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House Passes Sweeping Pro-Labor Bill

The Democratic majority in the House of Representatives passed the most far-reaching reform of U.S. labor laws since the 1930’s: The Protecting the Right to Organize Act (the “PRO Act”) (HR 2474). In what is clearly designed as a “template” for what a Democratic Administration would enact, the PRO Act includes provisions intended to assist unions in organizing, winning, and securing a labor agreement.

The main provisions of the PRO Act would:

  • Allow “card-check” certifications in which unions need only collect signatures from a majority of workers to form a unit and bypass the current secret-ballot process;
  • Curtail employers’ power to dissuade workers from forming unions;
  • Subject businesses to fines if they suppress worker organizing;
  • Allow “secondary” boycotts, in which workers disrupt their employer’s operations by interfering with suppliers, clients, and other related firms;
  • Outlaw “right-to-work” laws, which let union-represented workers withhold dues, in 27 states (Passed on 2/6/20);
  • Prohibiting lockouts; and
  • Allow workers to circumvent the NLRB and go to federal courts to adjudicate labor disputes.

This controversial Bill split the normally partisan House, with members of both parties voting for and against it. The Bill has little chance of passing the Senate and the President has already announced he would veto the Bill should it make it to his desk.

OFCCP Director Leen to be Nominated for OPM Inspector General

In an unanticipated move, President Donald J. Trump announced on Monday, February 3, 2020 his intent to nominate Craig E. Leen as Inspector General for the Office of Personnel Management (OPM). Leen has been Director of the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) since December of 2018. Leen came to OFCCP as a Senior Advisor in November of 2017 and became Acting Director of the agency in July of 2018, and was named as Director thereafter.

Prior to his work at OFCCP, Mr. Leen was the City Attorney of Coral Gables, Florida. This story is developing and FS will update as more information is available.

Report from the ABA/ Labor and Employment Meeting: Dir. Leen’s Plans for OFCCP Focused Reviews

OFCCP Director Craig Leen presented at the American Bar Association’s Annual Meeting of the Labor and Employment Section in New Orleans on November 8. Leen’s comments centered on 503 and VEVRAA focused reviews. That same day, OFCCP issued a second 2019 Corporate Scheduling Announcement Lists that included 500 VEVRAA focused reviews. Here are the key takeaways from Leen’s presentation:

  • 503 and VEVRAA focused reviews will include an analysis of “systemic” discrimination in promotions, terminations, and compensation. Leen stated that the agency will conduct regression analyses in order to ferret out such discrimination. Because most establishments do not employ a sufficient number of Individuals with Disabilities (IWDs) or protected veterans to conduct a statistical analysis, in all likelihood, an analysis of compensation or promotion practices will likely be based on individual comparators and anecdotal evidence. Leen also reported that all focused reviews, VEVRAA and 503, will include an on-site. He estimated the on-sites would last three to five days.
  • OFCCP plans to post on its website a list of the contractors who successfully completed a 503 or VEVRAA focused review without any adverse findings, as well as best practices identified in each review.
  • Leen urged attendees to review the list of 503 best practices posted on the agency’s website and considering implementing some or all of them. The 503 focused reviews will include an assessment of whether the contractor implemented any of the best practices. Leen also noted that OFCCP will be taking a hard look at the impact of assessments, particularly those using artificial intelligence, on IWDs and the basis for denying a requested accommodation. Leen asserted that virtually all requests should be granted since most accommodations cost less than $500. Finally, Leen wants to see an Accessibility Coordinator in every workplace.
  • Compliance officers conducting 503 focused reviews will ask for, at least, the following documentation:
    • Termination records
    • Personnel files
    • Flexible workplace polices
    • Response rate for self-identification surveys
    • Contractor’s efforts to increase self- id response rates
    • Job descriptions

Although Leen specifically referenced this list in connection with Section 503 focused reviews, this list could also apply to a VEVRAA review.

  • A revised version of the 503 self-identification form is pending approval with the Office of Management and Budget (OMB). The intent of the revisions is to make the form more welcoming to IWDs in an effort to increase response rates.
  • Leen’s comments focused primarily of compliance with Section 503. However, he did stress a new focus with respect to VEVRAA compliance – discrimination against military spouses. The VEVRAA regulations include a prohibition against associational discrimination similar to the Section 503 and the ADA. 41 CFR 60-300.21(e)

Leen also stated that contractors may implement hiring preferences for IWDs and Veterans. According to Leen, such programs are not discriminatory. This position appears to be contrary to the EEOC’s guidance on voluntary preferences. Before implementing such a hiring preference, please consult with counsel.

  • Finally, Leen announced that next year, OFCCP will launch additional types of focused reviews on disability accommodations and religious accommodations. Eventually, Leen also plans to implement compensation and promotion focused reviews.

For more information on preparing for or responding to a focused review, please contact your FortneyScott attorney or send us an e-mail with your questions.

Trump Rescinds Obama Executive Order Requiring Successor Employers to Offer Employment to Service Workers

On October 31, 2019, President Trump issued a new Executive Order that rescinded President Obama’s Executive Order 13495 (EO)—Nondisplacement of Qualified Workers Under Service Contracts—and its implementing regulations. The now rescinded EO required successor contractors to offer positions to qualified service workers and to provide employee notifications and workplace notice postings.

Additional Information on the Rescinded EO.      The recession is effective immediately. The former EO required that any contract or subcontract entered into by the federal government or its contractors covered by the McNamara-O’Hara Service Contract Act (SCA) include a clause that qualified workers currently on a covered contract be given the right of first refuse for employment with a successor contractor. The EO prohibited a successor contractor performing the same or similar services at the same location from hiring any new employees until qualified workers performing the prior contract were provided an opportunity to accept a job with the successor. The EO also required the predecessor contractor to provide written notice to eligible employees by either conspicuous workplace posting or by individual notices to employees. Federal contractors will no longer be required to post or provide EO notices as well.

Trump’s rescission order specifically terminates immediately any existing investigations or compliance actions based on EO 13495, and directs the Secretary of Labor and other heads of government agencies to promptly move to rescind any orders, rules, regulations, guidelines, programs or policies implementing or enforcing Obama’s executive order.

Of the three Executive Orders issued by President Obama which federal contractors sought to reverse—(1) Fair Pay and Safe Workplaces, (2) Nondisplacement of Qualified Workers under the Service Contracts and (3) Paid Sick Leave—only the Paid Sick Leave Executive Order is still in effect.

Contact your FortneyScott attorney who advises your company or email us at info@fortneyscott.com for additional information about the rescinded EO, and for advice on the impact that these changes have on your federal contracting compliance obligations.

OFCCP Issues Technical Assistance Guide for Educational Institutions

Today, OFCCP issued its long-anticipated Educational Institutions Technical Assistance Guide (“TAG”), designed to assist educational institutions with federal contracts “understand their obligations under the laws and regulations OFCCP enforces and to help them prepare for compliance evaluations.”

Acknowledging that educational institutions may face “unique challenges” in their compliance efforts, the TAG addresses a number of key issues, including:

  • Guidance for determining whether the institution should develop a single AAP (g., for the campus or the university) or multiple AAPs;
  • Clarification on when student employees should be included in, or excluded from, AAPs;
  • Methods for developing job groups for instructional and non-instructional employees;
  • Best practices for developing action-oriented programs;
  • Discussion of how OFCCP will review promotion data; and
  • Overview of OFCCP’s compensation analysis methodology.

While the TAG is useful, educational institutions must identify any content that goes beyond the regulatory requirements of Executive Order 11246, Section 503, and VEVRAA. OFCCP, as a matter of law, only can enforce the regulatory requirements, and the Agency cannot enforce any expanded obligations included in the TAG.

FortneyScott will provide a more in-depth analysis of the TAG for clients prior to the October 23, 2019 Town Hall OFCCP is holding for educational institutions.

For more information on the TAG or how educational institutions should respond to OFCCP compliance review, please contact your FortneyScott attorney or send us an e-mail with your question.

EEO-1 Component 2 Deadline Extended

Although the EEOC was scheduled to end the Component 2 data collection on Monday, September 30, 2019, the EEOC plans to keep the portal open in accordance with the district court’s order until it reaches approximately 72% of the employers who normally file EEO-1 Reports. On Friday, September 27, 2019 in its Status Report to the district court discussing post-September 30th activities the EEOC announced its plan to continue to accept Component 2 data for 2017 and 2018 in accordance with the judge’s order.  EEOC said that EEO-1 eligible employers should continue to submit and certify their Component 2 EEO-1 reports for 2017 and 2018 as soon as possible.

For more information on Component 2 pay data collection, see the EEOC’s portal for Component 2.

DOL Issues Long-Anticipated Update to Overtime Rule

This morning, the U.S. Department of Labor’s Wage & Hour Division (WHD) announced a final rule updating the overtime eligibility requirements for workers under the federal Fair Labor Standards Act (FLSA).

Most notably, the final rule bumps up the minimum salary threshold required for workers to be exempt under the FLSA’s “white-collar” exemptions—that is, the executive, administrative, and professional exemptions. The new threshold of $35,568 is a significant increase from the previous threshold of $23,660, an amount which has not been revised since 2004. However, the new threshold falls far short of the $47,476 level proposed in a scuttled Obama-era rule in 2016.

Very importantly, the final rule makes no changes to the current “duties test” for exemptions—a hotly debated subject during the rulemaking process. Nor does the final rule call for an automatic update of the salary threshold, another controversial feature in the blocked Obama rule.

Other significant components of the final rule include:

  • Updating the salary threshold for the “highly compensated employee” exemption from $100,000 to $107,432 per year;
  • Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level; and
  • Revising the special salary levels for workers in U.S. territories and in the motion picture industry.

According to a WHD press release, the final rule will make an additional 1.3 million American workers eligible for overtime pay.

Next Steps

While the rule is scheduled to go into effect on January 1, 2020, it is widely expected that it will be challenged immediately in federal courts by Democrats and worker advocate groups, with the intent of enjoining and invalidating the rule in favor of one more akin to the Obama rule.

The final rule’s release coincides with a Senate committee confirmation vote today on Trump nominee for Labor Secretary, Eugene Scalia. Scalia is expected to clear the committee vote and ultimately win confirmation by the Republican-controlled Senate.

FortneyScott will keep you updated on the status and impact of this final rule. If you have any questions, please contact your FortneyScott attorney, or e-mail FortneyScott.

Supreme Court Limits Public Access to Private-Sector Records

The U.S. Supreme Court, in a 6-3 decision, reined in the ability of the media and other members of the public to access commercial and financial records provided to the government by private-sector businesses.  Under the Freedom of Information Act’s (“FOIA’s”) Exemption 4, the government is not required to disclose “commercial or financial information obtained from a person and privileged or confidential.”  Although seemingly straightforward, this language has been the source of much dispute and confusion, as many courts have held that information should only be deemed confidential under Exemption 4 if it can be shown that its disclosure would cause “substantial competitive harm.”  However, on June 24, the Supreme Court provided clarity on this issue through its opinion in Food Marketing Institute v. Argus Leader Media, d/b/a Argus Leader.  The majority opinion, written by Justice Gorsuch, overruled the “substantial competitive harm” standard, and held that information provided to the government is “confidential” under FOIA Exemption 4 – and, as a result, not subject to public disclosure – if the information is “both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.”  As a result of this ruling, private companies which are required to provide sensitive data to the government, such as the pending EEO-1 Component 2 pay data submissions, can do so with more confidence that such information will not be made public.

Case History

In 2011, Argus Leader Media (“Argus”), a South Dakota newspaper, submitted a FOIA request to the U.S. Department of Agriculture (“USDA”) seeking information provided to the agency by retail stores regarding benefit payouts for food stamps under the Supplemental Nutrition Assistance Program (“SNAP”).  The USDA refused to disclose the requested information citing Exemption 4, and Argus filed suit.  The district court found in favor of Argus, holding that the USDA had not shown a likelihood of substantial competitive harm resulting from the disclosure of the requested information, and on appeal the Eight Circuit affirmed the district court’s decision.

Following the lower court decisions, the Food Marketing Institute (“FMI”) intervened in the case and petitioned the Supreme Court for review arguing that the “substantial competitive harm” standard applied by the Eighth Circuit improperly narrows Exemption 4 which requires only that information be confidential.  FMI asserted that the term confidential should be afforded its ordinary meaning – “something that is private and not publicly disclosed.”  In addition, the Department of Justice appeared in support of FMI arguing that data should be deemed confidential and not subject to disclosure under FOIA where it was reasonably understood to have been communicated to the government in confidence.

The Supreme Court’s Decision

Justice Gorsuch, writing for the majority, agreed with FMI and the Department of Justice, and noted that the language of Exemption 4 provided no basis for the “substantial competitive harm” standard which had been adopted by the lower courts.  In reaching this decision, Justice Gorsuch noted that the “ordinary, contemporary, common meaning” of the word “confidential” at the time FOIA was enacted simply required that in order for information to be deemed confidential it must be “customarily kept private” and, in the event information is disclosed to another party, assurances are provided that it will remain secret.  The majority found that here, the information at issue easily satisfied these conditions and fell under Exemption 4.

In addressing the “substantial competitive harm” standard, the Court held that in developing this interpretation the lower courts had ignored the plain language of the statute, and chose instead to apply their own interpretation of FOIA’s purpose.  By inferring that Exemption 4 only applied to information which would cause substantial competitive harm, lower courts had improperly narrowed the plain meaning of the statute as it was enacted.

In dissent, Justice Breyer pointed to the purpose of FOIA – to “permit access to official information long shielded unnecessarily from public view.”  With this purpose in mind, Justice Breyer noted that FOIA’s exemptions must be narrowly construed.  He further cautioned that as businesses tend to treat “as secret all information which need not be disclosed” the majority’s ruling would provide a great deal of leeway to deprive the public of information.

Looking Ahead

Moving forward, this ruling should have far reaching implications, as it provides the government with far more discretion to block the release of information that contains private-sector commercial or financial information.  Importantly, this decision should have an immediate impact as companies which are preparing to submit their EEO-1 Component 2 pay data, can now do so with confidence that their non-public information will be exempt from FOIA requests.

DoD Issues new Other Transactions Guide

This week the Office of the Under Secretary of Defense for Acquisition and Sustainment (USD (A&S)) rescinded the January 2017 version of the Other Transactions (OT) Guide for Prototype Projects and issued a new, revised OT Guide.  OT agreements (OTAs) are not Federal Acquisition Regulation (FAR)-based procurement contracts, grants, or cooperative agreements.  As enunciated under the new OT Guide, OTAs are intended to utilize more commercial arrangements to accomplish particular projects.  While OTAs are subject to certain laws and provisions, they are not required to comply with the full panoply of procurement laws and regulations, such as the FAR and agency-specific supplemental acquisition regulations, applicable to FAR-based contracts.

Statutory authority for OTAs traditionally has been used to allow Department of Defense (DoD) to enter into agreements for new research, prototype development, and limited production.  This also includes Technology Investment Agreements (TIAs).  Revision of statutory authority has expanded the definition of non-traditional defense contractor (NTDC) and the use of OTAs to permit appropriate follow-on production agreements.  DoD uses OTAs to access state-of-the-art technology solutions from traditional defense contractors, non-traditional defense contractors that do not typically engage in contracts with the federal government, consortia, or through teaming arrangements involving these or other types of entities.    

The OT Guide provides a useful compendium of information on OTA authority, processes, administration and resources.  It includes a set of definitions, mythbusters, authorities, as well as examples of OTA arrangements, to clarify for both Government and industry the nature and scope of OTAs.  

Takeaways:

·       DoD is seeking access to state-of-the-art technology solutions.

·       OTAs provide one avenue through which NTDCs as well as traditional defense contractors, may be able to engage in research, prototyping, and appropriate follow-on production.

·       OTAs are not cookie-cutter.  The nature and scope of an OTA, as well as the terms, rights, and available remedies, are governed by the controlling statutory and policy provisions of the agency, and the negotiation and agreement of the parties.  OTAs can be issued to an individual entity, team, consortium, or a combination of entities.  It is wise to consider all aspects and options, including, for example, the nature of the problem; your proposed solution; terms for successful completion; the availability of your own, potential team members, and the DoD resources; cost-share and funding; and intellectual property rights needs, when seeking to work in this space.

Susan Warshaw Ebner, one of FortneyScott’s shareholders, has experience in OTAs and TIAs, as well as traditional FAR-based procurements, grants and cooperative agreements.  If you have questions about this advisory, or seek assistance with regard to these types of transactions, please contact Susan Warshaw Ebner or your FortneyScott counsel.

EEOC Public Meeting on “Revamping Workplace Culture to Prevent Harassment”

The EEOC held an important public meeting on “Revamping Workplace Culture to Prevent Harassment” on October 31, and Sara Nasseri, an attorney from FortneyScott, attended.  Continue reading to find out recommendations and best practices for employers in the current environment in which there is growing awareness and complaints about harassment and discrimination in the #MeToo environment.

The meeting focused on the EEOC’s efforts in addressing sexual harassment in the workplace. The meeting was an open discussion between EEOC’s leaders and various witnesses and experts in the field on steps that employers, and the community as a whole, should take in the wake of the growing momentum of the #MeToo movement. The areas that were discussed and that offer the key points for employers’ compliance efforts include:

  • changing company culture,
  • ensuring strong leadership and accountability, and
  • implementing effective policies, procedures, and training.

The EEOC’s Substantial Efforts:   Acting EEOC Chair Victoria Lipnic reviewed EEOC’s efforts to date. For decades, the EEOC has investigated and litigated all types of harassment in all types of workplaces. When the #MeToo movement began about a year ago, EEOC was already leading efforts. Indeed, the agency’s focused efforts began about three years ago with the creation of the Select Task Force on the Study of Harassment in the Workplace which comprised of 16 members from around the country from a range of industries. After 18 months of extensive study, a detailed report was issued by the EEOC Co-Chairs, which echoed the same themes of company culture, leadership and accountability, and policies, procedures, and training that were voiced during the public meeting. The task force reconvened this past June. The Acting Chair and Commissioners stressed the role the EEOC has been trying to take as an enforcer, educator, and leader.

The Panelists Presentations:  Seven panelists, ranging from a management labor and employment attorney to a rape and sexual assault survivor and activist, presented their testimonies on their perspectives on the issue and their recommendations for the EEOC. All panelists were questioned on various aspects of their testimonies and each was given an opportunity to really engage with the agency from both a personal and a professional perspective.

The key takeaways from the panelists include:

  • The EEOC is hoping to be a leader in this movement and their efforts have not gone unnoticed – it is reported that charges filed with the EEOC alleging sexual harassment the past FY 2018 increased by 13.6% from FY 2017.
  • Focus on company culture and for employers to shape their cultures in such a way as to stop harassment before it even starts.
  • Account for harassment on all bases and not just focus on sexual harassment in light of the growing #MeToo movement.
  • Understand that there is no “one size fits all” approach to policies, procedures, and training and tailoring different approaches to different types of workplaces. There are different vehicles by which to conduct training, which includes a wide range from harassment prevention and response to civility training.
  • Emphasize transparency so that communication lines are open and the workforce can trust that measures will be taken.

Next Steps for Employers:   Company culture was underscored and it was strongly recommended that employers “own” their culture down to the individual workplace level. Employers training and response efforts must be broad enough and targeted enough not only regarding harassment on the basis of sex but on all bases of unlawful discrimination, and across all industries.  Well-counseled employers are going well beyond the traditional, narrowly focused sexual harassment training.

If you have questions or need assistance on how your company can navigate the complexities and ever-evolving nature of the #MeToo movement, related training, or if you need more information about EEOC’s stepped up enforcement efforts, please contact Sara Nasseri or your FortneyScott attorney.