Current News and Updates Labor and Employment Special Edition 2018

LABOR DEPARTMENT RESUMES OPINION PROGRAM, REISSUES 17 RESCINDED LETTERS

THE U.S. DEPARTMENT OF LABOR (DOL) HAS REISSUED 17 opinion letters originally issued in January 2009 during the last few weeks of the Bush administration but later withdrawn by the Obama administration “for further consideration.” The Obama administration subsequently discontinued the practice of issuing opinion letters, opting instead to issue general guidance documents.

On June 27, 2017, the DOL announced the reinstatement of the opinion letter process, stating that the letters “will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act (FLSA) and other statutes.”

The 17 reissued letters, dated Jan. 5, 2018, and designated as FLSA 2018-1 through FLSA 2018-17, address a wide range of issues arising under the FLSA. The letters provide case-specific guidance on actual workplace issues raised by employers, employees, or their representatives.

Among the reinstated opinions are:

• FLSA2018-1, finding that on-call hours of ambulance personnel are not compensable under the FLSA
• FLSA2018-8, finding that client service managers at an insurance company are exempt administrative employees under the FLSA
• FLSA2018-11, finding that bonuses paid to non-exempt equipment operators for each day worked at an oilfield services company must be included in the operators’ regular rate of pay

Each letter emphasizes that the opinion is based “exclusively on the facts and circumstances” provided in the submitted request. Members of the public can access existing opinion letters or submit a request for agency guidance, including an opinion letter, at https://www.dol.gov/whd/opinion/.

- Lexis Practice Advisor Attorney Team

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RESEARCH PATH: Labor & Employment > Wage and Hour > FLSA Requirements and Exemptions > Articles

D.C. COURT LIFTS RULEMAKING NOTICE DEADLINE BUT HOLDS EEOC TO REVISION REQUIREMENT

JUDGE JOHN BATES OF THE U.S. DISTRICT COURT FOR THE District of Columbia has partially vacated his December 2017 order, AARP v. EEOC, 2017 U.S. Dist. LEXIS 208965 (D.D.C. Dec. 20, 2017), setting an August 2018 deadline for the Equal Employment Commission (EEOC) to give notice of proposed rulemaking aimed at revising two regulations governing employer-sponsored wellness programs.

However, the order, issued on January 18, AARP v. EEOC, 2018 U.S. Dist. LEXIS 27317 (D.D.C. Jan. 18, 2018), reaffirms the court’s earlier ruling vacating portions of the regulations as of January 1, 2019, in the absence of action by the EEOC and requires the EEOC to provide a status report on its rulemaking process by March 30.

The regulations, 81 Fed. Reg. 31,126 and 81 Fed. Reg. 31,143, which allow employers to require employees to disclose health information in order to be eligible for financial incentives tied to participation in wellness programs, were challenged by the American Association of Retired Persons (AARP) in a suit brought on behalf of its members. The AARP contended that the rules are inconsistent with requirements in the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act that disclosure of health information to an employer be voluntary. Specifically, the AARP argued, employees who would not otherwise disclose health information would be forced to do so in order to obtain reductions in health coverage costs of up to 30%, as permitted by the regulations.

Finding that the EEOC failed to justify its adoption of the 30% incentive figure, Judge Bates ordered the agency to reconsider the regulations “in a timely matter,” but left them in place, finding that to vacate them would likely cause “widespread disruption and confusion.”

Subsequently, the AARP moved for vacatur of the regulations. Judge Bates granted the motion, but he set an effective date of January 1, 2019, and ordered the EEOC to issue a notice of proposed rulemaking by August 2018.

In his most recent order, in addition to lifting the August 2018 deadline and ordering a status report, Judge Bates rejected the EEOC’s request that he clarify that he “is not retaining jurisdiction over this matter,” stating instead that the case will be deemed closed as of January 2, 2019.

- Lexis Practice Advisor Attorney Team

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RESEARCH PATH: Employee Benefits & Executive Compensation > Health and Welfare Plans > Health Plans and Affordable Care Act > Articles

SUPREME COURT TO RULE ON CONSTITUTIONALITY OF TRAVEL RESTRICTIONS

THE U.S. SUPREME COURT IS EXPECTED TO RULE LATER this year on the constitutionality of President Donald J. Trump’s most recent executive order restricting the entry of certain foreign nationals into the United States.

The high court agreed on January 19 to review a ruling by the U.S. Court of Appeals for the Ninth Circuit enjoining enforcement of the executive order. Trump v. Hawaii, 199 L. Ed. 2d 620 (2018).

At issue is Proclamation 9645, entitled “Enhancing Vetting Capabilities and Processes for Detecting Attempted Entry Into the United States by Terrorists or Other Public Safety Threats,” 82 Fed. Reg. 45161. The order, signed by President Trump on September 24, 2017, seeks to restrict citizens of Chad, Iran, Libya, North Korea, Syria, Venezuela, and Yemen from entering the United States because of deficiencies in the countries’ “identity-management and information-sharing capabilities, protocols, and practices.”

The state of Hawaii filed suit on October 17 in the U.S. District Court for the District of Hawaii, seeking an injunction against enforcement of the order. The court granted the injunction. The government appealed; the Ninth Circuit affirmed in part, limiting the injunction to “persons who have a credible bona fide relationship with a person or entity in the United States.” Hawaii v. Trump, 878 F.3d 662 (9th Cir. 2017).

Acting on a petition by the federal government, the Supreme Court stayed the injunction pending further proceedings in the Ninth Circuit or the government’s filing of a petition for writ of certiorari. The government filed its petition on January 5, arguing that both the U.S. Constitution and federal law “confer on the President broad authority to suspend or restrict the entry of aliens outside the United States when he deems it in the Nation’s interest” and that the injunction is overly broad. Opposing review, the state of Hawaii argued that the president exceeded his authority by issuing an order “that purports to ban over 150 million aliens from this country based on nationality alone” and that the Ninth Circuit acted properly in enjoining application of the order.

A decision is expected before the high court adjourns at the end of June.

- Lexis Practice Advisor Attorney Team

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RESEARCH PATH: Labor & Employment > Business Immigration > Employment Eligibility Verification > Articles

UNION MEMBERSHIP IN THE UNITED STATES

ON JANUARY 19, 2018, THE DEPARTMENT OF LABOR (DOL) released its annual report on the status of union membership in the United States, showing that for calendar year 2017, the union membership rate was unchanged from 2016, holding at 10.7%. The actual number of employees who were union members in 2017 increased by 262,000 workers to 14.8 million. By comparison, in 1983, when the DOL first started reporting such data, the union membership rate was 20.1%, nearly double the 2017 rate, and total union membership was 17.7 million workers.

If only private-sector employment is considered, the 2017 union membership rate drops to 6.5%, demonstrating the strength of organized labor’s influence in the public sector, where more than 34% of the workforce is unionized—more than five times the rate in the private sector. Stated another way, in the public sector workforce, consisting of nearly 21 million workers, 7.2 million employees are unionized; in the private sector workforce, consisting of nearly 117 million workers, 7.6 million employees are organized. The occupations with the highest rate of unionization are teachers, police officers, and firefighters.

The statistics show that unionized employees enjoy a substantially higher median weekly wage than non-unionized employees: $1,041 versus $829.

- Bender’s Labor & Employment Bulletin, Volume 18, Issue 3

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RESEARCH PATH: Labor & Employment > Labor-Management Relations > Union Organizing and Representation > Articles

FINANCIAL FIRMS REVISITING APPROACH TO RESTRICTIVE COVENANTS

MANY BUSINESS OWNERS UTILIZE SOME FORM OF restrictive covenant when hiring employees. Whether it is to protect trade secrets or customer lists or to ensure that sensitive information remains confidential, employees routinely execute agreements barring them from competing with their former employer, soliciting their former employer’s clients, or taking certain information with them when they leave.

While the enforcement of these covenants varies across jurisdictions, financial advisors and wealth management firms have chosen in the past to take a different tack. Instead of trying to restrict wealth managers from taking their clients with them when they moved to new firms, these firms voluntarily joined the broker protocol, which permitted wealth managers to take certain client information with them when they left and allowed managers to solicit their clients to join them at their new firms. Wealth management firms believed that competition for the managers and their clients was a good thing.

The good times may be coming to an end. A recent article in the New York Times noted that Morgan Stanley, UBS, and Citibank withdrew from the broker protocol last year. If other brokerages, especially the larger ones, follow suit, clients may see their advisors subject to increased restrictions upon departing. This usually means one thing: litigation. While post-employment restrictions are subject to various levels of enforcement, the threat of litigation and its attendant costs will surely chill the liberal movement of wealth managers from one firm to another.

- Bender’s Labor & Employment Bulletin, Volume 18, Issue 3

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RESEARCH PATH: Labor & Employment > Non-competes and Trade Secret Protection > Restrictive Covenants > Articles