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Chaos and Confusion Grip the Regulatory Agenda

Feb. 15, 2019
Expect to see Democrats wage total war on Trump while agencies press workplace regulatory reform.

Analysis and commentary from our Washington correspondent.

As we have seen from the partial shutdown of the federal government, the 2018 election created fertile ground for an all-out war between the Democrats who now control the House of Representatives and the administration of President Donald Trump.

Before the final votes had even been tallied Democrat leaders in the House had been recruiting attorneys to staff committees to be deployed against the Administration. It is not being partisan to observe that over the past two years Democrats have maximized their use of Congress, the courts and state governments in their control to wage an all-out battle against Trump central to their “Resistance!” campaign.

Previously, the parties on either side of the aisle engaged for the most part in proportional exertions on policies they opposed. But in our hyper-partisan era, virtually anything done by opponents isn’t just subject to close scrutiny, but almost automatically condemned as evil in the most extreme terms.

Of course, the main focus of this year’s Democrat congressional investigations initially will be on Trump’s alleged collusion with Russia during the 2016 election. But along with chasing these conspiracy theories, the House committee leaders will bear down hard on any and all actions of the Administration, weaponizing investigations against Trump.

When the Democrats unleash their investigations in the House, don’t expect reason or even common sense to prevail. Do expect legitimate actions to be mischaracterized and distorted along with hyped-up expressions of unjustified outrage.

Think I am going too far? Consider what happened to the National Labor Relations Board (NLRB) in 2018 after it overturned an Obama-era board decision asserting joint employer status for employers who were franchisees or staff leasing services. The Trump-appointed Republican-dominated board reversed a 2015 decision called Browning Ferris that had abruptly overturned a policy in effect for three decades.

That Browning Ferris decision held that a company was a joint employer even when it did not exercise control over another company’s staff, just as long as there was even the most remote chance it could do so some time in the future. The decision was widely seen as a bald-faced attempt to assist unions’ ongoing attempts to organize franchise operations like McDonald’s.

In December 2017, the newly-constituted Republican NLRB majority reversed the Browning Ferris decision, unleashing a remarkable combination of legal chicanery by a holdover Democrat Inspector General and over-the-top public expressions of outrage from prominent Democrat legislators—but only after the issue had been brought to their attention by their union allies. 

Conflict of Interest?

First, after unions brought the issue to the attention of members of Congress, the Democrat NLRB IG declared that one Republican board member had a conflict of interest. Lawyers for his former law firm—which employs hundreds of attorneys nationwide—participated in the 2015 case that was overturned, although none were involved in the later case their colleague had voted on. Sens. Patty Murray (D-Wash.) and Elizabeth Warren (D-Mass.) then solemnly intoned that, “A big ethics cloud hangs over the NLRB.”

Foreseeing that to continue could draw legal challenges, the board withdrew its decision and then opened a proposed rulemaking to address the issue, and another one to examine the board’s ethics standards. Sens. Warren, Bernie Sanders (I-VT) and Kirsten Gillibrand (D-NY) then accused the NLRB chairman of trying to “appease corporate interests desperately seeking to escape liability and suppress their workers’ efforts to organize.”

What makes this phony outrage galling is the fact that during the Obama Administration when conflict of interest charges were repeatedly raised over a Democrat board member voting on decisions involving his former employer, the Service Employees International Union, these same legislators and the Obama-appointed IG all remained conspicuously silent for years.

Now imagine this happening again and again this year, with federal agencies mired in lengthy congressional hearings centered on unfair accusations, fueled by the upcoming 2020 presidential primary season and a raft of legislators running for President. It is not too much to foresee these hearings will turn into a series of three-ring circuses, devouring agency staff and leadership time needed to conduct business.

As for the NLRB, it is still pressing forward with its joint employer rulemaking, although in the face of even more obstructionism from unions who claimed the board failed to pay adequate attention to their late-filed comments. The board extended the deadline for comments to Jan. 24, but it is almost certain it will issue a final rule this year.

(The NLRB also may use the proceeding as an opportunity to address the Dec. 28, 2018, federal appeals court panel 2-1 ruling that appears to reverse—or sustain—the 2015 Obama board’s decision in Browning Ferris depending on how you read it. The three-judge panel ruling was accurately termed by the one dissenting judge to be “confused and confusing”—so much so that various law firms issued press releases that the court had either overturned Browning Ferris or had upheld it.)

Other NLRB actions seen coming this year include a revision of the Obama-era board’s “ambush” election rule, which significantly shortened the period during which employers could try to counter union actions and claims before an organizing vote is held. Union access to employee e-mail systems is another issue being addressed.

Also expect NLRB General Counsel Peter Robb to continue riding point on a number of issues. He already has issued guidance memos to staff that are intended to undo unbalanced pro-union policies adopted by the previous board, including their sweeping assaults on non-union companies’ employee manuals. None of his actions will make the unions and their congressional allies happy.

Trouble Brews Elsewhere

Let’s take a quick look at what some other agencies are doing and we can play the game of “pin the congressional investigation on the issue” to guess which policies and actions will be deemed suitable weapons for weakening President Trump in advance of the 2020 election.

Like the NLRB, the Department of Labor (DOL) is considering a rulemaking dealing with the joint employer issue from its angle. Under the most likely proposal, two companies would be considered joint employers—making them equally liable for wage and hour enforcement—only if they share or co-determine the essential terms and conditions of employment, and actually exercise control over the employees’ work.

DOL also continues to look at alternatives to the Obama-era overtime rules that were stayed by a federal court before they could go into effect. Last year, the department said it plans to issue new standards this March, including a new minimum salary dollar amount for employees who will be considered non-exempt as well as changes in the job function definitions that contribute to determining who is considered an exempt supervisor.

DOL’s Wage & Hour Division appears to be right on schedule with this proceeding and has sent the proposed rule to the White House for review that is required before it can be published. Reports suggest that the new minimum annual salary for achieving exempt status will be in the low $30,000s, which would be down substantially from the Obama Labor Department’s annual salary minimum of nearly $48,000.

Another action that drew opposition from Democrats was DOL’s Payroll Audit Independent Determination (PAID) program, which continues through March 2019. This is a voluntary supervised settlement program for federal wage violations which drew fire from unions, at least five Democrat senators and the attorneys general of 11 states, who charged that the program let employers off too easily.

However, the Wage and Hour Division recovered a record $304 million in wages for workers in Fiscal Year 2018, which also was $34 million more than in 2017. A tiny portion of the $304 million total was $508,767 paid by nine employers who participated in the PAID program in its first six months.

Another division of DOL—the Occupational Safety and Health Administration (OSHA)—has done little to court controversy, but that might not spare it from the tender ministrations of the Bulldog Drummonds of the House. One possible target could be the agency’s attempt to revise an electronic illness and injury reporting regulation that was adopted under President Obama.

The California state legislature already has cast a jaundiced eye on this proceeding in a way that seems odd until you take into account the state government’s ongoing, broad-based attacks aimed at just about anything done by the Trump Administration. A law passed by those state legislators last year calls on the state safety agency (Cal/OSHA) to closely watch the federal OSHA electronic recordkeeping proceeding to see if it turns out to be something they may find objectionable.

This just gives you a taste of what is facing the country over the course of the year. I hope that I am wrong and wiser heads prevail among the congressional Democrats, but given recent history that hope seems unrealistic.

About the Author

David Sparkman | founding editor

David Sparkman is founding editor of ACWI Advance, the newsletter of the American Chain of Warehouses Inc., as well as a member of the Editorial Advisory Board of Material Handling & Logistics, a sister publication to IndustryWeek.

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