Article by Caryn Pass, Grace H. Lee, Janice Gregerson and Ashley Sykes, Venable LLP
Independent schools should prepare for a major shift in national labor policy following President-elect Joe Biden’s inauguration. Larger legislative initiatives, such as a federal minimum wage, may be off the table if Republicans maintain control of the Senate following the Georgia runoff elections, but business officers can expect the Biden administration to use the first 100 days in office to achieve several non-legislative labor initiatives, including the abandonment of Trump-era NLRB decisions impacting employee use of email, the joint employer rule and independent contracts as well as the rescission of other executive orders and rules issued by President Trump or the Trump Department of Labor.
Short-Term Policy Changes: A Return to Worker Protections
Biden has committed to incentivizing union organizing and collective bargaining, while supporting measures to impose financial penalties on employers that interfere with workers’ organizing efforts. While larger legislative initiatives may be stalled due to a Republican majority in Congress, schools should expect the Biden administration to roll back many NLRB actions taken by the Trump administration during the last four years.
Use of School E-mail for Union Campaigns
Reinstating an Obama-era NLRB decision would be beneficial for employees seeking to organize in the workplace — and it would require schools to review their handbooks.
Also likely to be reinstated is an Obama-era NLRB decision determining that employees had an NLRA-protected right to use their work email accounts for organizing purposes even if the employer prohibited non-work related use of work emails accounts. Reinstating this decision would be beneficial for employees seeking to organize in the workplace — and it would require schools to review their handbooks to make sure their email use rules do not prohibit use of school email accounts for this reason.
Joint Employer Rule
We can also expect that the Biden administration will abandon the Trump administration’s changes to the joint employer rule. The new rule imposed a four-factor test for determining whether two or more businesses may be deemed the employer for the same worker and accordingly become liable for violations of the Fair Labor Standards Act. The four-factor test limited joint employer liability to situations where the alleged employer actually exhibited control over an alleged employment relationship through things like hiring and firing, setting terms of employment, or directing the work at issue.
Notably, a Federal judge in New York invalidated substantial portions of the Trump administration’s joint employer rule on the grounds that the rule was arbitrary and capricious and conflicted with the worker protections provided under the Fair Labor Standards Act. For similar reasons, it is likely that the Biden administration will abandon Trump’s four-factor test in favor of the Obama administration’s interpretation of the joint employer rule, which focuses on the “economic realities” of the employer/employee relationship. This change would make it easier for a worker to allege that a school is a joint employer and claim protections reserved for employees of the school. Schools are advised to revisit vendor contracts, such as food service and cleaning.
Independent Contractors
Similarly, a Trump administration proposed rule regarding independent contractor classification may be in the Biden DOL’s crosshairs after inauguration day. The proposed rule narrows the definition of “employee” in the Fair Labor Standards Act, making it easier for schools to lower labor costs by classifying workers as independent contractors rather than employees. Workers classified as independent contractors are not covered by the FLSA’s wage and hour protections, including minimum wage and overtime laws, and are generally not eligible for health insurance and other benefits afforded to employees.
Provided this proposed rule becomes final before Trump leaves office, schools can expect that a Biden DOL will rescind the new rule in short order in favor of a definition of “employee” that secures federal wage and hour protections for more U.S. workers.
Executive Order 13950
President-elect Joe Biden has committed to rolling back many executive orders issued by President Trump, including the recent Executive Order 13950 on “Combating Race and Sex Stereotyping.” As you may recall, President Trump recently issued Executive Order 13950 which requires, among other things, that new contracts entered into with the federal government include a clause prohibiting federal contractors from including certain concepts in diversity and awareness trainings – including unconscious bias and societal privilege trainings that have become increasingly common in the wake of the racial and social justice movements sparked this summer.
The effective date of the Executive Order was November 21, 2020. Therefore, the Office of Federal Contract Compliance Programs (“OFCCP”) began enforcing the provisions against recipients of federal contracts, subcontracts, and purchase orders on that date. It is unlikely that Federal grant recipients, including PPP loan recipients, will also be required to comply with the Executive Order, as the Federal Government has yet to give even an indication of when it might release the precise requirements for Federal grant recipients. Fortunately, it is likely that the Biden Administration will rescind the Executive Order before it becomes clear whether Federal grant recipients are required to comply.
Micro Bargaining Units
A Biden NLRB would likely reinstate an Obama-era NLRB decision which endorsed the concept of “micro-units” when evaluating potential bargaining units. Under the “micro-unit” standard, the NLRB presumes that a bargaining unit is appropriate when it is composed of employees that perform the same job at the same facility regardless of whether other employees share a community of interest with that unit. This means that organizing efforts can target a smaller group of employees with a school, allowing the Union to gain a “toe-hold” in an employer’s operation from which it can expand its representation.
Legislation with potential bipartisan support may meet with success, including changes to the federal declassification of marijuana as a Schedule I drug or the enactment of a national paid sick/family leave program.
Longer-Term Policy Initiatives
Although we anticipate that the Biden administration intends to pursue other labor policy initiatives in the next 4 years, we do not expect any major labor legislation in the near future. To be sure, the Biden Administration’s immediate focus will be on legislative efforts to combat the COVID-19 pandemic. Furthermore, it is likely that any wage and hour initiatives will stall in the short-term due to a Republican-controlled Congress. That said, legislation with potential bipartisan support may meet with success, including changes to the federal declassification of marijuana as a Schedule I drug or the enactment of a national paid sick/family leave program.
Venable’s Independent School Law team will continue to track the latest legislative and regulatory developments affecting independent schools. If you have any questions regarding this alert, or if you would like assistance with any of the requirements described here, please contact a member of Venable's Independent School Law Practice.
