2016 Presidential Election Aftermath: What Can be Expected in the Labor & Employment Law Space

By Gerald T. Hathaway

We continue to analyze and assess what the 2016 election results mean in the Labor & Employment Law space, and what we can expect from a GOP White House, House and Senate.  The last two times that this GOP alignment was present were 1929 and 2007 (let’s hope that the financial events that followed those two occasions – the Great Depression and the Great Recession – do not repeat themselves this time around).

It is difficult to predict what President Donald J. Trump’s actual agenda will be, because his campaign was long on broad concepts and very short on serious, detailed policy presentation. While Candidate Trump said many things, including contradictory things, about many topics, some themes can be discerned from pre-election and post-election comments.  Also, some issues have been on the GOP wish list for some time, but until they could have the alignment of White House and Congress that will be in place in January, those wish list items, as a practical matter, were just wishes.  Here are our impressions about what changes will occur.

NEAR TERM

  • Affordable Care Act (Obamacare)

There will be a change, but it is not clear as to what the extent of the change will be, nor is the timing. Candidate Trump promised repealing and replacing the entire law.  But President Elect Trump has indicated that he wants to maintain coverage for dependents up to age 26, and to continue the mandate that previously existing conditions be covered.  If the statements of President Elect Trump are the desired results, the altering of the ACA then becomes quite complicated, because fundamental rules of underwriting will have to be respected (because the mandate for coverage was put into place to offset the costs of insuring pre-existing conditions, by having many healthy people in the pool of the insured).  This may be the subject of negotiation, but it will be within the GOP, to the exclusion of the Democratic Party (who may want nothing to do with any amendment, anyway).

There likely will be a push to allow insurance companies regulated in one state to offer insurance to residents of a different state, without being subject to regulation by the other state whose residents are being insured. Under that scheme, states desiring tax revenues from hosting insurance companies will lower their regulatory schemes, and the least regulated companies will be offering the insurance. (The Democratic Party may try and filibuster this particular issue).

  • Public Works: Possible Repeal or Major Modification of the Davis-Bacon Act

In his victory speech, President-Elect Trump made the following statement, which is similar to statements he made during the campaign:

We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.

We think that this initiative would invigorate the U.S. economy, particularly if there is a mandate for the use of materials made in the USA.  This initiative, however, may be opposed by the party he joined to run his Presidential campaign. We think that if they conclude that they must go along with this initiative, the GOP will realize that they may be in a place to do what was not so long ago unthinkable, and that is the repeal of the Davis-Bacon Act (or a substantial modification of it).  The Davis-Bacon Act requires “prevailing wages” to be paid for federal construction projects – which as a practical matter means union wages, which almost always results in the public projects being built by union contractors.  Prevailing wages are typically in the range of $50-$60 per hour, for wages and benefits.  If that requirement is removed, and non-union market wages are paid, the cost of constructing the new projects would be drastically reduced.  We think it likely that the GOP will make that trade, and the obvious benefit of spending so much money on local economies may well deter a Senate filibuster.  Given the drastic drop in union membership over the last few decades, it seems unlikely that the AFL-CIO has the muscle anymore to stop this.

  • New EEO-1 Form

Every year, the EEOC requires employers having 100 or more employees (50 if a government contractor) to file an EEO-1 form, which is a numerical census of the work force broken down by types of jobs, and the sex and race characteristics of those who hold them. Over the last year or so, the EEOC has been preparing a much more detailed form, which would require employers not only to give information about types of jobs, but salary bands of workers, broken down by sex and race.  Management interests have widely criticized the new form, both because of the magnitude of the task of collecting the data, and the low value of the data collected.  If the White House exercises its influence over the EEOC, which we expect it will, President-Elect Trump will likely direct that this new form be killed.

  • Increase in Race, Sex and Religious Discrimination Cases

Many were surprised by the rhetoric of the campaign, which included incendiary racial commentary that would be actionable if the commentary were tethered to workplace speech. Indeed the Trump campaign was openly supported by the KKK and other racial hate groups.  Since the election results were announced, both the FBI and the Southern Poverty Law Center have announced that hate crimes are being committed at new levels of frequency, and there is fairly widespread open and notorious anti-racial speech.  In this environment, one can expect open racial, sexual and religious hostility to reveal itself in the workplace, which will result in an increase of claims in response to that hostility, which may well include pattern and practice claims, and the return of race class actions.  Harassment training is the best answer for this problem, but the trainers had better be prepared for open push-back against notions of diversity.

  • Arbitration of Employment Claims and Class Action Waivers

There has been over the last three decades much back and forth as to what kind of employment claims can be forced into private arbitration, and whether there can be waivers of class action claims. The Congress can address this without fear of veto, and as a consequence there may be a legislative initiative to strengthen the Federal Arbitration Act with respect to employment and wage & hour claims, as well as some legislation permitting class action waivers.

  • Federal Regulations Review

Congress has had the power for twenty years to engage in filibuster-proof review of recently implemented federal regulations. Under the technical provisions of the Congressional Review Act (“CRA”) (enacted as part of Newt Gindrich’s “Contract with America” that followed the mid-term elections that occurred during President Bill Clinton’s first term), any regulation published as “final” after May 30, 2016 can be subject to review.  This date is estimated to be the cut-off date based on Congressional schedules currently in effect, and the actual cut-off date is subject to change.  An explanation of that the complicated process for determining the cut-off date for CRA review is here.

Rarely used in the past, because the President would likely veto any attempt to set aside a regulation put into effect by that President’s administration, the CRA likely will be used to set aside the August “blacklisting” rule applicable to government contractors, which requires federal contractors and bidders to disclose their labor violations to the government, as well as the sick-leave mandates applicable to federal contractors.

On the other hand, and apart from action on the part of federal courts, the new DOL Regulations elevating the salary levels for exempt, white-collar employees will remain in effect.  Since they were published as final on May 23, 2016, it currently appears that they will not be subject to the Congressional Review Act when the next Session of Congress takes place.  There is some wide-spread litigation seeking to block those regulations, and an update on that litigation is here.  As of November 23, 2016, a federal court injunction is in place blocking the implementation of the rule.

  • No Anti-Bullying Legislation

Despite the incoming First Lady’s recently announced campaign against cyber bullying, we are of the view that contemplated federal anti-bullying legislation will not happen.  This website likely will disappear: https://www.stopbullying.gov/laws/.  Many states will fill in the gap, likely led by California.

  • E-Verify

Employers must obtain I-9 forms from new employees to ensure that they are eligible to work in the United States. A streamlined way to verify the information given on an I-9 is E-Verify, the use of which is required for certain federal contractors.  It may well be that the requirements to use E-Verify will be expanded to include almost all employers.

MEDIUM TERM

In 2018, 33 senators will be up for re-election, but only eight of them are Republicans, and seven of those eight are in states that have long histories of voting the Republican slate. The other 25 senators are Democrats, or caucus with Democrats.  Many of those are from states that have been traditionally “blue,” but went “red” in 2016, among them:

Florida
Indiana
Missouri
Montana
North Dakota
Ohio
Pennsylvania
West Virginia
Wisconsin

So it is possible that in 2019, the Republican President will have a filibuster-proof Senate. If that happens, deregulation and repeal of a lot of labor & employment legislation will occur.  It is too early to tell which laws will be targeted.

In the meantime, states that have been deeply and historically blue will be passing laws to give protections that the federal government rolls back. While federal laws are generally pre-emptive, in the labor & employment space most laws are exempt from pre-emption, allowing states to provide greater benefits than the protections that are available under federal law.  The laws that are pre-empted relate to unionization and union affairs, and to ERISA pension & welfare benefits.

LONG TERM

If there is indeed a filibuster-proof GOP Senate, and there is a roll-back of labor & employment laws, we can expect employees to return to unionization, seeking protections from unions in the absence of protective federal laws.

We will update this list as our review of issues continues.

New ACA Rule Changes Hospitals’ Obligations to Provide Auxiliary Aids to Patients and Companions

By Melissa Provost

On September 8, 2015, the Department of Health and Human Services (“HHS”) proposed regulations to implement Section 1557 of the Affordable Care Act.  Section 1557 prohibits certain entities that administer health programs and activities from excluding an individual from participation, denying program benefits, or discriminating against an individual based on his or her race, color, national origin, sex, age or disability.  On May 13, 2016, the HHS Office of Civil Rights issued the final rule implementing Section 1557.  The final rule also prohibits discriminatory practices by health care providers, such as hospitals, that accept Medicare or doctors who participate in the Medicaid program.  The final rule became effective on July 18, 2016.

Section 1557 builds on long-standing federal civil rights laws, including Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, Title III of the Americans with Disabilities Act (ADA), and the Age Discrimination Act of 1975.  The final rule addresses effective communication for individuals with disabilities at section 92.202.  One notable requirement of this new rule is that hospitals must give “primary consideration” to the individual’s preference regarding auxiliary aids for effective communication, such as requests for on-site ASL interpreters and other types of auxiliary aids.

In the proposed rule, OCR considered whether to incorporate the standards in the regulation implementing Title II of the ADA or the standards in the regulation implementing Title III of the ADA.  Under Title II, government entities are required to give “primary consideration” to the choice of auxiliary aid requested by an individual with a disability, whereas under Title III, the ultimate decision as to what auxiliary aid to provide rests with the private entity.

After addressing the public comments received regarding the proposed final rule pertaining to this section, HHS concluded that:

we believe it is appropriate to hold all recipients of Federal financial assistance from HHS to the higher Title II standards as a condition of their receipt of that assistance. We also noted that it is appropriate to hold HHS itself to the same standards to which the Department subjects the recipients of its financial assistance. (emphasis added)

What does it mean for a hospital to give “primary consideration” to an individual’s expressed choice of auxiliary aid?  In its technical assistance manual for Title II of the ADA, the DOJ explains that:

When an auxiliary aid or service is required, the public entity must provide an opportunity for individuals with disabilities to request the auxiliary aids and services of their choice and must give primary consideration to the choice expressed by the individual. ‘Primary consideration’ means that the public entity must honor the choice, unless it can demonstrate that another equally effective means of communication is available, or that use of the means chosen would result in a fundamental alteration in the service, program, or activity or in undue financial and administrative burdens. — Dep’t of Justice, The Americans with Disabilities Act: Title II Technical Assistance Manual 38 (1993) (emphasis added).

State and local government services under Title II must give the person with a disability an opportunity to make an express choice, and the “public entity shall give primary consideration to the requests of the individual with “to request the auxiliary aids and services of their choice.”  This contrasts with Title III of the ADA (which applies to public accommodations, including hospitals), which permits a public accommodation to consult with disabled individuals whenever possible to determine what type of auxiliary aid is necessary to ensure effective communication, but the ultimate decision as to which aid to use is left to the hospital.

Very few courts have analyzed the “primary consideration” test in the context of visually or hearing impaired plaintiffs.  However, Bonnette v. District of Columbia Court of Appeals, 796 F. Supp. 164 (2011), provides some useful guidance.  In Bonnette, the plaintiff was a legally blind law school graduate who sought an order allowing her to take the D.C. bar exam with the assistance of a computer equipped with an accessible screen-reading program commonly used by individuals with visual impairments, and other accommodations.  Her request was partially granted, but her request to use the specially equipped computer to take the Multistate portion of the bar exam was denied.  In its place, the NCBE, which administers the bar exam on behalf of the Court of Appeals, offered plaintiff the use of an audio CD or a human reader, who was also an attorney.  NCBE also claimed that it ran on a very tight budget, and could not afford the extra $5,000 that the special computer would cost.  Plaintiff presented evidence as well as expert testimony that the accommodations she requested were optimal for her skill set and in this particular situation.

The Court held that the Court of Appeals was subject to the heightened standards of Title II, whereas NCBE was subject to the standards set forth in Title III.  Although the Court agreed that the defendants were not required to provide plaintiff with her requested accommodation, it did find that:

both the Title II regulations applicable to the Court of Appeals (through the “primary consideration” requirement) and the Title III regulation applicable to NCBE (through its “best ensure” requirement) require that Bonnette be provided with an accommodation that is at least “as effective” as her preferred accommodation. Therefore, if Bonnette can establish that the alternative accommodations offered to her by Defendants do not make the MBE accessible to her in the same way that [her requested accommodation] does, then Defendants must provide her with [her requested accommodation] unless they can establish that doing so would fundamentally alter the nature of the examination or constitute an undue burden.

The new ACA rule now requires hospitals to honor the patient’s and/or companion’s requested auxiliary aid unless it can demonstrate that another equally effective means of communication is available, or that use of the means chosen would result in a fundamental alteration in the service, program, or activity or in undue financial and administrative burdens.  Non-compliance with the new final rule could result in investigations by the Department of Justice, OCR reviews, and lawsuits by aggrieved individuals.  In addition, a recent Supreme Court decision held that non-compliance with a material statutory or regulatory requirement also could result in liability under the False Claims Act.

How can hospitals meet this new, heightened standard?  Hospital staff should be trained on what auxiliary aids are appropriate and necessary in any given situation.  Hospital staff should also be reminded to document the patient’s and/or companions requested auxiliary aid in the medical record, as well as any complaints by the patient and/or companion about the auxiliary aid provided by the hospital.  Most importantly, hospital staff should engage in a dialogue with the patient and/or companion, to ensure that the auxiliary aid provided by the hospital is meeting his or her needs throughout the hospital stay.

Complimentary Webinar – Regulatory and Economic Outlook: Health Care Reform and Your Business

The uncertainty of the implications of the Affordable Care Act (health care reform), the current debate over the debt ceiling, federal sequestration and the ever-changing regulatory and legislative environment continue to serve as key sources of confusion and concern for businesses and organizations across the U.S.

On Wednesday, October 9, 2013, from 10 – 11 am eastern, join members of Drinker Biddle’s Lobbying & Advocacy Team and Employee Benefits & Executive Compensation Practice Group for a complimentary webinar that will review the current state of federal fiscal and health policy and outline what you and your company or organization need to know about what’s ahead. The webinar also will provide the tools you need to successfully navigate these unpredictable business, economic and political climates.

Speakers:
Heather B. Abrigo, Counsel, Drinker Biddle
Jodie Curtis, Senior Government Relations Director, Drinker Biddle

Moderator:
Nick Araco, Director of Growth Strategies, Drinker Biddle

Date: Wednesday, October 9, 2013

Time: 10 – 11 a.m. eastern

Location: Webinar

Is Your Business Ready for Health Care Reform? Join Us for an In-person Panel Discussion

Understanding and Preparing for the Changes Coming in 2014

The Patient Protection and Affordable Care Act (ACA) represents the most dramatic change in U.S. health care policy since the introduction of Medicare in 1965.  The ACA contains many requirements that can significantly impact your company’s bottom line.

Join Drinker Biddle and The CEO Trust for a panel discussion on some of the key provisions of the ACA and what your  business can and should be doing to address them. Topics will cover:

  • Required changes in employee health plan options
  • Formulating an insurance strategy tailored to meet the needs of your business
  • The latest from Capitol Hill and last minute efforts to meet the January 2014 insurance exchange deadline

Date: Tuesday, October 15, 2013

Time: 8 – 8:30 a.m.

Location: Drinker Biddle & Reath
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996

Event Chair:
Chuck Steege, President, SFG Wealth Planning Services, Inc.

Moderator:
Matt Amodeo, Partner, Drinker Biddle

Panelists:
Julie Allen, Government Relations Director, Drinker Biddle
Warren Geller, CEO, Englewood Hospital and Medical Center
Joan Neri, Counsel, Drinker Biddle
Scott Welks, Principal and Consulting Actuary, Milliman