Regulators Reset Their Agenda After Tumultuous Year in Labor Law

Many labor law “firsts” occurred in 2013, as the Obama administration’s anti-business agenda sparked numerous legal challenges impacting the merit shop construction industry. The president’s unprecedented recess appointments to the National Labor Relations Board (NLRB) were found to be unconstitutional by several appeals courts. The NLRB’s Notice Poster Rule was found to be unlawful, as was its unprecedented “quickie” election rule. The NLRB lost its quorum to do business, only to be resurrected with a confirmed, pro-union majority.

For the first time, the Department of Labor (DOL) expanded Davis-Bacon to privately funded projects and OSHA declared union agents could join safety inspections at nonunion workplaces. Meanwhile, the Office of Federal Contract Compliance Programs (OFCCP) issued a first-of-its-kind rule setting a hiring goal for disabled workers on government contracts. Following is a summary of where things stand in early 2014.

PRO-UNION RULINGS EXPECTED FROM THE ‘NEW’ NLRB
In July, the Senate confirmed five presidential nominees to the NLRB, including new members Nancy Schiffer (D) and Kent Hirozawa (D), as well as NLRB Chairman Mark Pearce (D), who was reconfirmed. Two Republicans, Harry Johnson III and Philip Miscimarra, also were confirmed by voice vote. This is the first time in memory that a majority of a fully confirmed set of NLRB members consists of attorneys who have advocated on behalf of labor unions throughout their careers. Nevertheless, the board is fully staffed, meaning it can issue rules and decisions requiring a quorum unencumbered by the legal obstructions that plagued it during the last two years. The board is expected to continue the strongly pro-union trend that already was under way prior to the recess appointment controversy.

U.S. Supreme Court Hears ‘Recess’ Appointments Case
The U.S. Supreme Court recently heard the government’s appeal from the D.C. Circuit’s Noel Canning decision, which struck down the president’s recess appointments of NLRB members last year. Two other circuits agreed with the D.C. Circuit, jeopardizing the legal status of more than 1,000 board actions in the last two years. A decision is expected from the Supreme Court later this spring.

While the Supreme Court case remains pending, the D.C. Circuit and some of the other appeals courts have put in abeyance many pending challenges to NLRB decisions. As a result, highly questionable NLRB rulings on matters such as social media policies and terminations, confidentiality of internal investigations, off-duty employee access to the workplace, class action arbitration clauses and many more will remain in limbo for at least another year.

In another important development, the Supreme Court recently dismissed a union appeal in the Mulhall case, in which an appeals court deemed it illegal to exchange “things of value” for labor peace, including increased organizing access to property and employee information. The Supreme Court declined to reach the merits of the appeal, leaving open significant questions regarding the legality of neutrality agreements.

NLRB Re-Issues Ambush Election Proposal
The NLRB adopted controversial changes to its election processing rules in late 2011, which would drastically limit the amount of time available for employers to communicate with employees once a union files a petition for an NLRB election. In 2012, a federal judge blocked the new election rule because a quorum was not present for the board’s vote. Initially, the NLRB’s appeal from that decision was held in abeyance pending the outcome of the Supreme Court’s consideration of the Noel Canning case. But rather than wait for the outcome of the pending case, the NLRB dismissed its appeal and re-issued the proposed election rule now that the board has a full quorum.

The Notice Posting Rule Is Officially Dead
The NLRB recently waived its right to petition the Supreme Court to decide whether the board’s Notice Poster Rule should be allowed to take effect. The NLRB issued this rule in 2011, attempting to force six million employers to display notices of worker rights to organize on their private property. Associated Builders and Contractors (ABC) joined numerous business groups in lawsuits against the rule, resulting in two appeals court decisions striking down the notice poster requirement. Employers are not required to post anything under the NLRB’s Notice Rule. Government contractors are still required to post a similar notice required by the U.S. Department of Labor, but a new legal challenge has been filed against this rule as well.

‘Micro-Units’ Decision Upheld
Although many NLRB decisions issued without a quorum have been stayed, one precedent-setting case dealing with election bargaining units was upheld in 2013. In the Kindred Nursing case, the U.S. Court of Appeals for the 6th circuit upheld the NLRB’s new “overwhelming community of interest” test, which dramatically increases the likelihood that a union will be permitted to hold elections among small and fragmented bargaining units in many industries, including construction.

DOL INCREASES REGULATORY BURDEN ON MERIT SHOP CONTRACTORS

Under the leadership of Labor Secretary Thomas E. Perez, who was sworn in last July, burdensome regulations likely will be proposed and promulgated in the foreseeable future.

OSHA Says Unions Can Represent Nonunion Employees During Inspections
Last April, OSHA released an interpretation letter stating nonunion employees can authorize an individual “affiliated with a union or a community organization” to act as their representative during agency-sanctioned inspections and other enforcement situations. Essentially, the letter states employees at worksites without collective bargaining agreements can designate an individual affiliated with a union or community organization to be their “personal representative” in enforcement-related matters during an OSHA workplace inspection. Multiple lawsuits could transpire as a result of this unprecedented policy.

OFCCP Imposes New Burdens On Government Construction Contractors

ABC has sued to block enforcement of an unprecedented rule issued by the OFCCP imposing new disability affirmative action requirements on all covered government contractors, including those in the construction industry. Of particular concern, the agency for the first time is requiring construction contractors to collect and analyze statistical information about hiring and utilizing disabled workers to meet an arbitrary 7 percent goal for employment of disabled workers. A court decision is expected shortly, as the new rules are scheduled to take effect March 24.

‘Persuader’ Rule Expected Soon
Secretary Perez is expected to move forward soon with publication of the final “persuader” rule, which is one of the most significant threats to merit shop contractors and will impact millions of employers. This rule will eviscerate the “advice” exemption of the persuader reporting requirements of the Labor Management Reporting and Disclosure Act (29 U.S.C. 433). The proposed change would subject nonunion employers and their trade associations, lawyers and consultants to draconian new public reporting requirements.

‘Right to Know’ Rule Looms Ahead
The DOL has published a “work classification” survey that is widely viewed as the first step in requiring employers to provide written notices to independent contractors about the reasons for their classification (which may then be challenged). This so-called “Right to Know” rule would significantly burden employers and increase the number of Fair Labor Standards Act lawsuits concerning exemption and misclassification issues.

Davis-Bacon Coverage Expanded To Private Projects
Last April, the DOL’s Administrative Review Board (ARB) issued an unprecedented ruling expanding coverage of the Davis-Bacon Act to a privately funded, owned and occupied construction project in the District of Columbia, known as CityCenterDC. The ARB held that the project was nevertheless a “public work,” leading both the District of Columbia and the private developer of the project to file suit in federal court. A similar case has arisen in Cape Canaveral, Fla.

BATTLES CONTINUE OVER GOVERNMENT-MANDATED PLAs
ABC continues to lead the fight against efforts to impose government-mandated project labor agreements (PLA) on taxpayer-funded federal projects. Eighteen states have taken action to prohibit state government entities from requiring contractors to sign a PLA, or any other agreement with labor unions, as a condition of performing work on public construction projects. Fourteen states have enacted this reform since President Obama issued Executive Order 13502 in February 2009, which encourages federal agencies to require PLAs on federal construction projects costing more than $25 million and allows state and local governments to require PLAs on federally assisted projects.

Labor unions have fought back with lawsuits against open competition laws. However, the U.S. Court of Appeals for the 6th Circuit recently upheld the Michigan Fair and Open Competition in Government Construction Act. Challenges to similar state laws or regulations remain pending in Idaho, Ohio and Louisiana. Legal challenges to state-mandated PLAs also are pending in New York and Maryland.

RESIDENTIAL HIRING AND APPRENTICESHIP LAWS ARE CHALLENGED

Residential preferences and apprenticeship mandates continue to proliferate around the country, but such laws remain vulnerable to constitutional challenge. A suit is still pending against the District of Columbia’s First Source residential hiring law, which sets minimum percentages of work hours for district residents on government-assisted projects.

Last year, California enacted S.B. 54 to require privately owned and operated petrochemical companies to pay prevailing wages and employ graduates of state-approved apprenticeship programs on private projects. A legal challenge has been filed against this law on labor preemption and other constitutional grounds.

PPACA THREATENS EMPLOYER HEALTH PLANS
On top of all the other labor issues, employers will begin to feel the delayed impact of the new health care mandate this year. Uncertainty and political battles over the new Patient Protection and Affordable Care Act (PPACA) are expected to continue throughout 2014, culminating in the congressional elections. 


Maury Baskin is a shareholder with Littler Mendelson, P.C. in Washington, D.C., and general counsel to Associated Builders and Contractors. For more information, call (202) 772-2526 or email mbaskin@littler.com.