FEDERAL REGULATORY READING LIST: Resources for New Employment and Workplace Agency Leaders

*Note: This is the first in a planned series of  posts compiling Washington Legal Foundation papers, briefs, regulatory comments, and blog commentaries relevant to critical legal and constitutional issues facing new senior leaders at specific federal regulatory agencies.

For the past eight years, employers have faced a dizzying array of new employment and workplace-safety regulations, guidance documents, and enforcement policies from the Department of Labor (DOL), the Occupational Safety and Health Administration (OSHA), the Equal Employment Opportunity Commission (EEOC), and the National Labor Relations Board (NLRB). Some of those new rules and directives departed dramatically from decades-old agency policies and practices.

Through its public-interest litigating, publishing, and communications capabilities, WLF influenced debates over those agencies’ policies and actions with timely papers and blog commentaries, and weighed in directly through regulatory comments and amicus briefs.  Those activities have resulted in an impressive body of reference materials that are instructive for new leadership in those agencies.  We provide a summary of and links to those documents below to simplify access to relevant work product from WLF in each of those areas.

DOL Fiduciary Rule and Persuader Rule

DOL’s so-called Fiduciary Rule, issued last spring, has inspired several legal and constitutional challenges, and a recent Presidential Memorandum ordered the agency to review the rule anew. Under the rule, most brokers or insurance salespeople may no longer recommend investments to persons investing retirement funds without first agreeing to become the investor’s fiduciary under government-dictated contract terms. In an October 14, 2016 WLF Legal Opinion Letter, attorney Donald Falk and Professor Eugene Volokh argue that the rule violates the First Amendment rights of investment advisors.

WLF has also supported First Amendment challenges to another spring 2016 DOL regulation known as the Persuader Rule. DOL issued the rule as a radical reinterpretation of a law that purports to limit employers’ activities that may persuade employees not to collectively bargain. It reverses 50 years of regulatory practice by expanding who is considered a “persuader” and what type of activity constitutes unlawful persuasion. WLF raised First Amendment issues in its amicus brief supporting a small business group’s challenge in a Texas federal court, and filed similar briefs (here and here) in challenges filed in Arkansas and Minnesota federal courts. The judge in Texas imposed a permanent nationwide injunction against the rule’s implementation last November.

Redefining “Employer”: NLRB and DOL

Through two enforcement actions filed in 2014, NLRB signaled its intention to overturn a 30-year old agency precedent regarding the “joint employer” relationship. The new interpretation vastly expands the legal responsibilities of franchisors and businesses that hire temporary workers or outsource certain responsibilities. A 2014 WLF Legal Backgrounder, Redefining “Employer”: How the NLRB Plans to Treat Separate Companies as One, explains what the authors call a “seismic shift” in NLRB regulation. Another Legal Backgrounder from 2015, After Browning-Ferris: The Ballooning Definition of “Employer” and Implications for NLRB, EEOC, and OSHA, describes how NLRB’s joint-employer definition would influence how other agencies view the employer-employee relationship. When DOL took action on the issue with regards to wage-and-hour disputes, WLF released the Counsel’s Advisory, Department of Labor Issues New Guidance on Determining Joint-Employer Status.

When Browning-Ferris, the target of one of NLRB’s actions on joint-employer, appealed the Board’s decision to the US Court of Appeals for the DC Circuit, WLF filed an amicus brief in support of its arguments.

Both NLRB and DOL have also advanced a very narrow definition of “independent contractor,” which has likewise expanded employers’ legal responsibilities.  The agencies have pursued “employee misclassification” claims with such zeal that employers have asked federal courts to protect their rights. A WLF blog commentary, Fifth Circuit Requires Labor Department to Pay Attorneys’ Fees in Bad Faith Independent Contractor Suit, and a Legal Opinion Letter, Eleventh Circuit Reins in NLRB’s Mischaracterization of Independent Contractors as “Employees”, spotlight two instances of judicial oversight.

An October 2015 WLF Web Seminar, Transforming the Workplace: How Lawsuits and Government Regulators Are Redefining “Employer” and “Employee”, also addressed federal agency activism in these areas.

Opposing Arbitration in Employment Contracts: NLRB

In 2012, NLRB announced through an enforcement action against D.R. Horton that federal labor law prohibits employment-contract arbitration clauses that ban claims resolution through class actions or collective arbitration. This announcement marked yet another departure from a long-standing agency legal position.

D.R. Horton appealed to the Fifth Circuit, arguing that the Federal Arbitration Act explicitly permits such contract provisions. The company prevailed, but the loss did not deter NLRB from continuing its crusade against arbitration. The Board’s actions led to a split among the federal circuits and last month, the US Supreme Court agreed to review three decisions addressing the legal question.

The following WLF papers and blog posts discuss NLRB’s arbitration opposition and the decisions that led to High Court review:

Criminal Background Checks: EEOC

A 2012 “enforcement guidance” alerted employers that EEOC would take legal action against those that conducted criminal background checks on prospective employees or contracting hires if the employer could not prove that the screening was “job related and consistent with business necessity.” EEOC’s enforcement actions met with strong resistance from employers, who challenged the Commission in court. Such vigorous defense led to a number of embarrassing losses for the Commission, some of which are documented in the following WLF papers and blog posts:

Workplace Safety: OSHA

The employment regulatory activism described above has largely overshadowed OSHA’s equally aggressive workplace-safety oversight. One particularly onerous initiative OSHA has pursued over the past eight years involved the issuance of several new injury and illness reporting rules. WLF filed comments on one of the proposed rules in 2014, arguing that the agency presented no proof that more reporting would increase worker safety and that public release of injury records imperiled employees’ privacy and would lead to needless shaming of businesses. A 2015 Legal Backgrounder, OSHA’s Latest Reporting and Recordkeeping Mandates: More Burdens with Few Benefits, criticized the then-final rule that WLF opposed in its comments and discussed a second, equally misguided reporting proposal.

Other WLF publications on OSHA regulation during the Obama Administration include:

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