Commentary & Analysis
Following the Republican takeover of the House of Representatives in the last election, you are sure to hear loud challenges coming from that direction to the Biden administration’s regulatory game plan, but don’t expect federal agencies to back down from their energetic support for the Biden agenda.
Prominent House Republicans have been crystal clear about one thing: They are committed to opening a number of committee investigations into what they see as Democratic malfeasance and misfeasance, ranging from the administration’s response to the COVID-19 pandemic to a regulatory agenda explicitly crafted to promote the interests of the Democrats’ labor union and other special interest allies.
One thing that employers should not have to worry about is passage of the Protecting the Right to Organize Act, or PRO Act, which was introduced by the Democratic House leadership in early 2021, not long after President Joe Biden was sworn in. Explicitly constructed from unions’ wish list of reforms, the legislation was considered too radical even by some Democrats and stalled in the House. With the GOP now in charge of that body, don’t expect it to go anywhere in the next few years.
However, federal agencies throughout the government have dedicated themselves to promoting organized labor’s interests following a unified effort mounted early in 2022 after Biden appointed a cabinet-level task force. Separate agencies pledged to pursue these efforts individually and by working together as allies. This included formal agreements for agencies to work jointly on a range of issues that encourage union organizing efforts.
The following is what you can expect from the major federal agencies whose actions directly impact employers throughout the country. However, don’t forget that state legislators and governors, as well as some local jurisdictions, have succeeded in imposing new laws and regulations promoted by unions and will continue to pursue this course in 2023. It is important for employers to keep this in mind and watch out throughout the year.
OSHA Follows White House Lead
The Occupational Safety and Health Administration (OSHA) exploded into the general public’s awareness after, at Biden’s command, it sought in 2021 to impose on most American employers a near-universal requirement that they insist their employees be vaccinated against the COVID-19 virus. It turned out to be one of the most controversial policy pronouncements on public health in recent memory.
Of course, the firestorm of opposition culminated with the U.S. Supreme Court striking down the Emergency Temporary Standard (ETS) that OSHA issued. The wrenching shock that followed the legal defeat of mandatory vaccinations in private industry resulted in OSHA withdrawing the ETS and initiating a formal rulemaking process.
As of press time, the agency’s proposed rule was under review at the White House before it was slated to be published. This rule is not expected to be anything near as controversial as was the ETS. As conceived, it primarily deals with procedures employers should follow to prevent and limit the impact of the disease in the workplace while keeping the sore subject of imposing vaccines at arm’s length. Most of the recommended practices will follow those made earlier by the Centers for Disease Control and Prevention (CDC).
OSHA has been active on other fronts as well. A major target has been the logistics industry in the form of targeting warehousing and distribution centers, deploying inspectors to search for safety violations of all sorts, but with a special focus on forklift truck safety. This was accomplished through a series of Regional Emphasis Programs (REPs) that eventually covered almost all such employers throughout the country (except in states with their own approved safety plans).
Although OSHA points to an increasing number of accidents in these work environments, it also doesn’t seem to be just a coincidence that a union drive to organize Amazon’s vast distribution network also reignited around the time Biden took office. A decades-long effort by the unions to organize all sorts of warehouse operations also led to a new OSHA heat regulation that is expected to be finalized in 2023.
The agency had already directed its inspectors to pay special attention to heat-related issues during worksite inspections that took place in 2021 and 2022. It also announced a National Emphasis Program (NEP) on heat in April 2022.
Also in April 2022, OSHA also initiated a new enforcement program designed to identify those employers who failed to submit Form 300A injury and illness report data through its online Injury Tracking Application. In December, this effort resulted in six Amazon warehouse facilities with injury and illness reporting and recordkeeping violations.
Other actions OSHA plans to undertake in 2023 include a proposed update to the lock-out/tag-out (LOTO) rule. The existing LOTO regulation was rewritten to incorporate several technological advancements that have taken place since it was last changed. It has been assigned a target release date of March.
Labor Department’s ESG Battle
OSHA is a division of the Department of Labor (DOL), which has been active on other fronts, particularly in regard to its enforcement of wage and hour laws and regulations. Labor Secretary Marty Walsh, former mayor of Boston and a long-time union leader, co-directed Biden’s interagency task force on promoting union membership growth (along with Vice President Kamala Harris).
Walsh also took a prominent role in representing the President during the contentious freight railroad union contract negotiations that reached a head late in 2022 and eventually had to be resolved by Congress at Biden’s request in a move that angered the unions involved and their members.
In November 2022, DOL also staked out a position in the political battle over environmental, social and governance (ESG) investment standards. It released a final rule, making it clear that federally-regulated pension plan fiduciaries can consider ESG factors when it comes to their retirement plan investment decision-making.
In contrast, the governors and attorneys general of several red states, including Texas and Florida, have taken strong public stands against ESG, acting to the extent of withdrawing from investment plans like BlackRock, which led the way several years ago in the private market by requiring companies they invest in to embrace ESG principles.
Critics of ESG have asserted that it is not in the best interests of their state pension plan beneficiaries to follow ESG priorities that promote “woke” political objectives at the expense of purely fiduciary principles, which focus exclusively on obtaining the best financial return for their beneficiaries. This is why several of the red states with Republican leadership are seeking only those investment opportunities that do not utilize ESG while withdrawing from investor services like BlackRock.
Among the ESG factors that can come into play when plan managers make investment decisions are “negative screening,” where investments that score poorly based on ESG factors are excluded (e.g., carbon emissions), or “positive screening,” where they pick investments that score highly on ESG factors (e.g., sustainability). They also can take an “integrated” strategy, blending together selected ESG principles into their overall investment analysis.
Republicans see ESG as an unwarranted and unjustified intrusion into the free market to impose controversial policies that cannot be imposed directly by the government. Expect this high-profile battle to continue and even intensify over the course of 2023, as both Democrats and Republicans position their parties in preparation for 2024 elections.
“With the next U.S. presidential election less than two years away, any change in administration always brings the risk of a change in regulations,” said attorneys for the law firm of Morgan, Lewis & Bockius when the DOL rule was issued last November. “So, while the Final Rule provides what we believe many will consider welcome clarity, the current political environment may make certainty in this area elusive.”
The NLRB Goes to War
No agency in the federal government has been more active and vocal in its support of organized labor than the National Labor Relations Board (NLRB), which due to its structure as an independent agency sometimes can act with more speed and finality than most other parts of the government.
Although supposedly independent of White House control and led by board members who serve for five-year terms, the NLRB enthusiastically signed on to the Biden administration’s government-wide campaign to promote union organizing early on. In 2022, this included signing memoranda of understanding with the Federal Trade Commission and Department of Justice to coordinate enforcement activities.
If you are of the thought that the NLRB is supposed to function as a neutral arbiter or objective umpire, you should know that Democrats stretching back quite a few years have instead embraced their position and wielded the board’s power with the goal of promoting unionization of nonunion employees and making sure the unions retain the involuntary adherence—and dues—of existing members.
A perfect example is the board’s recent action to make it more difficult for union members to pursue a successful vote to decertify their union. Under longstanding board standards, no decertification vote can be held if the employer has an unfair labor practice (ULP) claim pending against it. Years ago, the unions would stymy any decertification campaign by filing phony ULP claims. Under the Trump NLRB, this was made more difficult for unions to resort to this gimmick. Under Biden, the board is back to letting unions get away with it.
As a result, the NLRB has guaranteed that collective bargaining agreements will remain only contracts in America that can never expire—unless the company goes out of business. It even is planning to allow board staff to overturn elections where workers rejected the union if a ULP is found to have taken place, granting union representation by administrative fiat even where the union lost the vote.
In 2022, the board also made it easier for unions to organize smaller groups of employees within a single workplace, also called micro-units, such as the janitors working within a manufacturing facility. This is supposed to allow a union to get its foot in the door at a worksite. Embraced by the Obama-era NLRB, it later turned out to be a mixed bag for unions, requiring a lot of effort without much of a payoff.
Another pending change is a rule proposed last September that is intended to redefine joint employer status in such a way that the unions will be allowed to organize the employees of independent franchise operations, such as McDonald’s, and workers employed directly by commercial staffing agencies.
The change in how joint employer status is regarded already has impacted college sports. In 2021, the board took significant steps toward allowing college athletes to unionize (including trying to dictate that you can’t call them “student athletes” anymore. The NLRB insists they be called “players at academic institutions”).
In 2021, NLRB General Counsel Jennifer Abruzzo issued a directive to regional staff endorsing the concept behind allowing these athletes to organize. Last December, the board’s regional counsel in southern California extended this further by supporting a ULP complaint filed by the men’s and women’s basketball teams of the University of Southern California against the university, the Pac-12 Conference and the NCAA.
Overall, the NLRB’s belief that pursuing an agenda aggressively supporting organized labor is well worth the effort. Union representation petitions filed with the board increased 53% for fiscal year 2022 (which ended Sept. 30, 2022) when compared with FY 2021 and had reached the highest level since 2016. The NLRB said that 2,510 union petitions were filed in FY 2022, up from 1,638 petitions in FY 2021.
“Given the spike in case intake we are seeing in the field, we can expect even more cases to come before the board in fiscal year 2023," observed NLRB Chairman Lauren McFerran when she announced the numbers. “You also can expect more of those elections to succeed, given the administration-wide support the unions can now count on.”
David Sparkman is founding editor of ACWI Advance and contributing editor to EHS Today.