Punching In: DOL Solicitors Punching Out?

Monday morning musings for workplace watchers

DOL Looks to Lawyer Up | Latest on Labor Board Reorg| Data Protection: Just Say No?

Ben Penn: After four months of relative silence, the Labor Department’s top attorney telegraphed her intentions to the business community at a closed-door U.S. Chamber of Commerce meeting Friday.

Sources in the room tell me that Solicitor Kate O’Scannlain’s prepared remarks offered scant detail on the agency’s plans to revise Obama-era policies. But in response to attendee grousing during the Q&A, Kate went off script to slip a few specifics about a new field memo in the hopper.

Check out my full report on the meeting here.

Business representatives who gathered to hear O’Scannlain speak certainly welcomed the news, but the solicitor’s bandwidth to whip the field into shape with comprehensive new legal interpretations from the national office is about to take a significant hit. Four of the agency’s most senior and trusted legal advisers are retiring from the department, essentially all at once.

Three of the 10 associate solicitors plus a regional solicitor will soon hang it up after lengthy careers in the senior civil service. The list includes Jeff Nesvet, the department’s top counselor for employment and training; Ann Rosenthal, who heads occupational safety and health; Michael Felsen, New England regional solicitor; and Robert Shapiro, who technically retired several months ago as the top counselor for ethics and administrative law, but his role hasn’t been filled with a permanent replacement.

These people work in the shadows, so they’re hardly household names. But the departing attorneys represent multiple decades of institutional knowledge that agency heads rely on to implement rules, advance unresolved investigations in the courts, or craft new enforcement policies.

So what will Labor Secretary Alex Acosta and O’Scannlain do to replace them? I’ll be reporting on that later this week.

Conservatives may be eyeing this as an opportunity for the legalistic Acosta to install Federalist Society members in senior solicitor’s office spots, but the secretary may be skittish. Back when Acosta ran the Justice Department’s Civil Rights Division in the mid-2000s, he was lightly involved in a DOJ politicized-hiring fiasco.

Besides, it will be tough to convince private, management-side attorneys to forgo their high-six-figure (at least) salaries to sign up for a rigorous, unglamorous, lower-paying job in the senior executive service.

Chris Opfer: We may soon get some clarity on National Labor Relations Board General Counsel Peter Robb’s plans to update the agency’s case-handling processes. Robb told a group of lawyers in New York earlier this year that he expected to trim down an initial list of possible changes—based on input from agency staff—and have an official set of proposals sometime this month. Robb also said he plans to tackle the case-handling process before turning his attention to possible moves to reduce the NLRB’s field office footprint and consolidate more authority in its D.C headquarters. Both propositions have already generated some controversy from inside and outside of the agency.

Bloomberg Law’s Hassan Kanu in January obtained an initial list of the possible case-processing revisions that Associate General Counsel Beth Tursell emailed to regional officials. Tursell made clear that the list was a draft, likely to change based on internal feedback. The 59 proposals range from shifting to the use of email to communicate with parties in unfair labor practice investigations to emphasizing the settlement of merit cases and requiring detailed position statements with the filing of a ULP charge. Charges that don’t include an adequate position statement could also be dismissed within days.

Robb’s office told an American Bar Association group in March that the separate proposals to reorganize the agency’s field offices will “will be open for public comment prior to implementation, as appropriate.” It doesn’t appear that the general counsel will be taking public comment on the case-processing changes, moves that are within his purview as the board’s top prosecutor.

I had a chance to ask Robb directly about the possible changes afoot last week. We were both in Phoenix for a conference hosted by management-side law firm Littler Mendelson. Robb declined my request for an interview before he addressed a group of business attorneys, but he did answer two quick questions. I asked if there was anything about the proposals and the related hullabaloo that we’re getting wrong.

Robb’s response: “A lot.” But when asked to specify, Robb declined to answer.

BP: Let’s take a quick look at a handful of other noteworthy developments we’re expecting this week:

  • The Fifth Circuit’s decision to vacate the Obama DOL’s fiduciary rule takes effect today. This edges us closer to a final death blow for arguably the highest DOL regulatory priority in the prior administration—an effort to prevent retirement advisers from providing conflicted advice. But it’s not over till the fat lady sings, and in this case, that means Acosta still has until June 13 to appeal the court’s decision to the Supreme Court. Jacklyn Wille will have more on the implications surrounding this case, including why it’s looking likelier by the day that the DOL will walk away from the Obama fiduciary rule for good.
  • On Tuesday, the Senate labor committee Chairman Lamar Alexander (R-Tenn.) will speak at the International Franchise Association’s legal symposium. The IFA members will be praying for Alexander to promise action on the House-passed bill to codify a narrower, more business-friendly interpretation of joint employment under the Fair Labor Standards Act and the National Labor Relations Act. He can offer the franchise community lip service on why franchiser liability for franchisees’ actions will destroy their model, but consider us skeptical that the Senate labor panel is ready to introduce, let alone mark up, its own version of the House legislation until after the midterms.
  • Also on Tuesday, I’m told senior DOL officials will be meeting with business representatives to sort out the Office of Federal Contract Compliance Programs’ contentious plans to relax guidance on how to enforce pay discrimination. Last we heard, the draft guidance was sitting on the secretary’s desk, awaiting final approval. Perhaps this meeting means the agency is on the cusp of releasing the directive once and for all.
  • The Trump administration expects to release the spring regulatory agenda on Wednesday. We’ll be paying close attention to the list of DOL regulatory and deregulatory actions slated for the next 12 months. That includes updates on overtime and tip pooling, and maybe even a surprise or two now that Acosta’s had some time to get a few senior political officers in place since the last semiannual agenda published in the fall.
  • Finally, Acosta had once projected a May release of the Bureau of Labor Statistics’ highly anticipated contingent worker survey. I don’t think we can hold him to a May deadline, but the word is that BLS will this week announce a release date for the report (thanks to our generous Bloomberg News colleague Josh Eidelson for the tip). Once that study is out, the ongoing conversations about how to address the future of work and the rise of freelancing and independent contracting will be elevated. Maybe legislative solutions will even be prioritized on Capitol Hill.

CO: A comprehensive new data protection law is set to go into effect in less than three weeks. The General Data Protection Regulation requires companies to beef up safeguards for a wide range of employee, customer, and other personal information, from Social Security Numbers to IP addresses. It applies not only to businesses operating in the European Union, but also those elsewhere around the globe that offer goods or services to folks in the EU or who target European consumers.

The new law could have particularly significant consequences for employers that use algorithms and other automated decision making tools for human resources moves like hiring, promotion, and salary negotiations. HR shops are increasingly turning to artificial intelligence to develop models that predict candidates’ ability to work in a team, likelihood to stay on the job, and leadership skills, based on personal information. Machine learning allows the model to continue to refine itself based on feedback about how selected candidates perform on the job.

This kind of artificial intelligence has been hailed as a way to avoid unconscious bias by employment decision makers. But it can also open up a hornet’s nest of new possible biases. The use of similar automated intelligence to predict whether a person convicted of a crime is likely to be a repeat offender, for instance, has come under fire for what some say are significant racial disparities.

The GDPR bans employers from making decisions based solely on automated programs, unless it’s necessary to perform a contract, is otherwise authorized by EU or member state law, or the person whose data is being crunched freely and explicitly consents to the arrangement. To quote Nancy Reagan, a worker or job applicant who isn’t all that keen on having his or her personal information used for employment purposes has the right to “just say no.” And HR professionals can’t punish those who opt out by passing them over for a job or promotion.

So I can’t tell you “if you don’t do this I won’t employ you,” management attorney Garry Mathiasan said during the Littler conference.

Even employers who aren’t covered by the GDPR may want to bone up on the new law. The European Union bans companies from transferring data out of the EU unless the other country has its own data protections that have been deemed adequate, according to Littler attorney Zoe Argento.

“I don’t think this is going to be unique to the European Union,” Argento said.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.comand bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

Bloomberg Law’s Jacklyn Wille is following a federal lawsuit that could have big implications for employers who use class action waivers in arbitration agreements with their workers. No, it’s not the trio of cases pending before the Supreme Court. The Ninth Circuit is hearing arguments next week in a dispute over whether broad class action waivers can be extended to ERISA suits for breach of fiduciary duty related to retirement plans. Meanwhile, Louis LaBrecque will be on the scene Wednesday when Office of Personnel Management Director Jeff Pon and other government officials talk civil service reform at a Partnership for Public Service event.

See you back here next Monday.

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To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com