Are Federal Labor Agencies Waging A 'War On Business'?

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I recently attended an employment law symposium in Las Vegas that gave me the opportunity to compare notes with other labor lawyers. Not surprisingly, there was virtually unanimous agreement that federal agencies have become increasingly aggressive in enforcing laws and expanding missions. What was surprising, however, was the sheer number of devices utilized by these agencies. What follows is the “short list.”Some federal agencies are vigorously expanding the scopes of their missions. This is particularly true of the National Labor Relations Board (NLRB). Normally, the NLRB is the referee in the ongoing wrestling match between unions and management. Faced, however, with a steep decline in union membership, the NLRB has been seeking new roles in order to remain relevant. It has expanded its mission into areas that have little to do with union activity. For example, it has been active in monitoring employers’ use of social media to gather information on their employees. Another example is the NLRB’s review of company handbooks in an effort to root out potentially objectionable policies. In one now-classic case, the NLRB held that a company policy requiring respect for supervisors, co-workers and customers to be unlawful!Federal agencies are now “partnering” with other agencies. In the past, there was traditionally little cooperation between the various agencies. Now, however, coordination is the order of the day. When one agency uncovers evidence that a statute outside of its jurisdiction has been violated, it will call in its sister agency. The Department of Labor (DOL) led the way. In conducting wage and hour audits, the DOL often calls in the Internal Revenue Service. The NLRB directs employees who are filing unfair labor practice charges to file companion charges at the Equal Employment Opportunity Commission (EEOC). Of course, the necessity of defending against simultaneous charges from different agencies multiplies the difficulty and expense of any employer.Some agencies, instead of merely processing complaints that are brought to them, are now actively soliciting new charges on their own. This is certainly true of the DOL, which has targeted various industries it believes are characterized by systemic violation of wage and hour laws. The restaurant industry, as an example, has been an ongoing target of the so-called “pizza and pasta” initiative that has driven hundreds of small eateries completely out of business. The building service industry is rumored to be on the list of targeted industries.Investigatory tactics are changing. Government agents are now schooled in deceptive tactics for the purpose of gathering incriminating evidence without raising employers’ suspicions. An agent may appear unannounced at a facility and say something like, “I was just in the neighborhood and was hoping to ask a few questions.” Most employers want to be seen as cooperative, so they give away whatever the agent asks for. The next encounter, however, will not be so friendly because, once given, incriminating evidence can’t be taken back.Some agencies have become much more inflexible in settlement negotiation. In the past, some agencies, particularly agencies like Immigration and Customs Enforcement that are charged with enforcement of complex statutes, have recognized that an employer might have committed technical errors but was acting in “good faith.” This justified lowering or eliminating penalties. No more. Only strict compliance is acceptable. Agencies now routinely seek the maximum penalties allowable by law.  Some agencies — the NLRB again comes to mind — have adopted more coercive enforcement strategies. For example, the NLRB often petitions the federal courts to grant crippling injunctions against employers well before any finding of guilt or innocence has been made, thereby throwing the full weight of the federal government against a company that may ultimately be found to have done nothing wrong. Similarly, the EEOC is referring cases out to private attorneys, who will then initiate lawsuits against employers.Whether you call it “war on business” or “enhanced enforcement,” the result is the same: Employers are forced to spend ever-increasing amounts of time and money to defend themselves. Often, management settles these cases just to be free of the burden of litigation.The only effective strategy is pre-emptive. Work with an attorney who is at home on this fast-changing legal background to craft effective compliance strategies before the government comes knocking on the door. As the saying goes “an ounce of prevention . . .”

Perry Heidecker is senior counsel for Milman Labuda Law Group PLLC, Lake Success, N.Y. The firm is a full-service Employment Law practice focused on counseling, preventive advice and training, policy and procedure design, representation before administrative agencies, litigation, and appeals.