|November 2, 2012|
Previously published on October 2012
Although it may just seem like yesterday for some, four years have now passed and Americans find themselves in the midst of another presidential election. While each and every election is important, this one appears to be especially important to Americans because of the current state of our nation’s economy. With all four debates now concluded, it is safe to say that "employment" will remain a top, if not the number one, issue of concern for the majority of Americans.
But what exactly does "employment" and this election mean for employers? Regardless of who is elected to run our country for the next four years, employers will have to understand -- and most will end up addressing -- a myriad of labor and employment issues in their workplaces. So let’s break down the labor and employment issues employers will face depending upon the result of the November 6th election.
1) Unions and The National Labor Relations Board
Unions and collective bargaining rights have been a hot topic since President Obama took office, with Obama voicing his support of legislation seeking to expand employee and union rights and disapproval of legislation seeking to limit union and collective bargaining rights. During his first term, Obama immediately supported the Employee Free Choice Act ("EFCA") - the proposed law introduced into Congress in March 2009 (but ultimately did not go anywhere) which sought to establish an easier system to enable employees to form, join, or assist labor organizations. We then saw Wisconsin Governor Scott Walker and the Wisconsin budget repair bill, seeking to significantly change the collective bargaining process for most public employees in Wisconsin. Obama, commenting on the Wisconsin law in 2011, was quoted as saying, “Where you’re just making it harder for public employees to collectively bargain generally seems like more of an assault on unions.” Finally, and an issue which the majority of employers have been dealing with this past year, are the series of recent social media decisions coming down from the National Labor Relations Board ("NLRB"), providing guidance to employers on the permissible scope of employment policies limiting employees’ social media use. Those decisions upheld challenges to employers’ social media policies that employees would “reasonably construe” them as restricting their Section 7 rights to communicate about wages, hours, and working conditions.
With the EFCA on the backburner and the Wisconsin budget repair bill only directly impacting a limited number of Americans, the NLRB decisions are still very much alive and remain a hot issue for employers nationwide. Many people attribute these NLRB decisions to the fact that President Obama had appointed labor-friendly members to the NLRB. In fact, during his first term, President Obama signed a series of executive orders that encourage the use of union labor in federal construction projects, ease union financial reporting requirements and more. Those favorable union organizing rules approved by Obama’s appointees at the National Labor Relations Board, however, have been tied up in the courts and have not yet been implemented.
Governor Romney says he will reverse all of Obama’s executive orders that help unions, seek to prohibit unions from using automatic dues deductions for politics and strive for national right-to-work legislation that prohibits unions from collecting dues from nonmembers. While Romney has praised efforts to limit collective bargaining rights for public workers, Obama has denounced them. Clearly this is a huge issue for employers, as approximately 14.8 million Americans are members of labor unions and organized labor now makes up just 11.8 percent of the work force.
2) Health Care Reform Legislation
Unless you have been living under a rock these past four years, you have heard of the Patient Protection and Affordable Care Act ("PPACA") - commonly referred to by many Americans as "Obamacare" (or the federal health care law) - which was signed into law by President Obama on March 23, 2010. PPACA is aimed primarily at decreasing the number of uninsured Americans and reducing the overall costs of health care, providing a number of mechanisms—including mandates, subsidies, and tax credits - to employers and individuals in order to increase the coverage rate. The number of issues affecting employers are countless, including grandfathering policies to individual mandates, co-payments, co-insurance, and deductibles.
Regardless of who wins the election, employers will still need to be advised on the health care reform legislation. With an Obama win, employers will be scurrying to ensure their benefit plans comply with PPACA. It is anticipated that Romney would revoke the PPACA if elected, which would require employers to re-evaluate their benefit plans and any changes they made to comply with the PPACA.
3) Employment Litigation
When the economy suffers, businesses look to reduce their labor costs—i.e. layoffs, downsizing and terminations in certain cases. With many employees out of work, employment litigation claims are on the rise. There have been some employees who have turned down severance packages and opted to file claims against their former employer, believing the latter to be more lucrative. Over the last four years, employers have seen an increase in the number of ERISA class action filings for recovery of 401(k) losses, age related discrimination cases, Worker Adjustment and Retraining Notification ("WARN") lawsuits, and wage and hour litigation under the Fair Labor Standards Act ("FLSA"). Also fueling this employment litigation is the government’s expansion of some employment related legislation—e.g., the Americans with Disabilities Act and the Family and Medical Leave Act. Cases testing the limits of the new legislation have been tied up in the courts, and we have only recently seen decisions being handed down, providing us with some initial guidance.
Hopefully, the number of employment lawsuits will decrease with an economic turnaround and a decreased unemployment rate. The question, thus, is which candidate can accomplish that.
4) Wage and Hour Class Actions
As mentioned above, wage and hour class action suits have been on the rise over the past four years. According to the American Bar Association, the filing rate of federal fair wage cases increased more than 13 percent in the first nine months of 2010 alone compared with the same period in the previous year. The Bureau of National Affairs reports that for the year-long period ending March 31, 2012, these suits reached a record annual total of 7,064 federal filings.
Many of the cases are the result of employee claims that they have been "misclassified" as exempt from overtime and should have been paid time and a half for hours worked over 40 in a workweek. There has also been an increase in employee claims that they were not paid for time worked while "off-the-clock" -- most likely attributable to smart phones and other technology making it easier for employees to work when they are away from their desks. Finally, employers are beginning to see an increase in claims of misclassification of employees as independent contractors.
Many have attributed the increase in wage and hours class actions to President Obama’s administration cracking down on employer FLSA violations. However, high-profile lawsuits against big companies -- e.g., Wal-Mart, Pep Boys and Dollar General -- have also brought attention to FLSA regulations and have spurred copycat suits against smaller employers who have employed similar practices.
While we can’t all agree on political views, it should be safe to say that everyone is in favor of a stronger economy for our country. Each person’s vote on November 6th is important and will help decide the next four years for our country. Make sure you are informed before you cast your vote.