New Legislation, (Non)-Quirky Question # 135

Quirky Question # 135:

This question is not particularly “quirky” but I’d like to know what legislation Congress currently is contemplating that bears upon employment issues.  Can you provide any guidance?

Dorsey’s Analysis:

There are a variety of legislative initiatives being considered by Congress that could impact the employment relationship.  At the present time, however, it is difficult to predict whether any of these legislative efforts will be successful.  The recent Massachusetts Senate election and the resulting loss of the Democratic super-majority in the Senate may result in the delay or indefinite postponement of some of the initiatives currently underway.  Moreover, the current focus on the nation’s health care debate and the polarization caused by that debate also may affect the passage of some or all of these bills, especially if the mid-term elections further alter the composition of the House and Senate.  Nevertheless, there are at least ten significant bills that are being contemplated at the present time of which employers should be aware.  In alphabetical order, they are described briefly below:

1)         Employee Free Choice Act (EFCA):  This bill has received the most attention of all the potential employment legislation and has been the subject of numerous lobbying efforts and advertising campaigns.  The legislation is key to the union movement, which contributed strongly to President Obama’s election victory.  Conversely, it is strongly opposed by various employer and business groups.

EFCA was introduced in the House and Senate in March 2009, approximately one year ago.  There are two critical features of the legislation of which employers should be aware.  First, in its current form, EFCA would eliminate the right in unionization campaigns for secret ballot elections.  A union could be certified as a bargaining representative for the affected employees if a majority of the employees in the relevant bargaining unit have signed “authorization” cards.  Fifty percent, plus one, would suffice to result in unionization of the bargaining unit.  The principal concern that employer groups have expressed about this prospect is that undue pressure may be brought on employees to sign the authorization cards and that the union “campaign” will be over before an employer even knows it is underway.

Second, in the context of a “first contract” negotiation, if the employer and employees cannot agree within 90 days on the contract terms, those terms may be determined through binding arbitration.  Again, the concern articulated by employer groups is that an arbitrator, who may or may not fully understand a business, will be empowered to impose contract terms on the employer and employees alike.

There are other features of the bill that, if passed, would affect the employer/employee relationship for those employers with unionized employees or with employees who seek to organize.  Given the publicity associated with this bill from both its advocates and detractors, you can be confident that you will learn much more about it if it is resuscitated.  [Note: We have been monitoring EFCA quite closely and have presented seminars on this evolving legislation.  If you would like a copy of the PowerPoint materials we have generated in connection with our most recent seminar on EFCA, please send me an email with your contact information – name, company, position, address, and email.  I then will forward you the referenced materials.]

2)         Employee Non-Discrimination Act:  This legislation was introduced in the House and Senate in August 2009.  Simply summarized, if passed it would prohibit discrimination against any employee with respect to his or her terms or conditions of employment based on actual or perceived sexual orientation or gender identity.

As with so many other pieces of legislation, until the competing bills are passed by the House and Senate and reconciled, it is difficult to predict accurately the full ramifications of the potential statute.  Note, however, that many states (including, for example, Minnesota) already prohibit discrimination on the basis of sexual orientation, and many companies that do business in all fifty states already have internal policies prohibiting sexual orientation discrimination.  Thus, while the potential statute could create new rights in states that do not currently provide this protection, it likely will not change the way companies do business in many states throughout the U.S.

3)         Fairness in Arbitration Act:  This Bill, which was proposed in July 2009, would invalidate arbitration agreements in employment, consumer and franchise contracts between parties of unequal bargaining power, unless both parties voluntarily agree to use arbitration after a dispute arises.  The legislation exempts collective bargaining agreements.  Otherwise, however, it would have extremely broad ramifications.  In my view, this proposed legislation is perhaps the most significant of all the legislation being considered, and has the potential to eviscerate well-established arbitration programs that many companies utilize to handle workplace disputes.

4)         Family Friendly Workplace Act:  This legislation was introduced in early 2009.  It is one of the proposals currently being considered to amend the Fair Labor Standards Act (FLSA).  This legislation would allow private sector employers to offer employees the option of taking “comp time” PTO rather than receive cash wages for all overtime hours worked at a rate of 1.5 hours per hour for which the overtime premium would be due.  The maximum accrual of “comp time” would be 160 hours (essentially, one month’s work).  There are certain prerequisites that must be met for an employee to be eligible.  Of course, as with the other legislation discussed in this analysis, until the final provisions of the legislation are agreed upon and the bill is converted into a statute, the specific prerequisites will not be fully known.

5)         Family Medical Leave Act (Expansion):  This legislation is, as the name implies, an expansion of the existing statute, the FMLA.  As proposed, the expansion would mandate leave for employees to address the effects of domestic violence.  In addition, the modified FMLA would provide employees up to 24 hours of unpaid leave per year to attend school activities, or to take family members to regular dental or medical appointments.

6)         ForeWARN Act:  As the name of this legislation implies, it too represents an expansion of an existing statute (WARN).  The proposed modification of this statute, introduced in June 2009, would amend WARN by expanding the scope of covered employers, expanding the scope of what constitutes a “plant closing,” and expanding the scope of automatically covered “mass layoffs.”  Employers would be required to provide employees covered by an employment loss with 90 days advance notice.  Moreover, the scope of the notice would be expanded.

7)         Healthy Families Act:  This legislation, introduced in May 2009, would require employers with more than 15 employees to provide workers up to 56 hours of paid sick leave annually.

8)         Paycheck Fairness Act:  The most recent version of this legislation was passed in the House in January 2009.  This bill would amend the Fair Labor Standards Act “to provide more effective remedies to victims of discrimination in the payment of wages on the basis of sex.”  Essentially, the Paycheck Fairness Act would make it more difficult for employers to defend pay discrimination claims, creating the risk of punitive damages and establishing an “opt-out” rather than an “opt-in” class for class action claims alleging differential compensation based on gender.

9)         Protecting Older Workers Against Discrimination Act:  This proposed legislation is a Congressional response to last year’s Supreme Court decision of Gross v. FBL Financial Services, Inc., 129 S. Ct. 2343 (2009).  [To see my prior analysis of the Gross decision, use the “View By Topic” tab on the upper left-hand side of this page and go to “Age Discrimination.”]  In October 2009, following the Gross decision, legislation was advanced that essentially would undo that Supreme Court decision and treat age discrimination cases in the same manner as discrimination cases under Title VII.  Specifically, the legislation would reinstate the “motivating factor” standard that was previously used for age discrimination cases and repudiate the “but for” analysis adopted by the U.S. Supreme Court.  (Again, keep in mind that the “motivating factor” framework still may be the governing law under state anti-discrimination statutes, regardless of the Supreme Court’s interpretation of the ADEA and regardless of whether this legislation is passed.)

10)       Working Families Flexibility Act:  This legislation was first introduced in December 2007, and reintroduced in March 2009.  Under current law, employers have considerable flexibility to determine whether to offer flexible work arrangements and if so, what kinds.  The proposed legislation would give employees the rights to request flexible work options, including changes in the number of hours the employee is required to work, the times when the employee is required to work, and the location where the employee is required to work.  Employees also would have the right to seek reconsiderations of employer decisions on these issues.  To the extent that employers do not comply with the requirements imposed, employees could file complaints with the Department of Labor, which could impose penalties and damages for infractions.

As the ten examples above illustrate, Congress is debating a number of pieces of legislation that could affect significantly the employer/employee relationship.  Employers and employees alike should monitor these legislative proposals to determine which, if any, of these bills become law.  If any (or all) of these proposals become statutes, I will provide additional details regarding the final versions of these statutory schemes.

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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