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The Trump Effect :

The Trump Effect :. How President Trump’s Federal Appointments and De-regulation Will Transform the Workplace. Mark Clark Partner Thompson Coe 713-403-8286 mlclark@thompsoncoe.com. Laura Alaniz Partner Thompson Coe 713-403-8397 lalaniz@thompsoncoe.com. David Comeaux

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The Trump Effect :

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  1. The Trump Effect: How President Trump’s Federal Appointments and De-regulation Will Transform the Workplace Mark Clark Partner Thompson Coe 713-403-8286 mlclark@thompsoncoe.com Laura Alaniz Partner Thompson Coe 713-403-8397 lalaniz@thompsoncoe.com David Comeaux McKesson Corporation Lead Counsel - Employment 281-863-4804 David.Comeaux@McKesson.com

  2. Topics • Department of Labor: Then and Now • National Labor Relations Board under Trump • Work Place Safety under OSHA AND BSEE

  3. Department of Labor: Then and Now

  4. New Leadership • Secretary of Labor: Alexander Acosta • Deputy Secretary of Labor: Pat Pizzella • Wage and Hour chief : Cheryl Stanton • Deputy assistant secretary for policy: Nathan Mehrens

  5. Press Release • Acosta announces the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors. • 06/07/2017

  6. Independent Contractor Classification BEFORE: • DOLunder Obama issued Administrator's Interpretation 2015-1 • Issued in July 2015 • the agency's interpretive guidance on independent contractor classification.

  7. Independent Contractor Classification Under Obama • Applied an economic realities test to classify workers as employees or independent contractors. • But the guidance took an expansive view of who is an employee for purposes of the Fair Labor Standards Act (FLSA). • Explained six factors the WHD would use to determine employee status.

  8. Six Factors • Is the Work an Integral Part of the Employer’s Business? • Does the Worker’s Managerial Skill Affect the Worker’s Opportunity for Profit or Loss? • How Does the Worker’s Relative Investment Compare to the Employer’s Investment?

  9. Six Factors • Does the Work Performed Require Special Skill and Initiative? • Is the Relationship between the Worker and Employer Permanent or Indefinite? • What is the Nature and Degree of the Employer’s Control?

  10. Independent Contractor Classification NOW: • June 2017 • DOLwithdrew the Administrator's Interpretation 2015-1 • The agency's announcement specifically states that the withdrawal does not change employer responsibilities under the FLSA.

  11. What has changed? • The independent contractor test will no longer start with the presumption that all workers are employees. • Pre-guidance, the “economic realities” test for determining whether a worker is an employee or independent contractor focused on a business’s control over the worker, rather than the worker’s economical dependence on the business.

  12. Joint Employer BEFORE: • In January 2016, DOL's Wage and Hour Division (WHD) issued: “Joint Employment Under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act”

  13. DOL’s Focus under Obama • The possibility of joint employment should be regularly considered in FLSA cases, particularly where: • the employee works for two employers who are associated or related in some way with respect to the employee; or • the employee’s employer is an intermediary or otherwise provides labor to another employer.

  14. Considerations • Economic realities analysis is employed. • BUT the focus is not only on control. • Hiring and firing is not determinative. • Whether the employer directly determines employee hours or pays the employee is not a deciding factor.

  15. Considerations (con’t) • There is no requirement that joint employers: • continuously monitor workers, • have near absolute control over the workers, or • be constantly “looking over” the workers' shoulder. • Control may be restricted or exercised only occasionally, but the employer may still be considered a joint employer under FLSA.

  16. Joint Employer • NOW • DOL withdrew 2016 informal guidance on joint employment • Effect: return to requiring “direct control “ • Power to hire/fire • Supervision and control over employee work schedules or conditions of employment • Rate and method of pay • Maintenance of personnel records

  17. Opinion Letters • June 2017 • DOLannounced it will reinstate the use of opinion letters. • Opinion letters allow employers to seek assistance from the DOL'sWHDabout wage and hour issues. • Able to do anonymously.

  18. Why it matters? • Defense for Any Employer • provides an affirmative defense for any employer who can demonstrate that it reasonably relied on it • Any other employer can cite the letter as a defense • provided its compensation practice aligns with the details the agency describes

  19. Internship Test • January 5, 2018 • WHD announced that it is doing away with its six-factor intern test • Now will use "primary beneficiary" test • See Glatt v. Fox Searchlight Pictures, Inc.

  20. Internship Test: Glatt v. Fox Searchlight Pictures, Inc. Glattv. Fox Searchlight Pictures, Inc. • Examines the “economic reality” of the intern-employer relationship to determine which party is the “primary beneficiary” of the relationship.

  21. What’s Coming? DOLannounced its plans to continue to rollback many rules issued under the Obama administration: • January 2018: The Office of Labor-Management Standards plans to issue a final rule to rescind the persuader rule, • Comments on the proposal to rescind the rule by Aug. 11.  • October 2018: WHD plans to issue a proposed rule to revise the 2016 final overtime rule. • Comments on the DOL’srequest for information on the overtime rule by Sept. 25.

  22. Persuader Rule • Required employers and their laborrelations consultants, including legal counsel, • to disclose relationships and • other information related to activities undertaken directly or indirectly to influence employee decisions concerning union representation.

  23. What to expect? • Change back to previous interpretation of the advice exemption under the Labor Management Reporting and Disclosure Act (LMRDA), e.g. • Only need to disclose consultant activities undertaken with an object, “directly or indirectly,” to persuade employees. • Do not have to file a report covering services by reason of giving “advice.”

  24. These times are a changin’ . . .

  25. History- Overtime Rule • May 2015: Obama’s DOL proposed regulations that would significantly expand eligibility for overtime pay by more than doubling the salary threshold for the FLSA’s “white-collar” exemptions. • Raising minimum weekly salary from $455 to $913. • December 1, 2016: Regulation was to go into effect December 1, 2016.

  26. History- Overtime Rule • November 2016: US District Court for the Eastern District of Texas issued a nationwide preliminary injunction enjoining implementation and enforcement of the rule. • July 2017: DOLissued a Request for Information seeking new comments, data, and information on an appropriate salary level for exempt employees.

  27. History- Overtime Rule • August 2017: US District Court issued a final decision that invalidated the rule. • Ruling appealed to 5th Circuit • DOL asked that appeal on the preliminary injunction be dismissed on injunction • But, DOL still pursuing appeal on issue of whether the DOL has the authority to issue a rule that includes a minimum salary level component

  28. What to Expect? • For now the previous (since 2004) minimum salary level of $455 per week ($23,600/year) for the white collar exemptions remains in place. • Salary level under this DOL likely to $30,000, rather than the $47,000+ level set forth in the Obama-era rule.

  29. NLRB National Labor Relations Board under Trump

  30. NLRB – National Labor Relations Board • 5-member Board, appointed by president • By custom (not law), 3-2 aligned with president’s party • General Counsel – appointed by president • 26 Regions – staffed by career professionals

  31. Federal labor laws • Statutes • National Labor Relations Act • Regulations • Subject to rule-making procedures • Board Decisions • Appealable to Federal Circuit Courts (geographic or DC Circuit)

  32. NLRB law -- what has changed • Board Decisions - December 2017 • Hy-Brand Indus. Contractors – reversed Browning-Ferris decision on Joint Employment • PCC Structurals – reversed Specialty Healthcare decision that permitted “micro bargaining units”

  33. NLRB law -- what has changed • Board Decisions - December 2017 • The Boeing Company – overturned Lutheran Heritage (Bush-era NLRB decision) that handbook rules were invalid if they could be “reasonably construed” to prohibit exercise of Section 7 rights. • Raytheon Network Centric Systems – reversed E.I. duPont decision that employers had to bargain over even minor decisions, regardless of accepted past practice.

  34. NLRB – what will be changing • Rulemaking • Quickie Election Rules • Case Law – Murphy Oil • Supreme Court – oral argument October 2017 • Whether waiver of class / collective action violates NLRA • GC Memo – • Instruction to Regional • Follow current law, but • Watch out for good test cases

  35. NLRB – what could be changing (?) • Decisions that could be overturned – Examples • Purple Communications (2014) – permits employee use of company email for organizing • Total Security (2016) – duty to bargain over individual discipline before first contract

  36. NLRB – what could be changing (?) • Decisions that could be overturned – Examples • Pier Sixty (2015) – obscene, vulgar, racist language on social media is “protected concerted activity” • Piedmont Gardens (2014) – permits employee access to property while off-duty

  37. WORK PLACE SAFETY OSHA Regs and Enforcement Under the Trump Administration

  38. THE POLITICS OF WORK PLACE SAFETY

  39. OSHA AFTER TRUMP • President Trump signed an Executive Order on Jan. 30, 2017, requiring federal agencies to cut two regulations for every new one proposed. The White House published a guidance memo three days later clarifying that the Executive Order would apply only to those regulations with a proposed cost of $100 million or more.

  40. FEWER REGULATIONS BEING IMPLEMENTED BUT NO PRE-EXISTING OSHA REGULATIONS BEING REPEALED • As expected under the new administration, potential regulatory action from OSHA has been cut by more than half, according to the Department of Labor’s updated agenda released July 20.The report, typically published twice a year, lists the statuses of and projected dates for all regulations. The updated agenda lists 14 OSHA regulations in three different stages – pre-rule, proposed rule and final rule – compared with 30 on the fall 2016 agenda. • It is also important to note that the Department of Labor has not issued any notice to rescind existing OSHA regulations

  41. VOLKS RULE • AKM LLC d/b/a Volks Constructors v. Sec’y of Labor 675 F.3d 752 (D.C. Cir. 2012) • Court ruled that OSHA had to issue penalty within SOL of 6 months from incident not, within 6 months of end of record keeping period. • December, 2016 OSHA issues a new rule changing its REGS to make it clear that penalty could be assessed within six months of end of record keeping requirement. • March, 2017 Congress uses the Congressional Review Act to approve a resolution repealing the OSHA Reg. Trump signs. • May, 2017 Democrats in the Senate introduce the Accurate Workplace Injury & Illness Records Restoration Act to reinstate the rule. The bill dies in committee.

  42. OSHA NOT GOING PUBLIC AS OFTEN WITH VIOLATIONS • The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) no longer issues press releases identifying offenders in enforcement actions and fines levied on companies that break workplace safety rules.

  43. ENFORCEMENT ACTIONS HAVE INCREASED • The Administration’s deregulation agenda, has not slowed down the enforcement actions of the U.S. Occupational Safety and Health Administration (“OSHA”). In 2017, OSHA conducted 32,396 inspections compared with 31,948 in fiscal year 2016. In addition, the average penalty per serious violation rose to $3,645 per violation in fiscal year 2017 compared with $3,415 during the previous year.

  44. DEPARTMENT OF INTERIORNOT CHANGING SEMS • We have no plans to alter two significant rules enacted following Deepwater Horizon,theDrilling Safety Rule and the Safety and Environmental Management Systems Rule. The SEMS approach rightly moves operators toward a performance-based safety approach, allowing the government, industry and independent third parties to focus on improving safety outcomes. We are also strengthening our inspection program by implementing risk-based process that focus our efforts on potential safety problems. I am confident that we will be able to achieve the goal of integrating a risk-based inspection protocol in 2018. Through these efforts, and many others, we are moving forward toward meeting the Administration’s goal of achieving energy dominance without sacrificing safety. Scott Angelle, Director of Bureau of Safety and Environmental Enforcement.

  45. IN RE LARRY DOIRON, INC. • In re Larry Doiron, Inc., 2018 WL 316862, a (5th Cir. Jan. 8, 2018). • Mark Clark and Jeff Bridger of Thompson Coe, Lead Counsel for Oil States and Zurich. • Davis & Sons Six Factors No Longer the Primary Test for Maritime Contracts Offshore • Doiron Test: First, is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters? . . . Second, if the answer to the above question is “yes,” does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract? If so, the contract is maritime in nature.

  46. Thank You Laura Alaniz 713-403-8397 lalaniz@thompsoncoe.com Mark Clark 713-403-8286 mlclark@thompsoncoe.com David Comeaux 281-863-4804 David.Comeaux@McKesson.com

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