March 28, 2025 • 61 mins
In a time of rapidly shifting administrative law norms, the Department of Labor and NLRB have had busy and in some ways aggressive dockets over the last year. Our panel of experts will assess the regulatory and enforcement approach and key initiatives at DOL and NLRB during the final year of the Biden Administration; how does it grade out compared to prior years? And during the early days of the Trump Administration, how is the regulatory approach changing—or staying the same?
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Episode Transcript
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Speaker 1 (00:00):
Regulation after regulation.
Speaker 2 (00:02):
There are all dated regulations that need.
Speaker 1 (00:04):
To be changed, one hundred and eighty five thousand pages
our public accountability and transparency. There will be no public supports.
It's really the best we can do. There's a regulation
that doesn't make any sense. Why do you keep you.
Speaker 3 (00:17):
Know who wrote the regulatory laws you must comply with.
Speaker 2 (00:20):
Welcome to the Regulatory Transparency Project's fourth Branch podcast series.
All expressions of opinion are those of the speaker.
Speaker 4 (00:31):
Good afternoon, and welcome to today's Regulatory Transparency Project webinar
discussing regulatory fermat at DOL and the NLERB. Thank you
for joining us. We're glad you're all here. My name
is Marie Blanchard, and I am the assistant director of
the Federalist Society's Regulatory Transparency Project. Today we're pleased to
have with us a stellar panel of experts. But moderating
(00:53):
today's discussion is Greg Jacob, a partner at Omelvinie and
Meyers LLP. Greg will introduce our speakers today, the experts,
and with that I will hand it off to Greg
to get right to the discussion.
Speaker 1 (01:06):
Thank you, Greg, Thank you Marie. Well, we are really
excited to present this panel on regulatory ferment at the
Labor Department and the National Labor Relations Board, who are
going to be particularly focusing on basically the last year
and a quarter the last year of the Biden administration.
In the first couple of months of the Trump administration,
(01:30):
our audience has probably noticed that there has been quite
a lot happening with sometimes to the administrative state during
that period of time, and we couldn't have a more
knowledgeable and distinguished panel of experts to talk about it.
So let me introduce them. We have Siama Nanda, who
was Solicitor of Labor during the entire four years of
(01:52):
the Biden administration previously had served as a Deputy Chief
of Staff in chief of Staff to Secretary Perez the
Obama administration. I also have film Ms Kamara, who is
a partner at Morgan, Lewis and Blockias and who was
previously chairman of the National Labor Relations Board in twenty
(02:15):
seventeen and prior to that a member of the Board.
And finally we have Shang Lee, who was Counselor to
the Wagen Hour Administrator at the Labor Department during the
last Trump administration and is now a Litigation Council at
the New Civil Liberties Alliance. So that's our panel, and
(02:37):
I'm gonna just ask them to set the table now
and maybe Seema, if you could start. Since of the
four of us, you were the one who was actually
in the thick of things during that last year of
the Biden administration, what would you consider to be the
most significant regulatory actions or enforcement initiatives of the last
(02:58):
year of the Biden administration at the Labor Department.
Speaker 5 (03:02):
Sure, thank you, Thank you, Greg, and it's great to
be with you all in my final fellow panelists, I
look forward to this conversation. So I think in terms
of the last year of the administration, the most significant
regulatory actions were certainly the overtime rule, that's the Part
five forty one who is EAP exempt. This rule making
(03:28):
in early twenty twenty four basically updated the overtime threshold
that was last updated in twenty nineteen by the Trump administration.
It was a two phased update, the first update going
into effect July first of twenty twenty four. That that
actually did go into effect despite litigation challenging that rule,
(03:53):
and that first update was essentially under the Trump methodology.
The twousand nine methodology, which was the same as a
two thousand and four methodology, increasing the overtime threshold to
thirty thirty five thousand, five hundred change to close to
forty four thousand, and then another update was scheduled to
(04:14):
go into effect January first, that did not go into
effect because of litigation. The next significant rule making i'd
call folks attention to was the classification rule making, sometimes
called the independent Contractor rule. This has a very long
(04:34):
and storied history, but I think in a nutshell, basically,
the Trump administration had done what we sometimes call a
midnight rule. It was in January of twenty twenty one
before the administration changed, the rule hadn't gone into effect,
the sixty day effective date hadn't taken place, and the
(04:55):
Biden administration when they came in, essentially did a delay
and that rule going into effect, and then did another
rule making that was a pure recision of the Trump rule,
and that was the status no rule making. There was
no rule in effect for a while, and there was
litigation challenging that rule, and essentially a court in Texas
(05:17):
struck down the recision rule making, which essentially made the
Trump rule making and by the Court's explicit decision made
that Trump decision come back to life, that Trump rule
making from January of twenty twenty one, so then we
engaged in rule making that came out in January of
(05:39):
twenty twenty four, went into effect March eleventh, twenty twenty four.
That rule making, I think is significant in our discussion
today because it is still in effect.
Speaker 6 (05:48):
It lives on.
Speaker 5 (05:50):
There are five lawsuits challenging that rule making. They are
in various stages of litigation, but so far they have
fared very well, both on the merits as well as
on on standing grounds, and I'm sure we all talk
more about that. The last one to probably draw your
(06:12):
attention to in terms of the rule making front is
the Retirement Security Rule, sometimes called the Fiducia Rule. Prior
iteration of it in the Obama administration had been called
the Fiduciae Rule. This is essentially the rule making that
seeks to protect people's retirements, particularly when they when they
(06:36):
go from having making a big decision about what they're
doing with their their retirement, as they transfer it into
an IRA, and as as more and more people you know,
have their own individual IRA accounts and trying to make
sure that people that that key decision they're making is
(06:58):
that people are subject to the fiduciary standard. That rule
has been enjoined. There are two there are two lawsuits
that are still pending. The Trump administration in this term
has not taken a position in a lot of these cases,
which I think we'll see unfolding over the next few months.
(07:20):
The last couple of things i'll just call folks attention
to is we were really doing a lot on the
child labor front. I think it will be interesting to
see how this a new administration tackles child labor, which
is something that I spent a lot of my time
working on. There were no regulations, but there was a
lot of subregulatory work Field Assistants bulletins, which in preparing
(07:43):
for this with Greg, I learned that he has authored
he is the one who mayfield Assistants bulletins actually come
to life. We also did a heat notice of proposed rulemaking, which,
while it is just a proposal, I think is a
pretty significant proposal. And sometimes those proposals, you know, start
(08:03):
you start to see a lot of private sector action
in response to those type of OSHA rulemakings, which are
often not done in one term.
Speaker 6 (08:13):
Anyways.
Speaker 5 (08:15):
On the enforcement front, I certainly had a lot of
enforcement initiatives that I was focused on and some of
which I certainly hope are continued in this administration. But
we had a big focus on retaliation. We were also
particularly focused on what we called coercive contractual practices. These
(08:35):
are contract provisions that are particularly owner onerous for workers.
Things like, you know, agreements that you're not going to
that you're going to indemn, off eye your employer if
you ever have a lawsuit against them, be shifting models
that come into place when people are hired. Uh, provisions
(08:56):
that say that you're going to pay, You're going to
pay some sort of damages if you leave your employment
before three years. That is something that we were starting
to really look into, in particular whether those provisions are
violative under the Fair Labor Standards Act.
Speaker 6 (09:19):
So much more to talk about, but i'll leave it.
Speaker 1 (09:21):
There for now. Well, I'm not sure whether it's good
news or bad seema, but I think that there's certainly
evidence that this administration is focused boast on retaliation and
on coercive contracts. So two boxes checked. Chang before we
go to phil to talk to us about all things NLRB.
Are there any things that you would sort of add
(09:42):
to significant regulatory initiatives or enforcement initiatives of the last
year of the Biden administration.
Speaker 3 (09:49):
I think Sema hit hit all my points, and maybe
I thought I had a little wage an hour bias
coming having been in the agency, and so thought wage
an hour had some of the most significant regulatory initiatives
in the last last year. And I agreed, And so
we have the independent contractor and the salary rule UH
and force the fiduciary rules a major thing as well.
You know, if we expand the scope beyond the top three,
(10:12):
maybe you can get you know, H two A or
something like that in there. But I think if you're
looking at the top three, those those are that list
in some order.
Speaker 5 (10:21):
Right.
Speaker 1 (10:21):
Well, we're going to come back to you momentarily to
sort of break down some of those because I think
one of the things about wage an hour is it
is the one that touches every business in America basically centrally,
and so those rules tend to have widespread impact and
a lot of interest in the employer community. But let's
go to Phil first to sort of set the table
(10:43):
of what was going on at the nl RB during
that last year. What were the what were the big happenings, Phil.
Speaker 7 (10:48):
Well, the answer is a lot, and the happenings were
pretty big. The nl RB is an interesting alternative to
the way that regulatory change is implemented because the LRB
throughout its history relies less on rulemaking in historically has
depended more on case adjudication than the promulgation of regulations,
(11:10):
and the most recent administration, Jory President Biden's term was
consistent with what the NLRB historically has done. So when
it comes to case adjudication, the NLRB was especially active
in the last several years. In a case called sevenex construction,
the NLARB created an employer obligation to recognize a union
(11:33):
based on a union demand for recognition without employee voting
in an election, unless the employer initiates the NLRB election
process within two weeks after getting a union demand for recognition.
In another case involving Amazon, the NLARB held it was
inherently unlawful, with limited exceptions, for an employer to conduct
(11:57):
any workplace meeting where an employe communicates views about union membership.
In a third case, involving sire in retail. The board
held that it's unlawful for an employer at a state
union representation will change the direct relationship between the company
(12:18):
and employees. And Greg, you asked about the most recent
year of the administration, the Biden administration. I'll note that
in an important case was decided in May twenty twenty
three called lion Elastomers, the Board held that racially and
sexually offensive statements and conduct get special legal protection if
(12:42):
they arise in the context of union organizing or other
types of union conduct. Now, those are decisions that were
adopted by the five member board or four member board
based on a vacancy that existed for much of the
past couple of years at the NLRB. The NLRB has
(13:03):
a prosecuting attorney, the General Council, and the former General
Council Jennifer A. Bruzzo, who served as GC during most
of the Biden administration. She was especially effective and active
in promulgating change. And I've just mentioned that, you know,
(13:25):
among the things that Jennifer Bruso initiated were requirements in
any settlement discussions that employers rather parties provide full remedies
she advocated limitations on non non compete agreements. Jennifer advocated
restrictions on electronic monitoring by employers. She implemented increased reliance
(13:52):
on district court injunctions while NLARB proceedings were pending. So
the board had a lot going on. It was not
a slow news day in the past several years. It
was the opposite, and the Board was very active and
that's reflected both in NLRB decisions as well as the
general Council initiatives that we've seen.
Speaker 1 (14:14):
Thanks Phil for that great table setting there. So as promised,
I'm going to go to shang next. So you and
Seema sort of agreed on what were the key initiatives,
the key regulatory actions. Now I want to sort of
break them down a little bit. You know, every regulation
has promised benefits, most of them promising benefits to workers
(14:37):
and retirees. Also acknowledged costs, costs to businesses and markets,
and particularly with the Labor department, trade offs between whether
workers are going to be able to choose their working environment,
where whether we need restrictive rules in order to solve
collective action problems and promise a better workplace for everybody.
(14:58):
So I'd like to get you're you're sort of grading
on how did the Biden administration do in balancing those
trade offs?
Speaker 3 (15:08):
So, uh, First, I think agencies in general, these cost
benefit things have been around for a while, and I
like to great agencies on a bit of a generous curve,
as courts do sometimes. The second uh, you know, I'm
also you know of disclose that I'm representing clients in
two of the wage an hour lawsuits that Seman mentioned,
(15:29):
one of the successful ones in Texas and a less
successful one in the in lower court in out of
New Mexico, and they're both in the appeals court now.
So with that in mind, I think I as a
general matter, I let's talk about the uh. I think
agencies as a general matter, tend to have a two
static view of costs and benefits.
Speaker 4 (15:50):
Uh.
Speaker 3 (15:51):
And so when they look at costs and they will say, oh,
these costs are two employers, these benefits are two employees.
But there's not generally a look to the next step. Well,
what happens when costs are imposed on employers. They tend
to be you know, passed on to consumers in the
more higher prices or to workers in the form of
lesser pay and so you have this dynamic model might
(16:14):
lead to kind of different cost benefit results and as
you as you mentioned Greg, you know the other more specifically,
we do have to recognize there are these important trade offs,
and I want to maybe call out I think the
agency as a general rule, I think it's you know,
the labor regulations tended to be power for the course
for agency cost benefit analysis, but I think the independent
(16:37):
contractor rules specifically falls a bit short of that, uh.
And the reason is the the agency calculated costs to
be not you know, included only rule for meyorization costs
in determining what, uh, what this rule does to to
the market and to the economy. Even though the agencies
(16:57):
that this would encourage employers to have more employees and
fewer independent contractors, I think that certainly has compliance costs
for employers if they wanted, you know, if there's a
reason they were hiring independent contractors instead of employees in
the first place, and to the extent the rule pushes
them into the other direction, that's going to lead to
a less efficient business model, which then has you know,
(17:18):
down downstream effects on workers' wages and consumer prices. Even
the SPA said the independent Contractor rules cost benefit analysis
was inadequately paid, you know, paid inadequate attention to the
cost to particularly small businesses that have to comply with
the rule. And so I think here the UH the
agency should have been more attentive for the trade offs.
(17:42):
In particular, the twenty twenty one Trump rule that was enacted,
you know, estimated trade offs, estimated some some benefits for
lowering reduced compliance burdens to the tune of about half
a million, half a half a billion dollars per year.
And while the agency can change his mind and redo
its calculations, I think it had a responsibility to say, well,
(18:03):
this is why we change our mind, this is why
we think maybe those benefits were overstated, and it didn't
do so here, and I think that's, you know, a
deficiency that we shouldn't mention here.
Speaker 1 (18:16):
Thanks for that great breakdown. I'm going to go to
SEEMA and particularly on the independent comment on any of them,
but particularly on independent contractor. It strikes me there's two
kind of interesting questions to grapple with with respect to
cost benefit on the independent contractor rule. One of them
is it's a self profess just interpretive right. It doesn't
(18:37):
have binding legislative effect the way that say, the salary
basis rule does for the overtime exemption. So what does
it mean for an interpretive rule to have costs or benefits?
It's just an interpretive guide for courts or is it more?
And then the other one that I think our audience
would be interesting in commenting on independent contractor versus is
(19:00):
one of those places that most centrally pits against the
workers desire for flexibility in their arrangements. A lot of
people like that for independent contractor status, but then you
don't get all the protections that come with employee status,
and so there's this tension there as to what is
best for workers to have the freedom or to have
(19:21):
the protections of an employment model. So I'd love to
hear both about that rule and any others that you
wanted to comment on how the costs and benefits were weighed.
Speaker 6 (19:30):
Sure, thank you, Thank you, Greg.
Speaker 5 (19:32):
I am. I think I'd like to talk about the
independent contractor rule because I think there was a lot
of misinformation about that actual rule making. I think the
rule that we did was it was very much based
on the multiple tests of the circuit courts. So without
(19:56):
legislative rule making authority in this area, it is the
circuit courts, not the Department, that are going to be
the last word in each of those cases. So, depending
on where a case arises, we are going to be
looking at the circuit courts and we're not making that up.
That that is how Congress has intended it. So as such,
(20:19):
the rule that we did was very much an attempt
to bring together the case law from those circuit courts
into a coherent framework that would make it easier for
employers to say, Okay, this is what the Labor Department
is saying, is the framework. The rule that the Trump
(20:40):
administration had promulgated at the end at the end of
its term hadn't done that. We can disagree about which
rule is better, which rule is more employer friendly, but
the fundamental fact is that no court of appeals had
ever identified so called factors, which is what that Trump
(21:02):
rule did, control an opportunity for profit of loss, and
then it sort of had a then look at the
other three. So I think a lot of the a
lot of this sort of chatter around the rule that
we did. It was a lot of catastrophizing that I
actually don't think was warranted. There was also, I think
a pretty active misinformation campaign that this was the ABC test,
(21:25):
which was just absolutely false. This was not the ABC test.
And you know, as shang Well knows from doing the litigation,
you're not talking about how how the department promulgated UH
an ABC test. And you know, as we talked about
it is so far you know, faring well in UH
in the district, in the district courts that have that,
(21:48):
I've looked at looked at it. So I want to
turn a little bit now to this idea of independent
contractor relationships.
Speaker 6 (21:59):
One thing that.
Speaker 5 (22:00):
Certainly I believe in that and that we actually say
throughout that rule making is that independent contractor relationships are
a really important part of the economy. They have always
existed independent contractors, true, true independent contractors, you know, may
very much want to be in that status. It can
(22:22):
provide them important flexibility. It can help working families. It
could help mothers who are trying to balance many things.
It can help people with elder care responsibility. The intent
of the rule we did was not to interfere with
valid independent contractor relationships. What our rule making was attempting
(22:46):
to do in response to I think a rule, our rule,
our recision getting struck down, and sort of the need
to sort of be doing affirmative rule making this area
is to sort of say, Okay, here is what the
circuit courts are saying.
Speaker 6 (23:02):
How do we bring this all together.
Speaker 5 (23:05):
One thing I think when we think about misclassification, we
everyone immediately goes to the gig economy. And yes, you
know there are cases that have are just undecided in
the gig world. You know, we have just not We
have a lot of cases where courts just haven't haven't opined,
(23:25):
and they certainly haven't reached A lot of these cases
haven't reached higher courts. There may be a whole other
reason to that. You know, there's a lot of mandatory
arbitration agreements and not a lot of people who can
actually challenge these cases in any way that is going
to reach higher level courts. But I think it's important
to point out that this really isn't just a new
(23:47):
economy issue. We saw lots of cases at the Department
of Labor where we have misclassification in janitorial misclassification in restaurants,
misc classification and construction, and misclassification and healthcare. We were
doing a lot of healthcare home care cases. So I
(24:08):
think just bringing some context to what we actually are
talking about is really important. The last thing I'll say
on this part is, you know, I think this idea
that workers have remarkably less flexibility as employees than as
(24:29):
independent contractors isn't necessarily true. You can have a lot
of flexibility as an employee as well what we are
talking about with misclassification, because remember, misclassification is not itself
unlawful under the Fair Labor Standards Act. What's unlawful is
not paying over time or not paying minimum wage. So
(24:53):
when we're talking about mistic classification, we're talking about usually
workers who are not getting paid some sort of bare minimum.
There are cases where and we even would look at
them sometimes at the at the labor department, like what's
going on with this company? You know, not sure they're
categorizing people right, but everyone's making a lot of money.
(25:14):
And guess what, you don't have a you don't have
an FLSA case. So I think it's really important to
talk about what we're actually talking about when we when
we talk about the classification rule and we when we
talk about misclassification, I think on the actual cost benefit
analysis when we did the rule.
Speaker 6 (25:34):
I mean, I think that it is a it is
a rule where we don't have legislative rulemaking authority. You know,
maybe some.
Speaker 5 (25:46):
Courts may disagree with that and may want to give
give the Department that authority, which I think is interesting
and of itself. But I think one of the things
that we were really trying to get at when we
were thinking about the cost benefit analysis is employers may
change behavior based on one rulemaking or the other.
Speaker 6 (26:10):
And how do you sort of factor in.
Speaker 5 (26:13):
The chance of misclassification when you're doing this type of rulemaking.
And I think that's what some of the cost benefit
analysis was trying to get at. I think it would
very much, you know, behoove the Trump administration to defend
this rule and actually just you know, give employers some
(26:34):
stability uncertainty in this area of law, because this is
one of those areas where how you classify your worker
is really fundamental to your business. Your business model might
not work if you are misclassifying workers. Maybe you won't
do it, maybe you'll structure it a different way, but
it's really fundamental to how people do things. And I
(26:56):
think employers having some clarity around it is important, and
I think that clarity is better when what the Department
is doing is aligned with what the Court of Appeals
is doing, which are going to be looking to their
own tests.
Speaker 6 (27:09):
Eventually, I'm going to.
Speaker 1 (27:11):
Phil to talk about NLRB, but before I do that,
since Shang's been in the trenches in litigating these independent
contractor regulation issues, Shang, I wanted to give you just
a minute or two to respond on some of those
independent contractor cost balancing assertions.
Speaker 3 (27:27):
So I think it's hard to discuss that without like,
actually the substance of the rules, the various rules and interpretations,
and the history of this is quite complicated and goes
back to I mean, if you want to go back
far enough, but let's say, you know, the courts of
appeals in the nineteen seventies started coming up with, you know,
variations of five or six factor tests, and the factors
(27:47):
are sometimes articulated differently from court to court and applied differently,
and that has caused quite a bit of confusion among
particularly on small businesses that don't hire a lot of
lawyers to navigate how these factors are are balanced, and
in emerging industries and emerging economies like the gig economy,
and so that that led in twenty fourteen or fifteen
(28:09):
the Department issuing a bulletin, an interpretive bulletin articulating its
view of a six factor test. And again that cost,
you know, because six factors, nobody knows what's important, nobody
knows how they're balanced. It continued to cast some confusion
and which led to the twenty ninth sorry to twenty
twenty one Trump administration rule that said, oh, we're going
(28:29):
to keep these factors, but really focus your attention on
what we think of the two core factors that matter
the most than those are the control and opportunity to profit,
and that you know, actually aligned with every We looked
at every every Court of Appeals decision then found that
when those two factors point in one direction, that's ultimately
the court's what the court did. And so, you know,
(28:51):
the interpreted rule basically told employers, if you don't do
these two factors, you're going to have to classify your
person as an employee, and if you do, you're pro
in a good place. Maybe maybe not guaranteed, but like
it's a pretty that's a pretty good indicator. The other
factors matter, but mean you know, are less important compared
to those two. And we thought that was you know,
a provided more certainty by focusing attention on the two
(29:13):
factors that tended to that that were demonstrated to uh
indicate a strong independent contractor versus employee relationship. And so
so I think it's it's an even as it is
an interpretive rule, employers particuely small businesses that don't hire
a large, large legal department are going to you know,
evaluate uh, their their relationships based on that, and they're
(29:36):
going to spend less time and less effort have lower
compliance costs if they're focusing on these two factors instead
of having a more nebulous six plus factor test that
uh that they may not they may not know what
to do with. And so so here it's an issue
of a kind of vagueness creates a compliance costs, and
(29:57):
it's also an issue of complexity, creating essentially a sub
city for larger employers that have the kind of resources
and to hire legal expertise to navigate the complex case
law and simplicity, uh would you know in trying to
benefit smaller particularly smaller employers who can then pass those
(30:20):
benefits to their to their workers and potentially consumers as well.
Speaker 1 (30:26):
Helpful thoughts. Well, so let let me go to Phil
as promised. Now, of course, the NLRB does the vast
majority of its activity through uh adjudication rather than through rulemaking,
so there aren't formal cost benefit requirements, but there are
still costs some benefits. So Phil take it away.
Speaker 7 (30:43):
Well. You know, I think that the Board has in
certain ways implemented changes that impose a very significant number
of costs on employers. But ironically, I think a number
of the changes implement by the Board actually end up
undermining the interests not only of employers, but employees and unions.
(31:07):
And you know, for example, one of the decisions that
I mentioned was the Board, in the lieon Elastomer's case,
implemented special protection for racially it's sexually offensive conduct if
it arises during union activity. I think that's kind of
productive for everybody. And I also think although the Board
(31:29):
over the past four years during President Biden's term, implemented
a number of changes which in the short run certainly
benefited unions and in certain respects benefited employees, I think
the Board's status as an even handed, honest broker regarding
NMRB issues has been undermined and really took a hit.
(31:53):
And you know, that's something I think that in terms
of the Board's regulatory role and all employment related agencies
or in the business of trying to be a delivery
system or work related protection or you know, not only
employees but employers and unions and balancing the various interests,
and I think that the board status in that role
(32:17):
has been undermined. And you know, that's something I think
continues to be a moving target and we'll see how
it goes in the in the new administration.
Speaker 1 (32:28):
Thank you for those insights. So now I want to
turn back to our our Labor department folks and ask Obviously,
one of the biggest developments of the last couple of
years when it comes to administrative law and rulemaking is
the reversal of Chevron and lober Brad. Chevron's gone, so
(32:48):
we don't have deference to agency interpretations of statutes ins
And I was talking to a senior department official who
I won't names, and you know, really this incentivizes us
to do, you know, basically, to regulate through enforcement rather
than through rulemaking, because rulemaking takes a lot of time.
(33:10):
You've got to do all this formal cost benefit analysis.
You finally issue the rule npr M final rule. Then
after that you do three years of litigation in the
courts to know whether it's going to be able allowed
to go into effect and is it worth it. If
then the rule that you have isn't even going to
be deferred to by the court. So Hana, I'm going
(33:32):
to go to you first and then to Seema to
ask you do you think this is the direction the
Labor Department is likely to head? And if so, you know,
we heard from Phil it's kind of the way the
NLRB operates. Is it totally a bad thing or might
it actually be okay?
Speaker 3 (33:49):
Well, I I yeah, I don't think it's necessarily a
good thing in that because if you're doing it through enforcement.
One great thing about rulemaking is that you're notifying the
regulated community what the new rule is. But if you're
doing regulation through enforcement, oftentimes there's not a great uh,
you know, prior notice to the person you're dragging into
what often is an administrative tribunal, and and that has
(34:12):
you know, attendant kind of notice and due process problems.
The other is, I'm not sure, it's it's as feasible
even you know, with yes local Bride came out and
knocked out Chevron. But a few days before that, we
had uh in secb jarcacy, Uh, the Supreme Court put
U significant limits on agency's ability to uh, you know,
(34:33):
to to do internal in house enforcement actions where civil
penalties are at issue, and uh, you know, the exact
sort after effect of that jocracy decision hasn't been fully
litigated at in the courts yet, but they're you know,
the Deparment Labor, for examples, is one of the parties
in a jocracy related case out of the Third Circuit,
And depending on how that decision comes out, it could
(34:56):
significantly impact the department's ability to U to regulate through
enforcement because those enforcement actions will have you brought in
federal court instead of uh, you know, before administrative judges,
and that has you know, certainly more devotedly requires the
devotion of a lot more resources by the department.
Speaker 1 (35:15):
And as promised, Sima your response.
Speaker 6 (35:20):
So I'm going to agree with Shang on a couple
of points here.
Speaker 5 (35:24):
You know, First, I do think we we are talking
a lot about Lowe Bright, and I think we talk
a lot less or or just in legal circuit circles
about the importance of the Jarksi decision, which I think is.
Speaker 6 (35:38):
Is really important.
Speaker 5 (35:41):
You know, I think how how jar Kessi is going
to play out in as these other as there's a
litigation in these other statutory schemes is really really important.
Speaker 6 (35:55):
The one thing I will say.
Speaker 5 (35:59):
Is, you know, in the Jarquesse decision, the SEC had
a choice there under that statute to bring those cases
through the administrative tribunal or to federal court. A lot
of our labor and statutes aren't written that way. There's
(36:19):
no choice. Osha has no you know, you can go
to you can go to a federal court if you
have an imminent danger case. You can get to a
federal court in certain limited situations. But you know, Msha Osha,
the h rules, which is where that Third Circuit, which
is about what that third Circuit case that Shang mentioned
is talking about, they don't have those schemes.
Speaker 6 (36:41):
So I think how that litigation plays out is going.
Speaker 5 (36:46):
To be really important. And you know what happens to
what happens to enforcement if you can't if you can't
do it, and you know is who rewriting these laws.
Are the courts rewriting them as Congress needs to rewrite them?
I mean, I think I think that.
Speaker 6 (37:06):
Is where.
Speaker 5 (37:08):
We're going to see the biggest action in ADMIN law
playing out over the next you know, two to two
to five years and beyond on on Low for Bright,
you know, I will say a couple of things. So
you know, first, just on a personal level, I certainly
don't like to spend you know, four to seven years
(37:30):
of my life working on rules that.
Speaker 6 (37:33):
That are that are struck down.
Speaker 5 (37:36):
And I and I do think about, you know, our
our enforcement tools a lot on Low or Bright in particular,
I will say, I think a lot of the story
here is really still unfolding, and there are so many
questions that remain and are really going to take many,
many years to be litigated. Some of those questions is
(38:00):
this is this really denvo review by courts of everything?
Or is there still the possibility of other levels of review?
Where is skid more deference in all of this when
you know, we have interpretations that are less less formal
than than formal rulemaking? Has the court blessed the possibility
(38:24):
of a more deferential mode of review if there is
an express delegation to the agency of authority. And I
think this question of you know, the the Court in Low,
in Low or Bright acknowledges that Congress can appropriately delegate
(38:45):
to agencies some authority and and the courts have to
respect that delegation. But what is the line between statutory
silence and the agency filling in and ambiguity? Is that
statutory ambiguity or is that just silence that that Congress
intended to be filled by the agency. And I and
(39:07):
I think that sort of plays into you know, is
that too much delegation to the agency some of these
other theories that that the Court has been sort of
tinkering with in recent years. I think I think my
larger point is I think that agency rulemaking is is
(39:30):
going to continue to evolve as this plays out. The
other piece I would agree with Shangan is that it's
agencies can't not do rulemaking in certain situations, or at
least it's not very good for both workers or for
the regulated community in many of and many of those
(39:51):
situations just to not have anything at all, particularly where
the agency has delegated rulemaking authority. You know, it's it's
incumbent upon the agencies to act in those situations, So
I think you'll you'll continue to see it. But I
will say that I think how agencies think about rule
(40:15):
making is going to change, and I think it'll continue
to evolve as as the case all continues.
Speaker 6 (40:21):
To develop under Low or Bright. And even.
Speaker 5 (40:25):
The answers aren't always you know, right or left or uh,
you know, democratic or Republican. I mean how Loper Bright
plays out in cases can really vary under you know,
what different administrations are doing. So I think you know
everything you do has to go through this different lens
(40:47):
of you know, every rule making.
Speaker 6 (40:50):
That we did.
Speaker 5 (40:51):
Certainly you're like, well, how how likely is this to survive?
And what are the arguments that we can be making.
And I think as agencies do those calculations, it'll just
be very different under a lower right than under Chevron.
But it doesn't necessarily mean the agency's never going to
do rulemaking. They're still going to need to, it's just
going to play out a little bit differently.
Speaker 1 (41:14):
Yeah, I'll just add as a moderator comment, I think
you're exactly right that it's not a this is not
a pure Republican Democrat left right issue right dem should
judges be the final deciders or should administrative regulators, And
we are seeing a lot of discussion about that, even
just in the last couple of weeks, as there have
been fights between administrative actions and judges and which side
(41:35):
do you like better? Phil, I'd like to you know,
Jarcausy has had shell shock effects in the NLARB universe
as well. And maybe you even have a little commentary
to offer on loper Bread as well.
Speaker 7 (41:49):
Yeah, you know, Jcacy. The issue when it comes to
remedies has really become up front, the center stage with
the NLRB, and two things about that, and I'll talk
a little bit about lober Bright as well. But the
NLRB has always had broad remedia authority, but there have
(42:11):
also always been limits on the NLRB's authority, which is
generally restricted to make whole relief. And anything that goes
beyond make whole relief, even if it might in some
way act as a disincentive for people to violate the
National Relations Act. It's been struck down by the courts.
The irony is in jarcacy. The Supreme Court adopted pretty
(42:36):
much the same standard, to the extent that any administrative
remedies go beyond restoration of the status quo or make
whole relief. It's then considered to be a legal remedy
that requires a jury trial within before an Article three court,
and so as it relates to the NLARB to some extent,
(42:58):
jarcasy creates a plows the same ground but on a
different platform, because you're talking about constitutional limitations with respect
to deference to administrative agencies and in lowerbright I'll just say,
in my experience, enforcement proceedings and case adjudication involves the
(43:20):
same amount of time or in some cases involves more
time than rule making. And in certain ways I agree
with Seema. I think certain things really you know, beg
to be implemented or adopted by way of rule making
in a variety of respects. Rulemaking is often more efficient
because you have the opportunity to look at a class
(43:44):
of potential clayments, a class of potential employment situations, and
address the whole panoply of issues that can arise, as
opposed to trying to you know, take small bites one
at a time in enforcement proceedings or case eduication. And
one other thing I'll note is I think the elimination
of Chevron deference pretty much has the same impact on
(44:08):
enforcement proceedings by agencies and rule making. Excuse me and
a case adjudication as it does on rule making. And
I've been handling a case for a client for the
past five years. We had a decision by the NLRB
against our client. We appealed to the Court of Appeals
for the Fifth Circuit, and then during the oral argument
(44:30):
that occurred in this case three years ago, one of
the judges said, well, why shouldn't we just defer to
the NLRB what the NLRB did in this case? And
I said, well, your honor, we preserved and the judge
had erupted me and said in a footnote. I said, yes,
we had in fact preserved in a footnote our position
(44:53):
that the court should reconsidered reevaluate whether Chevron deference is inappropriate.
As it turned out, the Court of Appeals in to
to one decision against us deferred to what the NLRB did.
We sought Supreme Court review, and then the Supreme Court
decided Loper Bright, which eliminated Chevron deference, and four days later,
(45:17):
the Supreme Court granted searched in our case, vacated the
Fifth Circuit decision and returned our case to the Fifth
Circuit to be redecided without deference. So you know, case
in point, the end of Loper Bright. Excuse me, Loper
Bright's elimination of Chevron deference does have the same impact
(45:38):
I think on cases as it does on rulemaking. But
you know, I think the impact is likely to be
great in both respects, and it remains to be seen.
Some of the questions that Seema raised I think are
good ones. I think agencies are still going to be
in the business of applying the law to particular facts
on a case by case basis, and that is uniquely
(46:00):
I think within the province of what agencies to rip out.
But the around the edges, I think there's still a
lot of questions that have remained to be addressed.
Speaker 1 (46:11):
I think it's Judge Posner who was always on a
crusade against footnotes. No footnotes, he would always say, and
so take that, Judge Posner. Without that footnote, where would
you have been, phil.
Speaker 3 (46:23):
Every once in a while, footnote comes to the rescue.
Speaker 4 (46:26):
Yes.
Speaker 1 (46:28):
Well, So next I'd like to go do you seem
and ask you, you know, looking back at the last
year of the Biden administration, you were actually in a
pretty similar position to the one I was at the
end of the Bush administration. You've got a year to go.
There's only so many things that you can do in
one year. Are there any things that you didn't get
to that you wish that the Biden dol had done
(46:51):
by way of regulatory initiatives?
Speaker 5 (46:55):
Yeah, I mean there's always you know, I think as
those of us who've been in you know, everyone on
this panel, No, you know, you're just you're fighting fighting
the clock from from the day you get there on.
I mean, I think you know by the by the
last year, you know that the tenor of everything changes,
(47:16):
you know, and your you're sort of you know, fighting
fighting again a bunch of a bunch of different clocks
when you're in there the last year, as you as
you think about all of the things that are going
to happen, you know, with the election, and you know
regulations that that can be reviewed by Congress. So I
(47:38):
guess I'm going to broaden this a little bit. I mean,
some of the things I think about and I don't
know if I could have anything different, could have be done,
could have been done.
Speaker 6 (47:48):
But you know, we spent a lot of time in
the OSHA.
Speaker 5 (47:51):
Space on the COVID related rules and in particular that
you emergency temporary standards. It was it was really challenging work.
The data was rapidly changing, the disease was rapidly changing,
and so you know, the the infectious Disease rule, you know,
(48:13):
wasn't completed. We got a notice of proposed rulemaking on that,
but that is sort of would be more evergreen, protect
protecting healthcare workers and you know, regardless of the type
of disease that we have in different situations. So you know,
sometimes I think, you know, what, would anything have changed
(48:33):
that trajectory, and I'm not I'm not sure that it
would have. I think in terms of, you know, some
of the things we did last year, the last year,
I just I wish we had gotten them done earlier,
and I would like to be the one defending them
right now rather than sort of waiting to see what
(48:56):
the Trump administration is going to do going to do
right now.
Speaker 1 (49:00):
But you know, that is.
Speaker 5 (49:03):
That is always something that you know, you're you're playing
against a clock here. So I think they're sort of
broader things I think about when I think about, you know,
what we got done and why, you know, I think
in terms of getting things done. I mean, one thing
I think a lot about is in the enforcement space
(49:24):
in the Solicitor's office. You know, despite you know, we
haven't we haven't even started talking talking about the cuts
that are happening right now throughout the federal government. But
certainly at DL just this morning they canceled all of
their UH International Labor Affairs Bureau grants five hundred million
dollars to prevent child labor around the world. And you know,
(49:48):
we know that there's cuts pending at d L that
are sort of going through some sort of higher level
of review, but you know, we and it kind of
goes to your enforcement question. You can only do what
you have resources to do, and you know, I have
it on pretty good authority, even though our records in
the Slicter's Office didn't go back this far. But you know,
(50:10):
George Salem, a a solicitor in the eighties under the
Reagan administration, has told me that, you know, he had
probably two hundred more staff than in the Slicter's office.
And we're not talking of thousands of numbers. I mean,
I'm talking about the difference between six hundred and eight hundred,
(50:30):
where it makes a really big difference. So I do
think about some of the enforcement work I wish we
would have been able to take on if we had
had more resources. It's one of the reasons I find it,
you know, indiscriminately sort of chopping shopping agencies and you know,
seeing seeing what where you draw blood and where to
(50:54):
correct course isn't really the isn't really a way to
go about administering the federal government. But those are some
of the things I think about when I think about
what was left on the table.
Speaker 4 (51:08):
Shang.
Speaker 1 (51:08):
I want to both give you a chance to comment
on any of the conversation we've been having for the
last ten minutes, but also want to tee up the question.
You know, as we obviously the Trump administration has not
yet had time to put out regulatory initiatives by way
of rulemaking, but are there any things that you see
that have been happening in the last couple of months
(51:29):
that you wonder might they regret that at some point
down the road they are they cutting not whether personnel
or cutting what was previously viewed as constraints on regulatory
authority too quickly, And might any of those be ones
that come back to haunt them someday.
Speaker 3 (51:50):
Regarding the regulatory authority, again, the administration hasn't done much
at all. The Secretary has been there for just a
little bit, but what has I think it touches on
a lot of the nineteen forty nine Procurement Act, and
it's then the authority under that for the President to do,
uh to kind of manage federal contracts for efficiency and economy.
(52:13):
So so there was a circuit split on the Wage
an Hour Division's ability to set a minimum wage for
federal contractors under that under that statute, the administration has
decided not to uh, you know, not to defend it
and instead to rescind the executive order that that set
that minimum wage standard. And the other part is the
(52:35):
also under that statute, it's kind of OFCCP. I can
never remember what it stands for, the Office of Federal
Contract Compliance Programs. I think you got it. Yeah, it's
so an executive order rescinded the executive order from the
sixties that created that agency, which enforces certain federal non
(52:57):
discrimination standards. And you know, uh under the Anti di
I uh EO that was gotten away with taken away.
So so I think those are some you know maybe
some welcome changes. But at the same time, there's a
question of whether, uh what what position the administration will
will take with respect to the Procurement Act. Will it,
(53:21):
you know, it's rescinded that minimum wage, it's rescinded that
former e O, f C c P EO. But will
it flex its muscles to perhaps use that act Procurement
Act in in other ways. Maybe it'll try to enforce
some of its anti d I uh positions through through
an interpretation of the Act, or enforce other uh kind
(53:43):
of labor wage requirements using the Act, if if not
minimum wage, other ways. And if it sets that precedent,
does that create uh you know, a forward uh looking
effects for future administrations to continue to use the Procurement
Act to affect federal contractors.
Speaker 1 (54:03):
I think it's a great and important question for our
audience to pay attention to. Certainly there were things when
I was a solicitor at the last year of the
Bush administration that we thought about doing pursuing to the
Procurement Act and sort of through OFCCP and contracts. But
we were worried about what kind of president would we
establish about trying to make policy in that way. Through
(54:27):
the federal contracting system. So seeing how those precedents are
set and work out will be really interesting. Phil. What
about over at the NLRB.
Speaker 7 (54:38):
Well, you know, I think that when you talk about
the NLARB, one of the things that I can mention
is that time is always a fleeting thing and things
to take a lot longer than what you'd think. I
think in many ways, the NLRP and the last fifteen
(55:01):
or twenty years has really been a poster chop for
the flip flop concept. In the question when you talk
about trying to put an end to administrative oscillations, is
whether you prefer flip or whether you prefer flop. And
it's really a difficult thing to deal with, and you know,
(55:22):
we're going to be seeing that. I think prospectively in
the current administration, I think the lower Bright decision and
the Chevron the end of Chevron defference is likely to
have a stabilizing impact on a lot of the agency
changes that we've seen. But I also think that it's
quite likely that what used to be agency changes in
(55:43):
position is going to translate into, prospectively a bigger impact
on differences among the Circuit Court. The Circuit Courts of
Appeals and you know, again, I think the impact of
Loper Bright's going to play out, but it's going to
have a gific an impact, I think across the whole
spectrum of deployment related issues that we've been discussing, you know,
(56:06):
for the past sixty minutes.
Speaker 1 (56:08):
So I'm going to take Phil's flip or flop question
and I'm going to go I'm going to give Siam
and Shang both a minute and a half to close
things up here, and you can pick either flip or flop.
But I'll just put it in this way. I mean,
with independent contractor, we spent a lot of time talking
about today. Two thousand and eight, when I was a solicitor,
(56:28):
I think we issued a one page guidance document that
was just encapsulating in the barest terms, here's the factors
that get looked at. And then that became a memorandum
in the next administration, and then that got rescinded, and
then it became a rule, and then it became the
other administration's rule. Are we in a world where it's
just going to be Democrat playbook and Republican playbook for
(56:52):
administrative law? And if so, is that a good thing
or a bad thing, Sima you first, so as I.
Speaker 5 (57:01):
Don't think we can say anything happening in this administration
is normal or just the normal flip flop. Just take
o FCCP. I think that is one of the most
disturbing things that has happened. And talk about flip flop.
Let's talk about this administration flip flopping between Trump one
and Trump two. This is an administration that touted in
(57:21):
two thousand nineteen that they that they had achieved the
highest civil penalties in ofccp's history. Twenty nineteen press release,
statement from the secretary, statement from Craig Lean, who was
the director, and you know, four years later it's it's
DEI it's all unlawful, and I think it's very troubling.
(57:45):
And this is an executive order, and before that it
has precedent for being established in law, you know, going
back to three Roosevelt certainly something Eisenhower Eisenhower support, Nixon supported.
So I think we're seeing extremely troubling trends that go
(58:05):
beyond any sort of you know, flip flop. And the
last thing I'll say is, you know, ninety percent of
what agencies do is just you know, straight up enforcement
at the NLRB, I know, Jenna Brusse always gives even
higher percentages the cases that we're many of the cases
we're talking about are even at the margins, you know,
even the cases in rulemaking that are kind of going
(58:26):
to come out differently between the Trump test and our test.
But I think what we're seeing is unprecedented attacks here
on ways that we do things. And I think it's
going to come back to haunt this administration because one
thing we know is, you know, parties that are in
power will not always be in power forever, and I
(58:50):
think the administration has to think seriously about that.
Speaker 1 (58:54):
Thang.
Speaker 3 (58:54):
Last words, I think you will see different kind of
Republican versus Democrats at kind of policies and views, particularly
with respect to with respect to enforcement actions. There's always
been different priorities. You can never enforce every law to
the fullest extent, and different administrations will have different priorities.
You know, you might focus more on getting back wages
(59:16):
for workers, or you might focus more on, uh, you know,
setting the stakes you through regulation through enforcement by by
you know, drawing lines that you think we'll you know,
move the regulation regulatory state in one direction or another.
I think with respect to regulations, however, I think lower
write does have a very stabilizing effect. Perhaps not so
(59:37):
much in the short run as everything gets revisited, but
in the long run, if this administration comes out and
comes up with new rules and flips or flops, you know, again,
it'll have to come up with the best reading of
the statue instead of merely a reasonable one. And if
a court decides that's that's not the best reading, then
the court's decision will have forward looking effect and future
administrations can't come in and say, well, you know, we've
(59:59):
changed our mind this way or that way. So I
think with respect to the rules, you will see again
in the coming years. Once litigation kind of plays out,
statutes that sorry regulations that will will reflect a consistent
interpretation of the statute over time, and if things have
(01:00:19):
to change, they're going to have to go back to
Congress to change those things.
Speaker 1 (01:00:23):
Wow. I just want to thank my distinguished panel here
for your very air you day, interesting and timely thoughts
on everything. And I'll turn it back to Marie to
close us out.
Speaker 4 (01:00:35):
Yes, thank you Greg for moderating this, and thank you
Shang Seema and Phil and thank you to our audience
for tuning into this program. For more content like this
on the regulatory state and the American way of life,
just visit us at regproject dot org. Thank you everyone,
have a great rest of your day.
Speaker 2 (01:00:55):
On behalf of the Federal Society's Regulatory Transparency Project. Thanks
for tuning in to the Fourth Branch podcast to catch
every new episode when it's released. You can subscribe on
Apple podcasts, Google Play, and speaker lays from our TP.
Please visit our website at regproject dot org. That's our
egproject dot org.
Speaker 6 (01:01:23):
This has been a FEDSC audio production.
Regulation after regulation.
Speaker 2 (00:02):
There are all dated regulations that need.
Speaker 1 (00:04):
To be changed, one hundred and eighty five thousand pages
our public accountability and transparency. There will be no public supports.
It's really the best we can do. There's a regulation
that doesn't make any sense. Why do you keep you.
Speaker 3 (00:17):
Know who wrote the regulatory laws you must comply with.
Speaker 2 (00:20):
Welcome to the Regulatory Transparency Project's fourth Branch podcast series.
All expressions of opinion are those of the speaker.
Speaker 4 (00:31):
Good afternoon, and welcome to today's Regulatory Transparency Project webinar
discussing regulatory fermat at DOL and the NLERB. Thank you
for joining us. We're glad you're all here. My name
is Marie Blanchard, and I am the assistant director of
the Federalist Society's Regulatory Transparency Project. Today we're pleased to
have with us a stellar panel of experts. But moderating
(00:53):
today's discussion is Greg Jacob, a partner at Omelvinie and
Meyers LLP. Greg will introduce our speakers today, the experts,
and with that I will hand it off to Greg
to get right to the discussion.
Speaker 1 (01:06):
Thank you, Greg, Thank you Marie. Well, we are really
excited to present this panel on regulatory ferment at the
Labor Department and the National Labor Relations Board, who are
going to be particularly focusing on basically the last year
and a quarter the last year of the Biden administration.
In the first couple of months of the Trump administration,
(01:30):
our audience has probably noticed that there has been quite
a lot happening with sometimes to the administrative state during
that period of time, and we couldn't have a more
knowledgeable and distinguished panel of experts to talk about it.
So let me introduce them. We have Siama Nanda, who
was Solicitor of Labor during the entire four years of
(01:52):
the Biden administration previously had served as a Deputy Chief
of Staff in chief of Staff to Secretary Perez the
Obama administration. I also have film Ms Kamara, who is
a partner at Morgan, Lewis and Blockias and who was
previously chairman of the National Labor Relations Board in twenty
(02:15):
seventeen and prior to that a member of the Board.
And finally we have Shang Lee, who was Counselor to
the Wagen Hour Administrator at the Labor Department during the
last Trump administration and is now a Litigation Council at
the New Civil Liberties Alliance. So that's our panel, and
(02:37):
I'm gonna just ask them to set the table now
and maybe Seema, if you could start. Since of the
four of us, you were the one who was actually
in the thick of things during that last year of
the Biden administration, what would you consider to be the
most significant regulatory actions or enforcement initiatives of the last
(02:58):
year of the Biden administration at the Labor Department.
Speaker 5 (03:02):
Sure, thank you, Thank you, Greg, and it's great to
be with you all in my final fellow panelists, I
look forward to this conversation. So I think in terms
of the last year of the administration, the most significant
regulatory actions were certainly the overtime rule, that's the Part
five forty one who is EAP exempt. This rule making
(03:28):
in early twenty twenty four basically updated the overtime threshold
that was last updated in twenty nineteen by the Trump administration.
It was a two phased update, the first update going
into effect July first of twenty twenty four. That that
actually did go into effect despite litigation challenging that rule,
(03:53):
and that first update was essentially under the Trump methodology.
The twousand nine methodology, which was the same as a
two thousand and four methodology, increasing the overtime threshold to
thirty thirty five thousand, five hundred change to close to
forty four thousand, and then another update was scheduled to
(04:14):
go into effect January first, that did not go into
effect because of litigation. The next significant rule making i'd
call folks attention to was the classification rule making, sometimes
called the independent Contractor rule. This has a very long
(04:34):
and storied history, but I think in a nutshell, basically,
the Trump administration had done what we sometimes call a
midnight rule. It was in January of twenty twenty one
before the administration changed, the rule hadn't gone into effect,
the sixty day effective date hadn't taken place, and the
(04:55):
Biden administration when they came in, essentially did a delay
and that rule going into effect, and then did another
rule making that was a pure recision of the Trump rule,
and that was the status no rule making. There was
no rule in effect for a while, and there was
litigation challenging that rule, and essentially a court in Texas
(05:17):
struck down the recision rule making, which essentially made the
Trump rule making and by the Court's explicit decision made
that Trump decision come back to life, that Trump rule
making from January of twenty twenty one, so then we
engaged in rule making that came out in January of
(05:39):
twenty twenty four, went into effect March eleventh, twenty twenty four.
That rule making, I think is significant in our discussion
today because it is still in effect.
Speaker 6 (05:48):
It lives on.
Speaker 5 (05:50):
There are five lawsuits challenging that rule making. They are
in various stages of litigation, but so far they have
fared very well, both on the merits as well as
on on standing grounds, and I'm sure we all talk
more about that. The last one to probably draw your
(06:12):
attention to in terms of the rule making front is
the Retirement Security Rule, sometimes called the Fiducia Rule. Prior
iteration of it in the Obama administration had been called
the Fiduciae Rule. This is essentially the rule making that
seeks to protect people's retirements, particularly when they when they
(06:36):
go from having making a big decision about what they're
doing with their their retirement, as they transfer it into
an IRA, and as as more and more people you know,
have their own individual IRA accounts and trying to make
sure that people that that key decision they're making is
(06:58):
that people are subject to the fiduciary standard. That rule
has been enjoined. There are two there are two lawsuits
that are still pending. The Trump administration in this term
has not taken a position in a lot of these cases,
which I think we'll see unfolding over the next few months.
(07:20):
The last couple of things i'll just call folks attention
to is we were really doing a lot on the
child labor front. I think it will be interesting to
see how this a new administration tackles child labor, which
is something that I spent a lot of my time
working on. There were no regulations, but there was a
lot of subregulatory work Field Assistants bulletins, which in preparing
(07:43):
for this with Greg, I learned that he has authored
he is the one who mayfield Assistants bulletins actually come
to life. We also did a heat notice of proposed rulemaking, which,
while it is just a proposal, I think is a
pretty significant proposal. And sometimes those proposals, you know, start
(08:03):
you start to see a lot of private sector action
in response to those type of OSHA rulemakings, which are
often not done in one term.
Speaker 6 (08:13):
Anyways.
Speaker 5 (08:15):
On the enforcement front, I certainly had a lot of
enforcement initiatives that I was focused on and some of
which I certainly hope are continued in this administration. But
we had a big focus on retaliation. We were also
particularly focused on what we called coercive contractual practices. These
(08:35):
are contract provisions that are particularly owner onerous for workers.
Things like, you know, agreements that you're not going to
that you're going to indemn, off eye your employer if
you ever have a lawsuit against them, be shifting models
that come into place when people are hired. Uh, provisions
(08:56):
that say that you're going to pay, You're going to
pay some sort of damages if you leave your employment
before three years. That is something that we were starting
to really look into, in particular whether those provisions are
violative under the Fair Labor Standards Act.
Speaker 6 (09:19):
So much more to talk about, but i'll leave it.
Speaker 1 (09:21):
There for now. Well, I'm not sure whether it's good
news or bad seema, but I think that there's certainly
evidence that this administration is focused boast on retaliation and
on coercive contracts. So two boxes checked. Chang before we
go to phil to talk to us about all things NLRB.
Are there any things that you would sort of add
(09:42):
to significant regulatory initiatives or enforcement initiatives of the last
year of the Biden administration.
Speaker 3 (09:49):
I think Sema hit hit all my points, and maybe
I thought I had a little wage an hour bias
coming having been in the agency, and so thought wage
an hour had some of the most significant regulatory initiatives
in the last last year. And I agreed, And so
we have the independent contractor and the salary rule UH
and force the fiduciary rules a major thing as well.
You know, if we expand the scope beyond the top three,
(10:12):
maybe you can get you know, H two A or
something like that in there. But I think if you're
looking at the top three, those those are that list
in some order.
Speaker 5 (10:21):
Right.
Speaker 1 (10:21):
Well, we're going to come back to you momentarily to
sort of break down some of those because I think
one of the things about wage an hour is it
is the one that touches every business in America basically centrally,
and so those rules tend to have widespread impact and
a lot of interest in the employer community. But let's
go to Phil first to sort of set the table
(10:43):
of what was going on at the nl RB during
that last year. What were the what were the big happenings, Phil.
Speaker 7 (10:48):
Well, the answer is a lot, and the happenings were
pretty big. The nl RB is an interesting alternative to
the way that regulatory change is implemented because the LRB
throughout its history relies less on rulemaking in historically has
depended more on case adjudication than the promulgation of regulations,
(11:10):
and the most recent administration, Jory President Biden's term was
consistent with what the NLRB historically has done. So when
it comes to case adjudication, the NLRB was especially active
in the last several years. In a case called sevenex construction,
the NLARB created an employer obligation to recognize a union
(11:33):
based on a union demand for recognition without employee voting
in an election, unless the employer initiates the NLRB election
process within two weeks after getting a union demand for recognition.
In another case involving Amazon, the NLARB held it was
inherently unlawful, with limited exceptions, for an employer to conduct
(11:57):
any workplace meeting where an employe communicates views about union membership.
In a third case, involving sire in retail. The board
held that it's unlawful for an employer at a state
union representation will change the direct relationship between the company
(12:18):
and employees. And Greg, you asked about the most recent
year of the administration, the Biden administration. I'll note that
in an important case was decided in May twenty twenty
three called lion Elastomers, the Board held that racially and
sexually offensive statements and conduct get special legal protection if
(12:42):
they arise in the context of union organizing or other
types of union conduct. Now, those are decisions that were
adopted by the five member board or four member board
based on a vacancy that existed for much of the
past couple of years at the NLRB. The NLRB has
(13:03):
a prosecuting attorney, the General Council, and the former General
Council Jennifer A. Bruzzo, who served as GC during most
of the Biden administration. She was especially effective and active
in promulgating change. And I've just mentioned that, you know,
(13:25):
among the things that Jennifer Bruso initiated were requirements in
any settlement discussions that employers rather parties provide full remedies
she advocated limitations on non non compete agreements. Jennifer advocated
restrictions on electronic monitoring by employers. She implemented increased reliance
(13:52):
on district court injunctions while NLARB proceedings were pending. So
the board had a lot going on. It was not
a slow news day in the past several years. It
was the opposite, and the Board was very active and
that's reflected both in NLRB decisions as well as the
general Council initiatives that we've seen.
Speaker 1 (14:14):
Thanks Phil for that great table setting there. So as promised,
I'm going to go to shang next. So you and
Seema sort of agreed on what were the key initiatives,
the key regulatory actions. Now I want to sort of
break them down a little bit. You know, every regulation
has promised benefits, most of them promising benefits to workers
(14:37):
and retirees. Also acknowledged costs, costs to businesses and markets,
and particularly with the Labor department, trade offs between whether
workers are going to be able to choose their working environment,
where whether we need restrictive rules in order to solve
collective action problems and promise a better workplace for everybody.
(14:58):
So I'd like to get you're you're sort of grading
on how did the Biden administration do in balancing those
trade offs?
Speaker 3 (15:08):
So, uh, First, I think agencies in general, these cost
benefit things have been around for a while, and I
like to great agencies on a bit of a generous curve,
as courts do sometimes. The second uh, you know, I'm
also you know of disclose that I'm representing clients in
two of the wage an hour lawsuits that Seman mentioned,
(15:29):
one of the successful ones in Texas and a less
successful one in the in lower court in out of
New Mexico, and they're both in the appeals court now.
So with that in mind, I think I as a
general matter, I let's talk about the uh. I think
agencies as a general matter, tend to have a two
static view of costs and benefits.
Speaker 4 (15:50):
Uh.
Speaker 3 (15:51):
And so when they look at costs and they will say, oh,
these costs are two employers, these benefits are two employees.
But there's not generally a look to the next step. Well,
what happens when costs are imposed on employers. They tend
to be you know, passed on to consumers in the
more higher prices or to workers in the form of
lesser pay and so you have this dynamic model might
(16:14):
lead to kind of different cost benefit results and as
you as you mentioned Greg, you know the other more specifically,
we do have to recognize there are these important trade offs,
and I want to maybe call out I think the
agency as a general rule, I think it's you know,
the labor regulations tended to be power for the course
for agency cost benefit analysis, but I think the independent
(16:37):
contractor rules specifically falls a bit short of that, uh.
And the reason is the the agency calculated costs to
be not you know, included only rule for meyorization costs
in determining what, uh, what this rule does to to
the market and to the economy. Even though the agencies
(16:57):
that this would encourage employers to have more employees and
fewer independent contractors, I think that certainly has compliance costs
for employers if they wanted, you know, if there's a
reason they were hiring independent contractors instead of employees in
the first place, and to the extent the rule pushes
them into the other direction, that's going to lead to
a less efficient business model, which then has you know,
(17:18):
down downstream effects on workers' wages and consumer prices. Even
the SPA said the independent Contractor rules cost benefit analysis
was inadequately paid, you know, paid inadequate attention to the
cost to particularly small businesses that have to comply with
the rule. And so I think here the UH the
agency should have been more attentive for the trade offs.
(17:42):
In particular, the twenty twenty one Trump rule that was enacted,
you know, estimated trade offs, estimated some some benefits for
lowering reduced compliance burdens to the tune of about half
a million, half a half a billion dollars per year.
And while the agency can change his mind and redo
its calculations, I think it had a responsibility to say, well,
(18:03):
this is why we change our mind, this is why
we think maybe those benefits were overstated, and it didn't
do so here, and I think that's, you know, a
deficiency that we shouldn't mention here.
Speaker 1 (18:16):
Thanks for that great breakdown. I'm going to go to
SEEMA and particularly on the independent comment on any of them,
but particularly on independent contractor. It strikes me there's two
kind of interesting questions to grapple with with respect to
cost benefit on the independent contractor rule. One of them
is it's a self profess just interpretive right. It doesn't
(18:37):
have binding legislative effect the way that say, the salary
basis rule does for the overtime exemption. So what does
it mean for an interpretive rule to have costs or benefits?
It's just an interpretive guide for courts or is it more?
And then the other one that I think our audience
would be interesting in commenting on independent contractor versus is
(19:00):
one of those places that most centrally pits against the
workers desire for flexibility in their arrangements. A lot of
people like that for independent contractor status, but then you
don't get all the protections that come with employee status,
and so there's this tension there as to what is
best for workers to have the freedom or to have
(19:21):
the protections of an employment model. So I'd love to
hear both about that rule and any others that you
wanted to comment on how the costs and benefits were weighed.
Speaker 6 (19:30):
Sure, thank you, Thank you, Greg.
Speaker 5 (19:32):
I am. I think I'd like to talk about the
independent contractor rule because I think there was a lot
of misinformation about that actual rule making. I think the
rule that we did was it was very much based
on the multiple tests of the circuit courts. So without
(19:56):
legislative rule making authority in this area, it is the
circuit courts, not the Department, that are going to be
the last word in each of those cases. So, depending
on where a case arises, we are going to be
looking at the circuit courts and we're not making that up.
That that is how Congress has intended it. So as such,
(20:19):
the rule that we did was very much an attempt
to bring together the case law from those circuit courts
into a coherent framework that would make it easier for
employers to say, Okay, this is what the Labor Department
is saying, is the framework. The rule that the Trump
(20:40):
administration had promulgated at the end at the end of
its term hadn't done that. We can disagree about which
rule is better, which rule is more employer friendly, but
the fundamental fact is that no court of appeals had
ever identified so called factors, which is what that Trump
(21:02):
rule did, control an opportunity for profit of loss, and
then it sort of had a then look at the
other three. So I think a lot of the a
lot of this sort of chatter around the rule that
we did. It was a lot of catastrophizing that I
actually don't think was warranted. There was also, I think
a pretty active misinformation campaign that this was the ABC test,
(21:25):
which was just absolutely false. This was not the ABC test.
And you know, as shang Well knows from doing the litigation,
you're not talking about how how the department promulgated UH
an ABC test. And you know, as we talked about
it is so far you know, faring well in UH
in the district, in the district courts that have that,
(21:48):
I've looked at looked at it. So I want to
turn a little bit now to this idea of independent
contractor relationships.
Speaker 6 (21:59):
One thing that.
Speaker 5 (22:00):
Certainly I believe in that and that we actually say
throughout that rule making is that independent contractor relationships are
a really important part of the economy. They have always
existed independent contractors, true, true independent contractors, you know, may
very much want to be in that status. It can
(22:22):
provide them important flexibility. It can help working families. It
could help mothers who are trying to balance many things.
It can help people with elder care responsibility. The intent
of the rule we did was not to interfere with
valid independent contractor relationships. What our rule making was attempting
(22:46):
to do in response to I think a rule, our rule,
our recision getting struck down, and sort of the need
to sort of be doing affirmative rule making this area
is to sort of say, Okay, here is what the
circuit courts are saying.
Speaker 6 (23:02):
How do we bring this all together.
Speaker 5 (23:05):
One thing I think when we think about misclassification, we
everyone immediately goes to the gig economy. And yes, you
know there are cases that have are just undecided in
the gig world. You know, we have just not We
have a lot of cases where courts just haven't haven't opined,
(23:25):
and they certainly haven't reached A lot of these cases
haven't reached higher courts. There may be a whole other
reason to that. You know, there's a lot of mandatory
arbitration agreements and not a lot of people who can
actually challenge these cases in any way that is going
to reach higher level courts. But I think it's important
to point out that this really isn't just a new
(23:47):
economy issue. We saw lots of cases at the Department
of Labor where we have misclassification in janitorial misclassification in restaurants,
misc classification and construction, and misclassification and healthcare. We were
doing a lot of healthcare home care cases. So I
(24:08):
think just bringing some context to what we actually are
talking about is really important. The last thing I'll say
on this part is, you know, I think this idea
that workers have remarkably less flexibility as employees than as
(24:29):
independent contractors isn't necessarily true. You can have a lot
of flexibility as an employee as well what we are
talking about with misclassification, because remember, misclassification is not itself
unlawful under the Fair Labor Standards Act. What's unlawful is
not paying over time or not paying minimum wage. So
(24:53):
when we're talking about mistic classification, we're talking about usually
workers who are not getting paid some sort of bare minimum.
There are cases where and we even would look at
them sometimes at the at the labor department, like what's
going on with this company? You know, not sure they're
categorizing people right, but everyone's making a lot of money.
(25:14):
And guess what, you don't have a you don't have
an FLSA case. So I think it's really important to
talk about what we're actually talking about when we when
we talk about the classification rule and we when we
talk about misclassification, I think on the actual cost benefit
analysis when we did the rule.
Speaker 6 (25:34):
I mean, I think that it is a it is
a rule where we don't have legislative rulemaking authority. You know,
maybe some.
Speaker 5 (25:46):
Courts may disagree with that and may want to give
give the Department that authority, which I think is interesting
and of itself. But I think one of the things
that we were really trying to get at when we
were thinking about the cost benefit analysis is employers may
change behavior based on one rulemaking or the other.
Speaker 6 (26:10):
And how do you sort of factor in.
Speaker 5 (26:13):
The chance of misclassification when you're doing this type of rulemaking.
And I think that's what some of the cost benefit
analysis was trying to get at. I think it would
very much, you know, behoove the Trump administration to defend
this rule and actually just you know, give employers some
(26:34):
stability uncertainty in this area of law, because this is
one of those areas where how you classify your worker
is really fundamental to your business. Your business model might
not work if you are misclassifying workers. Maybe you won't
do it, maybe you'll structure it a different way, but
it's really fundamental to how people do things. And I
(26:56):
think employers having some clarity around it is important, and
I think that clarity is better when what the Department
is doing is aligned with what the Court of Appeals
is doing, which are going to be looking to their
own tests.
Speaker 6 (27:09):
Eventually, I'm going to.
Speaker 1 (27:11):
Phil to talk about NLRB, but before I do that,
since Shang's been in the trenches in litigating these independent
contractor regulation issues, Shang, I wanted to give you just
a minute or two to respond on some of those
independent contractor cost balancing assertions.
Speaker 3 (27:27):
So I think it's hard to discuss that without like,
actually the substance of the rules, the various rules and interpretations,
and the history of this is quite complicated and goes
back to I mean, if you want to go back
far enough, but let's say, you know, the courts of
appeals in the nineteen seventies started coming up with, you know,
variations of five or six factor tests, and the factors
(27:47):
are sometimes articulated differently from court to court and applied differently,
and that has caused quite a bit of confusion among
particularly on small businesses that don't hire a lot of
lawyers to navigate how these factors are are balanced, and
in emerging industries and emerging economies like the gig economy,
and so that that led in twenty fourteen or fifteen
(28:09):
the Department issuing a bulletin, an interpretive bulletin articulating its
view of a six factor test. And again that cost,
you know, because six factors, nobody knows what's important, nobody
knows how they're balanced. It continued to cast some confusion
and which led to the twenty ninth sorry to twenty
twenty one Trump administration rule that said, oh, we're going
(28:29):
to keep these factors, but really focus your attention on
what we think of the two core factors that matter
the most than those are the control and opportunity to profit,
and that you know, actually aligned with every We looked
at every every Court of Appeals decision then found that
when those two factors point in one direction, that's ultimately
the court's what the court did. And so, you know,
(28:51):
the interpreted rule basically told employers, if you don't do
these two factors, you're going to have to classify your
person as an employee, and if you do, you're pro
in a good place. Maybe maybe not guaranteed, but like
it's a pretty that's a pretty good indicator. The other
factors matter, but mean you know, are less important compared
to those two. And we thought that was you know,
a provided more certainty by focusing attention on the two
(29:13):
factors that tended to that that were demonstrated to uh
indicate a strong independent contractor versus employee relationship. And so
so I think it's it's an even as it is
an interpretive rule, employers particuely small businesses that don't hire
a large, large legal department are going to you know,
evaluate uh, their their relationships based on that, and they're
(29:36):
going to spend less time and less effort have lower
compliance costs if they're focusing on these two factors instead
of having a more nebulous six plus factor test that
uh that they may not they may not know what
to do with. And so so here it's an issue
of a kind of vagueness creates a compliance costs, and
(29:57):
it's also an issue of complexity, creating essentially a sub
city for larger employers that have the kind of resources
and to hire legal expertise to navigate the complex case
law and simplicity, uh would you know in trying to
benefit smaller particularly smaller employers who can then pass those
(30:20):
benefits to their to their workers and potentially consumers as well.
Speaker 1 (30:26):
Helpful thoughts. Well, so let let me go to Phil
as promised. Now, of course, the NLRB does the vast
majority of its activity through uh adjudication rather than through rulemaking,
so there aren't formal cost benefit requirements, but there are
still costs some benefits. So Phil take it away.
Speaker 7 (30:43):
Well. You know, I think that the Board has in
certain ways implemented changes that impose a very significant number
of costs on employers. But ironically, I think a number
of the changes implement by the Board actually end up
undermining the interests not only of employers, but employees and unions.
(31:07):
And you know, for example, one of the decisions that
I mentioned was the Board, in the lieon Elastomer's case,
implemented special protection for racially it's sexually offensive conduct if
it arises during union activity. I think that's kind of
productive for everybody. And I also think although the Board
(31:29):
over the past four years during President Biden's term, implemented
a number of changes which in the short run certainly
benefited unions and in certain respects benefited employees, I think
the Board's status as an even handed, honest broker regarding
NMRB issues has been undermined and really took a hit.
(31:53):
And you know, that's something I think that in terms
of the Board's regulatory role and all employment related agencies
or in the business of trying to be a delivery
system or work related protection or you know, not only
employees but employers and unions and balancing the various interests,
and I think that the board status in that role
(32:17):
has been undermined. And you know, that's something I think
continues to be a moving target and we'll see how
it goes in the in the new administration.
Speaker 1 (32:28):
Thank you for those insights. So now I want to
turn back to our our Labor department folks and ask Obviously,
one of the biggest developments of the last couple of
years when it comes to administrative law and rulemaking is
the reversal of Chevron and lober Brad. Chevron's gone, so
(32:48):
we don't have deference to agency interpretations of statutes ins
And I was talking to a senior department official who
I won't names, and you know, really this incentivizes us
to do, you know, basically, to regulate through enforcement rather
than through rulemaking, because rulemaking takes a lot of time.
(33:10):
You've got to do all this formal cost benefit analysis.
You finally issue the rule npr M final rule. Then
after that you do three years of litigation in the
courts to know whether it's going to be able allowed
to go into effect and is it worth it. If
then the rule that you have isn't even going to
be deferred to by the court. So Hana, I'm going
(33:32):
to go to you first and then to Seema to
ask you do you think this is the direction the
Labor Department is likely to head? And if so, you know,
we heard from Phil it's kind of the way the
NLRB operates. Is it totally a bad thing or might
it actually be okay?
Speaker 3 (33:49):
Well, I I yeah, I don't think it's necessarily a
good thing in that because if you're doing it through enforcement.
One great thing about rulemaking is that you're notifying the
regulated community what the new rule is. But if you're
doing regulation through enforcement, oftentimes there's not a great uh,
you know, prior notice to the person you're dragging into
what often is an administrative tribunal, and and that has
(34:12):
you know, attendant kind of notice and due process problems.
The other is, I'm not sure, it's it's as feasible
even you know, with yes local Bride came out and
knocked out Chevron. But a few days before that, we
had uh in secb jarcacy, Uh, the Supreme Court put
U significant limits on agency's ability to uh, you know,
(34:33):
to to do internal in house enforcement actions where civil
penalties are at issue, and uh, you know, the exact
sort after effect of that jocracy decision hasn't been fully
litigated at in the courts yet, but they're you know,
the Deparment Labor, for examples, is one of the parties
in a jocracy related case out of the Third Circuit,
And depending on how that decision comes out, it could
(34:56):
significantly impact the department's ability to U to regulate through
enforcement because those enforcement actions will have you brought in
federal court instead of uh, you know, before administrative judges,
and that has you know, certainly more devotedly requires the
devotion of a lot more resources by the department.
Speaker 1 (35:15):
And as promised, Sima your response.
Speaker 6 (35:20):
So I'm going to agree with Shang on a couple
of points here.
Speaker 5 (35:24):
You know, First, I do think we we are talking
a lot about Lowe Bright, and I think we talk
a lot less or or just in legal circuit circles
about the importance of the Jarksi decision, which I think is.
Speaker 6 (35:38):
Is really important.
Speaker 5 (35:41):
You know, I think how how jar Kessi is going
to play out in as these other as there's a
litigation in these other statutory schemes is really really important.
Speaker 6 (35:55):
The one thing I will say.
Speaker 5 (35:59):
Is, you know, in the Jarquesse decision, the SEC had
a choice there under that statute to bring those cases
through the administrative tribunal or to federal court. A lot
of our labor and statutes aren't written that way. There's
(36:19):
no choice. Osha has no you know, you can go
to you can go to a federal court if you
have an imminent danger case. You can get to a
federal court in certain limited situations. But you know, Msha Osha,
the h rules, which is where that Third Circuit, which
is about what that third Circuit case that Shang mentioned
is talking about, they don't have those schemes.
Speaker 6 (36:41):
So I think how that litigation plays out is going.
Speaker 5 (36:46):
To be really important. And you know what happens to
what happens to enforcement if you can't if you can't
do it, and you know is who rewriting these laws.
Are the courts rewriting them as Congress needs to rewrite them?
I mean, I think I think that.
Speaker 6 (37:06):
Is where.
Speaker 5 (37:08):
We're going to see the biggest action in ADMIN law
playing out over the next you know, two to two
to five years and beyond on on Low for Bright,
you know, I will say a couple of things. So
you know, first, just on a personal level, I certainly
don't like to spend you know, four to seven years
(37:30):
of my life working on rules that.
Speaker 6 (37:33):
That are that are struck down.
Speaker 5 (37:36):
And I and I do think about, you know, our
our enforcement tools a lot on Low or Bright in particular,
I will say, I think a lot of the story
here is really still unfolding, and there are so many
questions that remain and are really going to take many,
many years to be litigated. Some of those questions is
(38:00):
this is this really denvo review by courts of everything?
Or is there still the possibility of other levels of review?
Where is skid more deference in all of this when
you know, we have interpretations that are less less formal
than than formal rulemaking? Has the court blessed the possibility
(38:24):
of a more deferential mode of review if there is
an express delegation to the agency of authority. And I
think this question of you know, the the Court in Low,
in Low or Bright acknowledges that Congress can appropriately delegate
(38:45):
to agencies some authority and and the courts have to
respect that delegation. But what is the line between statutory
silence and the agency filling in and ambiguity? Is that
statutory ambiguity or is that just silence that that Congress
intended to be filled by the agency. And I and
(39:07):
I think that sort of plays into you know, is
that too much delegation to the agency some of these
other theories that that the Court has been sort of
tinkering with in recent years. I think I think my
larger point is I think that agency rulemaking is is
(39:30):
going to continue to evolve as this plays out. The
other piece I would agree with Shangan is that it's
agencies can't not do rulemaking in certain situations, or at
least it's not very good for both workers or for
the regulated community in many of and many of those
(39:51):
situations just to not have anything at all, particularly where
the agency has delegated rulemaking authority. You know, it's it's
incumbent upon the agencies to act in those situations, So
I think you'll you'll continue to see it. But I
will say that I think how agencies think about rule
(40:15):
making is going to change, and I think it'll continue
to evolve as as the case all continues.
Speaker 6 (40:21):
To develop under Low or Bright. And even.
Speaker 5 (40:25):
The answers aren't always you know, right or left or uh,
you know, democratic or Republican. I mean how Loper Bright
plays out in cases can really vary under you know,
what different administrations are doing. So I think you know
everything you do has to go through this different lens
(40:47):
of you know, every rule making.
Speaker 6 (40:50):
That we did.
Speaker 5 (40:51):
Certainly you're like, well, how how likely is this to survive?
And what are the arguments that we can be making.
And I think as agencies do those calculations, it'll just
be very different under a lower right than under Chevron.
But it doesn't necessarily mean the agency's never going to
do rulemaking. They're still going to need to, it's just
going to play out a little bit differently.
Speaker 1 (41:14):
Yeah, I'll just add as a moderator comment, I think
you're exactly right that it's not a this is not
a pure Republican Democrat left right issue right dem should
judges be the final deciders or should administrative regulators, And
we are seeing a lot of discussion about that, even
just in the last couple of weeks, as there have
been fights between administrative actions and judges and which side
(41:35):
do you like better? Phil, I'd like to you know,
Jarcausy has had shell shock effects in the NLARB universe
as well. And maybe you even have a little commentary
to offer on loper Bread as well.
Speaker 7 (41:49):
Yeah, you know, Jcacy. The issue when it comes to
remedies has really become up front, the center stage with
the NLRB, and two things about that, and I'll talk
a little bit about lober Bright as well. But the
NLRB has always had broad remedia authority, but there have
(42:11):
also always been limits on the NLRB's authority, which is
generally restricted to make whole relief. And anything that goes
beyond make whole relief, even if it might in some
way act as a disincentive for people to violate the
National Relations Act. It's been struck down by the courts.
The irony is in jarcacy. The Supreme Court adopted pretty
(42:36):
much the same standard, to the extent that any administrative
remedies go beyond restoration of the status quo or make
whole relief. It's then considered to be a legal remedy
that requires a jury trial within before an Article three court,
and so as it relates to the NLARB to some extent,
(42:58):
jarcasy creates a plows the same ground but on a
different platform, because you're talking about constitutional limitations with respect
to deference to administrative agencies and in lowerbright I'll just say,
in my experience, enforcement proceedings and case adjudication involves the
(43:20):
same amount of time or in some cases involves more
time than rule making. And in certain ways I agree
with Seema. I think certain things really you know, beg
to be implemented or adopted by way of rule making
in a variety of respects. Rulemaking is often more efficient
because you have the opportunity to look at a class
(43:44):
of potential clayments, a class of potential employment situations, and
address the whole panoply of issues that can arise, as
opposed to trying to you know, take small bites one
at a time in enforcement proceedings or case eduication. And
one other thing I'll note is I think the elimination
of Chevron deference pretty much has the same impact on
(44:08):
enforcement proceedings by agencies and rule making. Excuse me and
a case adjudication as it does on rule making. And
I've been handling a case for a client for the
past five years. We had a decision by the NLRB
against our client. We appealed to the Court of Appeals
for the Fifth Circuit, and then during the oral argument
(44:30):
that occurred in this case three years ago, one of
the judges said, well, why shouldn't we just defer to
the NLRB what the NLRB did in this case? And
I said, well, your honor, we preserved and the judge
had erupted me and said in a footnote. I said, yes,
we had in fact preserved in a footnote our position
(44:53):
that the court should reconsidered reevaluate whether Chevron deference is inappropriate.
As it turned out, the Court of Appeals in to
to one decision against us deferred to what the NLRB did.
We sought Supreme Court review, and then the Supreme Court
decided Loper Bright, which eliminated Chevron deference, and four days later,
(45:17):
the Supreme Court granted searched in our case, vacated the
Fifth Circuit decision and returned our case to the Fifth
Circuit to be redecided without deference. So you know, case
in point, the end of Loper Bright. Excuse me, Loper
Bright's elimination of Chevron deference does have the same impact
(45:38):
I think on cases as it does on rulemaking. But
you know, I think the impact is likely to be
great in both respects, and it remains to be seen.
Some of the questions that Seema raised I think are
good ones. I think agencies are still going to be
in the business of applying the law to particular facts
on a case by case basis, and that is uniquely
(46:00):
I think within the province of what agencies to rip out.
But the around the edges, I think there's still a
lot of questions that have remained to be addressed.
Speaker 1 (46:11):
I think it's Judge Posner who was always on a
crusade against footnotes. No footnotes, he would always say, and
so take that, Judge Posner. Without that footnote, where would
you have been, phil.
Speaker 3 (46:23):
Every once in a while, footnote comes to the rescue.
Speaker 4 (46:26):
Yes.
Speaker 1 (46:28):
Well, So next I'd like to go do you seem
and ask you, you know, looking back at the last
year of the Biden administration, you were actually in a
pretty similar position to the one I was at the
end of the Bush administration. You've got a year to go.
There's only so many things that you can do in
one year. Are there any things that you didn't get
to that you wish that the Biden dol had done
(46:51):
by way of regulatory initiatives?
Speaker 5 (46:55):
Yeah, I mean there's always you know, I think as
those of us who've been in you know, everyone on
this panel, No, you know, you're just you're fighting fighting
the clock from from the day you get there on.
I mean, I think you know by the by the
last year, you know that the tenor of everything changes,
(47:16):
you know, and your you're sort of you know, fighting
fighting again a bunch of a bunch of different clocks
when you're in there the last year, as you as
you think about all of the things that are going
to happen, you know, with the election, and you know
regulations that that can be reviewed by Congress. So I
(47:38):
guess I'm going to broaden this a little bit. I mean,
some of the things I think about and I don't
know if I could have anything different, could have be done,
could have been done.
Speaker 6 (47:48):
But you know, we spent a lot of time in
the OSHA.
Speaker 5 (47:51):
Space on the COVID related rules and in particular that
you emergency temporary standards. It was it was really challenging work.
The data was rapidly changing, the disease was rapidly changing,
and so you know, the the infectious Disease rule, you know,
(48:13):
wasn't completed. We got a notice of proposed rulemaking on that,
but that is sort of would be more evergreen, protect
protecting healthcare workers and you know, regardless of the type
of disease that we have in different situations. So you know,
sometimes I think, you know, what, would anything have changed
(48:33):
that trajectory, and I'm not I'm not sure that it
would have. I think in terms of, you know, some
of the things we did last year, the last year,
I just I wish we had gotten them done earlier,
and I would like to be the one defending them
right now rather than sort of waiting to see what
(48:56):
the Trump administration is going to do going to do
right now.
Speaker 1 (49:00):
But you know, that is.
Speaker 5 (49:03):
That is always something that you know, you're you're playing
against a clock here. So I think they're sort of
broader things I think about when I think about, you know,
what we got done and why, you know, I think
in terms of getting things done. I mean, one thing
I think a lot about is in the enforcement space
(49:24):
in the Solicitor's office. You know, despite you know, we
haven't we haven't even started talking talking about the cuts
that are happening right now throughout the federal government. But
certainly at DL just this morning they canceled all of
their UH International Labor Affairs Bureau grants five hundred million
dollars to prevent child labor around the world. And you know,
(49:48):
we know that there's cuts pending at d L that
are sort of going through some sort of higher level
of review, but you know, we and it kind of
goes to your enforcement question. You can only do what
you have resources to do, and you know, I have
it on pretty good authority, even though our records in
the Slicter's Office didn't go back this far. But you know,
(50:10):
George Salem, a a solicitor in the eighties under the
Reagan administration, has told me that, you know, he had
probably two hundred more staff than in the Slicter's office.
And we're not talking of thousands of numbers. I mean,
I'm talking about the difference between six hundred and eight hundred,
(50:30):
where it makes a really big difference. So I do
think about some of the enforcement work I wish we
would have been able to take on if we had
had more resources. It's one of the reasons I find it,
you know, indiscriminately sort of chopping shopping agencies and you know,
seeing seeing what where you draw blood and where to
(50:54):
correct course isn't really the isn't really a way to
go about administering the federal government. But those are some
of the things I think about when I think about
what was left on the table.
Speaker 4 (51:08):
Shang.
Speaker 1 (51:08):
I want to both give you a chance to comment
on any of the conversation we've been having for the
last ten minutes, but also want to tee up the question.
You know, as we obviously the Trump administration has not
yet had time to put out regulatory initiatives by way
of rulemaking, but are there any things that you see
that have been happening in the last couple of months
(51:29):
that you wonder might they regret that at some point
down the road they are they cutting not whether personnel
or cutting what was previously viewed as constraints on regulatory
authority too quickly, And might any of those be ones
that come back to haunt them someday.
Speaker 3 (51:50):
Regarding the regulatory authority, again, the administration hasn't done much
at all. The Secretary has been there for just a
little bit, but what has I think it touches on
a lot of the nineteen forty nine Procurement Act, and
it's then the authority under that for the President to do,
uh to kind of manage federal contracts for efficiency and economy.
(52:13):
So so there was a circuit split on the Wage
an Hour Division's ability to set a minimum wage for
federal contractors under that under that statute, the administration has
decided not to uh, you know, not to defend it
and instead to rescind the executive order that that set
that minimum wage standard. And the other part is the
(52:35):
also under that statute, it's kind of OFCCP. I can
never remember what it stands for, the Office of Federal
Contract Compliance Programs. I think you got it. Yeah, it's
so an executive order rescinded the executive order from the
sixties that created that agency, which enforces certain federal non
(52:57):
discrimination standards. And you know, uh under the Anti di
I uh EO that was gotten away with taken away.
So so I think those are some you know maybe
some welcome changes. But at the same time, there's a
question of whether, uh what what position the administration will
will take with respect to the Procurement Act. Will it,
(53:21):
you know, it's rescinded that minimum wage, it's rescinded that
former e O, f C c P EO. But will
it flex its muscles to perhaps use that act Procurement
Act in in other ways. Maybe it'll try to enforce
some of its anti d I uh positions through through
an interpretation of the Act, or enforce other uh kind
(53:43):
of labor wage requirements using the Act, if if not
minimum wage, other ways. And if it sets that precedent,
does that create uh you know, a forward uh looking
effects for future administrations to continue to use the Procurement
Act to affect federal contractors.
Speaker 1 (54:03):
I think it's a great and important question for our
audience to pay attention to. Certainly there were things when
I was a solicitor at the last year of the
Bush administration that we thought about doing pursuing to the
Procurement Act and sort of through OFCCP and contracts. But
we were worried about what kind of president would we
establish about trying to make policy in that way. Through
(54:27):
the federal contracting system. So seeing how those precedents are
set and work out will be really interesting. Phil. What
about over at the NLRB.
Speaker 7 (54:38):
Well, you know, I think that when you talk about
the NLARB, one of the things that I can mention
is that time is always a fleeting thing and things
to take a lot longer than what you'd think. I
think in many ways, the NLRP and the last fifteen
(55:01):
or twenty years has really been a poster chop for
the flip flop concept. In the question when you talk
about trying to put an end to administrative oscillations, is
whether you prefer flip or whether you prefer flop. And
it's really a difficult thing to deal with, and you know,
(55:22):
we're going to be seeing that. I think prospectively in
the current administration, I think the lower Bright decision and
the Chevron the end of Chevron defference is likely to
have a stabilizing impact on a lot of the agency
changes that we've seen. But I also think that it's
quite likely that what used to be agency changes in
(55:43):
position is going to translate into, prospectively a bigger impact
on differences among the Circuit Court. The Circuit Courts of
Appeals and you know, again, I think the impact of
Loper Bright's going to play out, but it's going to
have a gific an impact, I think across the whole
spectrum of deployment related issues that we've been discussing, you know,
(56:06):
for the past sixty minutes.
Speaker 1 (56:08):
So I'm going to take Phil's flip or flop question
and I'm going to go I'm going to give Siam
and Shang both a minute and a half to close
things up here, and you can pick either flip or flop.
But I'll just put it in this way. I mean,
with independent contractor, we spent a lot of time talking
about today. Two thousand and eight, when I was a solicitor,
(56:28):
I think we issued a one page guidance document that
was just encapsulating in the barest terms, here's the factors
that get looked at. And then that became a memorandum
in the next administration, and then that got rescinded, and
then it became a rule, and then it became the
other administration's rule. Are we in a world where it's
just going to be Democrat playbook and Republican playbook for
(56:52):
administrative law? And if so, is that a good thing
or a bad thing, Sima you first, so as I.
Speaker 5 (57:01):
Don't think we can say anything happening in this administration
is normal or just the normal flip flop. Just take
o FCCP. I think that is one of the most
disturbing things that has happened. And talk about flip flop.
Let's talk about this administration flip flopping between Trump one
and Trump two. This is an administration that touted in
(57:21):
two thousand nineteen that they that they had achieved the
highest civil penalties in ofccp's history. Twenty nineteen press release,
statement from the secretary, statement from Craig Lean, who was
the director, and you know, four years later it's it's
DEI it's all unlawful, and I think it's very troubling.
(57:45):
And this is an executive order, and before that it
has precedent for being established in law, you know, going
back to three Roosevelt certainly something Eisenhower Eisenhower support, Nixon supported.
So I think we're seeing extremely troubling trends that go
(58:05):
beyond any sort of you know, flip flop. And the
last thing I'll say is, you know, ninety percent of
what agencies do is just you know, straight up enforcement
at the NLRB, I know, Jenna Brusse always gives even
higher percentages the cases that we're many of the cases
we're talking about are even at the margins, you know,
even the cases in rulemaking that are kind of going
(58:26):
to come out differently between the Trump test and our test.
But I think what we're seeing is unprecedented attacks here
on ways that we do things. And I think it's
going to come back to haunt this administration because one
thing we know is, you know, parties that are in
power will not always be in power forever, and I
(58:50):
think the administration has to think seriously about that.
Speaker 1 (58:54):
Thang.
Speaker 3 (58:54):
Last words, I think you will see different kind of
Republican versus Democrats at kind of policies and views, particularly
with respect to with respect to enforcement actions. There's always
been different priorities. You can never enforce every law to
the fullest extent, and different administrations will have different priorities.
You know, you might focus more on getting back wages
(59:16):
for workers, or you might focus more on, uh, you know,
setting the stakes you through regulation through enforcement by by
you know, drawing lines that you think we'll you know,
move the regulation regulatory state in one direction or another.
I think with respect to regulations, however, I think lower
write does have a very stabilizing effect. Perhaps not so
(59:37):
much in the short run as everything gets revisited, but
in the long run, if this administration comes out and
comes up with new rules and flips or flops, you know, again,
it'll have to come up with the best reading of
the statue instead of merely a reasonable one. And if
a court decides that's that's not the best reading, then
the court's decision will have forward looking effect and future
administrations can't come in and say, well, you know, we've
(59:59):
changed our mind this way or that way. So I
think with respect to the rules, you will see again
in the coming years. Once litigation kind of plays out,
statutes that sorry regulations that will will reflect a consistent
interpretation of the statute over time, and if things have
(01:00:19):
to change, they're going to have to go back to
Congress to change those things.
Speaker 1 (01:00:23):
Wow. I just want to thank my distinguished panel here
for your very air you day, interesting and timely thoughts
on everything. And I'll turn it back to Marie to
close us out.
Speaker 4 (01:00:35):
Yes, thank you Greg for moderating this, and thank you
Shang Seema and Phil and thank you to our audience
for tuning into this program. For more content like this
on the regulatory state and the American way of life,
just visit us at regproject dot org. Thank you everyone,
have a great rest of your day.
Speaker 2 (01:00:55):
On behalf of the Federal Society's Regulatory Transparency Project. Thanks
for tuning in to the Fourth Branch podcast to catch
every new episode when it's released. You can subscribe on
Apple podcasts, Google Play, and speaker lays from our TP.
Please visit our website at regproject dot org. That's our
egproject dot org.
Speaker 6 (01:01:23):
This has been a FEDSC audio production.
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