Wyatt Employment Law Report


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OFCCP Issues Proposed Rule for Federal Contractors Prohibiting Policies/Practices Under Which Employees May be Disciplined For Discussing Pay

By Edwin S. Hopson

On September 15, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) proposed a new rule that would prohibit federal contractors from discharging or otherwise disciplining employees who discuss, disclose or inquire about their pay or the pay of another employee or applicant for employment.

“Workers cannot solve a problem unless they are able to identify it. And they cannot identify it if they aren’t free to talk about it without fear of reprisal,” said OFCCP Director Patricia A. Shiu in her press release. “Pay transparency isn’t just good for workers. It’s good for business. Fairness and openness are great qualities for a company’s brand.”

Back in April 2014, the President signed Executive Order 13665, which instructed Secretary of Labor Perez issue a proposed rule within 160 days that required “pay transparency” by federal contractors. The rule proposed would amend the Equal Opportunity clauses in Executive Order 11246. The new rule adds definitions for “compensation,” “compensation information,” and “essential job functions,” terms which appear in the revised clauses of the Executive Order. The proposal also establishes two types of defenses that contractors can use against allegations of discrimination under EO 13665.

The proposed rule will be published in the September 17 issue of the Federal Register and will be open for public comment for 90 days. See  http://www.dol.gov/ofccp/PayTransparencyNPRM.


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President Signs Executive Order Prohibiting Discrimination Based on Sexual Orientation or Gender Identity

By Edwin S. Hopson

On July 21, 2014, President Obama signed an Executive Order prohibiting federal government contractors and subcontractors from discriminating in employment decisions on the basis of sexual orientation or gender identity.

The Executive Order is an amendment to Executive Order 11246, issued by President Lyndon Johnson on September 24, 1965, and enforced by the Labor Department’s Office of Federal Contractor Compliance Programs.

Commenting on his action, “…the President also pointed out that workplace equality is simply good business. Noting that most of the Fortune 500 companies already have nondiscrimination policies on their books, he explained that these policies help companies attract and retain the best talent.”

For more information about Executive Order 11246, see:

http://www.dol.gov/ofccp/regs/compliance/ca_11246.htm


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President Nominates Sharon Block to be a Member of the NLRB

By Edwin S. Hopson

On July 14, 2014, the White House announced that President Obama was sending to the Senate the nomination of Democrat Sharon Block, currently working as an attorney at the U.S. Department of Labor, to be a Member of the National Labor Relations Board for the term of five years expiring December 16, 2019, replacing Democrat Nancy Jean Schiffer whose term expires in mid-December, 2014.

Block was previously recess-appointed to the NLRB by the President in January 2012. Block and two other recess appointees (including Richard Griffin) were found to have been invalidly appointed in the Noel Canning v. NLRB case by the Supreme Court last month.

In mid 2013, the President nominated new members to the NLRB who were confirmed, and Block and Griffin resigned from the Board. Griffin was later nominated and confirmed as General Counsel of the Board.

This action may forestall a deadlock on the Board should the Republicans win control of the Senate in November 2014, since, if Schiffer is not replaced, that would leave a 2 – 2 split at the Board of Republicans and Democrats.  Without a majority, the Democrats would be unable to decide important issues in cases or issue new regulations impacting labor-managment relations based on a pro-union agenda.


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President Obama’s Equal Pay Executive Orders to Impact Federal Contractors

By R. Joseph Stennis

In support of National Equal Pay Day, President Obama signed an executive order on April 8, 2014, that prohibits federal contractors from retaliating against workers who discuss their compensation with each other and/or in the workplace. According to White House officials, this executive order will not compel workers to discuss pay and/or require employers to publish employee compensation. Instead, it will serve as a “critical tool” to encourage pay transparency, so that workers have an additional mechanism in place for discovering violations of equal pay laws and are able to seek appropriate remedies. Whether retaliation against employees who discuss their pay on social media outlets such as Twitter or Facebook would also fall under the President’s order is uncertain, but more than likely would be protected under the contemplated executive order.

Additionally, President Obama will direct the Labor Department this week to create and issue regulations that will require federal contractors to submit to the Deparment data regarding their employees’ compensation. This data must include details regarding employee gender and race. The Labor Department will utilize the data to conduct more targeted enforcement against federal contractors with the expectation that companies will comply voluntarily with equal-pay laws — the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act. It remains unclear at this point what such “targeted enforcement” will entail. However, it may result in more enforcement activity by the Department if it concludes a company is not being compliant.


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U.S. Supreme Court Extends SOX Whistleblower Protection to Employees of Private Contractors Who do Business with Public Companies

By R. Joseph Stennis

In Lawson, et. al. v. FMR LLC, No. 12-3 (decided March 4, 2014), a divided U.S. Supreme Court confirmed that the whistleblower protections contained in the Sarbanes-Oxley Act of 2002 (“SOX”) extend to employees who work for private contractors that do business with public companies. At issue in the case was a bit of text in SOX which provides that, “[n]o public company. . . or any . . . contractor . . . of such company may [retaliate] against an employee . . . because of [SOX- protected activity].”

The U.S. Court of Appeals for the First Circuit had held this language applied exclusively  to employees of  public companies and not to employees of private contractors that do business with public companies. The First Circuit’s ruling was  in sharp contrast to  decisions issued by the Administrative Review Board of the U.S. Department of Labor (“ARB”).  For example, in Spinner v. David Landau & Assoc. LLC, Nos. 10-111 and 10-115 (decided May 31, 2012), the ARB held that a private contractor’s employee who was a whistleblower as to fraudulent activity by his company was covered by SOX and therefore protected by its anti-retaliation provisions.

In Lawson, the whistleblower plaintiffs were employed by private companies that performed as advisers to public mutual fund institutions.  Petitioners, Jackie Lawson and Jonathan Zang, urged the High Court to overrule the First Circuit and extend whistleblower protections to employees of private contractors of publicly held companies. The respondents argued that the petitioners’ interpretation would lead to an unlimited application of the statute.  Ultimately, the Supreme Court in a 6-3 ruling—penned by Justice Ginsburg—concluded that the plain meaning of SOX’s text, SOX’s legislative history, and its overall statutory purpose favored a wider interpretation and reading of the provisions than favored and advocated by the respondent companies.

Thus, Lawson establishes that an employee of a private contractor that does business for a public company and is retaliated against for engaging in SOX protected conduct would be entitled to pursue an anti-retaliation claim under SOX against that private employer.


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White House Seeking Expansion of Overtime Pay Under the FLSA

By Mitzi D. Wyrick

President Obama has directed the U.S. Department of Labor (“DOL”) to revise regulations under the Fair Labor Standards Act to make more workers eligible for overtime pay.  Specifically, the DOL will be reviewing the executive, professional, and administrative exemptions, sometimes referred to as the “white-collar” exemptions from the requirement to pay overtime for hours worked over 40 in a workweek.  The salary basis threshold, which is currently set at $455 per week, will be one area of focus.  In addition, the White House has directed the DOL to review other exemptions changes to which would result in more overtime pay based on the type of work performed.  For example, under the revised regulations thought to being considered, store managers who also perform non-management duties may be entitled to overtime pay unless they can demonstrate that the majority of their time is spent performing management work.  Read more about it at:  http://t.co/KgEmpdqfZT


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Labor Department Releases Data on Union Membership Rates in 2013

By Edwin S. Hopson

On January 24, 2014, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) released 2013 data on union membership in both the private and public sectors.

The statistics are virtually unchanged from 2012.  In 2013, BLS reported that the union membership rate overall was 11.3%, just as it was in 2012.  The number of workers belonging to unions was 14.5 million.  BLS noted that in 1983, the first year that comparable data is available, there were 17.7 million workers belonging to unions and the membership rate was 20.1%. Continue reading