President-elect Barack Obama will be sworn in on Jan. 20, a Tuesday. By Wednesday, the HR world could well be on its way to one of the most turbulent periods of change in the profession’s recent history.
On tap from the new Democratic president—with support from a 111th Congress firmly controlled by Democratic allies—is an array of legislative and regulatory changes that will likely rewrite the employment law rule book, affecting everything from union organizing to FMLA protections to the federal minimum wage.
HR must start preparing now
“It’s critical for HR people to be aware of what’s coming down the pike,” said Michael Fox, a shareholder in the Austin, Texas, office of the employment law firm Ogletree Deakins. “Top management and the C-Suite, too. The next four years will be one of the most interesting and challenging times any of us have ever faced.”
Speaking during an HR Specialist audio conference just two days after the election, Fox laid out the employment law agenda the Obama administration will probably pursue—and offered advice on how HR should start preparing now.
According to Fox, five initiatives—all backed by Obama during the presidential campaign—will almost certainly become law early in the president-elect’s first term.
Not only did Obama campaign on the following issues; they are also politically popular measures that House and Senate Democrats can pass without risking middle-class voter backlash. “These are all easy in concept for Congress to embrace,” Fox said.
1. Employee Free Choice Act (EFCA)
“The EFCA is organized labor’s No. 1 agenda item,” Fox said. The bill would amend the National Labor Relations Act (NLRA), fundamentally overhauling how unions gain the right to represent a workforce and bargain for worker rights.
It would require the National Labor Relations Board (NLRB) to certify a union as the exclusive collective bargaining representative of employees once the union demonstrated that a simple majority of employees had signed union authorization cards—a so-called “card check.”
That’s a significant change that would almost certainly result in certification of more unions. In the past, Fox said, unions have often had little difficulty getting employees to sign authorization cards, but have lost support when employees cast secret ballots.
The EFCA also mandates binding arbitration of initial union contracts if the union and the employer cannot reach a collective bargaining agreement within 90 days. And bargaining would have to begin within 10 days of union certification. Those first 100 days bracket an extremely tight time frame that virtually ensures that many contracts will wind up being finalized through arbitration. Initial contracts would be in force for two years.
The EFCA would also mandate significantly higher penalties for employers found to have violated the NLRA.
Fox isn’t sure the EFCA will be enacted without changes, and the card-check provision may be stripped out as Congress negotiates. Business groups are already lobbying hard to kill it.
“There has been significant push back to taking away the secret ballot. There may be compromises on that front,” Fox said. “However, there will be resistance to weakening the binding arbitration requirements, which in many ways is the most significant part of the EFCA.”
2. Expanded employee FMLA rights
A suite of bills would extend FMLA leave to more employees—and affect more employers. Among the proposals:
- Reducing from 50 to 25 the number of employees an employer must have to be covered by the FMLA
- Mandating seven days of paid sick leave for all employees
- Explicitly authorizing FMLA leave for employees affected by domestic violence
- Providing 24 hours of annual FMLA leave for parents to participate in children’s school activities
In addition, the Family Leave Insurance Act would create an employer-paid insurance program to create what amounts to paid FMLA leave.
3. Lilly Ledbetter Fair Pay Act
This legislation, a Congressional response to the U.S. Supreme Court’s landmark 2007 Ledbetter v. Goodyear Tire & Rubber decision, would liberalize statutes of limitations on when employees could file pay discrimination lawsuits.
In Ledbetter, the Supreme Court affirmed a Title VII provision requiring employees to file pay discrimination complaints within 180 days of the alleged discriminatory act (300 days in cases covered by a state or local anti-discrimination law). Lilly Ledbetter argued that each low paycheck she received over the years constituted a new discriminatory act. But the court said the discriminatory act happened decades earlier, when Goodyear first hired her at a pay rate below that of male employees. Since more than 180 days had passed since then, the court said Ledbetter could not sue her employer.
The Lilly Ledbetter Fair Pay Act, a platform centerpiece at the Democratic National Convention in August, would amend Title VII to make clear that each allegedly unfair paycheck could be considered a fresh incident of discrimination.
4. Employment Non-Discrimination Act (ENDA)
ENDA would create a federal prohibition on discrimination based on sexual orientation. Essentially, ENDA would place discrimination against gay and lesbian employees on a par with discrimination on the basis of race, ethnicity, national origin, gender and other characteristics already prohibited by Title VII and other federal laws.
An alternative version of ENDA would also prohibit discrimination based on gender identity, providing workplace protection to transgender people.
Thirteen states and the District of Columbia already have laws banning discrimination based on sexual orientation and gender identity. Seven other states prohibit sexual orientation discrimination only.
5. Arbitration Fairness Act
Look for legislation prohibiting employers from requiring employees to arbitrate employment-related disputes instead of filing lawsuits in court. Although many of the bill’s provisions are aimed at protecting consumers, it would also apply to employment contracts.
How to pay?
Fox listed several other legislative initiatives likely to find favor in the Obama White House and in the Democrat-controlled House and Senate. Among them: an increase in the federal minimum wage, the redefinition of many supervisors as employees for union-organizing purposes, higher caps on punitive damage awards in discrimination cases and greater protection for employee whistle-blowers.
Fox says the nation’s current financial crisis is unlikely to slow down passage of many of these bills, simply because they won’t directly affect the federal budget.
“Some people may think that the financial crisis so constrains Congress that they don’t pass much of this legislation. I don’t believe that,” he said. “In an ironic way, this may open the door to shifting expenses to employers that Congress itself will not be free to appropriate. It will be easier to ask employers to pay for seven days of paid sick leave, for example, than it will be for Congress to legislate greater federal spending.
“One of my concerns,” he continued, “has always been that Congress does not really understand how much it costs to comply with many employment laws—or to litigate cases that result from noncompliance.”
Business groups have begun mounting vigorous opposition to many of these measures.
Expect some of these sweeping changes to happen very quickly, Fox warned. “Recall that the FMLA was passed and signed into law within two weeks of President Clinton’s inauguration,” he said. “Very few will recognize the labor and employment law world that we will soon be facing.”
The coming change: How HR should respond
During his post-election audioconference to HR professionals, Attorney Mike Fox urged HR pros to begin tempering the possible effects of new legislation by getting their own houses in order. Specifically,
- First consider the potential costs of more employee-friendly employment laws. Plan to spend more. “If you are writing budgets,” Fox said, “it’s almost certain that you will face higher litigation costs.”
- Immunize your organization against union-organizing efforts by making it such a good place to work that employees won’t see the need to join a union. “Try to develop a positive employee relations program,” he said. And rein in rogue supervisors, whose discriminatory and retaliatory actions spawn thousands of lawsuits each year.
