Federal Agencies and The Executive Branch Shaping Workplace Policy

April 17, 2014

Published in the NH Bar Association

As attorneys, we tend to focus our energy and attention on state and federal laws and the court cases in which judges decide how to administer and construe them. However, when the branches of government and the legislative houses have difficulty working together, it is important not to overlook the significant impact state and federal agencies can have in shaping workplace and public policy.

The 113th Congress has passed very little workplace legislation, and a great deal of proposed legislation which was thought to have “legs,” in political parlance, has languished. A year ago employment law attorneys were predicting the passage of comprehensive immigration reform, new pay-equity legislation, and even the possibility of amendments to the Fair Labor Standards Act (FLSA), which would allow private employers to use compensatory or “comp” time in lieu of paying overtime. None of that has happened, primarily due to the widely divergent views of the Senate and House on these issues.

Instead, the most significant changes for employers and employees on the federal front have come through initiatives at the agency level and even executive order.

United States Department of Labor

The biggest and most unexpected news came last month, on March 13, when President Obama signed a memorandum instructing the US Department of Labor to undertake its first overhaul of the Fair Labor Standards Act since 2004. The agency is charged with updating the regulations regarding who qualifies for overtime pay.

The memorandum focuses first on increasing the salary threshold of $455 per week for the salary-basis test to account for inflation. It then suggests that the executive, administrative and professional exemptions should be reviewed to determine whether the second aspect of the test for exemption, the primary duties test, should be revised.

The thinking here is that the so-called “white collar” exemptions – originally meant for highly compensated employees with the power to negotiate favorable salaries and benefits for themselves – should not apply to workers earning as little as $23,660 per year. This review is likely to have significant implications for businesses, especially small businesses, and employees; and it will be completed without legislative action.

National Labor Relations Board

Issues with the NLRB are ongoing and pose previously unrecognized challenges for employers. The board has decided on numerous occasions that employer policies violate the National Labor Relations Act (NLRA), which protects the right of all employees, not just union employees, to engage in “concerted activity for the purpose of collective bargaining or other mutual aid and protection.”

NLRB decisions have focused on at-will employment clauses in employee handbooks, social media policies and employee behavior policies. Below are some examples of employee behavior and communication policies the NLRB has found to be overly restrictive:

• If an employee’s online blog, posting or other social media activities are inconsistent with, or would negatively impact the company’s reputation or brand, the employee should not refer to the company.
• Conduct that has, or has the potential to have, a negative effect on the company might be subject to disciplinary action… even if the conduct occurs off the property or off the clock.
• Employees may not post videos or photos recorded in the workplace without the company’s permission.

The NLRB is also scrutinizing confidentiality issues. In Banner Health System and James A. Navarro the board concluded that an investigator’s request that witnesses interviewed in a workplace investigation keep the discussions confidential violated the NLRA. The Office of the General Counsel of the NLRB followed up by issuing an advice memorandum in January 2013 stating that the employer should not have a blanket prohibition of discussions but rather must assess the need for confidentiality on a case-by-case basis. Although an advice memorandum does not have the authority of a decision of the Board or even an Administrative Law Judge, it signals a direction decisions might go in the future.

Equal Opportunity Employment Commission

Once again, statistics released by the EEOC show increases in enforcement efforts by federal regulators, despite a slight decline in the number of complaints of discrimination filed with the agency. The number of charges filed annually still hovers just below 100,000, but the EEOC makes its impact by deciding which type of lawsuits to file and by issuing guidance in certain focus areas.

The April 2012 enforcement guidance, titled “Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964,” garnered significant attention and is making an impact. In it, the agency set out its view on the use of criminal history information when making employment-related decisions.

The EEOC has taken the position that Title VII is potentially implicated when employers seek to use information gained in background checks to justify a decision relating to hiring, job promotion, performance management, and retention. The EEOC expressed concern that certain policies, such as a blanket prohibition against hiring someone with a conviction, might have a disparate impact on members of certain protected classes, thus running afoul of Title VII.

The guidance also stated that any decision regarding the use of criminal history information must be “job related and consistent with business necessity.” Now, employers are feeling the impact with more claims being filed challenging employers’ background check policies and practices. The agency’s strategic enforcement plan for fiscal years 2013-2016 includes the following priorities:
• Eliminating barriers in recruitment and hiring by targeting class-based intentional discrimination and facially neutral practices, which adversely affect particular groups
• Protecting immigrant, migrant and other vulnerable workers
• Addressing emerging and developing issues, such certain ADA accommodation and qualification issues, pregnancy discrimination and coverage of LGBT individuals under Title VII sex discrimination provisions
• Enforcing equal pay laws

The above are examples of just three federal agencies with significant ability to affect workplace and public policy. There are many other agencies with similar power, and we should be mindful of the changes ahead.
Charla Bizios Stevens is a director in the employment law practice group at the McLane firm. She can be reached at 603-628-1363 or charla.stevens@mclane.com and followed on Twitter @charlastevens. She also is a frequent contributor to www.employmentlawbusinessguide.com.

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