acting chair for a stretch of 1955 before being replaced by Boyd Leedom (R).

We may never know the truth about why Team Trump decided to swap Kaplan out—he remains a commissioner. The management bar, including some D.C. attorneys known to have the administration’s ear, were none too happy with Kaplan’s handling of the Hy-Brand joint employment case in response to concerns about Bill Emanuel’s (R) participation in overturning the Obama board’s ruling to the hot-button issue. Kaplan and the board’s two Democrats scrapped a precedent-setting decision in that case after the NLRB inspector general said Emanuel was too close to the matter to vote.

But there was chatter before Ring was even appointed to the board that whoever filled the seat of former Chairman Phil Miscimarra (R) would eventually also get the chairperson role.

“I don’t think it has anything to do with the controversy that is swirling around the board at this time or Kaplan’s leadership,” Barry Kearney, who worked for the NLRB for more than four decades before joining Cozen O’Connor last year, told me. “The president may have contemplated this before Ring was confirmed.”

There was also some grumbling that Miscimarra and his supporters weren’t exactly pleased when the Trump administration initially made Miscimarra the board’s acting chairman after the president took office. Some felt he shouldn’t have had the “acting” part of the title, which the White House dropped quickly. Perhaps the administration gave Kaplan the chairmanship without an “acting” tag after Miscimarra left to avoid the same headache but with the intent that it be temporary. With this White House, it may be easier to touch the moon than to uncover the actual thinking behind the move.

Ben Penn: The Labor Department’s Wage and Hour Division is marching ahead with efforts to improve its cooperation with businesses. In back-to-back weeks, the agency launched a self-reporting pilot program and issued the first opinion letters of the Trump era.

More employer-amiable tweaks are surely around the corner, especially once an administrator is confirmed. For instance, check out Porter Wells’ reporting on the change in attitude toward businesses at another DOL enforcement agency in the months after a permanent director came on board.

Opinion letters and self-reporting are separate compliance assistance initiatives that share at least one common trait: The Labor Department is attempting to bring employers to the table by offering a pathway to avoid class and collective litigation. This is an important sweetener to help businesses overcome their natural fear of ratting themselves out to the feds. Recall that workers accepting back pay, as a result of their boss self-reporting to WHD, must sign a waiver foreclosing their right to sue, and a business that has obtained a favorable opinion letter on a particular compensation practice can waive the letter in front of a judge as a good-faith defense.

But what if I told you the U.S. Supreme Court may issue a pro-business decision this week in Murphy Oil that would partially step on the Labor Department’s plans. If the ruling blesses class and collective action waivers in mandatory arbitration clauses—as many expect—it could open the floodgates for businesses to embrace the clauses. Suddenly, employers may not be so bothered at the prospect of class action wage claims.

The high court siding with Murphy Oil would presumably spur other companies to incorporate class action waivers into the arbitration agreements they require workers to sign as a condition of employment. That would appear to deflate the WHD’s appeal to management to take part in the twin programs.

Then again, if we listen to the words of one former DOL solicitor who now advises employers, Greg Jacob, the sea change some are predicting from Murphy Oil won’t necessarily come to fruition. Jacob, now a partner at O’Melveny & Myers, told me he’s talked to many businesses in recent years that don’t use class action waivers and never will, regardless of how the court decides.

“For a lot of employers, it doesn’t work for them. It’s not right for their workforces,” Jacob said. “My strong impression is those that want” class action waivers already have them.

My takeaway: Maybe the justices aren’t poised to inadvertently undermine the WHD compliance assistance effort to the extent I imagined. But that doesn’t mean this decision won’t have major implications that cut across practically every labor and employment statute.

CO: The Senate is set to vote this week on a bill that would shield employers on tribal lands from the NLRB’s reach. The measure, which the House passed earlier this year, would resolve ongoing questions about when federal labor law applies to casinos and other businesses operating on Native American property. It has been panned by labor groups as a free pass for tribal employers to silence and shortchange workers.

The bill likely faces a tight vote in the Senate, where at least nine Democrats will have to cross the aisle and side with the Republican majority to pass the legislation. It also puts some lefty lawmakers between a rock and a hard place: They want to protect workers’ right to organize, but they also want to back tribal sovereignty. The legislation even presented a bit of a pickle for former President Barack Obama, who in a moment of CYAism a few years ago tried to please everyone by saying he would support the bill only if it required tribes to come up with their own local labor laws.

Bloomberg Law’s Tyrone Richardson tells me to keep an eye on red state Democrats up for reelection later this year. Sens. Jon Tester (Mont.), Heidi Heitkamp (N.D.), and Claire McCaskill (Mo.) are of particular interest.

BP: This is where I’d normally preview the week. But since the tsunami of labor news last week may still have us reeling, here’s a quick debrief on what you might have missed:

  • Labor Secretary Alex Acosta was close to avoiding making headlines at a subdue Senate budget hearing Thursday. That is until he concluded the session with some interesting remarks defending his commitment to regulatory data transparency—provided that it doesn’t mislead the public. What made it somewhat odd was that Democrats weren’t even querying him about the tip pool process. The secretary attempted to correct the record about whether he went out of his way to keep negative data from the public. Perhaps he knew that a moderate Democrat who doesn’t typically bash the Trump administration, Sen. Heitkamp, was simultaneously reaming his agency out on a different panel. Acosta takes another trip to the Hill tomorrow to testify at a House Ways and Means Committee hearing on jobs.
  • The White House named John Pallasch, a relative unknown in D.C. workforce circles, as the nominee for DOL’s assistant secretary for employment and training. Pallasch most recently ran a Kentucky employment agency and worked as a senior DOL political appointee in the George W. Bush days, but not at ETA. That means he’ll need to get acquainted with the numerous federal, state, and local stakeholders that his new office regularly engages with. Considering the pace of appointments by this administration, he may have a full year to prep for the job before a confirmation.
  • Patrick Pizzella was approved by the full Senate as deputy labor secretary, on a 50-48 party-line vote. This went down pretty much entirely as expected, minus a hiccup from one of the leading labor-focused Democrats. Sen. Sherrod Brown took to the floor Tuesday to criticize Pizzella’s qualifications for the job but seemed to mistake him for a former Wage and Hour Division administrator. Brown, referring to Pat’s background in the Bush-era DOL, several times referred to him as having worked at WHD. In reality, Pizzella was assistant secretary for administration and management. I asked Sherrod the following day for his thoughts on Pat, and he went big picture: The Trump DOL has “a bias towards employers, and a whole worklife of fighting for employers against workers in front of the Labor Department, in front of the court system,” the Ohio Senator said. “And that’s why the Trump White House looks like Wall Street.”

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.

Secretary Acosta is headed home this morning. The former Florida International University law school dean will join President Trump at an event outside of Miami to tout the small business benefits of recent tax cuts.

Are you emoji fluent? You might need to be if you’re a lawyer who handles workplace discrimination, harassment, and retaliation cases. Bloomberg Law’s Genevieve Douglas and Jay-Anne Casuga have that story this week. If you’re a Brooklynite or have any business before the federal court in the Big Apple’s best borough, you may also want to keep an eye out for Patrick Dorrian’s data analysis of how the Eastern District of New York processes employment cases. Meanwhile, Laura Francis is looking at what a wave of announced departures from Congress means for the possibility of immigration legislation moving on Capitol Hill.

See you back here next Monday.

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