On Wednesday, the Senate confirmed Trump’s nominee, David Zatezalo, for a key employment-related position: Assistant Secretary of Labor for Mine Safety and Health Administration (MSHA). Mr. Zatezalo is the former Chief Executive Officer of the coal mining company, Rhino Resources.

Democratic Senators, including Joe Manchin from mining-heavy West Virginia, have publicly opposed Mr. Zatezalo’s confirmation, citing Rhino Resources’ MSHA violations under his leadership. Despite opposition, Mr. Zatezalo was confirmed to the position by a 52-46 vote along party lines, with all 52 Republican Senators voting to confirm Mr. Zatezalo. Mr. Zatezalo was approved by the Senate Committee on Health, Education, Labor and Pensions in October, also on party lines (12-11).

As the Assistant Secretary of Labor for Mine Safety and Health, Mr. Zatezalo will manage the MSHA, which regulates safety and health in all types of mines in the US. For more information on Mr. Zatezalo’s background and other key nominees refer to our previous post on his nomination.

What was scheduled as a hearing by the House Judiciary Committee regarding Attorney General Jeff Sessions’ testimony about possible Russian Government contacts with the Trump Campaign, also included another hot-button issue: Jeff Sessions’ views regarding marijuana.

Representative Steve Cohen, a Democrat from Tennessee, stated some of the purported benefits of marijuana, and his hope that the Department of Justice would consider states as the “laboratories of democracy.” (Justice Louis Brandeis). Attorney General Sessions stated that they would look at purported benefits and would conduct a “rigorous analysis of marijuana usage,” but he added that he was not as “optimistic” as Representative Cohen. Further, when Attorney General Sessions was asked to clarify his comment that people who use marijuana are “not good people,” he tried to explain that the context in which he made this comment was his experience as a U.S. Attorney where “it was seen” that “good people did not use marijuana.”

In the end, Jeff Sessions did not explain his prior comments on marijuana. Nonetheless, his statement that he is not optimistic that any investigation or research would show any purported benefit of marijuana may be a harbinger of things to come.

In 2015, the National Labor Relations Board (NLRB) expanded the joint employer doctrine through its controversial decision in Browning-Ferris Industries of California. The House of Representatives will vote today on the “Save Local Business Act” (SLBA), a recent effort advanced in Congress to re-define the concept of “joint employers” for collective bargaining purposes as well as wage-and-hour, safety, and other employment liability.  If passed, the bill would effectively undo Browning-Ferris.

The Browning-Ferris decision broadened the standard used in evaluating joint employment beyond the “direct and immediate” control over the essential terms and conditions of employment.  Instead, it created a two-part “indirect control” test for determining “employer” status that examined whether a common law relationship exists with the employee(s) in question and whether the potential employer “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful bargaining.” That broadened standard drew significant criticism and caused concern across a variety of industries, as companies that merely had “potential” or “reserved control” to hire, terminate, discipline, supervise, and direct an affiliated company’s employees – but who did not actually exercise that right – could now be liable for various employment claims and collective bargaining requirements.

If passed by Congress and signed into law, the SLBA would limit the extent to which affiliated businesses are considered to be “joint employers” under the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA).  Under the SLBA’s proposed terms, a person could be considered a joint employer under the NLRA only where it “directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment” over an employee.  The definition of “employer” under the FLSA would also be amended to include a reference to the NLRA’s definition, which is consistent with the Department of Labor’s decision in June 2017 to withdraw prior guidance that applied the broadened joint employer definition to the FLSA.

After the Browning-Ferris decision, franchisees, which typically get standardized training and employment manuals from franchisors, and staffing agencies, which recruit temporary workers for their client companies, feared increased liability under the new joint employer standard.  Unsurprisingly, then, the U.S. Chamber of Commerce, National Retail Federation, and the International Franchise Association all support the bill. Opponents argue, however, that the bill would enable wage theft by immunizing unscrupulous employers and would reduce collective bargaining rights of employees.

Until the SLBA becomes law, companies, including those using franchise models and staffing agencies, should be aware of potential liability not only for their own actions, but also for those of any other entity with which they can be determined to be a joint employer.  For more information on how to manage these liabilities, please contact one of Frantz Ward LLP’s Staffing Industry attorneys.

On Thursday, November 2, 2017, Mimi Walters (R-California), Cathy McMorris Rodgers (R-Washington), and Elise Stefanik (R-New York) introduced in the House of Representatives the Workplace in the 21st Century Act (H.R. 4219). The bill would amend the Employee Retirement Income Security Act (ERISA) to include a voluntary option for employers to provide employees with guaranteed paid leave and qualified flexible workplace arrangements.

The bill would exempt employers from having to comply with the patchwork of state and local paid leave laws if they voluntarily offer employees a minimum level of paid time off and at least one of the following flexible working arrangements: compressed work schedule, biweekly work program, telecommuting program, job-sharing program, or a flexible or predictable schedule. Employees would not be required to adopt a flexible work schedule in order to receive paid leave.

The minimum amount of paid leave that an employer would be required to provide under the plan depends on the size of the employer and the employee’s length of service. The minimum amount of compensable leave provided to an employee each year cannot be fewer than the minimum days as follows:

Number of employees employed by an employer Minimum number of compensable days of leave per plan year
Employees with 5 or more years of service with the employer Employees with fewer than 5 years of service with the employer
1000 or more 20 days 16 days
250 to 999 18 days 14 days
50 to 249 15 days 13 days
Less than 50 14 days 12 days

Under the bill, employers would be mandated to offer paid leave to both part time and full time employees, with prorated minimum leave requirements for part-time employees based on the number of hours they work. Only employees who have been employed for at least 12 months by the employer and have worked at least 1,000 hours during the previous 12 months would be eligible for a workflex arrangement.  Employers would be responsible for the cost of the paid leave.

Several states and local jurisdictions have adopted their own paid leave laws. The Workplace in the 21st Century Act would preempt state and local paid leave laws for employers located within those jurisdictions.  The bill would not affect state or local laws on unpaid leave or the Family and Medical Leave Act.

Ultimately, the bill, if passed, will have no immediate effect on employers located in jurisdictions with no paid leave mandate (such as Ohio). However, for employers in jurisdictions with more restrictive paid leave mandates, the Workplace in the 21st Century Act would provide another option to meet paid leave requirements if they adopt the voluntary plan. The bill was immediately referred to the House Education and the Workforce committee and its future is unknown. Frantz Ward will keep close track of the bill and provide updates on the Workplace in the 21st Century Act’s progress.  The full text of the Workplace in the 21st Century Bill is available here.

At this year’s National Safety Council (NSC) Congress & Expo in Indianapolis, OSHA’s Deputy Director of Enforcement Programs announced its preliminary list of the top ten citations issued for fiscal year 2017. OSHA’s top 10 violations for 2017 are as follows:

  1. Fall Protection in Construction (29 CFR 1926.501) 6,072 violations
    Frequently violated requirements include unprotected edges and open sides in residential construction and failure to provide fall protection on low-slope roofs.
  2. Hazard Communication (29 CFR 1910.1200) 4,176 violations
    Failure to have a written hazard communication program was the most frequently violated requirement, followed by failing to provide employee access to safety data sheets.
  3. Scaffolding (29 CFR 1926.451) 3,288 violations
    Frequent violations include improper access to surfaces and lack of guardrails.
  4. Respiratory Protection (29 CFR 1910.134) 3,097 violations
    Failure to establish a written respiratory protection program topped these violations, followed by failure to provide medical evaluations.
  5. Lockout/Tagout (29 CFR 1910.147) 2,877 violations
    Frequent violations were inadequate worker training and failure to conduct periodic inspections.
  6. Ladders in Construction (29 CFR 1926.1053) 2,241 violations
    Frequent violations include improper use of ladders, damaged ladders, and using the top step.
  7. Powered Industrial Trucks (29 CFR 1910.178) 2,162 violations
    Violations included inadequate worker training and refresher training.
  8. Machine Guarding (29 CFR 1910.212) 1,933 violations
    Exposure to/failure to guard points of operation topped these violations.
  9. Fall Protection—Training Requirements (29 CFR 1926.503) 1,523 violations
    The most frequent violations include failure to train workers in identifying fall hazards and proper use of fall protection equipment.
  10. Electrical—Wiring Methods (29 CFR 1910.305) 1,405 violations
    Violations of this standard included temporary writing in lieu of permanent wiring and were found in most general industry sectors, including food and beverage, retail, and manufacturing.

While OSHA’s top ten rankings vary little from year to year (2017’s top five violations remained the same), there is one new addition this year: Fall Protection – Training Requirements in the number 9 slot. The final report on the Top 10 violations for 2017 will be published in the December. Roughly 13,000 of these violations were in the construction industry, which is disproportionate to the employment in that industry compared with all others. This is likely reflective of the high turnover of employees and the number of employers who engage in construction work on an intermittent basis. The number of training and communication citations show the importance of paying attention to the administrative and paperwork regulations, and not just to the health and safety rules.

The Ohio Board of Pharmacy has released model dispensary applications

Today the Ohio Board of Pharmacy released, through the Ohio Medical Marijuana Control Program Website, the application materials for Ohio dispensaries. The Board will accept applications electronically beginning on November 3 at 8:00am and ending on November 17 at 2:00pm.

Similar to what the Department of Commerce did for medical marijuana cultivator applicants, the Board will hold two Q&A periods where it will accept questions from the public. These Q&A periods will be from September 19 – October 5 and October 16 – October 20, 2017. The Board will host an informational webinar on October 3, 2017.

Ohio will license 60 dispensaries, allocated among several geographic districts. There is a $5,000 fee per dispensary application.

Application materials for medical marijuana processors have not been released yet by the Department of Commerce, though it is anticipated that processor applications will be accepted after cultivator provisional licenses are awarded in November.

Conflicting messages from the federal government maintains uncertainty in the legal marijuana industry

Tom Angell reports that Deputy Attorney General Rod Rosenstein discussed the 2013 Cole Memo during an appearance at the Heritage Foundation recently. According to Angell, Rosenstein said, “[w]e are reviewing that policy. We haven’t changed it, but we are reviewing it. We’re looking at the states that have legalized or decriminalized marijuana, trying to evaluate what the impact is[.]” He continued, “[a]nd I think there is some pretty significant evidence that marijuana turns out to be more harmful than a lot of people anticipated, and it’s more difficult to regulate than I think was contemplated ideally by some of those states[.]”

Rosenstein also reiterated that while the Cole Memo may be interpreted to mean that the risk of prosecution is unlikely, it does not mean that an individual’s conduct is legal under federal law, even if that individual is acting in compliance with a conflicting state law.

While Rosenstein is right that the Cole Memo merely guides federal law enforcement in making decisions whether or not to charge marijuana businesses, Rosenstein apparently did not discuss the Rohrabacher-Farr amendment that has been renewed in every appropriation bill since 2014, and was recently renewed until this December.

Under Rohrabacher-Farr, the Department of Justice is prohibited from using funds to interfere in the implementation of state medical marijuana programs. The Ninth Circuit has held that this means the Department cannot prosecute individuals acting in strict compliance with state law. United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016). And at least one Michigan federal court has allowed a hearing to determine whether a federal defendant can take advantage of Rohrabacher-Farr’s protections. United States v. Samp, E.D. Mich. No. 16-cr-20263 (March 29, 2017). Attorney General Jeff Sessions objected to the renewal of Rohrabacher-Farr earlier this year.

The conflicting signals by various federal officeholders could be the new normal for marijuana policy. Over the last year, for example, we have seen the following:

For more information on the application process for Ohio medical marijuana dispensaries and processors, please contact Frantz Ward attorney Thomas Haren or another member of the firm’s Marijuana Law & Policy group.

It’s no secret that President Obama’s use of executive orders to transform workplace laws was unprecedented. But perhaps even more unprecedented is how quickly those efforts have been derailed by the Trump administration. From NLRB appointments, to safety standards, to persuader-disclosure and joint-employment rules—to name a few—the White House has been systematically reversing workplace rules that President Obama implemented through executive orders, rather than through Congress.

Now, add two more hits to the list.

Obama-Era Overtime Rule Takes Final Hit.

The first hit was the final blow to President Obama’s  controversial overtime rule, which sought to expand the number of workers eligible for overtime compensation. In November 2016, a Texas federal district court preliminarily enjoined the rule just before it was due to take effect. The Department of Justice (DOJ) subsequently appealed that decision to the Fifth Circuit Court of Appeals.

On  August 31, 2017, with the Fifth Circuit appeal pending, the district court made its final determination that the rule was invalid. Specifically the court held, as it had opined in November, that the overtime rule exceeded the Department of Labor’s (DOL’s) rulemaking authority because it focused too heavily on employees’ salary levels—rather than the nature of their job duties—in determining overtime eligibility. The court found that this was contrary to the intent of the Fair Labor Standards Act and granted summary judgment to the plaintiffs.

On September 5, 2017, at the Direction of President Trump and Attorney General Sessions, the DOJ asked the Fifth Circuit to dismiss its appeal of the preliminary injunction. The Court granted the request on September 6 and dismissed the appeal, thus leaving the overtime rule all but permanently invalidated. As a result, the minimum salary for exempt status under the FLSA remains at $23,600.

So what’s next?

Technically, the DOL still has until September 30, 2017 to appeal the district court’s August 31 decision. An appeal is highly unlikely. What is more likely is that the DOL will go back to the drawing board to develop and issue a new revised overtime rule. Current Secretary of Labor Alex Acosta previously stated that he believes the salary threshold should be raised to $33,600 (substantially lower than the Obama overtime rule’s roughly $47,000 threshold), and in July 2017, the DOL issued a request for public comment on potential revisions to the Obama overtime rule. The deadline to submit comments is September 25, 2017, with a revised rule expected to issue thereafter. Employers should stay tuned for further updates.

Obama-Era Revisions to EEO-1 Form Abandoned

The second recent hit  to President Obama’s workplace-law overhaul is the White House’s announcement suspending the Obama administration’s changes to the EEO-1 form. The revised EEO-1 form would have gone into effect March 31, 2018, and would have required employers with 100 or more employees and federal contractors with 50 or more workers to report W-2 wage information and total hours worked for all employees by race, ethnicity and sex within 12 proposed pay bands. The Obama administration had claimed that rewriting the form would help identify and reduce workplace wage discrimination. Opponents argued, on the other hand, that the new form was overly burdensome and would do little to accomplish its stated purpose, primarily because the aggregated pay data required for the form would not have compared people in the same job positions or controlled for the many other non-discriminatory variables that impact compensation. The time for reporting was also problematic, since it did not match the calendar year periods utilized by most HRIS programs.

On August 29, 2017,  the White House Office of Management and Budget agreed with the opponents and stated that the pay collection and reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” The White House explained its reasoning in a letter to the Chair of the Equal Employment Opportunity Commission, Victoria Lipnic.

So what’s next?

As a result of the announcement, the EEOC must publish a notice in the Federal Register announcing the immediate stay of new compensation and hours worked reporting requirements contained in the revised EEO-1 form and “confirming that businesses may use the previously approved EEO-1 form in order to comply with their reporting obligations for FY 2017.” Additionally, employers will not need to submit 2017 data until March 31, 2018.

This decision is welcome news for employers who have been struggling with the practical and potentially expensive challenges of complying with the new EEO-1 Form, including how to merge systems and payroll data to accurately and efficiently collect and calculate the requisite information. Nevertheless, as we previously posted, pay equity is an increasingly scrutinized issue—with more and more states passing laws imposing pay transparency obligations and prohibiting salary history inquiries of applicants. As such, employers should continue to stay abreast of these changes and ensure that compensation determinations are adequately documented and made in compliance with applicable laws.

President Obama’s National Labor Relations Board (NLRB) faced intense criticism for issuing significantly more precedent-changing pro-labor rulings than any previous Board. During President Trump’s first 200 days, employers have been waiting for Board nominees to be confirmed to two open slots, giving Republicans a 3-2 majority and shifting NLRB decisions towards individual employee and management rights.

One of Trump’s nominees, Marvin Kaplan, a former Occupational Safety and Health Review Commission lawyer, was confirmed (50-48) to fill one of the two open Board seats on Wednesday, August 2. Kaplan will serve a five-year term expiring August 27, 2020. Trump’s second nominee, William Emanuel, a management-side employment attorney, has been approved by the Senate Committee on Health, Education, Labor, and Pensions. A full Senate vote has not yet been scheduled, but is expected after the August recess. If he is confirmed, the Board will have a Republican majority for the first time since 2007.

The General Counsel position, currently held by Democrat Richard Griffin, Jr., will become vacant in November 2017. The Administration is considering Peter Robb, a management-side labor attorney, as a potential General Counsel nominee. The General Counsel controls which cases the NLRB prioritizes and pursues.  Consequently, whomever Trump chooses will have the opportunity to begin the process of reversing many of the pro-labor rulings issued by the Obama Board.

Finally, Phillip Miscimarra, Chairman of the NLRB and the only Republican remaining from Obama’s Board, announced on August 8 that he would no longer serve on the Board when his term expires in December 2017. Miscimarra made this decision in order to spend more time with his family. Miscimarra dissented from nearly every major precedent change from 2013 to the present. The Administration will need to make a prompt nomination of a qualified Republican to Miscimarra’s seat to avoid 2-2 deadlocked decisions of the full Board (if Emanuel is confirmed) or having cases decided by three member panels with 2-1 Democrat majorities. The Senate already has a full legislative schedule through the remainder of 2017, so confirming a Board nominee before Chairman Miscimarra leaves his seat will be more difficult the longer the President takes to make his selection.

Recently, House Republicans renewed efforts to rein in expansion of two federal labor laws’ joint employer definition by introducing the Save Local Business Act (“SLRA”) (H.R. 3441). The SLRA limits how affiliated companies are considered joint employers for collective bargaining liability purposes and within wage and hour laws.

The SLRA represents an expanded effort to reverse the National Labor Relations Board’s (“NLRB”) Browning-Ferris Industries of California Inc., 362 NLRB No. 186 (Aug. 27, 2015) decision. In Browning-Ferris, the NLRB reversed a 30-year old standard for determining joint employer status under the National Labor Relations Act (“NLRA”). According to Browning-Ferris, affiliated companies are joint employers if they 1) “are both employers within the meaning of the common law” and 2) “share or co-determine” matters governing the essential terms and conditions of employment. Under the first prong, the NLRB focuses on a company’s “right to control” employees and does not consider whether the company exercises that right. For example, a company may create a common law employer relationship if it reserves ultimate discharge authority over temporary workers but does not exercise that right. For the second prong, the NLRB defines “essential terms and conditions” to include wages, hours, hiring, firing, and supervision. Evidence of controlling these “essential terms and conditions” may include dictating the number of contingent workers supplied and controlling schedules or overtime.

The SLRA also addresses recent expansion of the joint employer definition by courts under the Fair Labor Standards Act (“FLSA”). For example, in Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir. 2017), the federal Fourth Circuit Court of Appeals, covering Maryland, North Carolina, South Carolina, West Virginia, and Virginia, applied an expanded test to conclude that general and subcontractors were joint employers. Under the Salinas-applied test, joint employment exists when 1) two companies “share, agree to allocate responsibility for, or otherwise codetermine – formally or informally, directly or indirectly – the essential terms and conditions of a worker’s employment” and 2) the companies’ combined influence “over the terms and conditions of the worker’s employment” renders the person an employee instead of an independent contractor. This determination has significant implications because, as joint employers, both companies must comply with the FLSA as it relates to an individual’s entire employment for a workweek. In other words, a company must add the hours worked for both employers to determine whether and to what extent the individual earned overtime pay.

The SLRA rolls back these expanded definitions by redefining joint employer in both the NLRA and FLSA.  Specifically, under the Act:

A person may be considered a joint employer in relation to an employee only if such person directly, actually, and immediately, and not in a limited and routine manner, exercises significant control over the essential terms and conditions of employment (including hiring employees, discharging employees, determining individual employee rates of pay and benefits, day-to-day supervision of employees, assigning individual work schedules, positions, and tasks, and administering employee discipline).

Ultimately, the bill seeks to reinstate the traditional joint employer standard and restore some semblance of predictability that the NLRB eviscerated in the Browning-Ferris decision. Although the House is on recess, the bill will almost assuredly proceed within Education and Workforce Committee upon Congress’s September return. In addition, the bill could quickly move to the House floor for consideration and, with sufficient support, advance to the Senate. Frantz Ward will keep close track of the bill and provide updates on the SLRA’s progress.

Two recent events serve as continuing examples of how attitudes towards marijuana are changing in the U.S. The National Football League (“NFL”), which strictly enforces its drug policies, may be changing its mind on medical marijuana. The NFL Players Association (“NFLPA”) has already been working on its own study for the potential use of medical marijuana for pain management. On August 1, 2017, the NFL wrote a letter to the NFLPA indicating its willingness to work together to study the potential use of marijuana for pain management and for acute and chronic conditions for players.

Further, former players have come out in favor of the use of marijuana for medical reasons. For example, on July 24, 2017, former New York Jets Defensive End Marvin Washington was one of five plaintiffs in a lawsuit filed in the Southern District of New York against Attorney General Jeff Sessions, the Department of Justice, and the Drug Enforcement Agency. See Washington, et al. v. Sessions, et al., No. 1:17-cv-05625 (S.D.N.Y.). The lawsuit seeks to remove marijuana from the list of Schedule I drugs, as it is currently classified under the Controlled Substances Act. Marijuana is classified in the same category as heroin, LSD, and Quaaludes, to name a few. However, drugs such as methamphetamine and cocaine are classified as Schedule II drugs and are subject to less strict enforcement.