Beware Obama’s Labor Legacy

President Barack Obama was never shy about using his pen to end-run a recalcitrant Congress, but few areas bear his stamp more firmly than labor policy. From doubling the salary threshold for overtime pay to requiring companies to turn over employee contact information to labor organizers, the Obama administration and its allies at the National Labor Relations Board (NLRB) pursued a relentlessly pro-union agenda.

Think it’s over? Think again. “We’re just in the ninth year of the Obama administration when it comes to the Labor Board,” says Michael Lotito, a labor attorney with Littler Mendelson who once calculated that the NLRB reversed more than 4,000 years of precedent during the Obama years.

Yes, courts have struck down some of the most pernicious labor rules and the Trump administration is working to dismantle others. But the fallout from those decisions is continuing, and CEOs shouldn’t lose sight of what happens with these in-flux regulations: Overtime Rule. In December 2016, the Labor Department raised the threshold below which employers must pay overtime wages from $455 to $913 a week, or $47,476 a year, describing it as a long-overdue adjustment designed to bolster the middle class. But employers and 21 states sued, saying it ignored differences between managers and workers, as well as regional differences in wages. A federal judge in Texas ultimately issued a permanent injunction on August 31. The Trump Labor Department, meanwhile, solicited comments for a new rule likely to have a lower threshold and clearer distinctions between managerial employees and workers.

Joint Employer. In 2014, the NLRB sued McDonald’s over alleged labor law violations by its independent franchisees, disregarding decades of precedent and clear language in most franchise agreements defining franchises as independent owner-operators. In 2015, the NLRB ruled that Browning-Ferris Industries was the “joint employer” of workers employed by an outside contractor servicing one of its plants. Both matters remain unsettled, with appeals pending. And Congress is considering a bill that would prohibit the NLRB from enforcing the new rule.

Arbitration. Ignoring a federal appeals court decision, the NLRB maintains it is illegal for employers to require individual arbitration of employee labor disputes. The Supreme Court will decide the issue in a trio of cases this fall.

Reporting Requirements. The Equal Employment Opportunity Commission dramatically increased reporting requirements on age, gender, ethnicity and other characteristics in an effort to uncover pay discrimination. The Trump administration suspended the new EEO-1 rules in August, but unions and labor lawyers will be seeking to restore at least some of the requirements, which would provide a treasure trove of data for discrimination lawsuits.

Meanwhile, the NLRB, a supposedly independent agency, still has Obama-era nominees who could serve as long as 2020. Chairman Philip Miscimarra is a Republican, and the five-member board now has a GOP majority. But General Counsel Richard Griffin, former chief counsel for the International Union of Operating Engineers, is arguing against the new administration in a key challenge to arbitration contracts before the Supreme Court. “The question,” notes Lotito, “is just how far the board swings back.”

Daniel Fisher
Daniel Fisher is a writer, financial analyst and former senior editor with Forbes magazine. He previously worked for Bloomberg Business News and newspapers in Texas and Wisconsin.

PARTNER CENTER