June Ends with a Bang with DOL Moving to Amend FMLA Regulations and Three Supreme Court Employment Decisions

The end of June is traditionally a busy week for legal observers since many of the Supreme Court’s most contentious employment decisions are issued before it recesses for the year.  This year was no exception.  However, there were also a number of regulatory matters raised by the Department of Labor which were equally – and maybe more – noteworthy.  First, the DOL has proposed to amend the FMLA regulation defining spouse to require employers in states where same-sex marriage is not recognized – like Ohio -- to provide FMLA leave to employees who were legally married in another state.  Second, the DOL proposed regulations to increase the minimum wage for certain employees of certain federal contractors beginning in 2015.  Next, a unanimous Supreme Court held that the Senate – not the President – gets to decide when it is in recess.  Therefore, Presidential appointments to the NLRB made during brief adjournments were not constitutional.  In addition, a divided Supreme Court found that the First Amendment rights of de factor independent contractors trumped the government’s interest in giving them union rights and requiring them to subsidize through fair share fees the political lobbying activities of unions to which the workers objected.  Finally, a divided Supreme Court found that closely held corporations can assert statutory and First Amendment rights to object to contraceptive coverage mandated by ObamaCare regulations and the government failed to show that less restrictive means existed to achieve its aims.

FMLA Rights of Domestic Partners.  On June 20, the Department of Labor announced that it would be proposing to change the regulatory definition of “spouse” in the Family and Medical Leave Act to include individuals who were legally married  in one country (like Argentina) or state, like Massachusetts, even though they currently reside in a state, like Ohio, which does not recognize that marriage.  Currently, FMLA rights only extend to individuals whose marriage is legal in the state where the employee resides.  The Act itself provides in § 2611(13) that “[t]he term “spouse” means a husband or wife, as the case may be.”    The current regulatory definition provides that: “Spouse means a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized.” Under the proposed rule – which was published in the Federal Register last week on June 27 – same sex and common law marriages will be included in the definition of “spouse” based on the place of celebration instead of the place of residence. The DOL also revised other regulations to replace “husband and wife” with “spouse” and “mother and father” with “parent.”   The DOL will consider comments on the proposed changes which are received before August 11.   The expansion of the rule will affect spousal leave (to care for an ill/injured spouse or during a qualified exigency military leave), child care leave (to care for ill step-children even if the employee is “does not stand in loco parentis” to that child) and parental leave (to care for an employee’s step-parent in a same sex marriage).

The new definition at §825.102 and §825.122 will read as follows:

Spouse, as defined in the statute, means a husband or wife. For purposes of this definition, husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under State law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State. This definition includes an individual in a same-sex or common law marriage that either (1) was entered into in a State that recognizes such marriages or, (2) if entered into outside of any State, is valid in the place where entered into and could have been entered into in at least one State.

NLRB Recess Appointments.  Last week, a unanimous Supreme Court affirmed the D.C. District and Court of Appeals in finding that President Obama exceeded his authority in appointing three NLRB members during a three day adjournment.   NLRB v. Noel Canning, No.12-1281 (2014).  Under the Constitution, NLRB members must be confirmed by the Senate, although the President has the right under the Constitution to temporarily appoint members when the Senate is in “recess.”  In this case, President Obama appointed three members when the Senate was on a three –day adjournment and not on a self-declared recess.  An employer which lost a case at the NLRB challenged the appointment of the three adjournment-appointed members and, thus, the Board’s quorum to conduct business and make decisions.  The Court ultimately held that Congress is presumptively in recess or in business when it  says it is and the President does not get to decide that for Congress by declaring a three day adjournment to be a recess.   The recess appointments clause was not meant as a routine alternative for the President to avoid Senate confirmation.  In addition, the Court indicated that adjournments of less than 10 days would presumptively not be recesses so that the President could avoid Senate confirmation.   Accordingly, all of the decisions made by those appointed NLRB members are invalid and, if still pending in the legal process, likely will not be enforced by the Courts.  However, there is a legal quorum on the NLRB a present and it has indicated that it intends to act quickly to reconsider (and probably reconfirm) these challenged decisions.

Public Union/First Amendment Rights for Independent Contractors.  On Monday, a divided Supreme Court limited the ability of public unions in Illinois’ to encourage unionization of home healthcare workers (who had traditionally been considered independent contractors) by precluding the unions’ ability to collect “fair share fees” from the home healthcare workers who object under the First Amendment to joining and financially supporting a union.   Harris v. Quinn, No. 11-681 (2014).   The State of Illinois had declared the Personal Assistant (home healthcare workers) to be “employees” of the state by virtue of the fact that the state paid them with Medicaid funds even though they were hired, trained, supervised and fired by individual citizens receiving Medicaid assistance.   As described by the Court’s syllabus, “[o]ther than compensating PAs, the State’s involvement in employ­ment matters is minimal. Its employer status was created by execu­tive order, and later codified by the legislature, solely to permit PAs to join a labor union and engage in collective bargaining under Illi­nois’ Public Labor Relations Act (PLRA).”   The healthcare workers do not receive other state government employee benefits and are not protected by, for instance, sovereign immunity.  Because the home healthcare workers were only partial government employees, there was little service that the union was providing them in exchange for union dues or a fair share fee (to preclude free riders) since Medicaid dictated a uniform rate of pay and the employing citizens governed virtually all other terms and conditions of employment.   Accordingly, the Court refused to extend prior Court decisions to these de facto independent contractors and, instead, applied the traditional First Amendment legal analysis to the propriety of requiring these individuals to pay a fee to a union which they did not join or support.   The Court’s majority concluded that there was no compelling government interest which could not be achieved by less restrictive means that would override the workers’ First Amendment rights.

 

First Amendment Rights of Small Businesses.  On Monday, a divided Supreme Court held that closely-held corporations could exercise First Amendment and statutory rights as “persons.”   Burwell v. Hobby Lobby Stores, Inc.¸ No. 13-354 (2014).  The Court noted that it had previously recognized these rights when raised by non-profit corporations and by for-profit sole proprietorships.  Therefore, when the owners of these businesses objected to being required to pay for methods of contraception which interfered with fertilized eggs, they had standing to raise the claims. The Court noted that it would be impractical for a publicly held corporation to assert similar claims.  On the merits, the Court found that the government had failed to demonstrate the existence of a compelling interest to justify its regulations that could not be addressed with less restrictive measures. 

Minimum Wage for Federal Contractors. In February, President Obama issued Executive Order 13658 requiring federal contractors to increase the minimum wage paid to certain employees to $10.10/hour beginning with contracts issued in 2015. That amount will be tied to the Consumer Price Index and may be adjusted going forward.   This month, the Department of Labor issued proposed regulations to implement this Executive Order.   Importantly, not all federal contractors or hourly employees are covered.  The EO covers mostly those employees covered by the Service Contract Act, Davis-Bacon and work in federal park concessions.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.