As the dust settles on the 2014 midterm elections, Republicans have expanded their lead and the House of Representatives and taken control of the Senate with at least 52 and possibly 54 seats. For employers, this could signal many positive developments in oversight, legislation, and appropriations over the coming year, but the election results will not end regulatory and sub-regulatory agency priorities over the next two years.
Key appointments will likely face stiff opposition for various posts in the Administration over the next two years. In that vein, the Senate Health, Education, Labor and Pensions Committee is holding confirmation hearings for pending EEOC nominations on November 13, 2014. The Committee will consider David Lopez for another four year term as EEOC General Counsel and Charlotte Burrows as a new EEOC Commissioner for a five year term. All indications are that the Senate will attempt to confirm Mr. Lopez and Ms. Burrows in the lame duck session of Congress. If successful, the EEOC will again be fully seated, empowering a majority of Commissioners to issue controversial guidance in the area of reasonable accommodation requirements, restrictions on wellness plans, and to authorize litigation, if sought by the General Counsel, on cases that attempt to expand the reach of the law under the EEOC’s jurisdiction.
At the NLRB, the President just yesterday withdrew the re-nomination of Sharon Block and, instead, nominated Lauren McFerran, currently the chief labor counsel to the Senate HELP Committee. Ms. Block was one of the recess appointees whose appointment was invalidated by the Supreme Court in the Noel Canning decision. If Ms. McFerran is confirmed in the lame duck session, there will be a majority of three Democrat NLRB members for the remainder of the Obama Presidency. The NLRB is still considering the expedited election regulations and other controversial regulatory and decision issues.
In January, Senate Committee Chairmanships will be held by Republicans. Executive overreach in many agencies, including the NLRB, OFCCP, and EEOC will likely be the subject of Senate oversight hearings. Indeed, recent executive actions applicable to government contractors related to minimum wage (here), overtime exemptions under the Fair Labor Standards Act (here), and additional penalties for the violation of civil rights laws (here) are prime candidates for additional oversight.
In the House of Representatives, the Committee on Education and Workforce has actively conducted oversight on DOL, NLRB, and EEOC activities, joint-employer issues, minimum wage and Executive Orders which impact government contractors over the last two years. With a larger majority in the House, continued oversight activity is expected.
Republicans stressed during the midterms the necessity to repeal the Affordable Care Act. Recognizing the wholesale repeal is unlikely given that the President would have to agree to repeal his signature accomplishment, Republicans will likely endeavor to repeal the medical device tax, adopt the 40-hour workweek threshold for full time employment, and other measures to limit the ACA’s applicability. We would also note that the Supreme Court just granted certiorari in King v Burwell which will address whether the Federal exchanges can include premium subsidies. Depending upon the resolution of this case, some Congressional activity can be expected.
In addition, on September 16, 2014, Senator Alexander, the incoming chairman of the Senate HELP Committee, and Mitch McConnell introduced S. 2814, the National Labor Relations Board Reform Act, which would increase the number of Board Members to 6 and require a four vote majority for NLRB decision. In the House, several bills are pending regarding EEOC overreach and its delegation of authority to the General Counsel. With a Republican controlled Congress, each of these and other bills will likely gain some traction, though ultimate enactment remains questionable.
Funding for the government expires on December 11, 2014, which the lame duck Congress will have to address in the coming weeks. It remains to be seen whether a short-term extension or an extension for the balance of Fiscal Year 2015 will be considered by Congress. Come January, the Republican-controlled Congress will likely use its power of the purse to limit government overreach. Last year, the House passed several appropriations bills, some of which contained riders limiting how the agencies spend funds. For example, on May 30, 2014, the House voted to approve the 2015 Commerce, Justice, Science Appropriation bill, directing the EEOC to engage in good faith conciliations before filing suit. Similar restrictions may be on the horizon for all agencies.
The coming months will be critical in determining how a Republican Congress and Democratic Administration will approach all questions, including important labor and employment issues. Regardless, there will be plenty of activity from agencies trying to adopt new policy positions in the final two years of the Administration. Please continue to follow this blog for periodic updates on how employers may be impacted by these changes.