President Trump issues Executive Order adopting Most Favored Nation Approach

In what appears to be one of President Trump’s last official acts, he has issued an Executive Order adopting, for certain purposes, the Most Favored Nation clause approach to the pricing of drugs in the United States.  During the campaign, it was the position of President-Elect Biden that we should be negotiating the price with the drug companies for the sale of drugs in the United States.

Obviously, an Executive Order by one President can be quickly replaced with an Executive Order by the next President.

The only approach in regard to institutionalizing the Most Favored Nation clause approach to drug pricing, would be Congressional legislation, which has not been forthcoming during the four years of the Trump Administration.

A recent development is the decision of the Canadian government to enact significant restrictions on the bulk purchase of drugs in Canada for shipment into the United States.  This is most likely the result of pressure by the drug companies, who have made it clear to the Canadians that the drug companies will only provide Canada with a certain quantity of drug products at particular pricing levels and at quantities which are sufficient for the Canadian population alone.  The drug companies will not permit the Canadians to sell drugs that had been purchased at the much cheaper Canadian price than the price for which those drugs are sold in the United States to institutions in the United States.

This action of the Canadians highlights that the approach of the Most Favored Nation clause would not be greeted in a friendly manner, by many of our allies.  These allies benefit from being able to negotiate cheaper prices for drugs, since the drug companies can then make up the shortfall needed for their R&D or their profit, by charging much higher prices for drugs in the United States.  Enacting a Most Favored Nation clause would shut down that option, on behalf of the drug companies, and they would be forced to negotiate with our allies at much higher prices for drugs sold to the allies.  Of course, this would stop the cost shifting to the American consumers and spread the cost of the development of drugs among all users, including those of our allies.

It will be interesting to see what approach the Biden Administration takes in regard to the pricing of drugs and whether or not it will continue the Trump approach of Most Favored Nation or will attempt to develop a different negotiating strategy for the pricing of drugs.


© 2020 Giordano, Halleran & Ciesla, P.C. All Rights Reserved
For more articles on executive orders, visit the National Law Review Election Law / Legislative News section.

Beltway Buzz: 2021 Labor and Employment Forecast

The results of the 2020 national elections are (mostly) in. Former vice president Joseph Biden is now President-elect Joseph Biden. Democrats have managed to hold the U.S. House of Representatives, but they will be working with the slimmest House majority in years. Control of the U.S. Senate is still not known at this time, though Republicans enjoy a 50–48 majority as we await two runoff elections in Georgia scheduled for January 5, 2021. If Democrats win both of those races, they will seize control of the upper chamber, as the vice president (who under the Constitution of the United States also serves as president of the Senate) can provide a tie-breaking vote in the event of a 50–50 deadlock. Any other outcome in Georgia will tilt the Senate balance in favor of Senator Mitch McConnell (R-KY) and the Republicans.

While the results of the congressional elections may put a damper on a robust Democratic legislative reform agenda, the Biden presidency will still bring a dramatic shift to the federal labor and employment policy landscape. The 180-degree turn in regulatory employment policy priorities that will likely result will undoubtedly create uncertainty for employers, which are already dealing with a pandemic and an unstable economy. Set forth below are the major labor and employment policy changes to anticipate for 2021.

I. Executive Actions

The quickest and easiest way for newly sworn-in President Joe Biden to initiate policy changes will be by rescinding certain executive orders issued by then former president Donald Trump and issuing his own executive orders. Revoking myriad Trump executive actions relating to immigration will top the list, including those relating to refugees and asylees, certain COVID-19–related travel restrictions, and the ban on certain nonimmigrant visas (Presidential Proclamation 10052 of June 22, 2020). In turn, Biden is likely to reinstitute the Deferred Action for Childhood Arrivals (DACA) program, as well as the temporary protected status of certain eligible nationals.

In the employment law space, Biden is expected to revoke President Trump’s Executive Order on Combating Race and Sex Stereotyping, which is opposed by civil rights groups and members of the business community. It is very possible Biden may follow this action with a proactive requirement on federal contractors to require diversity and inclusion or implicit bias training and programs. Additionally, Biden may also attempt to resuscitate a version of former president Barack Obama’s Fair Pay and Safe Workplaces executive order.

II. Congress: A More Modest Agenda

Leading up the election, there was much speculation regarding whether the Democrats would abandon the legislative filibuster in the event that they took control of the Senate. Such a move would allow senators to pass legislation with a simple majority vote (51 votes), rather than the 60-vote threshold that is currently required. Eliminating the filibuster would be a monumental and historic change to the way bills are drafted and passed in Congress. In this scenario, a Senate without the filibuster would enable Democrats to expand the number of seats on the Supreme Court of the United States and to pass legislation dealing with the COVID-19 crisis, voting rights, gun control, climate action, LGBTQ rights, and more.

The elections and political aftermath, however, have created a situation in which the filibuster will more than likely survive. At best, the Democrats would have 50 senators in 2021. A tiebreaking vote by a Vice President Kamala Harris would, therefore, appear to give the Democrats the necessary votes to scrap the filibuster, but Senator Joe Manchin (D-WV) has already stated that he will not vote to eliminate the filibuster, and others in the Senate Democratic Caucus have expressed similar concerns. Thus, with the filibuster likely remaining intact, Republicans will be better able to thwart the Democrats’ legislative efforts, even if the Democrats win both Senate races in Georgia. Similarly, if Republicans prevail in one or both of the Georgia races, Senate Democrats will be able to filibuster Republican bills. (The White House and House of Representatives would also obviously work as a check on the Senate.)

A. Potential Employment-Related Legislation

Of course, this is not to say that the chances of employment-related legislation being enacted are nil. If the political winds blow in just the right way, there is a possibility that one or some of the following bills could be enacted into law.

COVID-19/Economic Relief. As cases of COVID-19 continue to surge and state governments consider reinstituting more lockdown restrictions, there will be continued pressure on Congress to pass an economic stimulus package. Republicans and Democrats are in agreement about the need for funding to combat the virus (e.g., money for vaccines, testing, etc.), assist schools and childcare providers, and provide for a certain amount of expanded unemployment insurance. Like everything else in Congress, however, the devil is in the details regarding particular issues. More polarizing are the Republicans’ demand for liability protections from COVID-19–related lawsuits, as well as the Democrats’ demand for language requiring the Occupational Safety and Health Administration (OSHA) to develop a COVID-19–specific emergency temporary standard. It is unclear whether either side is willing to compromise on these issues.

Pregnancy Accommodation. The proposed Pregnant Workers Fairness Act (H.R. 2694) would clarify protections for pregnant workers under federal discrimination laws and would require employers to provide reasonable accommodation—such as more frequent restroom or water breaks—to those employees. The bill passed the House of Representatives in September 2020 by a vote of 329–73 (including 103 Republicans) and enjoys the support of the business community.

Paid Leave. The political debate surrounding federal paid family/sick leave legislation has evolved dramatically over the last several years. While Democrats have long supported such legislation, Republicans have only recently started to come on board with the concept (though they still have concerns about cost, scope, the need for preemption, etc.). Three recent developments have pushed the debate forward: (1) the increasing patchwork of state and local paid leave law requirements, (2) the new paid family leave benefit for federal government employees beginning in 2021, and (3) the paid family and sick leave provisions of the Families First Coronavirus Response Act (FFCRA) that provided a glimpse of a national requirement. Legislation in 2021 will remain a challenge, but the parties are inching—perhaps incrementally—closer.

Multiemployer Pension FixIt is getting harder and harder for legislators to keep kicking the can down the road with respect to the multiemployer pension crisis. Accordingly, there is some bipartisanship on this matter in that there is recognition by both parties of the problem. Some combination of premium increases and loans is the compromise position. There could be some action on this issue during the lame-duck session of Congress following the elections, but it could also slip to 2021.

ImmigrationOn July 10, 2019, the House of Representatives passed the Fairness for High-Skilled Immigrants Act of 2019 (H.R. 1044) by an overwhelming vote of 365–65. The bill would eliminate the 7 percent per-country cap for employment-based immigrant visas. Proponents of the bill have so far been unsuccessful in passing the bill in the Senate via unanimous consent.

B. Employment-Related Activity in the U.S. House of Representatives

Though their majority will be slim, House Democrats will likely reintroduce and seek to advance multiple employment-related bills in 2021. In response, Republicans and the business community will try to peel off a number of Democrats to spoil any potential floor votes. Expect action on the following issues:

COVID-19/Economic Relief. If negotiations break down on a bipartisan economic stimulus, Democrats in the House will likely proceed on their own and move on the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed the House of Representatives twice in 2020. Among other provisions, the HEROES Act would:

  • extend Pandemic Unemployment Assistance (for those workers who do not traditionally qualify for unemployment insurance (UI), such as independent contractors); Pandemic Extended Unemployment Compensation (providing an additional 13 weeks of benefits); and the Federal Pandemic Unemployment Compensation (FPUC) program, which provides displaced workers with $600 per week on top of their weekly UI benefits;
  • require OSHA to issue an emergency temporary standard for certain at-risk industries; and
  • extend the FFCRA emergency family and sick leave provisions for the remainder of 2021 and apply them to all employers, regardless of size.

Protecting the Right to Organize (Pro) Act. The Protecting the Right to Organize Act passed the House of Representatives in early 2020. It will be the top labor policy priority for congressional Democrats. The bill would:

  • codify Browning-Ferris Industries (joint employer);
  • codify Specialty Healthcare (gerrymandered units);
  • codify Purple Communications (email access);
  • codify the 2014 “ambush” election rules;
  • codify the 2016 “persuader regulation”;
  • prohibit right-to-work laws;
  • provide for “stealth” card check;
  • codify California’s controversial AB 5 on independent contractors into the National Labor Relations Act (NLRA);
  • provide a private cause of action for unfair labor practices (ULPs);
  • restore and codify the Board’s failed “notice posting” requirement;
  • allow for new civil penalties, including liquidated damages;
  • require binding arbitration for first contracts;
  • overturn the Supreme Court of the United States’ decision in Epic Systems, effectively prohibiting employment arbitration agreements;
  • prohibit employers from permanently replacing strikers; and
  • allow for secondary boycotts.

Worker Flexibility and Small Business Protection ActIntroduced in Congress in September 2020, this bill has not yet gone through the legislative vetting that the PRO Act has. But the bill could quickly draw the attention of congressional Democrats, as it dramatically amends federal employment laws, with a particular focus on independent contractors and temporary workers. The bill would:

  • codify California’s “ABC test” for independent contractors as part of most federal labor and employment laws;
  • greatly expand joint-employer tests throughout labor and employment laws, and extend liability to certain owners, officers, and shareholders;
  • create a “standalone violation” for incorrectly classifying a worker as an independent contractor, rather than an employee;
  • set unique wage and hour standards for certain “transportation and network dispatching workers”;
  • require temporary employees to be paid the same as “direct” employees and require that temporary employees be converted to “direct” employees after one year of service;
  • amend the Fair Labor Standards Act (FLSA) to include a “private attorneys general” provision;
  • require an employer with 100 or more employees to file with the U.S. Department of Labor (DOL) a “supply chain responsibility plan” describing its processes for ensuring that its suppliers and vendors do not violate labor and employment laws in the United States and abroad; and
  • require an employer to publicly post on its website and main entryways its labor and employment law compliance record and “rating” over the last three years, including through the use of emojis.

Paycheck Fairness ActAmong other provisions, the Paycheck Fairness Act would amend the Equal Pay Act of 1963 by replacing the “factor other than sex” defense with a “bona fide factor” defense that must be “job-related” and “consistent with business necessity”; would provide for uncapped compensatory and punitive damages; would require the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) to develop mechanisms for the collection of employee compensation data from employers; and would enact prohibitions on the use of, or inquiry into, applicants’ pay history.

ImmigrationThe last time Democrats controlled the Senate they passed bipartisan comprehensive immigration reform. Biden has vowed to take another crack at this and promises that he will “commit significant political capital to finally deliver legislative immigration reform.” It is also possible that Democrats will focus on targeted relief measures for Dreamers and/or temporary protected status (TPS) recipients.

Raising the Minimum Wage. The House passed the Raise the Wage Act in 2019. The bill would gradually increase the federal minimum wage over a six-year period to $15 per hour. The bill also indexes the minimum wage to inflation and would phase out the separate minimum wage for tipped employees. While a long shot—especially if the COVID-19 pandemic continues and the economy remains on shaky grounds—it is possible that Senate Republicans would be willing to cut a deal if the terms and legislative package were right.

III. U.S. Department of Labor

A. Who Will Be in Charge?

There is a saying in Washington, D.C., that “personnel is policy.” Whomever Biden nominates to run the various labor and employment related agencies will have an enormous influence on federal labor and employment policy. Democrats may have learned a lesson from former president Obama’s appointment of Congresswoman Hilda Solis to helm the DOL during his first term. Solis did not come into the job with much labor and employment experience and did not advance Democrats’ agenda as quickly as they would have liked. Indeed, the DOL’s regulatory machine really did not hit its stride until former president Obama’s second term, when Thomas Perez became secretary of labor. Thus, look for Biden to appoint a secretary of labor who is aggressive, savvy, and experienced.

The process of taking over functions at the DOL has already begun. Biden announced his “agency review teams” to begin evaluating agency operations in anticipation of the shift in executive power in January 2021. The labor review team (overseeing the DOL, the National Labor Relations Board, and the EEOC, among other agencies) includes many familiar faces from the Obama administration. Individuals such as Jenny Yang (former EEOC chair), Seth Harris (former DOL deputy secretary and acting secretary of labor), and Patricia Smith (former DOL solicitor) will likely join others from organized labor, academia, and progressive think tanks in beginning the initial overhaul of the DOL. This group will likely influence the selection of Biden’s DOL nominees and may even be candidates themselves.

Expect the DOL of the Biden administration to be aggressive from the start, in terms of both regulatory actions and enforcement proceedings. Clawing back some of the initiatives of the DOL of the Trump administration will, of course, be a priority. But beyond that, expect this DOL to go on the offensive with an agenda that is even more progressive than that of the Obama administration’s DOL.

B. Occupational Safety and Health Administration

The ongoing COVID-19 pandemic has thrust OSHA into the spotlight, and workplace safety will likely be the priority of the Biden DOL. First and foremost, this likely means quickly putting forward a nominee to be assistant secretary of labor for occupational safety and health. Additionally, expect OSHA to begin developing a COVID-19–specific emergency temporary standard right away. Enforcement is likely to tick up, too, especially with regard to COVID-19–related complaints. Finally, while it was not abandoned entirely by the current OSHA, a Biden OSHA can be expected to return to a much more aggressive “regulation by shaming” campaign through the use of conclusory press releases.

C. Wage and Hour Division

In addition to an aggressive enforcement strategy, the Wage and Hour Division (WHD) of the DOL will undoubtedly pursue a robust regulatory agenda that could potentially be described as “repeal and replace.” The agenda will likely include the following initiatives:

  • Joint EmployerThe Trump DOL’s joint-employer regulation under the Fair Labor Standards Act has been enjoined by a federal court. Whatever the legal status of the regulation, a Biden DOL is expected to “repeal and replace” the rule with a broader and more amorphous joint-employer standard.
  • Independent ContractorSimilarly, if the Trump administration finalizes an independent contractor regulation, it will quickly be targeted for reversal. Senate Democrats may try to repeal it by using the Congressional Review Act (though they are unlikely to have the votes and doing so would severely limit Democrats’ ability to promulgate their own version of an independent contractor regulation). If Congress does not act, the incoming administration will rescind the regulation via rulemaking. The Biden DOL may then proceed to issue its own version of an independent contractor standard, but the controversy surrounding AB 5 in California may give them pause.
  • OvertimeA federal court ruling in late 2016 blocked the enactment of the Obama administration’s overtime rule. Although the Trump DOL finalized its own overtime rule in September 2019 that increased the salary basis threshold, the level probably will not satisfy a Biden DOL, which most likely will want it to be at $47,000 or higher and may also look to make changes to the duties test.
  • Opinion LettersOpinion letters offer a way for stakeholders to seek assistance from the DOL when confronted with difficult questions as to the application of federal wage and hour law. In 2010, the Obama administration ended the opinion letter process in favor of sweeping Administrator’s Interpretations. The opinion letter program was reinstated in the current administration, but may be jettisoned in a Biden DOL.
  • PAID Program. A Biden WHD can be expected to do away with the Payroll Audit Independent Determination (PAID) program that encourages employers to self-report wage and hour violations.

D. Office of Federal Contract Compliance Programs

In 2019, OFCCP hauled in a record-breaking $40 million plus in legal settlements with federal contractors. That figure does not tell the whole story of the OFCCP in the Trump administration, but is indicative of an aggressive enforcement philosophy that carried over from the Obama administration (despite welcome efforts towards compliance assistance and transparency). Expect a Biden OFCCP to push this enforcement posture even further, particularly when it comes to alleged compensation discrimination (though whoever is running OFCCP in 2021 will have to work around a 2020 high profile ruling against OFCCP that calls into question the agency’s statistical analyses).

Additionally, OFCCP will likely pursue the following changes:

  • Roll back policies and processes established pursuant to President Trump’s Executive Order on Combating Race and Sex Stereotyping.
  • Implement affirmative diversity and inclusion obligations pursuant to a potential executive order.
  • Rescind any regulation relating to religious organizations with federal contracts.
  • Restart the 2014 compensation data collection tool proposal. This regulation never got off the ground and was overtaken by the 2016 wage and hour data collection changes to the EEO-1 form. In part because the EEOC will have a Republican majority through at least mid-2022, OFCCP may seek to revive this proposal.

IV. National Labor Relations Board

Republicans will maintain a majority at the NLRB at least into the summer of 2021, though Democratic member Lauren McFerran will assuredly be named chair in early 2021. She could look to slow down the issuance of case decisions, and especially rulemakings, until reinforcements arrive. Of course, if Republicans retain a majority in the Senate, Majority Leader Mitch McConnell will have a say in who gets confirmed to the Board and when.

Once Democrats gain a majority on the Board, it will come as no surprise that they may seek to roll back current Board policies and return to policies that favor unions. Assuming that Congress fails to enact the PRO Act, a Board with Democrats in the majority may attempt to enact the legislation administratively, where possible. Other action items for a Democrat-controlled NLRB include:

  • Joint Employer. In February 2020, the Board issued a final rule that reestablished the direct and immediate control standard that existed for decades prior to the 2015 Browning-Ferris Industries (BFI) A new Board can be expected to undo this rule and issue its own rule that cements BFI via regulation.
  • Election ProceduresA new Board may look to restore all elements of the “ambush” election rules that went into effect in 2015 but which were amended in 2019.
  • Employee Choice RegulationsA new Board will reverse 2020 final rule changes to the Board’s standards on blocking charges, voluntary recognition, and Section 9(a) bargaining relationships in the construction industry.
  • Other ChangesOver time, expect a Board dominated by Democrats to address the following issues via case law or regulation:
    • Fractured bargaining units (Specialty Healthcare)
    • Employee use of email (Purple Communications)
    • Independent contractors
    • Graduate students
    • Contract bar
    • Secondary activity
    • Employee discipline
    • Dues checkoff
    • Arbitration deferral

V. Equal Employment Opportunity Commission

Recent appointments to the EEOC will give the Commission a Republican majority through at least mid-2022. Further, Republican-appointed general counsel, Sharon Fast Gustafson, will remain in office until 2023. But as with his likely selection of an NLRB chair, Biden can be expected to name a Democratic commissioner (likely Charlotte Burrows) as the chair. In this scenario, Burrows will control the agenda, meaning that the EEOC will try to finalize a conciliation regulation prior to January 20, 2021. Further, the odd dynamic of having a chair who is in the minority will undoubtedly influence, and likely delay, the Commission’s position on a pending National Academy of Sciences analysis of EEO-1 pay and hours worked data, as well as the development of a rule on employer-sponsored wellness programs.

Of course, in Democratic hands, the Commission can be expected to explore ways to collect compensation data from employers. Additionally, a Commission with Democrats in the majority could revoke a September 2020 opinion letter clarifying EEOC’s interpretation and enforcement of “pattern or practice” litigation under § 707(a) of Title VII of the Civil Rights Act of 1964. The letter confirms that when pursuing § 707 pattern-or-practice cases, the EEOC must follow the same administrative prerequisites as when pursuing § 706 cases on behalf of individual employees, such as the requirement of an underlying charge of discrimination and engaging in conciliation.

VI. Immigration

Chances are that a Biden presidency will be friendlier to business immigration needs than the current administration, but this does not mean that there won’t be any challenges for employers that supplement their work forces with high-skilled foreign labor. Biden has a populist/protectionist streak and his campaign website states the following:

Biden will work with Congress to first reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages. Then, Biden will support expanding the number of high-skilled visas and eliminating the limits on employment-based visas by country, which create unacceptably long backlogs.

Thus, employers should not expect all scrutiny of the high-skilled nonimmigrant visa programs to disappear with a Biden victory. That being said, expect a Biden administration to:

  • restore DACA and TPS programs;
  • reaffirm the rule allowing employment authorization for certain H-4 spouses of H-1B nonimmigrants;
  • rescind (or not defend) the U.S. Department of Homeland Security’s rule on Strengthening the H-1B Nonimmigrant Visa Classification Program and accompanying DOL wage rule;
  • rescind the Inadmissibility on Public Charge Grounds final rule;
  • evaluate and possibly rescind current travel bans, although the COVID-19 travel bans may take time to rescind as the situation evolves;
  • rescind the proposed “duration of status” rule for nonimmigrant academic students, exchange visitors, and representatives of foreign information media; and
  • rescind the proposed rule on the collection and use of biometric data in the enforcement and administration of immigration laws.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles on labor law, visit the National Law Review Labor & Employment section.

Key Environmental Law and Policy Issues to Watch in the Biden Administration

On November 7, Joe Biden was projected to become President-elect. This news alert provides a high-level review of issues to watch and changes to expect in a Biden administration. Although the makeup of the Senate is not yet entirely clear, it seems that there will not be a change in Senate leadership and that the House will remain under Democratic control. The ultimate fate of the Senate majority will be decided on January 5, 2021 with the runoff of the two Georgia Senate Seats. For the Democrats to become the majority, they would need to prevail in both Senate races.

The next few years will see significant shifts in U.S. environmental and natural resource law and policy, as well as changes in political and perhaps some career personnel at the U.S. Environmental Protection Agency (EPA) and other federal agencies that establish and implement U.S. environmental regulation. The next six months look to be especially consequential, as the Trump administration seeks to finalize certain ongoing efforts while the new Biden administration identifies and implements early priorities. Although some form of the stimulus bill may get bipartisan support, and Congress must yet fund the government through the appropriations process, we do not expect any major environmental legislation during the remainder of the Trump administration. The Trump administration, however, still has complete Executive Branch authority and can still issue new rules, pursue enforcement actions, and promulgate significant rules. Similarly, without control of the Senate, a Biden Administration will be unlikely to pass significant environmental legislation, particularly a climate bill, but will be able to direct policy through the Executive Branch.

As events unfold, we will provide updates. Please contact the authors, your usual B&D attorney, or any member of our Election Analysis Task Force (including several former senior EPA and U.S. Department of Justice (DOJ) officials) for more information.

Key Takeaways

The Regulated Community should consider taking the following actions in the short term:

  1. Administrative litigation and rulemakings. Know where you stand with respect to ongoing litigation (which may be stayed in the early days of a new administration) and pending rulemakings, as well as recently-promulgated rulemakings or Executive Orders that may be subject to full or partial reversal.
  2. Climate, environmental justice, clean energy, and vehicles. Anticipate aggressive action by the Biden administration on climate change, environmental justice, and clean energy and vehicle technologies. If Congress remains divided, legislation is unlikely to occur, but much can be done through Executive Order and other executive branch action. The administration will also promote infrastructure reform which could be significant and will require legislation that may be able to get bi-partisan support.
  3. Federal-state coordination. Anticipate renewed state-federal coordination, with exceptions and some “patchwork quilt” effects, as the Biden administration EPA, the U.S. Department of the Interior, and DOJ join forces with progressive states on enforcement and implementation of policy priorities. Many of the environmental statutes are designed to be implemented cooperatively between the state and federal governments. This “cooperative federalism” is a balance that in many but not all cases, Trump officials favored with a more limited federal government role and a narrow interpretation of the scope of federal statutory authority. Expect Biden’s EPA and DOJ to increase federal enforcement, directing the agencies to pursue appropriate cases to the fullest extent permitted by law.
  4. Criminal enforcement. Expect criminal enforcement to be more vigorously pursued.
  5. International engagement. Prepare for renewed engagement on international environmental and waste treaties, as the Biden administration reengages in many of these issues.
  6. New key administration officials. Pay attention to new key officials in the new administration, some of whom will probably be announced in December. Generally speaking, cabinet-level officers are announced first. Below is a list of the cabinet-level officials in the areas of energy, environment, project development, and worker safety and the Senate committee that would review their nomination.

Immediate (Pre-Inauguration) Considerations

Transition Process

President-elect Biden has an established transition team with five co-chairs and a 15-person advisory board. The leaders are as follows:

  • Former U.S. Sen. Ted Kaufman
    Appointed to the U.S. Senate from Delaware on Jan. 15, 2009 and served until Nov. 10, 2010.
  • Jeffrey Zients
    CEO of Cranemere, a private equity firm. Past Director of the National Economic Council and Assistant to the President for Economic Policy, at the White House Feb. 2014-Jan. 2017.
  • Gov. Michelle Lujan Grisham
    Elected Governor of New Mexico in Nov. 2018. Served three terms in the U.S. House.
  • U.S. Rep. Cedric Richmond
    Member of the U.S. House representing LA-2. First elected in Nov. 2010.
  • Anita Dunn
    Senior advisor on the Biden campaign.

President-elect Biden has also indicated that he intends to name the White House Chief of Staff very soon.

Other specific transition steps typically occur. In September, the Office of Management and Budget (OMB) sent a memorandum to all of the federal agencies titled “Guidance on Presidential Transition Preparation.” The memo required each agency to designate a senior career official as in charge of the transition, and outlined its purpose as follows:

“This memorandum provides guidance to agencies on transition preparation requirements and deadlines consistent with the statutory obligations in the Presidential Transition Act of 1963, as amended (3 U.S.C. § 102 note) (the Act) and best practices. In addition to the ongoing work required by the Act, this guidance is intended to ensure the seamless continuity of Federal government operations and services during a transition to a second term of an administration or to a new administration. It also increases the transparency of the transition process. As agencies implement the guidance outlined below, officials should approach the work in ways that are responsive to the ongoing needs of the current administration while balancing the preparations for a potential new administration.”

Biden’s transition team has already signed a memorandum of understanding with President Trump’s General Services Administration to begin planning for a potential handover of power. The document is required under the Presidential Transition Act and formalizes how the federal government will go about assisting Biden’s transition team ahead of Election Day. For the memorandum to be effective, the GSA Administrator Emily Murphy, must sign a letter acknowledging Biden as the President-elect.

In addition to the transition team, “landing teams” will meet with each federal agency to collect information and interview selected individuals to prepare for the new administration. Those landing teams are not agency officials and do not receive confidential or privileged information, but are extraordinarily valuable to the new administration. They report regularly to the incoming White House on the immediate issues facing the administration and provide an important conduit between the incoming President’s team and the executive agencies.

Personnel

While landing and transition teams have already begun work (or will soon increase the pace of their work), the Trump administration still has nearly three months with which to complete its work. Amidst the changeover in political appointed positions, career staff will continue to make decisions and move matters forward. Ensure that your relationships with career officials at headquarters and regional offices are sound, as you will need to rely on them over the next six months and beyond.

It is typical for virtually all of the outgoing administration political appointees to resign before the new administration starts. The exception is often the U.S. Attorneys, who are sometimes held over in their positions. At the beginning of a new administration, political positions are either temporarily filled by political appointees or often with senior career officials.

Ensure that your relationships with career officials at headquarters and regional offices are sound, as you will need to rely on them as appointed positions change over the next six months.

Post-Inauguration Administrative, Legislative, and Judicial Process

Expect the new administration, upon taking office, to immediately issue a directive withdrawing pending regulations that are not yet published in the federal register. This could include final rules that are awaiting publication. This is a standard approach by a new administration.

The new administration will also review executive orders and guidance documents and rescind those that conflict with Biden policy direction. There are over a dozen, maybe two dozen, different executive orders and many, many guidance documents relevant to environmental policy direction. These do not have the force of law but often direct agencies to take specific actions. The Environmental Law Institute and Harvard Law School’s Environmental and Energy Law Program have produced useful references on this subject. Note that rescinding an Executive Order, which can be done immediately, does not rescind implementing actions, such as new regulations finalized in response to the Executive Order.

Without democratic leadership in the Senate, significant environmental legislation is not expected, with the possible exception of a bi-partisan infrastructure bill. Without legislation, Biden will be particularly interested in moving policy forward using Executive Branch tools. A Biden administration will want to issue new executive orders to re-direct the federal government consistent with his policy initiatives, such as environmental justice. For example, he has already pledged to revise and reinvigorate the 1994 Executive Order 12898 (EO 12898) Federal actions to Address Environmental Justice in Minority Populations and Low-Income Populations. In addition, he has pledged that he would rejoin the Paris Accords on the first day of the administration, which can be done by Executive Order.

DOJ will likely seek to stay federal litigation, particularly litigation challenging rulemaking, to allow time to develop new administration positions. The administration would then have the option of supporting the regulation, rescinding it through the Administrative Procedure Act process, and/or replacing it with a new regulation. Currently, litigation is pending on several high profile rules, including the Navigable Waters Protection Rule that defines the scope of Clean Water Act jurisdiction, the National Environmental Policy Act revisions, and the Affordable Clean Energy Rule which regulates greenhouse gases from coal-fired electric generating units. In addition, there is active litigation on the California waiver, which determines whether California will be allowed to continue to set vehicle emission standards.


© 2020 Beveridge & Diamond PC
For more articles on environmental law, visit the National Law Review Environmental, Energy & Resources section.

Election Results: New Data Privacy and Security Laws

Although the Presidential race is unconfirmed at the time of this writing, there are several data privacy and security laws to put on your radar following the election this week.

Here is a brief list of laws that passed that we are aware of so far. We will provide more information as news breaks, but in this ever-changing area, we want to alert you to some important changes in the state law landscape following the election.

California’s Prop 24

 This proposition updates California’s CCPA, now referred to as California Privacy Rights Act (CPRA). In addition to other provisions (link Deb’s blogs from today and last week here), from a compliance perspective, it establishes a first-of-its-kind enforcement agency, the California Privacy Protection Agency, which will oversee enforcement of CPRA, and further establishes fines and penalties for violation of the law. The law goes into effect on January 1, 2023, for all data that are collected starting on January 1, 2022. Keep this one on your compliance radar and we will update you further.

Maine Approves Referendum on Limiting Use of Facial Recognition Technology 

Maine voters approved Referendum Question B, which strengthens the ban on the use of facial recognition surveillance technology by police and public officials. 

Massachusetts Votes in Favor of Ballot Question 1 

Massachusetts voted in favor of Ballot Question 1, which would require car manufacturers to equip vehicles using telematic systems with an open-access data platform starting with the model year 2022.

A detailed analysis of Ballot Question 1 is here.

Michigan Amends Constitution to Require Warrant for Access to Electronic Data

In Michigan, it appears that voters have approved an amendment to the state constitution to require search warrants for law enforcement to access electronic data and communications. The measure amends that part of the constitution that provides for the protection against unreasonable search and seizure.

Staying abreast of new state laws and regulations is a complex process for those charged with compliance adherence. We will continue to update you on the most significant changes to assist you in your compliance efforts.


Copyright © 2020 Robinson & Cole LLP. All rights reserved.
For more articles on privacy, visit the National Law Review Communications, Media & Internet section.

The 2020 Election: Previewing the Potential for Shifts in Labor & Employment Law

As Election Day approaches, employers nationwide consider the changes that may come with a victory by Senator Joseph Biden in the Presidential race and/or shift in representation in the U.S. Senate.  While we cannot be certain of what the future holds—either in the election or the subsequent legal landscape—the Bracewell Labor & Employment team has prepared the following information in an effort to highlight areas of employment law that may transform, in both the near and far term, in the event of such changes in the country’s elected officials.

Labor Relations, Collective Bargaining and Union Organizing

  • Senator Biden strongly supports unions, stating that “Everything that defines what it means to live a good life and know you can take care of your family  . . . is because of workers who organized unions and fought for worker protections.”
  • Specifically, he supports:
    • Provisions of the Protecting the Right to Organize Act (PRO Act) – which would institute financial penalties on companies that interfere with union organizing – and supports legislation that would hold company executives personally liable for such interference.
    • Funding a “dramatic increase” in the number of investigators at the National Labor Relations Board (NLRB).
    • Shorter timelines for union election campaigns and bans on mandatory employer meetings with employees during union organizing campaign.
    • Creating a federal right to union organizing and collective bargaining for all public sector employees.
    • Creating a cabinet-level working group that will “solely focus on promoting union organizing and collective bargaining.”
    • Extending the right to organize and bargain collectively to independent contractors.
  • While recent prior Democrat administrations were not able to strengthen organized labor in the way Senator Biden’s platform hopes to achieve, at a minimum, if Senator Biden were to become President, his appointments to the NLRB would return a pro labor union majority to the agency.  In that case, the NRLB decisions and rule making would strengthen union organizing and limits on workplace rules.

Workplace Rules

  • President Donald Trump shifted the limits of employer workplace policies by undoing pro-union rulings the NLRB made under former President Barack Obama.  A Biden Presidency would likely swing such rulings back to where they were in the Obama era.
  • Employees should look for potential changes in the following areas:
    • Facially neutral workplace rules:  The Trump NLRB, in its Boeing Company decision, ruled that an employer does not necessarily violate the NLRA by maintaining a facially neutral work rule, policy or handbook provision that could be reasonably construed to interfere with union or other protected concerted activity protected under Section 7.  This overruled Lutheran Heritage Village-Livonia, which under the Obama administration, was frequently applied to invalidate facially neutral employer rules adopted and applied for legitimate business reasons unrelated to an employee’s Section 7 activity. Examples of Section 7 activity include the right discuss wages and working conditions and the right to organize.
    • Workplace investigations: In its 2015 Banner Health decision, the NLRB prohibited employers from requiring employees to keep workplace investigations confidential.  Last December, the Trump NLRB, in Apogee Retail, reversed the Banner Health decision, finding that employer policies that require confidentiality during internal investigations are per se lawful.
    • Employer e-mail: As a result of the NLRB’s 2014 Purple Communications decision, employers could not prohibit employees from accessing company email for union-related communications.  The Trump NLRB, in its Caesar’s Entertainment decision, restored employer rights to prohibit use of its email systems for non-business purposes.

Employment Law Developments and Enforcement

Senator Biden supports the following legislation:

  • The Equality Act
    • A proposed law that would codify anti-discrimination protections for LGBTQ individuals in employment as well as other contexts, including housing.
    • Ensure protection from associational discrimination – discrimination on the basis of a person’s association with an individual in a protected class.
    • The Equality Act passed the House of Representatives but has not come to a vote in the Senate.
  • Paycheck Fairness Act
    • A proposed law that addresses wage discrimination on the basis of sex.
    • Amends equal pay provisions of the Fair Labor Standards Act to restrict use of the bona fide factor defense to wage discrimination claims, enhance non-retaliation provisions, make it unlawful to require an employee to sign a contract or waiver prohibiting the employee from disclosing information about the employee’s wages and increase civil penalties for violations of equal pay provisions.
    • Prohibits employers from screening job applicants based on their salary history or requiring salary history during the interview or hiring process.
    • Requires EEOC to issue regulations for collecting compensation and other employment data from employers according to the sex, race, and ethnic identity of employees for use in enforcing laws prohibiting pay discrimination.
    • The Paycheck Fairness Act passed the House of Representatives but has not come to a vote in the Senate.

Department of Labor: Independent Contractors, Wage Changes and Federal Contractors

  • As stated above, Senator Biden supports the PRO Act:

    • Increasing the standard to classify workers as independent contractors
    • Expanding the definition of “joint employer”
    • Criminal liability for employer interference with organizing efforts
  • DOL, Wage & Hour/FLSA:  Recent Rules & Potential Changes
    • (Existing) Final Rule increasing the salary threshold to $684/week
      • If the minimum wage is increased to $15/hr, then the salary threshold would likely increase to retain a sufficient gap between exempt and non-exempt employees under the FLSA ($15/hr = $600/wk)
    • (Existing) Final Rule expanded Section 7(i) overtime exemption for retail and service industries by withdrawing the dated list of businesses with “no retail concept.”
      • Likely not affected
    • (Existing) Final Rule allows bonuses or other incentives to salaried, nonexempt employees without defeating the fluctuating workweek” method described in 29 CFR 778.114.
      • Likely not affected
    • (Existing) Final Rule on joint employer describing “vertical” and “horizontal” joint employer scenarios (enjoined by federal district court) to the extent the DOL too narrowly defined joint employment)
      • This may be challenged.
    • Proposed rule adopting the “economic realities” test for  independent contractors and emphasizing the factors of control and opportunity for profit and loss.
      • This may be challenged.
  • Senator Biden’s general proposals:
    • Increased penalties (in addition to current FLSA remedies and liquidated damages) for worker misclassification.
    • Senator Biden proposes to increase DOL/FLSA enforcement effort.
    • Senator Biden proposes to increase staffing of agencies.
    • Senator Biden proposes  greater collaborative enforcement efforts between various labor agencies (NLRB, EEOC, IRS, State unemployment and labor agencies).
  • Executive Orders & the Office of Federal Contract Compliance Programs (OFCCP)
    • Executive Order 13950, “Combating Race and Sex Stereotyping” prohibiting federal contractors from instilling race or sex stereotyping or scapegoating in workplace diversity and inclusion training
      • Likely withdrawn by Senator Biden administration
  • Notably, the OFCCP under the Trump Administration collected greater enforcement fines than expected –  e.g., OFCCP collected more than $21 Million from Dell Technologies, Goldman Sachs and Bank of America primarily relating to gender/race wage disparity claims.

COVID Response – Economic and Public Health Policies Affecting Employers

  • From “Unemployment” to “Employment Insurance”:
    • Focus on maintaining employment at reduced hours, with federal government supplementing worker wages
    • 100% federal financing for short-time compensation plan that is “automatically extended based on economic and health conditions” (without the vote of Congress)
    • Tax credit for employer’s extra health care costs
  • COVID:
    • Create Pandemic Testing Board to “guarantee regular, reliable and free access to testing for all, including every worker called back to the job”
    • Hire 100,000 Americans to conduct contact tracing
    • Ensure emergency paid leave for all who contract COVID-19 or need to care for a loved one with COVID-19
    • “Ensure worker protection and accountability” including tasking OSHA with “setting and enforcing a rigorous emergency temporary standard”
    • Equip small business with a “restart package” to retain and rehire workers
  • Schools – Issuing “basic, objective criteria” at the federal level to guide school reopening and passing significant emergency federal funding for school.

OSHA and Workplace Safety

  • Senator Biden has committed to reinstating a variety workplace safety and health regulations altered during the Trump administration, such as regulations requiring companies to report their workplace injuries.
  • He also has promised to increase the number of investigators in the Occupational Safety and Health Administration (OSHA) and the Mine Safety Health and Administration (MSHA) and to direct OSHA to substantially expand its enforcement efforts.

Employment Agreement Restrictions

  • Senator Biden has promised to will work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets, and outright ban all no-poaching agreements.

© 2020 Bracewell LLP
For more articles on the election, visit the National Law Review Election Law / Legislative News section.

Which Way will the House Go? Democratic or Even More Democratic?

As we head towards the election on November 3, 2020, the question is not whether the US House of Representatives will remain in the hands of the Democrats. Polling suggests that is a near certainty. The question is by what margin they will control the chamber. Democrats currently control 232 seats, while Republicans control 197 seats, with one independent and five vacant seats. The number of seats controlled by Democrats in the 117th Congress has significant implications for Democrats’ ability to forward their agenda, especially if they are also in control of the White House and the US Senate.

Below we take a look at a few of the structural forces at play in the House elections and identify key races to watch on election night.

The Uphill Challenge for Republicans

On election night 2016, Republicans controlled 241 seats in the House. The 2018 election went disastrously for Republicans as they lost control of the House for the first time since 2010. A Republican return to control two years later was always going to be an uphill battle. The last time a party regained control of the House a mere two years after losing it was in 1956 when Democrats retook the House.

House Republicans are going into the cycle with 31 of their members retiring. By comparison, Democrats have only 12 members retiring. The incumbency advantage in House races has traditionally been significant. With Republicans having to defend 31 open seats while trying to win back enough seats to retake the House, the proposition of a productive election night becomes all the more challenging.

The Challenge (and Opportunity) For Democrats

Since the 1994 Republican takeover ended 40 years of Democratic rule of the House, we have seen three change elections: 2006, 2010 and 2018. A change election occurs when the minority party flips a significant number of seats previously held by the majority party. The challenge for the new majority party after winning a change election is to keep those seats from immediately flipping back to the other party in the next election. This is one of the key challenges that House Democrats face on November 3. In order to keep their majority, Democrats must hold seats that Republicans won in 2016 with Donald Trump at the top of the ticket.

Democrats are also attempting to expand the electoral playing field with competitive candidates in as many of the seats being vacated by retiring Republicans as possible. This will allow Democrats to potentially grow their majority.

A Time Zone Approach to Reading Election Night

Below are 24 seats that will be important for deciding party control and margin in the House. They are currently evenly divided between Democrats and Republicans, 12 to 12. The charts below are divided by time zone for your convenience as you follow along on election night.

The Democratic seats are predominantly held by incumbents seeking reelection for the first time with President Trump at the top of the ticket. Democrats’ ability to hold these seats is critical to growing their margin in the House. If Democrats lose these seats while not picking up Republican seats, it will be a very bad night for the Democrats.

The Republican seats are a combination of incumbents seeking reelection and open seats. If Republicans lose these races in states such as California, Pennsylvania and New York, it may be indicative of a defeat at the top of the ticket hurting the party down the ballot.

Time Zone Chart

How Much Does Margin Matter in the House?

It goes without saying that the margin in the House matters—but how much? It really comes down to the ideological diversity within the majority. If the majority party has 225 members who vote in ideological lockstep, then it doesn’t matter whether the majority party ultimately has 235, 255 or 275 votes in the House.

Ideological diversity is better understood in terms of a bell curve. On one tail of the curve are members who are more ideologically strident and represent districts that support their position: the far left or far right of the party. On the other tail of the curve are members who represent toss-up districts and who, regardless of their personal ideology, must be more careful with their votes. The vast majority of the party may be largely in ideological agreement with their more strident members but are willing to make compromises to achieve policy outcomes that protect members in toss-up districts. The difficulty governing in the House comes when the members in toss-up districts and/or the strident members are too numerous and refuse to vote for any compromise.

When the ideologically strident members refuse to compromise, we call that the John Boehner problem. When Speaker Boehner led a Republican majority with 234 members but faced a far-right flank of 25 members committed to opposing all legislation that wasn’t exactly what they wanted, it effectively limited his ability to lead the House. In the latter part of his speakership, Boehner regularly had to make compromises with the Democrats that gave the minority vastly more influence in the final legislation than they typically command.

In 2009, Democrats had 257 seats in the House and still struggled to secure 218 votes to pass the Affordable Care Act. The problem then was too many members from toss-up seats and too many members who were not as far left ideologically as the majority of their caucus. The current Democratic majority of 232 is arguably less ideologically diverse than the larger 2009 majority.

With a robust progressive agenda on the table for 2021, Democrats may face the challenge of garnering sufficient support on critical legislation from the ideologically strident members who may be reluctant to compromise.

The margin will still matter significantly if Democrats control the White House, the Senate and the House and seek to move major progressive legislation. The effort to get to 218 votes will always be a challenge. Democrats will have to meet that challenge while satisfying the vast sweep of their majority and their more ideologically strident members. Doing so will be easier if there are 255 Democrats as opposed to 245 Democrats in the House.in the aftermath of the general election, which will make the politics of that vote an event unto itself.


© 2020 McDermott Will & Emery
For more articles on the election, visit the National Law Review Election Law / Legislative News section.

When Governors Bite Back: Circuit Court Upholds Hawaii Governor’s Emergency Powers

As mentioned in our previous post, the legality of state Governors’ emergency powers have come under scrutiny during the pandemic. Michigan’s Supreme Court, for example, recently struck down Governor Gretchen Whitmer’s emergency powers. The Hawaii Circuit Court, however, recently dismissed a legal challenge to Hawaii Governor David Ige’s emergency powers. In response to the victory, Hawaii Attorney General Clare Connors stated “[t]his decision sends an important message at an important time—the Governor’s emergency proclamations are lawful. By continuing to follow these rules, all residents and visitors protect each other and promote public health during this pandemic crisis.”

The lawsuit alleged that Governor Ige’s powers were time-limited, lapsing after the initial 60-day period following the declared state of emergency. Plaintiffs argued that the Governor’s supplemental emergency proclamations were facially invalid, and invalid as applied to Plaintiffs. Plaintiffs sought an order permanently enjoining Governor Ige and Hawaii Mayor Harry Kim from issuing further executive orders, or enforcing existing orders. The State argued, however, that no language prohibits supplementary or additional emergency proclamations from being issued, and that HRS Section 127A provides that the Governor or Mayor shall be the “sole judge of the existence of the danger, threat, or circumstances giving rise to a declaration of a state of emergency[.]” HSR § 127A-14(c).

The court agreed with the State, finding that “the use of supplementary proclamations is lawful” and that the purpose of Hawaii’s emergency powers statute “is to confer comprehensive powers to protect the public and save lives.” However, the court acknowledged that the Governor’s powers are not without limit. The court held that “[t]o support each successive emergency proclamation, the Governor must identify the existence of the danger, threat, or circumstances giving rise to a declaration of a state of emergency. When the facts on the ground no longer justify such a determination, the Governor’s emergency powers will cease.” Plaintiffs did not challenge the existence or impact of the pandemic within Hawaii.

Had the Circuit Court found the Governor’s supplemental emergency declarations unlawful as Plaintiffs argued, Hawaii’s price gouging statute may have also been declared unlawfully in effect. Hawaii’s price gouging law, which is triggered upon the governor or mayor declaring a state of emergency prohibits “any increase in the selling price of any commodity, whether at the retail or wholesale level, in the area that is the subject of the proclamation or the severe weather warning.” Hawaii Rev. Stat. §127A-30.

As previously mentioned, the limits of emergency powers have become a hot topic during the pandemic. Businesses need to stay current with respect to changes that may result from the coming potential wave of orders being challenged and rescinded.


© 2020 Proskauer Rose LLP.
For more articles on state powers, visit the National Law Review Election Law / Legislative News section.

Senate Election Preview

Control of the US Senate is never inconsequential. However, control of the Senate at the end of this election cycle seems to be significantly more consequential than previous cycles. If former Vice President Joe Biden is elected president, his ability to deliver on the Democratic agenda will depend on Democrats taking control of the Senate, and the margin by which they do so. If President Trump is reelected, his administration’s ability to function normally in a second term would improve if Republicans maintain control of the Senate and are able to approve his nominees.

HISTORICAL CONTEXT

Every Senate election cycle, and every individual election within an election cycle, is what academics would refer to as an independent event. Every six years for a given Senate seat, each campaign and its outcome is a function of the individual candidates, the actions of their campaigns, and the current circumstances surrounding those candidates and campaigns. History is important to provide context, but the outcomes are independent from the history.

Nonetheless, history tells us something about odds, and historic experience is illuminating as we look to predict potential 2020 Senate outcomes, because presidential victories, driven by state-specific Electoral College results, tend to align with Senate results too. For example, if a presidential candidate carries Nebraska, chances are high that the Senate candidate of the same party also will win in Nebraska. Going back through election history, four specific trends are valuable for considering the Senate outcome in this election cycle. This is not to say these trends predict the outcome in any specific race, but rather each example speaks to how each outcome would fit, or not, within trends over the last two decades or longer.

  1. If Biden wins the presidential election, the White House would change party ownership. The last time the White House changed party ownership and the new owners didn’t also control the Senate was the election of Richard Nixon in 1968. If Biden wins and the Senate is not also under Democratic control, it would be the first time in more than 50 years that an election produces a split White House and Senate.
  2. A president that wins reelection does not lose the Senate. This is not to say that a president winning reelection must flip the Senate. Richard Nixon and Bill Clinton won reelection while the Senate remained under control of the opposition party. Since the Civil War, how many times has a president running for reelection lost control of the Senate in the same election? Never. Trump winning reelection and Republicans losing control of the Senate would be a first.
  3. In 2016, Republican Senate candidates won every state that President Trump won. Where Trump lost, the Republican candidate lost. The last Republican to win a Senate race when the Democratic candidate for president won that same state was Susan Collins in Maine in 2008. The last Republican to defeat a Democratic incumbent in a presidential election year was John Thune over Tom Daschle in 2004. No Republican Senate candidate has defeated a Democratic incumbent while the Democratic presidential candidate won the same state in the last 20 years. If Biden wins a state, history favors the Democrats holding or flipping the Senate seat.
  4. In 2012, four Democratic Senate candidates won states that Mitt Romney won, although none of them defeated an incumbent Republican senator. The last time a Democratic defeated an incumbent Republican senator while the Republican presidential candidate won the state was Mark Begich over Ted Stevens in 2008, and prior to that Mel Carnahan over John Ashcroft in 2000. For Democrats to take decisive control of the Senate (a margin of two or more seats), they will need to win seats that run counter to outcomes over the last 20 years.

With this historical context in mind, below we provide additional context for the Senate seats that could decide how the politics in the Senate will function in 2021.

LIKELY REPUBLICAN

Democrat Doug Jones won election to the Senate from Alabama with a surprising special election victory over the highly controversial Republican candidate Roy Moore. In a presidential election year, with Republicans fielding a significantly less controversial candidate, Tommy Tuberville, Alabama is the Senate seat most likely to change parties in the 2020 election. Count this as a likely Republican pick-up.

LEANING DEMOCRATIC

The three most endangered Republicans in the Senate are Susan Collins (Maine), Cory Gardner (Colorado) and Martha McSally (Arizona). Biden is highly likely to win Colorado and Maine. Thus, for Gardner and Collins to survive will require significant ticket splitting. While McSally has the advantage of Trump being the favorite in Arizona, she is running for election as an appointed incumbent who has consistently polled behind throughout the race. If Republicans win any of these three Senate seats and pick up Alabama, Democrats gaining control of the Senate is unlikely.

THE ONES THAT DECIDE THE MARGIN

If Biden wins the White House and Democrats win the three toss-up races while simultaneously losing Jones in Alabama, one of the following seats must go to the Democrats for them to take functional control of the Senate : Iowa, Montana or North Carolina. These three states are all considered highly competitive. Accordingly, for Democrats to take control of the Senate and expand their working margin for 2021, they will have to defeat Republican incumbents in three states that President Trump won in 2016. At the presidential level, Iowa and North Carolina are toss-ups. The better Biden does in those two states, the more plausible it is for the Democrats to upset the Republican incumbent. For the Democrats to defeat Republican incumbent Steve Daines in Montana in a presidential year would be something atypical in the last generation, as Montana has consistently voted Republican in presidential elections.

THE LANDSLIDE

What does the bottom falling out look like for Republicans in the Senate? If Biden clearly wins the White House, taking as many electoral votes as Obama did in 2008 (somewhere around 365), and is competitive in close races in typically red states, other Republican incumbents could be in danger. John Cornyn (Texas), David Perdue (Georgia) and Lindsey Graham (South Carolina) are all in potential jeopardy in this scenario. But it is worth remembering that, as discussed previously, in the last 20 years only two Republican senators have lost reelection in a presidential election year in which the Republican presidential candidate wins their state, and both of those instances occurred under unusual circumstances.

NOT COMPLETELY OFF THE TABLE

There are two races on each side that at least warrant a passing comment because the outcome is not the certainty that we see in other Senate races that are considered safe seats. On the Republican side, the open seat in Kansas and, of course, Mitch McConnell’s seat in Kentucky are seats Democrats dream of carrying on November 3. While not impossible, those Senate seats changing hands seems improbable. Alternatively, in a world where Republicans have a better day than conventional wisdom might expect, Democrats would be concerned about Gary Peters (Michigan) and Tina Smith (Minnesota). Of the four mentioned here, Peters is the most plausible upset because of the potential that Trump could win Michigan.

A RUNOFF TO WATCH

It is highly unlikely that the winner of the Georgia special Senate election will be decided on November 3. Absent the unlikely occurrence that one of the six candidates wins a majority, it will necessitate a runoff election. The outcome of that runoff will determine the final Senate margin and will occur in the aftermath of the general election, which will make the politics of that vote an event unto itself.


© 2020 McDermott Will & Emery
For more articles on the election, visit the National Law Review Election Law / Legislative News section.

Election Season and the Workplace, Part 1: Employee “Free Speech” and Political Activities

With Election Day just around the corner, we’ll be highlighting some of the issues facing employers in a two-part series on elections and the workplace. In this first installment, we’ll look at employee protections around political speech and activity both in and outside the workplace. In Part 2, we’ll address statutory leave entitlements for employees to vote or engage in other political activities.

Political Speech in the Workplace

Political speech and activity in the workplace is a recurring source of employer concern, for a number of reasons. First, when these discussions or activities occur during working hours, they can impact performance, productivity, or even cross the line into unlawful bullying or harassment.

In addition, if the employer is a tax-exempt organization, certain political speech can also implicate the organization’s tax-exempt status. Many tax exempt-organizations are subject to significant restrictions on lobbying and political activities in exchange for the public subsidy that they receive. For example, a 501(c)(3) organizations may lose their tax-exempt status if they engage in political campaign activities or if a substantial part of its activities involve lobbying. Speech by an employee that constitutes political campaign or lobbying activity may be attributed to the organization if it can be inferred that an employee’s speech is made as a representative of the organization or that the speech has been ratified by the organization. This could happen, for example, if an employee, using their own social media account that the employee also uses to engage in speech on behalf of the organization, engages in lobbying activity by urging followers to contact their state representative to advocate for the adoption or rejection of proposed legislation.

Finally, when employees attend political rallies or support causes – for example, on social media – they may (intentionally or not) criticize or create a conflict of interest with their employer. How far employers can go to restrict employee speech and activity is a complicated question, governed by several sources of law.

Employee “Free Speech.”

Despite popular misconception, there is no general right to “free speech” in a private sector workplace.  As an initial matter, because the U.S. Constitution is primarily concerned with issues that involve state actors rather than private actors, the First Amendment does not prevent private employers from prohibiting political speech in the workplace.  Speech by public sector employees may be protected by the First Amendment, but only to the extent it involves a matter of public concern.  Therefore, subject to the limited exceptions discussed below, private sector employers are generally free to prohibit and discipline employees for discussing politics at work.

Free speech protections can extend to private sector employees by statute.  For example, Connecticut General Statute § 31-51q prohibits employers from taking any adverse action against employees for exercising their First Amendment rights, provided that such activity does not interfere with the employee’s job performance or the employment relationship.  As in the context of public sector free speech protections, courts have interpreted this statute to only protect statements made outside of the scope of employment, and not speech pursuant to official duties (e.g., reports of labor law or payroll violations).

In addition, Section 7 of the National Labor Relations Act (“NLRA”), which applies to both union and non-union employees, protects certain “concerted activities” of employees for the purposes of “mutual aid or protection.”  Political speech or activity that is unrelated to employment – for example, an employee distributing campaign literature encouraging co-workers to vote for their candidate or political party of choice – would not be covered or protected by the NLRA. The NLRA therefore does not prevent employers from prohibiting these purely political discussions or activities in the workplace.

However, political speech may be protected by the NLRA when it relates to the terms or conditions of employment.  For example, conversations regarding wages, hours, workplace safety, company culture, leaves, and working conditions may be deemed protected concerted activity and therefore be protected.  An employee who encourages co-workers to vote for a candidate because the candidate supports an increase in the minimum wage might claim protection under the NLRA.

The same rule generally applies to employee advocacy.  When employees are engaging in advocacy unrelated to employment, the National Labor Relations Board has taken the position that employees are simply acting “in the interest of the community at large and in furtherance of [their] own political agenda.”  For example, a construction worker engaging in advocacy involving police reform at a protest or before a legislative body would likely not be protected because the topic of the advocacy is unrelated to the employee’s job as a construction worker.  However, if the same construction worker was advocating before a legislative body in support of safety regulations that would impact the jobsite, the employee’s advocacy would likely qualify as protected concerted activity.

Therefore, despite that employers have broad authority to prohibit political discussions at work, employers should ensure that their policies and practices do not infringe upon rights granted to employees under state law or the federal NLRA.

Lawful Outside Activity/Off-Duty Conduct Statutes.

Many states have laws that prohibit adverse action against employees based on lawful activities outside the workplace, including political activities. For example:

  • In approximately a dozen states, employers are prohibited from preventing employees from participating in politics or becoming candidates for public office. New York Labor Law § 201-d prohibits employers from discharging or otherwise discriminating against employees because of their “political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property, if such activities are legal.”  Political activities are defined to include: (1) running for public office, (2) campaigning for a candidate for public office, or (3) participating in fund-raising activities for the benefit of a candidate, political party, or political advocacy group.  Similar laws exist in CaliforniaLouisiana, and Minnesota, among other states.
  • Other states – including DelawareFloridaMassachusetts, and New Jersey– prohibit employers from attempting to influence an employee’s vote in an election. For example, in Florida, “[i]t is unlawful for any person … to discharge or threaten to discharge any employee … for voting or not voting in any election, state, county, or municipal, for any candidate or measure submitted to a vote of the people.”   A dozen or so states approach this issue in a more limited fashion by prohibiting employers from attaching political messages to pay envelopes.
  • At least two states, Illinois and Michigan, prohibit employers from keeping a record of employee’s associations, political activities, publications, or communications without written consent.
  • Washington, D.C. prohibits discrimination in employment on the basis of political affiliation. Despite its seemingly broad scope, this statute has been interpreted to only protect political party membership and not (1) membership in a political group, or (2) other political activities, such as signing a petition.

These laws vary considerably from state to state, so it is important for employers to consult the statutes in each jurisdiction in which they operate and ensure that their policies and practices are compliant.

Employer Access to Employee Social Media.

As employees turn to social media to discuss the election and other political and social issues, employers should remain mindful of restrictions on their ability to monitor or discipline employees for their social media use.  In addition to potential issues under the NLRA and state-level free speech guarantees, the federal Stored Communications Act (“SCA”) and a number of state statutes also regulate an employer’s ability to monitor employee social media activity.

The SCA affords privacy protections to certain electronic communications.  Although the law predates the advent of social media as we know it today, courts have applied it to unauthorized access of employee social media accounts.  Therefore, employers across the country should exercise caution before accessing employees’ social media accounts without their authorization or coercing employees to turn over information posted on social media.  Such actions not only carry risk under the SCA, but also under various state laws.  For example:

  • Approximately half a dozen states – including ColoradoNew Hampshire, and Vermont – prohibit employers from requesting that employees change their privacy settings to make information on social media accounts visible to their employer.
  • In more than two dozen states – including CaliforniaIllinoisLouisianaMarylandNew Jersey, and Virginia – employers are prohibited from requesting social media usernames and passwords from employees.

Despite these limitations, employers generally have significantly greater leeway to monitor social media activity conducted on the employer’s systems when such monitoring is pursuant to the employer’s written policy.  In addition, many of the statutes prohibiting employers from requesting social media log-in information contain exceptions that allow employers to request this information for the purpose of accessing an employer-owned device or account.  Employers relying on their internal policies to justify action with an impact on employees should always be mindful to interpret and apply those policies in a consistent and otherwise non-discriminatory manner.

*     *     *

All signs point to this year’s election season being one of the more contentious in U.S. history.  Given the wide range of federal, state, and local laws protecting employee speech and political activities, employers should: (1) review their policies to ensure that they are compliant with the laws in each jurisdiction in which they operate, (2) communicate these policies to managers and supervisors and provide effective training where necessary; and (3) monitor compliance on a regular basis.


© 2020 Proskauer Rose LLP.
For more articles on the election, visit the National Law Review Election Law / Legislative News section.

ABA Encourages Attorneys and Law Students to Volunteer as Poll Workers

The stakes are high for the 2020 Election.  The nation is deeply divided politically, and a global pandemic is upending daily life. At this time of unrest, a smooth and efficient election process is crucial.  The ABA (American Bar Association) is encouraging lawyers and law students to volunteer as poll workers to perform an important civic duty during a difficult time.

The ABA, though the Standing Commission on Election Law, is working with the National Association of Secretaries of State (NASS) and the National Association of State Election Directors (NASED) to encourage attorneys and law students to volunteer as poll workers.  Patricia Lee Refo, President of the ABA:

 “Long wait lines at polling places or unexpected delays in getting election results counted can add to a distrust of the system . . .We hope lawyers and law students step up to help make this election run smoothly and efficiently.  I have volunteered as a poll worker here in Phoenix, and I hope this initiative inspires others to join me.”

COVID-19 Creates Adds Challenges to Poll-Worker Recruitment

Sylvia Albert Director of Voting and Elections at Common Cause, a watch-dog group focused on ensuring access to the vote and election integrity, points out that poll-workers are usually in short supply. Albert describes the problem of the shortage of poll workers this year as  “exponentially larger.”

Law students and younger attorneys may have an increased role this year. Poll workers in the United States are generally older Americans.  In 2018, 58% of poll workers were 61 or older, according to the Election Assistance Commission, and over 25% are 71 or older. Even without underlying medical conditions, this is an age group that has an increased vulnerability to the Coronavirus.  Many in this age group are choosing to sit 2020 out due to concerns about their health and coming into contact with a large number of people at a polling location, and younger poll workers can help undercut a shortage.  To this end, the ABA Young Lawyers Division and the Law Student Division have joined the initiative.  This could provide many younger attorneys and law students with the opportunity to provide an important civic service and ensure a smooth, efficient election experience for voters.

Law Firm Involvement and Election Day Time Off

Many big law firms are providing a paid day off for their employees and attorneys on election day. Mintz, Jenner & BlockHogan Lovells and many more firms have announced plans to make election day a paid holiday to encourage employee voting and volunteering in election-related activities.   Fenwick & West indicated their voting push will include “volunteer and community service opportunities for people to engage in nonpartisan election activities—including get-out-the-vote letter-writing campaigns, hosting and staffing an Election Protection call center, poll monitor training and support, and supporting nonpartisan organizations working for voter protection, registration and outreach.”

The ABA’s Push for Attorneys as Poll-Workers

To encourage the effort, the ABA has released a video (watch it below) which details the sign-up process.  Additionally, a social media campaign on Twitter, Linkedin and Facebook with the hashtag #PollworkerEsq encourages lawyers and law students to volunteer.  Work may include staffing polling places, opening ballot envelopes, comparing signatures and helping election officials tabulate the results.  The requirements and work vary across the country, as elections are managed by local entities, but attorneys and law students may be particularly suited to the work. Additionally, in some instances, poll worker training for lawyers may be eligible for CLE (Continuing Legal Education) Credit.

With all the uncertainty and confusion surrounding the election process, especially with the challenges created by COVID-19, this year is an election like no other in recent memory.  Regardless of the political fights playing out, the ability to cast a vote is a crucial piece, and it is important for everyone.  Refo says, “there is no question that maintaining the integrity and efficiency of our electoral process is important to all lawyers.”

Those interested can go to canivote.org, a website set up by the National Association of Secretaries of State, for more information.  The importance of voting and active bipartisan civic engagement is crucial to a healthy democracy, so if volunteering as a Poll-worker isn’t an option, it’s important to check your voter registration and make sure you have a voting plan in place.  As Thomas Jefferson said, “We do not have government by the majority. We have government by the majority who participate.”


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For more articles on election law, visit the National Law Review Election Law / Legislative News section.