Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

These budget increases will allow the EEOC and DOJ to increase enforcement efforts.  EEOC Chairman Stuart Ishimaru noted that budget increases would “allow [the EEOC] to build on the progress [ ] made in hiring frontline staff, reducing a burgeoning inventory of charges, and increasing productivity.” BNA 20 Daily Labor Report AA-8.   Furthermore, Ishimaru, who has made the EEOC’s nationwide systemic enforcement program a top priority, noted that increased funding would enable the agency to “continue [its] focus on systemic enforcement.”  BNA 20 DLR AA-8

Systemic discrimination cases typically involve an employer policy or practice that results in a disparate impact upon a group of persons in a protected class or a class action.  Such cases often focus on employer hiring and promotion policies or practices.  Both the EEOC and the DOJ’s Civil Rights Division have authority to litigate systemic discrimination or pattern or practice cases under Title VII of the 1964 Civil Rights Act.  The EEOC handles systemic discrimination cases on behalf of employees in the private and federal sector while the Civil Rights Division litigates pattern or practice cases on behalf of persons employed by state and local governments.  In addition, the EEOC also has the ability to litigate systemic discrimination cases under many of the other laws that it enforces, such as the Age Discrimination in Employment Act and the Americans with Disabilities Act.

Systemic discrimination cases are important to the EEOC’s goal of eliminating employment discrimination because such cases often gain nationwide attention, can lead to large settlements or damage awards, and can impact a broad section of an industry or a profession.  Private employers should be aware that the EEOC often utilizes information that it gathers from individual charges and requests for information to build a case for potential systemic discrimination claims.

Misclassification of employees as independent contractors is expected to cost the Treasury Department over $7 billion in lost payroll tax revenue over the next ten years.  To help make up for this shortfall, the proposed budget includes a joint proposal by the Departments of Labor and Treasury.  The joint proposal, a $25 million initiative, would enhance the ability of both agencies to penalize employers who misclassify their employees and would attempt to eliminate or reduce opportunities under current law for employers to misclassify workers.  The initiative also provides for competitive grants to boost states’ incentives to address the problem, as well as the hiring of 100 new enforcement personnel to target worker misclassification. 

The President’s proposal also is likely to build momentum for legislation, already introduced called the Taxpayer Responsibility, Accountability, and Consistency Act of 2009, that would revise the Revenue Act of 1978’s safe harbor provision (which allows an employer to treat a worker as a contractor if certain requirements are met) to make it more difficult for employers to classify workers as independent contractors for employment tax purposes.  The legislation also would significantly increase employer penalties in the event of misclassification.  In addition, states also are enacting new laws to impose harsher penalties for misclassification.  Colorado, for example, passed a law in 2009 that included penalties of up to $5,000 per employee for the first offense and up to $25,000 per employee for subsequent violations.  Other states have passed similar laws.

In light of these developments, which continue a trend that has been building for the past several years, employers will need to be vigilant to ensure that their independent contractor relationships will pass muster.  Misclassifying an employee as an independent contractor will be a very costly mistake. 

The EEOC’s fiscal year data, which ended September 30, 2009, reflects increases in certain types of discrimination and retaliation complaints.  Notably, disability complaints increased by 10 percent, from 19,453 to 21,451; national origin complaints increased 5 percent, from 10,601 to 11,134; and religious discrimination claims increased 3 percent, from 3,273 to 3,386.  Also, retaliation charges reached a record high of 2009, going from 32,690 to 33,613 over the span of a year.  Meanwhile, although the number of age bias claims decreased from 24,582 in 2008 to 22,778 in 2009, it was still the second-highest total ever. The EEOC also reported that it recovered a record high of $294 million through administrative enforcement and mediation. 

According to Stuart J. Ishimaru, acting chairman of the EEOC, “[t]he latest data tell us that, as the first decade of the 21st century comes to a close, the commission’s work is far from finished….Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC.” 

Employers will likely see similar rises in liability risks and activity in the area of discrimination and retaliation in year 2010, particularly in light of the ADA Amendments Act of 2008, which went into effect on January 1, 2009, and expands the scope of the Americans with Disabilities Act by reversing or nullifying several Supreme Court rulings that significantly narrowed the scope of protection under the ADA. Similarly, the EEOC’s Fiscal Year 2010 Congressional Budget Justification includes, as the EEOC’s objectives for Year 2010, an increased focus on combating systemic discrimination (unlawful patterns or practices of discrimination which have a broad impact on an industry, profession, company, or geographic location) as well as charges raising priority, novel or emerging legal issues in the context of race discrimination.

To help manage exposure, employers should revisit their handbooks, policies, and day-to-day practices, and should take steps to make certain that their supervisors and human resources staff are trained to both identify and properly address potential discrimination and retaliation issues.
 

The recent revisions could signal an increased focus on several particular topics.  For example, a number of the revisions address issues relating to undocumented witnesses, bilingual or non-English speaking witnesses, and posting of notices in languages other than English.  These provisions likely highlight an increased focus on workplaces with high concentrations of workers from other countries.  Significantly, investigators and field agents are told to inform undocumented witnesses that the NLRB is not associated with the U.S. Immigration and Customs Enforcement, but that they cannot guarantee that action will not be taken against the witness due to immigration status. 

Several of the revisions relate to the issuance of investigative subpoenas and procedures for opposing petitions to revoke subpoenas, including a new section on recovery of attorneys’ fees and costs in subpoena enforcement proceedings.  One section adds as considerations for issuing a subpoena “the possible derivative liability of additional parties” and the possible need “to obtain a protective order or other pendente lite relief.”  Another section clarifies language regarding notice to attorneys, emphasizing that the agency is not required to notify a party or its counsel if the agency subpoenas a witness who is not a supervisor or agent of the party.  This may forebode an increased emphasis on the use of subpoenas in Board investigations and proceedings.  The Regional Director has broad discretion to issue pre-complaint investigative subpoenas whenever evidence cannot be obtained by reasonable voluntary means.

Other sections with revisions include guidance on procedures when attorney misconduct is alleged in agency proceedings, guidance on introducing evidence regarding the appropriateness of particular remedies, and guidance on processing representation petitions that are blocked by ULP charges that are otherwise appropriate for deferral to grievance and arbitration.  Significantly, even if such a ULP charge is appropriate for deferral, the Manual states that Regional Offices should proceed with pre-complaint investigations and reach determinations on the merits (but not proceed to a complaint), so as to unblock the representation case.  In addition, the revised Manual also contains a new section with guidance on alternative dispute resolution of cases pending before the Board.  These changes might suggest a heightened aggressiveness on the part of the agency to pursue enforcement and obtain settlements in a more efficient manner.

Although to some extent the revisions to the Manual might simply reflect the need to update procedures in light of issues encountered over the past several years, they also constitute tangible evidence that the NLRB is taking steps to improve its enforcement procedures so they may be put to better use.

Solis said the DOL will be working with "advocacy groups and other stakeholders" to develop and distribute campaign materials to workers.  She noted that this initiative signifies her intent to increase both employee outreach efforts and enforcement efforts against employers who are accused of violating the law.  Solis had a strong rebuke for employers who are not in compliance with minimum wage and overtime standards: "There is no excuse for employers who disregard federal labor standards - especially those that are designed to protect the most vulnerable in the workplace."
 
To help support this effort, Solis has hired 250 new wage and hour investigators, who she says will ensure that the DOL can properly respond to complaints and "undertake more targeted enforcement."  Solis vows that the DOL "will not rest until the law is followed by every employer."
 
We have commented previously that the federal agencies charged with enforcing workplace protection laws, such as EEOC, OSHA, and NLRB, all have indicated that they will be pursuing employee complaints more aggressively.  Solis' recent announcement is yet another example that the Obama administration is taking a more employee friendly approach to federal enforcement.  Employers should be taking steps now to ensure that their pay practices comply with the FLSA and applicable state wage and hour laws, which may include a privileged pay practices audit by experienced legal counsel.
 

Secretary Solis announced that the DOL planned to hire an additional 670 investigators, inspectors, and program staff to support the increased enforcement.  Since July 2009, the Occupational Safety and Health Administration (OSHA), which is an arm of the DOL, has conducted 689 inspections resulting in 1,100 violations and $1.6 million in fines.  Although pleased with recent enforcement efforts, Secretary Solis commented that there is “much more work to do to protect workers.” 

Secretary Solis’ recent comments are only the latest indication that the DOL intends to increase enforcement of the nation’s workplace protection laws.  During the 2008 presidential campaign, Candidate Obama accused the DOL of following a mandate to “err on the side of corporations.”  He stated that “OSHA must be reinvigorated” by increased Congressional funding “to assure that there are more inspectors to reach more of the most dangerous workplaces.”

Once in office, President Obama nominated David Michaels, a research professor at George Washington University and former Assistant Secretary of Energy for Environment, Safety and Health, in July to head OSHA.  Michaels has consistently advocated for increased funding to support OSHA’s aggressive enforcement efforts.  Michaels’ confirmation has stalled in the Senate.

If confirmed, a Michaels-led OSHA is expected to concentrate on three main areas.  First, OSHA will likely focus on prevention of workplace injury and illness.  This goal will be pursued through stricter occupational safety and health standards supported by an augmented OSHA inspection staff.

Second, OSHA is expected to address recordkeeping accuracy and efficiency.  Advocates of enhanced enforcement believe that employers have seriously under-reported injuries in the workplace.  OSHA may investigate employer recordkeeping practices and possibly mandate increased recordkeeping requirements, such as electronic recordkeeping.  

Third, OSHA will likely seek more severe penalties for OSHA violations.  It is believed that OSHA will promulgate regulations and seek legislative enactments to increase employee protections and employer penalties. 

With or without Michaels, the DOL is expected to continue pushing for an enhanced enforcement agenda for OSHA.  Although no concrete plan or timeline has been established, changes at OSHA will almost assuredly take place under the Obama Administration.

Shiu is considered to be an aggressive advocate of employee rights and disadvantaged persons.  This, coupled with an expected increase in the OFCCP’s budget, suggests that the OFCCP’s enforcement efforts will be particularly active under her leadership.  Her new position currently is classified as a Deputy Assistant Secretary of Labor, which does not require Senate confirmation.  However, following a reorganization in the DOL, Shiu will report directly to Labor Secretary Hilda Solis, which could elevate her title to Assistant Secretary of Labor and require Senate confirmation.

Shiu has been an employment attorney with the Legal Aid Society of San Francisco since 1983.  She focuses primarily on employment cases of alleged race and sex discrimination.  Shiu also directs the Legal Aid Society’s Works and Family Project and is the Vice President of Programs.  Shiu graduated from the University of San Francisco School of Law, and spent several years in private practice before joining the Legal Aid Society.

In the federal arena, Shiu’s experience includes an appointment to the Department of Education’s Civil Rights Reviewing Authority during the Clinton administration.  She is also a former board member and past vice president of the National Employment Lawyers Association, a plaintiffs’ attorney group.

Lopez has 13 years of experience working with the EEOC in both the field and at the agency’s headquarters.  He has tried several notable EEOC cases, including a jury verdict case against the software company GoDaddy.com for discrimination against a Muslim employee, and he obtained a consent degree with the Phoenix Suns for its sex restrictive hiring policies.  Lopez obtained his undergraduate degree in Political Science from Arizona State University and graduated magna cum laude from Harvard Law School.  From 1988 to 1991, he worked as an associate with the D.C. firm of Spiegel & McDiarmid.  Following this, he worked in the U.S. Department of Justice’s Civil Rights Division.

Under Lipnic’s leadership, the agency made the first revisions to the union financial disclosure regulations in forty years, and the Office of Federal Contract Compliance Programs (OFCCP) issued its first compensation guidance and regulations.  Lipnic also served as counsel for the House Committee on Education and Labor.  Before her work for Congress, Lipnic spent six years as in-house labor and employment counsel for the U.S. Postal Service, then the largest employer in the country.  Most recently, 1she has been Of Counsel with law firm Seyfarth Shaw LLP.   She received a B.A. from Allegheny College in 1982, and graduated from the George Mason University School of Law in 1991.  She is admitted to the Pennsylvania bar.

In July 2009, the President named Jacqueline A. Berrien as the next Chair of the EEOC.  Berrien has a strong background in civil rights advocacy, and particularly in the area of voting rights.  Since September, 2004, Berrien has been the Associate Director-Counsel for the National Association for the Advancement of Colored People (NAACP)’s Legal Defense and Educational Fund (LDF).  In that capacity, she supervises litigation, public education, and organizational work.  From 2001-2004, Berrien was a Program Officer in the Governance and Civil Society Unit of the Ford Foundation’s Peace and Social Justice Program.  Before that, she was an attorney with the Voting Rights Projects of the Lawyers’ Committee for Civil Rights and then Assistant Counsel for the LDF, where she coordinated the areas of voting rights and political participation. 

Berrien received a B.A. with high honors in government from Oberlin College.  She graduated from Harvard Law School, where she was General Editor of the Harvard Civil Rights-Civil Liberties Law Review.  She began her legal career by clerking for the Honorable U.W. Clemon, who was the first African-American U.S. District Court Judge in Birmingham, Alabama.  She has represented African-American voters before the United States Supreme Court and various U.S. Courts of Appeals and U.S. District Courts.  She also has taught trial advocacy at the Harvard and Fordham law schools, and is an Adjunct Professor of Law at New York Law School. 

In September 2009, President Obama chose Chai R. Feldblum to fill another vacancy on the EEOC.  Feldblum is a law professor at the Georgetown University Law Center, where she has taught since 1991.  She specializes in disability discrimination and gay and lesbian rights.  If confirmed, she will serve a five-year term.  Before Georgetown, Feldblum was legislative counsel to the American Civil Liberties Union (ACLU)’s AIDS Project, where she led efforts (among others) to draft and negotiate the Americans with Disabilities Act of 1990.  She also has also been instrumental in supporting the more recent ADA Amendments Act of 2008, and is considered an expert on the proposed Employment Nondiscrimination Act, which if enacted would prohibit discrimination based on sexual orientation.

Feldblum received her J.D. from Harvard Law School and her undergraduate degree from Barnard College.  She clerked for Judge Frank M. Coffin on the First Circuit Court of Appeals and for Justice Harry A. Blackmun on the U.S. Supreme Court.

All these nominations require Senate confirmation.  They are currently pending before the Senate’s Health, Education, Labor and Pensions Committee.  Some commentators speculate that Lipnic’s recent nomination will help speed along those of Berrien and Feldblum. 

President Obama has at least one other EEOC appointment on the horizon.  He will need to replace Commissioner Constance Baker, whose term expires in 2011. 

These new EEOC appointments may lead to new enforcement and litigation goals and priorities.  The Commission already has stepped up enforcement activity and likely will continue increasing the overall number of cases filed, particularly those involving systemic discrimination.  Focus likely will turn also to reducing the EEOC’s significant backload of charges, which has more than doubled since 2004.