Whole-of-Government Approach to Labor, Employment Issues Set to Shift into High Gear

As the calendar shifts to election season and labor legislative priorities such as the PRO Act have failed to clear the Senate filibuster hurdle, the Biden administration’s all-of-government approach to labor and employment policy will kick into high gear. The administration’s labor and employment policy agenda will begin to move primarily through the regulatory front as employers can expect a slew of proposed and final rules and other impactful agency actions to land by the end of the year and through next spring.

New sheriffs in town: As previously identified by the Association, traditional players such as the NLRB and the DOL will be joined by newcomers such as the SEC, FTC, and DOJ in the labor and employment regulatory space as the Biden administration throws the executive branch’s full alphabet soup at employers.

This unprecedented cross-agency focus on labor and employment law and policy is already in motion with several new developments surfacing in recent months, including:

• A slew of multi-agency partnerships focused on enhanced enforcement coordination and information sharing, including new NLRB partnerships with the DOJ, FTC, EEOC, and the DOL;
  
  
• The FTC preparing potential regulatory action targeting the use of noncompete agreements in employment contracts, as well as rulemaking related to data privacy and algorithms, and pursuing an aggressive antitrust campaign involving compensation and employment issues;  
  
  
• The USDA proposing a rule blacklisting federal contractors for labor violations;
  
  
• The SEC issuing proposed rules requiring human capital metric disclosures for public companies, including DEI metrics, use of independent contractors, and employee turnover; and
  
  
• The DOJ filing an amicus brief in an NLRB case involving independent contractors.

The above examples each represent significant deviations from traditional approaches to federal labor and employment law and policy regulation and highlight the Biden administration’s commitment to regulate employers with every tool available within the executive branch. The result, particularly regarding the various new interagency partnerships, could mean that employers could face enforcement actions from several different agencies for the same alleged violations.

Only the beginning: To this point, we likely have only seen the tip of the iceberg when it comes to committing the entirety of the executive branch to targeting employer practices and increasing union density. Thus far, the Biden administration has been bogged down by lingering COVID-19 pandemic-related issues, understaffed regulatory agencies including stalled confirmations for agency heads, and start-and-stop attempts to push through legislation both in the labor and employment space and elsewhere, to mixed results.

Rulemaking activity to intensify: As the dust has begun to settle on the above fronts and agencies have received staffing and funding increases, coupled with the looming possibility of a new Republican Congress come the midterm elections, employers can expect the Biden administration to begin channeling its energies and resources towards regulatory actions through the fall and into next year. Several proposed rules are expected to be published this fall, including on:

• Independent contractor status under the FLSA (DOL)
• Exempt vs. non-exempt employees (DOL)
• Joint employer liability under the NLRA (NLRB)
• Human capital metrics disclosures (SEC)

The NLRB is also expected to issue decisions in several pending cases by the end of the year, each with the potential to alter federal labor policy in ways that could increase union density and create compliance challenges for employers, respectively. The NLRB issued its first such decision this week, holding that employer uniform policies that in any way restrict employees’ abilities to wear union apparel are unlawful, absent a showing of special circumstances by the employer justifying such restrictions.  

In short, employers can expect a variety of regulatory activity from several different agency sources, including those that have not traditionally been involved in the labor and employment law and policy space.