Deregulation at Work

July 24, 2017
Guest Post

by Charlotte Garden, associate professor at Seattle University School of Law

*This is part of ACSblog's Symposium on Regulatory Rollback

With key National Labor Relations Board and Department of Labor appointments nearing confirmation votes, the Trump administration’s labor policy will soon be in full swing. There is little doubt that that policy will involve some 180-degree reversals from the generally pro-worker positions of the Obama NLRB and DOL, and other more incremental retreats from Obama-era policies. This post discusses a few deregulatory changes that are likely to take effect over the next several months or years, and what they will mean for workers.

The Department of Labor

Under Tom Perez’s leadership, the Obama Department of Labor enacted a series of new rules designed to improve workers’ lives. Key among them was a rule that doubled the threshold below which employers would have to pay overtime to white-collar workers to $47,500. In addition to that signature achievement, other important Obama DOL rulemakings would have forced employers to disclose more of their spending on anti-union “persuaders,” and halved the permissible level of silica dust (which is linked to cancer and other lung diseases) to which construction workers can be exposed. The first two of these rules were enjoined before they could take effect; litigation regarding the last is pending in the D.C. Circuit.

Under Trump, the DOL has taken steps toward reversing or cabining each of these rules. The persuader rule presents the starkest case: the Trump administration declined to defend the rule in court and has issued a notice of proposed rulemaking to rescind it altogether. The other two rules seem likely to survive in in some form, though possibly as a shadow of their former selves. DOL delayed the enforcement date for the silica rule until September 2017 and it refused to defend the $47,500 overtime threshold in litigation – though it is defending the generic idea that it can set an overtime threshold at some level.

That last concession should give some hope that the Trump DOL may finally raise the overtime threshold above the federal poverty line for a family of four, though it is evident that whatever level the DOL ultimately arrives at will not approach $47,500. During his confirmation hearing, current DOL Secretary Alex Acosta seemed tentatively receptive to the idea of mandating overtime for workers paid less than $33,000 per year, though he declined to endorse any specific dollar amount. It is undeniable that any rise in the overtime threshold will benefit some of the most vulnerable workers. Still, someone making a salary of $33,000 per year will be unable to pay rent on even a modest two-bedroom apartment in many states and cities – yet their employer will be able to demand that they work extra or erratic hours that would make it difficult to work a second job.

The National Labor Relations Board

The NLRB currently has three members – two Democrats and one Republican – as well as a democratic general counsel whose term expires in November. However, the Senate will likely soon confirm two new Republican board members, putting the Board back at full strength. Once that happens, the Board will be in a position to reverse recent and longer-established precedent in ways that leave fewer workers eligible to unionize, and make collective bargaining more difficult.

One sure target for reversal will be a case called Browning-Ferris Industries. In Browning-Ferris, the Board expanded the circumstances under which an enterprise that is partially responsible for setting working conditions counts as a “joint employer” of a group of workers, along with the entity that actually signs the paychecks. This matters because only employers can be held responsible for unfair labor practices (ULPs), or compelled to sit across the bargaining table from their unionized workforce. Because of those potential consequences, corporate franchisors have been especially critical of the Board’s joint employer rule.

However, Browning-Ferris is only one of many Board decisions that are likely to come under fire. Others include the recent NLRB decisions that graduate students who work doing teaching and research at their university, as well as some adjunct faculty members working at religiously affiliated schools, are eligible to form a union. And a Republican-led Board is far less likely than a Democratic Board to conclude that gig economy workers like Lyft and Uber drivers are employees with union rights.

This list of pending regulatory rollbacks only scratches the surface – many lower-profile changes that will further deregulate employers (while cracking down on unions) are also in the pipeline. Further, we shouldn’t ignore Congress and the Supreme Court. For example, the Court will soon hear a trio of cases about whether employers violate the NLRA when they require employees to sign individual arbitration clauses, which often make it impossible as a practical matter for employees to enforce their rights. For its part, Congress has already repealed the DOL’s Fair Pay and Safe Workplaces rule, which required federal contractors to disclose previous violations of employee rights. And Republican House members recently inserted a provision into an appropriations bill that would prevent the NLRB from enforcing its current joint employer standard. In other words, employers will push their agenda on multiple fronts during the Trump administration – the question is how far they will be able to go.