2001: An Employer's Odyssey

Several months ago, most observers (ourselves included) would have viewed a George W. Bush presidency as the start of a welcome period of regulatory respite for employers battered by nearly a decade of unprecedented governmental interference in basic labor and employment decisions. The events of the last several months — particularly the closeness of the presidential and congressional elections — have thrown these expectations into a state of turmoil, a situation that could take months or even years to resolve.

Given this unsettled state of affairs, we plan to use THE LABOR RELATIONS ALERT and its electronic counterpart, THE E-ALERT, as timely and informative publications to educate you about up-to-the-moment changes in the labor and employment landscape from a legal, political, regulatory and economic perspective. As competition intensifies in all segments of the economy, employers must take advantage of important changes and avoid mistakes in the human resources context.

Although President Bush suspended the implementation of all new federal regulations for 60 days following his inauguration, a number of onerous regulations affecting employers already have taken effect, including:

• New affirmative action guidelines for federal contractors
• New rules concerning the payment of wages on federally funded construction projects
• Regulations permitting debarment of contractors for violations of federal labor laws
• OSHA’s controversial new ergonomics rule (see below)

We will keep you advised as to the status of these regulations.

President Bush is strongly considering several Executive Orders that favor federal contractors, including: an order requiring unionized contractors to notify their employees of the right to pay less than full union dues, consistent with the U.S. Supreme Court’s 1988 decision in CWA v. Beck; an order limiting the use of project labor agreements on federally funded construction projects; and an order eliminating the requirement that contractors providing custodial and other services in federal buildings offer employment to the employees of the contractor formerly providing these services.

President Bush has the opportunity to appoint a majority of the five-member National Labor Relations Board, as well as that agency’s general counsel. However, it may be a number of months before these appointments are announced and confirmed.

In the interim, the NLRB will continue to grapple with such important labor law issues as unilateral withdrawal of union recognition, "salting," union dues/Beck issues, contingent workers, requiring employers to bargain with unions without the benefit of a representation election, the right of nonunion workers to representation during disciplinary interviews, the supervisory status of RN’s and LPN’s in the health care context, and access to an employer’s computer and e-mail systems during an organizing campaign.

EEOC regulations requiring insurance coverage of female contraceptives to the same extent as other preventive medications.

From a legislative perspective, the narrow Republican majority in the House and the 50/50 split in the Senate likely will preclude any meaningful overhaul of the major statutes governing employers, unions and workers. Lawmakers will deal with a number of important issues during the next session of Congress, including: OSHA’s controversial ergonomic standards; an increase in the federal minimum wage; consideration of a patient’s bill of rights; renewed debate on the TEAM Act; and possible amendments to the Fair Labor Standards Act to exclude bonuses and other incentive pay from overtime calculations and to permit the use of "comp time."

In sum, the closeness of last November’s election further crystallized the disagreement of labor and management on many critical issues and undoubtedly presages contentious partisan battles over matters affecting employers and their relationship with their employees. It seems that employers hoping for a quick pendulum swing back from the predominantly anti-employer policies adopted by the Clinton administration are likely to be disappointed, at least in the short term.

As part of a final flurry of bureaucratic acts of the outgoing Clinton Administration, the Occupational Safety and Health Administration ("OSHA") published the final version of its new ergonomics regulations on January 16, 2001, and the rule will go into effect later this year. Hailed by AFL-CIO boss John Sweeney as "the agency’s most important Act since Congress signed the Occupational Safety and Health Act in 1970," the rule applies to all employers outside the construction, maritime, agriculture and railroad industries. Business groups have sharply criticized the rule’s administrative burdens -- estimated at approximately $100 billion over ten years -- and have filed several lawsuits to stop its enforcement. Nonetheless, the regulations are now in place and employers must familiarize themselves with the legal and practical implications of the new workplace standards.

Under the new rules, employers are required to provide written information to employees about the signs and symptoms of so-called "musculoskeletal disorders" ("MSD") such as carpal tunnel syndrome and other "repetitive stress" type injuries, and begin receiving and responding to reports of possible MSD’s no later than October 14, 2001. If an employee makes a complaint covered under the new standards, the employer must determine whether certain "action triggers" are present. Where such an action trigger is present, the employer must take specified steps to reduce the employee’s exposure to the condition causing the potential MSD, including making physical adjustments to the work place, rotating jobs, making temporary assignments, and/or providing up to 90 days paid "recovery time." In subsequent years, employers will be obligated to establish an "Ergonomics Program" that is designed to reduce the incidents of MSD’s in the work place, including training supervisors and employees in various aspects of MSD’s and their reduction.

It is clear that the new rules pose various financial and administrative hurdles for employers. As a basic compliance issue, employer groups have complained that it may be difficult to determine when an injury is truly "work-related" under these standards. For example, under the new rules, if an employee complains of wrist soreness or back pain, the employer must respond even though the injury may have occurred outside of the work place. Perhaps even more troubling is the "wage replacement" component of the standards, which may create an obligation to provide up to 90 days’ paid leave to employees suffering from covered injuries. This creates potential conflicts with other federal statutes, including the Family and Medical Leave Act and the Americans with Disabilities Act.

In any event, employers must be in compliance with the regulations by October 14, 2001. Accordingly, employers should familiarize themselves now with the standards and begin to implement appropriate policies. Navigating the details of the ergonomic standards may be expensive and time consuming for employers. However, the cost of non-compliance may be even greater. Employers must approach this issue carefully and be prepared to institute programs that will effectively address the new standards.