- A Brave New Washington: How the 2008 Election May Affect Employment Law
- January 16, 2009
- Law Firm: Dinsmore & Shohl LLP - Cincinnati Office
In his 2006 memoir, "The Audacity of Hope," President-elect Obama made the following comment concerning unions that supported his 2004 senatorial campaign: "The leaders of service workers unions broke ranks and chose to endorse me over [my opponent], support that proved critical to my campaign. It was a risky move on their part; had I lost, they might have paid a price in access, in support, in credibility. So I owe those unions. When their leaders call, I do my best to call them back right away." More recently, in the 2008 presidential campaign, he wrote a letter to Department of Labor employees saying: "I believe that it's time we stopped talking about family values and start pursuing policies that truly value families, such as paid family leave, flexible work schedules, and telework."
Accordingly, November 4, 2008 marked a potentially colossal victory for organized labor and those who want to regulate employers' decision-making rights. President-elect Obama can now accept or reject any legislative enactment he chooses. He will find support in a House of Representatives comprised of at least 255 Democrats compared to 175 Republicans (five seats are still undecided). In the Senate, Democrats have at least 58 seats compared to Republicans' 40 (two Senate races are still undecided). While Republicans, at this time, appear to have retained their filibustering powers (leading in the two remaining Senate races), they are holding on to the ropes, gathering their composure to make it through the standing eight count.
With legislation concerning the economy and the War on Terror atop the marquis, employment-related legislation is pushing its way into the limelight. Below is a synopsis of labor and employment legislation that was proposed in the 110th Congress (2007-2008). Versions of these bills are likely to be seen in the 111th Congress (2009-2010) when the House and Senate take their posts in early January 2009. After President-elect Obama's inauguration, much of this legislation may become a reality. Employers and employees alike should be wary because much of this legislation will (1) unnecessarily increase costs associated with operating a business, (2) tip the scales too far against free markets which keep people employed, and (3) encourage litigation, which tends to benefit attorneys alone.
- The Employee Free Choice Act (EFCA). The EFCA mandates that the National Labor Relations Board certify a labor union as the representative of employees where a majority of the employees are found to have "signed valid authorization" cards designating a labor union as the employees' bargaining representative. This will enable labor unions to more easily organize employees by secretly having them sign cards, rather than having them exercise a free choice behind a closed curtain and away from the coercive influences of unions and employers. The EFCA would also force employers and unions into binding arbitration if they cannot reach an agreement on an initial contract after 90 days of negotiations, resulting in non-negotiated collective bargaining agreements governing the employer/employee relationship for two years.
- The Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers Act (RESPECT). RESPECT would amend the National Labor Relations Act to exclude from the definition of "supervisor" those employees who would commonly be referred to as supervisors (i.e., employees "assigning" work to other employees and employees with "responsibility to direct" other employees). This legislation would dramatically increase the number of employees that could be part of a collective bargaining unit, thus stripping employers of necessary control over their businesses.
- The Healthy Families Act (HFA). The HFA would require employers with 15 or more employees to provide seven paid sick leave days to full-time employees working 30 hours or more per week. It would also require employers to provide a pro-rata amount of paid sick leave days to part-time employees. While on its face the bill appears employee-friendly, it would result in increased costs associated with doing business that all employers would then factor into their bottom lines, which would in turn negatively affect employees. Moreover, it would be an affirmative intrusion by government into the expense sheets of businesses – mandating that businesses compensate employees for time spent not actually working.
- The Working Families Flexibility Act (WFFA). The WFFA would enable employees working for employers with 15 or more employees to request a change in the terms or conditions of their employment so long as the request relates to required hours, working times, or working locations. It would require an employer to hold meetings with the requesting employee and to then justify its decision to the employee in writing. While most employers entertain and often grant reasonable requests made by employees on various issues, this law would mandate certain procedural requirements for employers, the definition of micromanagement.
- The Family Leave Insurance Act (FLIA). The FLIA is designed to amend the Family and Medical Leave Act ("FMLA") to provide workers with paid FMLA leave through a Family and Medical Insurance Program. Like the HFA and the WFFA above, this bill would add a substantial cost to doing business for employers, which, unfortunately, would be born by employees and consumers paying for products or services.
- The Lilly Ledbetter Fair Pay Act (Ledbetter Act). This law is named for a plaintiff whose sex discrimination lawsuit was rejected by the United States Supreme Court in 2007. The Supreme Court rejected Ledbetter's wage discrimination claim because she did not file her claim within 180 days of the discriminatory act that gave rise to her claim. Ledbetter argued that the act of issuing her a paycheck within the relevant statute of limitations was itself a discriminatory act, even though the discriminatory decision affecting her pay was made years before she filed her claim. The Ledbetter Act would nullify the Supreme Court's decision and make the act of paying an employee a discriminatory act if the payment relates to a discriminatory decision made at any point in time prior to the employee's allegation of discrimination. Such a law conflicts with the purpose behind statutes of limitation, which are designed to give litigants (plaintiffs and defendants) the right to bring and defend lawsuits within a reasonable timeframe.
- The Paycheck Fairness Act (PFA). Among other things, the PFA would: (1) impose compensatory and punitive damages on employers found to have violated the Equal Pay Act; (2) allow plaintiffs to proceed with a class action lawsuit under the Equal Pay Act; and (3) curtail an affirmative defense under the Equal Pay Act, which currently allows employers to assert that a pay differential between a man and woman exists by virtue of a "factor other than sex." The PFA would replace the "factor other than sex" defense with a "bona fide factor other than sex" defense, requiring an employer to prove that business and economics necessitate the pay differential. Current laws already protect against pay discrimination. If an employer pays a female employee less than another employee because she is a woman, the employer is liable to the female employee for damages. However, the PFA would now require an employer to economically justify any difference in pay between men and women, rather than relying on evidence that shows (for whatever reason) the difference in payment is not because of the female's gender. Because the PFA severely limits an employer's ability to defend an equal pay lawsuit and it increases the potential damages for such suits, the PFA is nothing but an invitation to trial attorneys to sue employers.
- The Private Whistleblower Streamlining Act (PWSA). The PWSA would expand whistleblower coverage to all federal laws, rules, and regulations, as well as making such claims actionable in federal courts. Relief under the PWSA would include punitive damages, compensatory and consequential damages, as well as attorneys fees. The expansiveness of this bill is horribly apparent from its language and, if passed, will likely invite increased litigation in an area already subject to frivolous litigation.
There is no question that labor and employment legislation has its role. For instance, it has drastically improved equality in pay, equality in opportunity, and equality in bargaining power, all of which are beneficial to a free and equal society. However, much of the legislation noted above is either (1) superfluous in the sense that laws protecting equality within the workplace already exist, or (2) overreaching in the sense that it will stifle economic progress by increasing the cost of operating a business. The adoption of these laws will ultimately result in a victory for one group – lawyers. Lawyers benefit from an overly litigious nation, and more laws with stricter requirements and stricter penalties do nothing but invite lawyers to encourage parties to litigate.
George Washington once said that the Senate is designed to cool legislation from the House of Representatives, much like a saucer is used to cool hot tea. George Washington understood that in the House of Representatives – a truly democratic body – the majority can easily impose its will over a minority, resulting in legislation that reflects a dangerous majoritarianism. Washington knew that the Senate – a remarkably undemocratic body that is not reflective of the general populous – would often curb the unfiltered legislation from the House of Representatives, making it slightly more prudent. Moreover, a Senate minority can still wield the filibustering sword to stifle overreaching and unnecessary legislation from the belly of the House.
For years, courts have said that it is not their role to micromanage business decisions made by business owners and management. President-elect Obama and the Democratic Congress should heed this advice and at the very minimum temper or abstain from adopting much of the legislation discussed above. If Democrats do not proceed accordingly, the Senate Republican minority should work to curb the presumptuous will of a hubristic majority, lest business becomes the victim of a Brave New Washington.