Many employers and management-side labor and employment practitioners expected dramatic changes in labor and employment law to be passed quickly by a Democratic Congress and become law under the Obama Administration. While some of those changes have come to pass, the Obama Administration's first 100 days saw only one significant new piece of legislation – the Lily Ledbetter Fair Pay Act – become law. Other major legislation, including the Employee Free Choice Act, remains stalled in the Senate. However, employers would be well-advised to remain vigilant. Significant legislative changes may still be in the offing. Moreover, President Obama's appointments to key posts, including Secretary of Labor, and nominations for the National Labor Relations Board, point to a more activist, employee-friendly approach to regulation and enforcement of existing laws. The following is a summary of developments in the Obama Administration's first 100 days, as well as highlights of things to come:
The Lily Ledbetter Fair Pay Act
On January 29, 2009, President Obama made good on a campaign pledge by signing into law the Lily Ledbetter Fair Pay Act. The Ledbetter Act was the first piece of legislation signed by President Obama, and overturned a controversial 2007 Supreme Court decision that limited the time for filing pay discrimination claims. The Act amended Title VII and the Age Discrimination in Employment Act to provide that an unlawful employment practice occurs "when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wage, benefits or other compensation is paid resulting in whole or in part from such a decision or practice." Because the Americans with Disabilities Act follows the remedial scheme provided by Title VII, the Ledbetter Act also applies to ADA claims. Under the Ledbetter Act, a charge of employment discrimination will be deemed to be timely so long as it is filed within 300 days of the last paycheck paid pursuant to a discriminatory compensation decision or practice.
While many legal observers have commented that the Ledbetter Act did little more than restore a commonly-held understanding with respect to the limitations period for filing claims related to discriminatory pay practices, the law's impact may be somewhat broader than anticipated depending on how courts interpret the statutory language making the new provisions applicable to a "compensation decision or other practice." For example, in Gentry v. Jackson State Univ., 106 FEP Cases 189 (S.D.Miss. April 17, 2009), the District Court ruled that a charge of discrimination filed in 2006 with respect to the university's 2004 decision to deny the plaintiff tenure was timely because the "denial of tenure also denied her a salary increase and hence was a compensation decision." Id. at 191. Therefore, the Court denied the university's motion for summary judgment which was based solely on the limitations period for filing a charge. Other courts have reached similar conclusions. See Bush v. Orange County Corr. Dept., 597 F.Supp. 1293 (M.D. Fla. 2009).
The Paycheck Fairness Act
At the same time it passed the Ledbetter Act, the House also passed the Paycheck Fairness Act (H.R. 12). However, the bill remains stalled in the Senate, and passage of the Act is far from certain. If enacted, the Paycheck Fairness Act would amend the Equal Pay Act to provide for compensatory and punitive damages, and opt-out class actions for pay discrimination claims. The Act also would significantly narrow the current affirmative defense, which allows an employer to avoid liability by establishing that a pay disparity is the result of "any factor other than sex," by requiring a showing that a pay disparity resulted from a "bona fide factor other than sex."
The Employee Free Choice Act
Speedy passage of the Employee Free Choice Act ("EFCA"), which would eliminate secret ballot elections in favor of a card check procedure in most union organizing campaigns, provide for mandatory interest arbitration for first contracts after 120 days of negotiations, and increase penalties for unfair labor practices during union organizing drives or first contract negotiations, was high on President Obama's agenda. As in the previous Congress, EFCA easily passed the House, but stalled in the Senate in March after a number of key Senators, including Dianne Feinstein and Arlen Specter, announced they could not support EFCA in its present form. There currently are a number of compromises to EFCA being discussed, some of which would include retention of the secret ballot election process, but on an expedited time frame. While organized labor remains committed to passing EFCA in its current form, the Act remains extremely controversial, and passage of the bill appears unlikely in the current Congress.
Workplace Safety
Both President Obama and his new Secretary of Labor, Hilda Solis, have repeatedly stated that the Obama Administration will place renewed emphasis on improving workplace safety, which they claim was given short shrift during the Bush Administration. During the Obama Administration's first 100 days, the only tangible result of this approach was the scuttling of an Advanced Notice of Proposed Rulemaking ("ANPR") for a new standard on exposure to diacetyl – a food flavoring associated with serious lung disease. Withdrawal of the ANPR is intended to allow OSHA to act more expeditiously in promulgating the new standard. Other new OSHA standards for construction cranes and derricks, and combustible dust may also be developed in the near future, and some lawmakers have expressed interest in a new push for an ergonomics standard.
In addition to these regulatory developments, on April 23, 2009, House Democrats introduced a bill entitled the Protecting America's Workers Act, which would amend the Occupational Safety and Health Act to, inter alia, expand OSHA coverage to include state, local and federal government employees and increase penalties against employers for repeat or willful violations. Although bills with the same title and similar provisions were introduced in prior sessions of Congress and never became law, prospects for some change in the OSH Act, particularly with respect to increased penalties, appear more likely with the current Democratic majority and a White House focused on improving workplace safety.
Labor-Friendly Executive Orders
Between January 30 and February 6, 2009, President Obama issued four pro-labor Executive Orders aimed at employees of government contractors. The first of three Executive Orders signed on January 30, entitled "Economy In Government Contracting," prohibits federal agencies from reimbursing contractors for costs associated with efforts to persuade employees not to unionize, including such items as duplicating costs and legal fees. An Executive Order entitled "Notification of Employee Rights Under Federal Labor Laws," also issued on January 30, requires federal contractors to post a notice informing employees of their rights under various federal labor laws. That Executive Order also revoked an Executive Order by President Bush which required government contractors to advise employees of their rights under the Supreme Court's Beck decision not to join a union or pay fees for non-representational activities. The third Executive Order issued on January 30, entitled "Nondisplacement of Qualified Workers," requires federal service contracts to include a provision requiring a successor contractor providing the same or similar services at the same location to offer continued employment to non-management, non-supervisory employees of the predecessor contractor. Finally, the Executive Order entitled "Use of Project Labor Agreements for Federal Construction Projects," issued on February 6, encourages the use of project labor agreements on all "large scale construction projects," defined as those projects involving a total cost to the federal government of $25 million or more.
Changes At The NLRB
On April 24, President Obama announced his intention to nominate two long-time union attorneys to fill two of the three vacancies on the NLRB. If confirmed, Craig Becker, an associate general counsel for the Service Employees International Union, and Mark G. Pearce, a union-side labor lawyer in private practice in Buffalo, N.Y., would join current Chair Wilma Liebman and Member Peter Schaumber on the Board. The immediate effect of having two new members join the Board would be to remove the cloud that currently hangs over the Board's authority to decide cases. Since January 2008, the Board has functioned with only two members. On May 1, 2009, the United States Court of Appeals for the District of Columbia Circuit held that the two-member Board lacked legal authority to decide cases because the National Labor Relations Act requires a quorum of three members at all times. See Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, No. 08-1162, Slip Op., May 1, 2009. However, on the same day, the Seventh Circuit issued a decision upholding the authority of a two-member Board to decide cases. See New Process Steel, L.P. v. NLRB, Nos. 08-3517, 08-3518, 08-3709, 08-3859, Slip Op. May 1, 2009. The employer in that case recently filed a petition for certiorari seeking review by the Supreme Court. Until this conflict in the Courts of Appeals is resolved, the D.C. Circuit's decision calls into question approximately 400 decisions issued by the two-member Board in the past sixteen months. Two additional Board members would remove any question about the validity of Board decisions going forward.
As important, two additional Board members would allow the Board to decide more controversial cases in which Chair Liebman and Member Schaumber disagreed. In addition, with a solid Democratic majority, the Board may revisit some of the high-profile decisions of the Bush Board, from which current Chair Liebman dissented. In particular, employers should look for the newly-constituted Obama Board to revisit the decision in Guard Publishing Co. d/b/a Register Guard, 351 NLRB No. 70 (2007), in which the Board held that employees have no statutory right to utilize an employer's email system, and modified the law governing discriminatory enforcement of employer communications policies, and possibly the so-called "Kentucky River" decisions from 2006 (Oakwood Healthcare, Inc., 348 NLRB No. 37 (2006); Croft Metals, Inc., 348 NLRB No. 38 (2006); and Golden Crest Healthcare Center, 348 NLRB No. 39 (2006)), in which the Board broadly interpreted the statutory definition of the term "supervisor" in a way which organized labor claimed would strip large numbers of minor supervisory employees and working foremen of their rights under the National Labor Relations Act. A narrower interpretation of which employees qualify as supervisors under the Act has been a high priority for organized labor since the Kentucky River cases were decided. Having failed to achieve such a definition through legislation (see Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers Act ("RESPECT Act"); H.R. 1644, S. 969), organized labor may now seek a regulatory solution before a more labor-friendly Board.
Concluding Thoughts
The first 100 days of the Obama Administration did not bring many of the major legislative or regulatory changes workers had hoped for and employers had feared. Nonetheless, President Obama has clearly marked out a very different path from his predecessor, and employers should continue to expect increased regulation of the workplace, including new legislation, heightened scrutiny from regulatory agencies, and greater emphasis on inspection and enforcement activities.
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