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FY 2016 OFCCP budget proposal designed to support ambitious regulatory agenda, update technology

February 26th, 2015  |  Cynthia L. Hackerott  |  Add a Comment

Earlier this month, President Obama released his budget proposal for fiscal year (FY) 2016 in which he is requesting $113,687,000 and 660 full-time equivalent (FTE) employees for the OFCCP. That request represents a $7,211,000 increase from the FY 2015 funding level of $106,476,000 – an increase of about a 7 percent. It also represents an additional 10 FTE employees, which the OFCCP states will be used to strengthen its pay discrimination enforcement efforts.

According to the OFCCP’s FY 2016 Congressional Budget Justification, the agency will, at the requested funding level, complete a total of 4,290 compliance evaluations in 2016, which includes 3,840 supply and service compliance evaluations and 450 construction contractor reviews. The FY 2016 target for total completed compliance evaluations is identical to that for FY 2015.

Shift in outreach strategy. The OFCCP will continue to shift its outreach strategy from being contractor-centric to worker-focused, which it claims will strengthen its enforcement capacity. Specifically, the agency seeks to increase the number of affected class members located and remedied in its enforcement cases. It aims to continue to implement a robust language access plan to effectively communicate with key populations, including immigrants and individuals with limited English proficiency. The agency intends to accomplish this goal by translating materials into various languages and providing materials that meet the accessibility requirements under Section 508 of the Rehabilitation Act. In addition, the OFCCP intends to utilize innovative tools and technologies to engage workers and communities through an enhanced agency website, social media and other communication strategies.

Priorities. The agency states that it has the following three key priorities:

  • Supporting economic justice and opportunity and leveling the playing field for compliant employers, through robust enforcement programs that protect workers from discriminatory employment practices – with a particular focus on systemic pay discrimination and equal employment opportunity in the construction industry;
  • Improving service delivery through data and technology, including updates to the agency’s enforcement database and technology platforms that will enhance data quality and integration and increase the agency’s ability to focus limited enforcement resources on more likely violators; among other things, the OFCCP will perform critical upgrades of its obsolete case management system with dedicated funding of $3,300,000 for the continued development of an improved enforcement case management database system; and
  • Implementing its regulatory agenda, by finalizing proposed rules, operationalizing final regulations and fulfilling responsibilities set forth in executive orders and a Presidential Memorandum.

Regulatory agenda. The Department of Labor’s most recent Regulatory Agenda (Fall 2014) included the following items:

  • On December 9, 2014, the OFCCP published in the Federal Register a final rule to implement President Obama’s Executive Order (EO) 13672 which amended the existing EO 11246 to add sexual orientation and gender identity to the list of categories of protected federal contractor employees (79 FR 72985-72995). This final rule is scheduled to take effect on April 8, 2015, and it will apply to federal contractors who hold contracts entered into or modified on or after that date.
  • On January 30, 2015, the OFCCP published a Notice of Proposed Rulemaking (NPRM) to rescind its outdated regulations at 41 CFR Part 60-20 setting forth the agency’s Sex Discrimination Guidelines and to replace them with updated regulations (80 FR 5246–5279). The public has until March 31 to submit comments.
  • The OFCCP anticipates a final rule on its Equal Pay Report proposal will be published in August 2015. A NPRM was published in the Federal Register on August 8, 2014 (79 FR 46562- 46606) with corrections published on August 20 (79 FR 49260-49261) that would require some covered federal contractors and subcontractors would be required to electronically submit an annual “Equal Pay Report” on employee compensation as a supplement to the annual EEO-1 Report. The OFCCP’s proposal would revise its regulations at 41 CFR Part 60-1, which set forth the reporting obligations of covered federal contractors and subcontractors under EO 11246. The original comment deadline on the NPRM was November 6, 2014, but a notice was published on November 5, 2014 extending the comment period to January 5, 2015 (79 FR 65613-65614).
  • In September 2015, the agency intends to publish its final rule on regulations to prohibit pay secrecy. Pursuant to the provisions of a EO 13665 signed by the President in April 2014, the OFCCP published, on September 17, 2014, proposed regulations to prohibit federal contractors and subcontractors from discharging or otherwise discriminating against employees and applicants for talking about pay (79 FR 55712-55742). The comment period on this NPRM ended on December 16, 2014.
  • Also in September 2015, the OFCCP plans to issue a NPRM to revise the regulations in 41 CFR Parts 60-1 and 60-4 implementing the affirmative action requirements of EO 11246 that are applicable to federal and federally assisted construction contractors.

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Challenges mount against efforts to unionize home health care workers

February 24th, 2015  |  Ron Miller  |  Add a Comment

In the wake of the Supreme Court’s decision in Harris v. Quinn, individual home health care providers in Washington who did not wish to join a union brought a class action suit challenging that state’s efforts. In Harris, the High Court held that that the imposition of involuntary “agency fee” payments to unions in lieu of equivalent union membership dues was a violation of the First Amendment rights of Illinois home health care providers who were deemed employees solely for the purpose of collective bargaining. The relationship between the state, the union, and the home health care providers Centeno v. Quigley resembled the statutory scheme assessed in Harris.

In Centano, the question presented was whether the Washington’s alteration in its practice in response to Harris—an opt-out as opposed to opt-in system for the imposition of the agency fee-type payments prescribed by the Washington statute—was as unconstitutional as the involuntary system struck down in Harris. The plaintiffs moved for summary judgment on their request for a declaratory judgment that Washington’s statutory scheme and the collective bargaining agreement (CBA) between the state and the union was unconstitutional, or in the alternative, a preliminary injunction preventing the state from making payroll deductions with respect to home health care providers who had not affirmatively indicated their wish to join the union.

“One-way intervention” rule. As a threshold argument, both the state and the union asserted that the “one-way intervention” rule embodied by the notice provision in FRCP 23(c)(2) precluded a judgment on the merits of a class action prior to class certification. The rule is intended to prevent putative class members from waiting to intervene until a favorable merits determination has taken place, thus preventing multiple opportunistic class actions and safeguarding judicial economy. This rule, if applicable, would prevent adjudication of the plaintiffs’ summary judgment claim but not the claim for a preliminary injunction.

Here, the court concluded that summary judgment on the plaintiffs’ request for declaratory relief would be a favorable adjudication on the merits of a central component of the claim for class-wide relief, and the one-way intervention rule applied. The summary judgment motion was premature prior to class certification and was denied.

Preliminary injunction. With respect to the plaintiffs’ request for a preliminary injunction, the court noted that “a plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” However, the defendants argued that the plaintiffs were not currently experiencing injury because the state had ceased making deductions from their pay and that the plaintiffs were not entitled to seek a preliminary injunction on behalf of the absent class under Ninth Circuit precedent. Finding that the defendants were correct, the court concluded that the plaintiffs were not presently suffering the personal injury that might justify a preliminary injunction.

Minnesota case. Homecare providers challenging the constitutionality of Minnesota’s Individual Providers of Direct Support Servicers Representation Act (IPDSSRA), saw their suit tossed out on motions to dismiss filed by the Minnesota Governor and the SEIU, the union certified as exclusive representative for homecare providers. Finding that the plaintiffs failed to state a claim of NLRA preemption, a federal district court in Minnesota ruled in Greene v. Minnesota Governor Mark Dayton, that the defendants were justified in their actions in implementing and enforcing the IPDSSRA.

Like the plaintiffs in Centano, the plaintiffs here challenged constitutionality of the IPDSSRA, which provides that homecare providers are state employees for purposes of Minnesota’s Public Employment Labor Relations Act (PELRA), but not other purposes. That is they were granted the right to union representation.

Under the PELRA, public employees have “the right by secret ballot to designate an exclusive representative to negotiate . . . the terms and conditions of employment with their employer.” Once a union is certified under PELRA, the public employer “has an obligation to meet and negotiate in good faith with the exclusive representative . . . regarding . . . the terms and conditions of employment.” If a union is certified under PELRA, the employees in the bargaining unit are not required to become members of the union.

NLRA preemption. On August 26, 2014, the SEIU was certified as the exclusive representative for homecare providers. After the plaintiffs failed in their initial attempt to have the election ballots impounded, they filed an amended complaint asserting three counts: (1) preemption under the NLRA; (2) tortious interference with employment; and (3) violation of the Contracts Clauses of the United States and Minnesota Constitutions.

Injunction decision. In denying the plaintiffs’ motion for preliminary injunctive relief, the court analyzed whether the NLRA preempts the IPDSSRA under both the Garmon and Machinist standard. Sections 7 and 8 of the NLRA only give rights to those classified as “employees” by the statute. Individuals employed “in the domestic service of any family or person at his home,” are excluded from the definition of “employee.” In Harris the Supreme Court referred to Illinois’ homecare providers as “personal assistants,” and reaffirmed that they are not covered by the NLRA. Because homecare providers are excluded from NLRA coverage through the domestic services exclusion, the court concluded that Garmon preemption does not apply. Under the Machinist standard, the court held that “there is no indication that Congress intended the area of domestic services to be free from all regulation.” Accordingly, the Greene court held that the plaintiffs were unlikely to succeed under the Machinist preemption standard.

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Don’t assume all retirement-eligible employees ‘lack commitment’ to job

February 19th, 2015  |  Joy Waltemath  |  Add a Comment

By Joy P. Waltemath, J.D.

Ah, employee engagement. It’s that magic elixir touted by consultants as critical in order for employers to be able to execute on strategies for future growth. Employees who are deemed to be “engaged” exhibit traits variously defined as “Preach, Plan, and Pursue” (Quantum Workplace) or “Say, Stay and Strive” (Aon Hewitt). In essence, these traits are the same: Engaged employees speak positively about their workplaces (preach or say); they are strongly interested in staying with their employer (plan or stay); and they exert extra discretionary effort on their employer’s behalf (pursue or strive). Engaged employees are much desired, according to the popular narrative, because their discretionary efforts help businesses grow, innovate, and prosper.

Lack of commitment? So it wasn’t surprising when a city looked critically at a 51-year-old police lieutenant’s “commitment” to the job of police chief for which he had applied. But the city’s mistake, according to the Eighth Circuit in Hilde v. City of Eveleth, was evaluating his commitment solely on the basis of his age-based retirement eligibility. Because the court found the city denied him the job based on his age, it revived the lieutenant’s age discrimination lawsuit.

Retirement eligibility. Notably, the city did not deny that it considered the lieutenant’s retirement eligibility in making its decision to award the job to a candidate eight years younger, arguing that retirement eligibility was evidence of an employee’s lack of commitment to a job—a legitimate concern, the city said, given the importance of employee engagement. And generally, employment decisions motivated by factors other than age (such as retirement eligibility, salary, or seniority), are not age discrimination even when those factors correlate with age. But this is true, stressed the court, only if the factors other than age are wholly independent from age.

Age-based stereotyping. In this case, the court stated, “retirement eligibility is always correlated with age because it is dependent on the employee reaching 50; it cannot be ‘divorced from age.’” As a result, when the city assumed that the lieutenant was not committed to the police chief position because his age made him retirement-eligible, it engaged in prohibited age-stereotyping, the court explained. This prohibited stereotype—older employees are likely to be less committed to a job because they can retire at any time—figured in the city’s decision.

Erroneous assumption. Not only was it age-stereotyping, it might well have been wrong. There is at least some evidence in the engagement research that older workers are the most engaged, although obviously not every consultant breaks down its research by age. In 2013, example, Quantum Workplace reported that an analysis of engagement by age showed that baby boomers were the most engaged. Specifically, “employees 66 years old and older were the most engaged at 79.5 percent, followed by the younger boomers, ages 56 to 65, with 72.3 percent engaged.  Following baby boomers, the youngest millennials, 25 years old and younger, were the next most engaged with 71 percent. The least engaged group of employees by age were the oldest millennials, 26 to 35 years old, of which 66.7 percent were engaged. A gap of nearly 13 percentage points existed between the least and most engaged age groups.”

City never even asked about his commitment. Back to the city and the police lieutenant’s commitment, or lack thereof: The city failed to provide any evidence that it doubted the lieutenant’s commitment to the job for any reason other than his age-based retirement eligibility. The three commissioners responsible for hiring and promoting city police employees admitted he had a great reputation in the force and that they held his continued service in the highest regard. And while the city argued that he should have convinced them he would not retire, the commissioners never even asked about his job commitment or his retirement plans. That meant to the court that the city had failed to meet its burden to articulate a nondiscriminatory (non-age-based) justification for its reliance on the employee’s retirement eligibility. As a result, the Eighth Circuit reversed summary judgment for the employer and remanded the case back to the district court.

Don’t apply any stereotype. According to Oxford Dictionaries, a stereotype is “a widely held but fixed and oversimplified image or idea of a particular type of person or thing.” One purpose of the discrimination laws in general is to avoid decision-making based on stereotypes. Assuming, without more, that every employee who is eligible to retire due to age lacks commitment to the job (or to a promotion for which he or she has applied) not only violates the age discrimination laws, but it runs counter to employee engagement research suggesting that older employees actually might be more engaged than younger. Relying on either “stereotype,” however, instead of viewing an individual’s actual attributes and qualities, is a mistake employers should not make.

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American Council of Employees gets a place at the VW table

February 19th, 2015  |  Pamela Wolf  |  Add a Comment

If you were wondering what the European labor model might look like transplanted to the United States, Volkswagen Group AG has been painting the picture at its plant in Chattanooga, Tennessee.

On Monday, February 16, Volkswagen told employees at the plant that the American Council of Employees (ACE) had met the requirements under the company’s Community Organization Engagement (COE) policy for “Level 1” support, meaning that Ace members make up more than 15 percent of those on the current employee roster. Accordingly, the employee organization has earned the right to express its voice in the workplace through access to various employer groups. ACE is the apparent rival of the UAW, which in a high-profile battle a year ago lost its bid to organize the VW plant by a vote of 712-626. In the wake of the election loss, the UAW formed Local 42 with the goal of giving employees a voice in the workplace via the company’s German-style labor model.

VW labor model. The COE policy gives eligible organizations the opportunity to engage in constructive dialogue with Volkswagen and its employees. To be eligible for such activity, “an organization must exist for the primary purpose of representing employees and their interests to employers consistent with the National Labor Relations Act” and must also agree to comply with the policy. Volkswagen reserves its right under the policy to define and determine eligibility consistent with the NLRA.

However, as a Volkswagen spokesperson made clear to Employment Law Daily, the fact that any group has met the threshold requirements for engaging in dialogue with Volkswagen under the COE policy does not mean it is the exclusive bargaining representative of any group of employees for collective bargaining purposes.

So, to what opportunities for engagement is ACE now entitled? Consistent with Volkswagen’s Open Door and Solicitation policies, individual or groups of employees are already free to discuss and/or promote their interests /group in non-work areas during non-work time; wear promotional clothing in non-work areas during non-work time; display/use promotional items that comply with material specifications (i.e., no silicone); and raise questions, ideas, or concerns directly to Volkswagen management at any time.

Additional opportunities are available for groups that have completed the verification process and “represent a significant percentage of employees in the relevant employee group and whose members support the organization’s interaction with Volkswagen pursuant to this policy.” Ace has been verified for Level 1 support, which permits the organization in addition to reserve and utilize space in the Conference Center for internal employee meetings on non-work time once a month and post announcements and information in company-designated locations. Organization representatives who are VW employees may also meet monthly with company HR to present topics that are of general interest to their membership.

UAW won Level 3 privileges. In December 2014, UAW Local 42 submitted a sufficient number of cards that were independently verified to include enough employees to gain “Level 3” support, which means that more than 45 percent of current employees were members of the organization. That level of membership entitled Local 42 to:

  • Reserve and utilize space in the Conference Center for meetings on non-work time once per week
  • Invite external representatives of their organization for Conference Center meetings once per month
  • Post materials on a dedicated/branded posting board
  • Meet quarterly with a member of the Volkswagen Chattanooga Executive Committee (a Level 2 privilege that accelerates to bi-weekly with Level 3 support)
  • Reserve and utilize on-site locations for meetings on non-work time (with staff and/or employees) as reasonably needed
  • Meet bi-weekly with Company HR and monthly with the Volkswagen Chattanooga Executive Committee

According to some media reports, ACE is allegedly a group that may have been backed by business and political interests. However, ACE calls itself “an independent employee council created to ensure that all VW Chattanooga employees have a voice on the Volkswagen Global Works Council.” The organization also says that it is a local, not national, group that has no outside influence or political agenda.

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Federal court blocks DHS from implementing Obama’s immigration reforms

February 18th, 2015  |  Lisa Milam-Perez  |  Add a Comment

By Lisa Milam-Perez, J.D.

Throwing cold water on President Obama’s immigration reform agenda, a federal district court in Texas has blocked the Department of Homeland Security from implementing its Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, which included halting deportation proceedings and issuing work permits and other benefits to a specific class of undocumented immigrants. (The court also barred a proposed expansion of a similar program implemented in 2012 on behalf of undocumented immigrants who came to the United States when they were 16 years old or younger.) The DAPA program, set forth in a memorandum issued by the DHS secretary, sought to implement immigration reform measures proposed by the President last November in the face of a seemingly intractable immigration debate. The White House has indicated it will appeal the decision, handed down in a lawsuit against the federal government brought by 26 states (State of Texas v. United States, February 16, 2015, Hanen, A.).

Careful to note that there was no formal executive action on the table (there having been no executive orders or other proclamations at issue), and that it was not weighing in on the wisdom of the actual policies before it, the court framed the question as whether U.S. law, including the Constitution, authorized the secretary to take the actions challenged here. Resolving the question with a “no,”—at least without benefit of notice-and-comment rulemaking—the court enjoined the agency from implementing the DAPA program. It also emphasized, though, that it had not yet entertained the merits of the states’ constitutional challenge or their substantive claims under the Administrative Procedure Act.

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