Today’s News & Commentary — June 7, 2017

The Supreme Court has been asked to reconsider whether arrangements requiring non-union employees in the public sector to pay fair share or agency fees violate the First Amendment of the Constitution.  Yesterday, Mark Janus, an Illinois state employee, petitioned the Supreme Court to review the Seventh Circuit’s decision in Janus v. AFSME and consider overturning the Court’s precedent in Abood v. Detroit Board of Education.  This petition comes just one year after the Court was asked to consider its precedent in Abood in Friedrichs v. California Teachers Association but split 4-4 following Justice Scalia’s death.  A decision overturning Abood could weaken unions financially and politically.  Read more here.

Bloomberg reports that Uber terminated more than 20 employees following an investigation by the law firm Perkins Coie into reports of harassment and discrimination at the ride-sharing company.  Perkins Coie was hired along with the D.C. firm Covington & Burling to examine Uber’s workplace culture.  Perkins Coie examined 215 workplace claims but did not act in response to 100 of these human resource complaints.  Read more here.

Lyft also made the news this week.  The ride-sharing company announced a deal with NuTonomy Inc.  The two companies will work together to test self-driving cars in Boston.  Lyft has also partnered with Waymo and General Motors Co. in the race to put self-driving cars on the road.  Read more here.

The New York Times reports that the Trump Administration has moved to undercut several workplace safety initiatives.  These actions signal a shift in the direction of the Occupational Safety and Health Administration (OSHA) even though President Trump has yet to put forth a nominee to lead OSHA.  The Trump Administration has suggested changes to the beryllium rule, which was updated under the Obama Administration.  These changes might exclude some important industries from coverage.  The Trump Administration has also delayed enforcement of the silica rule and a rule mandating that employers report their violations so that they may be made publicly available online.  Furthermore, Trump’s budget indicates the Administration’s suspicion of workplace safety programs by proposing getting rid of the Chemical Safety Board and cutting a grant program which educates workers with limited English proficiency on safety hazards in especially dangerous industries.  

A Missed Opportunity: Worker Voice in Portable Benefits

Last week, Senator Mark Warner and Rep. Suzan DelBene introduced the Portable Benefits for Independent Workers Pilot Program Act.  The Act would authorize $20 million for competitive grants to states, local governments and nonprofits to fund pilot projects around portable benefits. The program aims to provide wide latitude for grantees to experiment with innovative new models of providing benefits for workers outside of “traditional full-time employment.”  The only requirements seem to be that the pilot programs: (1) provide benefits that are usually available to “traditional full-time employees,” but are not retirement benefits; (2) allow accumulated benefits to be portable from one job to another; (3) accept contributions from more than one job; and (4) be scalable to a national program. With this legislation, Senator Warner demonstrates again why he is considered a Congressional leader in thinking seriously about the policy implications of the gig economy.

The proposal is a serious attempt to address the needs of the growing number of American workers who lack even the most basic employment benefits — workers comp, unemployment insurance and paid leave. Too many workers are rendered economically vulnerable, not only because of the precarious nature of their paychecks, but because of lack of access to the safety net to catch them when those paychecks diminish or stop coming. New ways of accessing traditional safety net benefits would be a step up for these workers.

Senator Warner’s proposal leaves open many important questions about the optimal features of a portable benefits program – who pays, how much should contributions be, and how can we prevent such programs from encouraging the misclassification of employees as independent contractors.  Before we move a major national program, we will have to answer these important questions.  I can see the value in Senator Warner’s proposal as a vehicle for moving those debates forward.

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Today’s News & Commentary — May 30, 2017

Uber and Lyft returned to Austin, TX on Monday after Texas Governor Greg Abbott signed HB 100 into law, eliminating Austin’s fingerprint requirements for drivers.  As the LA Times describes, the bill designates the state, not local, government as the regulator of the “ride-hailing industry.”  Uber and Lyft left Austin in May of 2016 after losing Proposition 1—Austin voters decided (56% to 44%) not to allow Uber and Lyft to continue using their existing background check systems.  Governor Abbott called HB 100’s passage a “celebration of freedom and free enterprise.”  Austin Mayor Steve Adler, in contrast, was “disappointed” and expressed his “hope that [Uber and Lyft] return ready to compete in a way that reflects Austin’s values.”

Last Thursday, the Court of Appeals for the Second Circuit agreed to hear en banc Zarda v. Altitude Express, 855 F.3d 76 (2d Cir. 2017), a case which held that Title VII’s ban on sex discrimination does not protect against sexual orientation discrimination.  As we have covered in a previous post, this issue has been addressed, and decided to the contrary, by the Seventh Circuit.  Notably, the Seventh Circuit’s ruling produced a split with the Eleventh Circuit (Evans v. Georgia Regional Hospital, 850 F.3d 1248 (11th Cir. 2017)).  Zarda’s case was originally dismissed on summary motion pursuant to Simonton v. Runyon, 232 F.3d 33 (2d Cir. 2000), another Second Circuit case holding that Title VII does not proscribe sexual orientation discrimination.  On appeal, the Second Circuit panel refused Zarda’s argument that it overrule Simonton, citing Christiansen v. Omnicon Group, 852 F.3d 195 (2d Cir. 2017) (court permitted an openly gay employee to pursue a Title VII claim, but on a sex-stereotyping, not sexual orientation discrimination, theory) for the proposition that only the en banc panel of the Court or SCOTUS could reverse circuit precedent.  Oral argument in the case will take place this September.

On Friday, a New Jersey judge denied the Jersey City teachers union’s motion to dismiss a lawsuit, brought by two NJ residents working with the Goldwater Institute (a conservative think tank), challenging the district’s “release time” policy as violative of the New Jersey Constitution.  The policy allows two top union officials to work exclusively on union activities while being paid by the district.  The suit alleges that “release time” is prohibited by the state Constitution’s ban on local governments giving gifts to individuals or entities.

Last Thursday, Rep. Phil Roe (R-Tenn.) reintroduced the Employee Rights Act (ERA).  The bill, if passed, would amend the NLRA to, among other things, require secret ballot elections in employee unionization decisions; require unionized workers to hold periodic secret ballot elections to verify a continued desire to be represented by the union; empower the NLRB to de-certify unions for intimidating members; criminalize union threats; and require unions to receive affirmative permission from members to use payments toward political spending.  Rep. Roe described the ERA as neither “pro- or anti-union,” but rather, “a commonsense measure to ensure a transparent and fair workplace.”

Today’s News & Commentary — May 29, 2017

Senator Mark Warner (D-VA) and Congresswoman Suzan DelBene (D-WA) introduced legislation on Thursday to promote innovative ways to offer portable benefits to workers engaged in temporary, contract, or on-demand work.  The Portable Benefits for Independent Workers Pilot Program Act would establish a $20 million grant fund for states, local governments, and nonprofit organizations that design, implement, and evaluate models to deliver employment benefits that independent workers can maintain as they move from job to job.  According to BuzzFeed News, Senator Warner recognizes the criticisms that his portable benefits proposal does not require cost-sharing and may make it easier for companies to misclassify employees as independent contractors, but underscored that “[the proposal] tries to meet the workforce where it’s at, and where it’s headed.”

Last week, the Rhode Island Superior Court held that a local company is guilty of discrimination for refusing to hire a prospective employee that actively used medical marijuana pursuant to the state’s medical marijuana program. ACLU’s Carly Beauvais Iafrate, an attorney representing the plaintiff, remarked, “This decision sends a strong message that people with disabilities simply cannot be denied equal employment opportunities because of the medication they take.”

The Commodity Futures Trading Commission (CFTC) approved rule changes last week to increase protections for whistleblowers and improve the claims review process. The 2010 Dodd-Frank Act established the agency’s whistleblower program, which now, according to the Financial Times, allows the CFTC and whistleblowers to bring anti-retaliation actions against an employer. Furthermore, employers can no longer prohibit would-be whistleblowers from contacting the CFTC directly.

A federal district court in Pennsylvania held earlier this month that the Americans with Disabilities Act (ADA) does not exclude coverage of “disabling conditions that persons who identify with a different gender may have —such as . . . gender dysphoria, which substantially limits . . . major life activities of interacting with others, reproducing, and social and occupational functioning.”  According to JD Supra, the decision implies that transgender individuals diagnosed with gender dysphoria can seek reasonable accommodation and disability discrimination protection under the ADA.

Today’s News & Commentary—May 11, 2017

The New York Times reports that Canada’s technology sector may benefit from the Trump Administration’s efforts to restrict immigration and immigration’s increased centrality in the American political debate.  After the travel ban was announced, Canada received an increase in temporary and student visa requests.  While not enough time has elapsed to determine whether the “Trump effect” has staying power, early signs indicate that fields, such as artificial intelligence, will benefit by attracting foreign workers.  The Atlantic suggests Canada is well-positioned to capitalize on these developments.  The country has publicly welcomed immigrants and invested in its technology sector.  Read more here.

Uber is piloting a personal injury insurance program for drivers in eight states.  The insurance program will be funded by a mix of increased fares for customers and a fee for drivers who opt-in.   Customers will pay five cents more a mile in these states, and drivers will contribute 3.75 cents per mile.  Maximum benefits will equal $1 million for medical expenses, $150,000 in survivor benefits, and wage replacement of fifty percent of a driver’s weekly earnings.  However, Uber has not escaped criticism by instituting this program.  Commenting on this development, Rebecca Smith, the deputy director of the National Employment Law Project, objected to the optional nature of the program and stated that “[i]f Uber valued its workers, it would simply pay its workers’ compensation premiums and cover all of them.”

In other gig economy news, the New Yorker published a piece on liberals embrace of the gig economy.  Nathan Heller details the connections between Democratic political operatives and companies, such as Airbnb and Uber.  While showing that the gig economy is a source of wealth for some, the article highlights evidence suggesting that those who benefit the most from the gig economy are not the same people who benefited from the service industries being disrupted.  Describing the findings of Boston College Sociology Professor Juliet B. Schor, Heller observes,

“[i]nstead of simply driving wealth down, it seemed, the gigging model was helping divert traditional service-worker earnings into more privileged pockets—causing what Schor calls a ‘crowding out’ of people dependent on such work.  That distillation-coil effect, drawing wealth slowly upward, is largely invisible.”

In light of these effects, Heller asks what can be done to make the gig economy viable over the long-term.  Read more here.

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Today’s News & Commentary — May 5, 2017

Congress may be open to revisiting the classification of gig economy workers as employees or independent contractors under the Fair Labor Standards Act.  Per Bloomberg BNA, “the head of the House workforce committee May 3 told an audience of innovators that she would be open to updating the Great Depression-era Fair Labor Standards Act to better serve the on-demand workforce.”  Education and the Workforce Committee Chairwoman Virginia Foxx (R-N.C.) likened classifying gig economy workers as “trying to fit a square peg in a round hole.”  Rep. Foxx made the comments at Consumer Technology Association’s New American Jobs Summit.  Workforce Protections subcommittee ranking Democrat Rep. Mark Takano (Calif.) responded to Bloomberg BNA with concern, stating “When she talks about updating the laws, what I hear her say is we need to throw out protections instead of how these workers can get a fair deal.”

New data shows that the U.S. unemployment rate is near a record low – but productivity is dropping.  Reuters reports that “U.S. job growth rebounded sharply in April and the unemployment rate dropped to a near 10-year low of 4.4 percent, signs of a tightening labor market that could seal the case for an interest rate increase next month despite moderate wage growth.”  Reuters also notes, however, that “in another report, the Labor Department said productivity decreased at a 0.6 percent annualized rate in the first quarter, the weakest in a year, after rising at a 1.8 percent pace in the fourth quarter.  It increased at a 1.1 percent rate compared to the first quarter of 2016.”

State-sponsored retirement plans for low-income workers exempted from strict ERISA requirements under the Obama Administration will likely see that protection revoked.  According to CNBC, the Senate passed a resolution to repeal the exemption.  The resolution previously passed the House, and President Trump is expected to sign it into law.  Under the plans in question, “private-sector workers whose employers do not offer 401(k) or other retirement benefits, and who often have low incomes, are automatically enrolled in plans being launched in some states, such as Illinois.  States say the exemption would have let employers pass workers’ money into plans without footing ERISA compliance costs.”

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Gig News: NLJ Update on Gig Economy Legislation and Lawsuits

Last week, The National Law Journal published an update on state legislation and lawsuits regarding the classification of gig economy workers as independent contractors.

First, the article noted that the Florida Legislature has passed a bill, expected to be signed into law by Governor Rick Scott, “that classifies drivers for companies such as Uber and Lyft as independent contractors rather than employees, marking the latest state to attempt to regulate the rapidly growing and litigious ride-hailing workforce.”  Other states that have passed similar legislation include Arkansas, West Virginia and Colorado.

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