Labor Law -- 2018

Associated Builders & Contractors v. Perez   (E.D. Ark.)

DOL Persuader Rule chills employer and employee communications

In 2016, the NAM led a coalition of associations in challenging the Department of Labor's (DOL) Persuader Rule in federal court in Arkansas. Our complaint argued that the rule violates manufacturers’ First Amendment rights of free speech and association. We argued the new rule is also void for vagueness and prohibited by the Fifth Amendment's due process clause.

The rule requires employers, third-party lawyers and other labor consultants to disclose their relationships more frequently than under the 50-year-old "bright line" standard. Under that standard employers and their consultants filed reports only when consultants communicated directly with workers. Under the new rule, employers must file reports if consultants are providing guidance to employers without contacting employees directly. Guidance includes conducting union-avoidance seminars or providing materials to distribute to and persuade workers. The government’s expansion of what constitutes “advice” vastly broadens the persuader definition and restricts manufacturers’ ability to communicate with their workforce. Further, the rule expands possible criminal liability related to disclosure and will result in employers not seeking out important counsel for guidance on employer and employee related questions.

The NAM also filed a reply brief in support of a preliminary injunction. Our brief argued that, contrary to DOL’s opposition, plaintiffs are likely to succeed on the merits of their claims that the new rule is unlawful. Further, our brief argued that we established irreparable harm, that the DOL failed to show maintaining the fifty-year status quo will harm the agency and that the public interest would be furthered by granting injunctive relief. Meanwhile, on November 16, 2016, a judge in the Northern District of Texas entered an order for a permanent nationwide injunction against the rule.

After that decision, we filed a motion to stay the proceedings in the Arkansas court, which the judge granted the next day.

The DOL proposed to rescind the persuader rule in June, 2017. In July 2018, the DOL officially rescinded the rule.

Related Documents:
NAM Motion to Stay Brief  (December 12, 2016)
NAM Summary Judgment Brief  (August 19, 2016)
NAM Memorandum  (April 2, 2016)
NAM Motion  (April 1, 2016)
NAM Complaint  (March 30, 2016)


Labor Law -- 2017

Plano Chamber of Commerce v. Perez   (E.D. Tex.)

Challenging DOL's new overtime rule

The Department of Labor’s (“DOL”) new overtime rule drastically alters minimum salary exemption thresholds —increasing the minimum by 100%, from $23,660 to $47,476 annually — imposing new overtime costs on businesses of all sizes, including those who employ millions of individuals who have historically been exempt from overtime. This effectively eliminated the statutory exemption for those employed in an executive, administrative, or professional capacity (the “EAP Exemption”) below the $47,476 threshold. The rule also includes an escalator provision automatically updating the minimum salary requirements to even higher levels every three years.

In 2016, the NAM sued DOL to block the rule, and a federal judge issued a nationwide injunction preventing implementation of the rule, finding that the DOL’s actions likely exceeded its statutory authority.

While the DOL appealed to the Fifth Circuit and sought to pause all further proceedings in the district court the AFL-CIO sought to intervene in the district court. We opposed the motion to stay the proceedings pending appeal, and the judge agreed.

On August 31, 2017, the judge ruled in our favor and granted summary judgment. The judge applied a two-pronged test when reviewing the DOL regulation, namely, (1) whether Congress has directly and unambiguously spoken to the precise issue at question and (2) if it hasn’t, whether the agency’s interpretation is based on a permissible construction of the statute. Congress satisfied the first prong of the test by expressly stating that a duty-based (not salary-based) determination qualifies individuals for the EAP exemption. After reaching this determination, the court found that the DOL’s new overtime rule violated its authority by contradicting the express will of Congress by eliminating the duty-based EAP exemption test in favor of a salary-based determination, making it unlawful. Additionally, in dictum, the court stated that even if Congress had failed to meet the first prong of the test, the DOL’s rule would still have failed because it was not based on a permissible construction of the statute.

Related Documents:
NAM Opposition Motion to Intervene  (December 15, 2016)
NAM Opposition Motion to Stay  (December 15, 2016)
NAM Reply Brief  (November 21, 2016)
NAM Response  (October 21, 2016)
NAM Motion to Consolidate  (October 17, 2016)
NAM Summary Judgment Brief  (October 14, 2016)
NAM Complaint  (September 20, 2016)
Press Release  (September 20, 2016)


OSHA -- 2017

Texo ABC/AGC, Inc. v. Perez   (N.D. Tex.)

Challenging OSHA's injury and illness rule

The NAM filed a lawsuit on Friday, July 8, 2016, to challenge the Labor Department’s Occupational Safety and Health Administration (OSHA) workplace injury and illness New Rule. The NAM’s complaint challenges the New Rule’s prohibitions and limits on employer safety incentive programs and drug testing programs.

By encouraging all employees, including supervisors, to improve workplace safety, incident-based safety incentive programs jump start a change in culture that results in a prompt and sustained decrease in accident frequency and severity. Without these incident-based safety incentive programs, instituting a culture of safety in the workplace is much more slow and difficult and seldom leads to the same dramatic reductions in serious accidents.

On July 12, 2016, the NAM filed a preliminary injunction motion seeking to prohibit OSHA from implementing the New Rule, which will otherwise take effect on August 10, 2016, causing irreparable harm to many thousands of employers across the country. The New Rule irreparably harms employers and employees by making their workplaces less safe and increasing the likelihood of workplace injuries and fatalities. OSHA’s main goal is to eliminate or minimize the frequency and severity of workplace injuries, illnesses and deaths--this misguided New Rule does not accomplish that goal.

On 8/19/16, the government filed its opposition to our motion for preliminary injunction, claiming that there is no irreparable harm in limiting employment programs designed to protect worker safety. Their motion further argues that the balance of hardships and public interest both counsel in favor of allowing OSHA to ban injury-based incentive programs and post-injury drug testing. The government's arguments against preliminary injunction lack common sense and would only serve to increase worker injuries.

On 9/2/16, the NAM filed a reply to the government's opposition. Our reply argued that OSHA's claim of unlimited Congressional authority is both dangerous and wrong. OSHA fails to justify the "anti-safety" provisions of the New Rule, which is ripe for review and remains arbitrary and capricious. Contrary to OSHA's opposition, the criteria for a preliminary injunction are met, and manufacturers and the public will be irreparably harmed if the New Rule is implemented.

On 9/27/16, the NAM filed a response to the government's objections to the scope of relief requested, and, on 11/1/16, the NAM filed a supplemental brief in support of the nationwide scope of preliminary injunction.

On 11/28/16, the judge unfortunately denied our preliminary injunction motion without reaching the merits. The government then moved to dismiss. We also filed an amended complaint on 2/8/17, which caused the judge to dismiss the government's motion to dismiss as moot. OSHA has proposed delaying the compliance date to 12/1/17. On 6/30/17, in response to an OSHA motion for an indefinite stay of proceedings, the judge issued an unusual order “administratively closing” the case.

Related Documents:
NAM response to stay  (March 31, 2017)
NAM amended complaint  (February 8, 2017)
NAM motion to dismiss  (January 18, 2017)
NAM supplemental brief  (November 1, 2016)
NAM response to objection  (September 27, 2016)
NAM reply brief  (September 2, 2016)
NAM preliminary injunction memorandum  (July 12, 2016)
NAM preliminary injunction  (July 12, 2016)
NAM complaint  (July 8, 2016)
Press release  (July 8, 2016)


Administrative Procedure -- 2015

Perez v. Mortgage Bankers Association   (U.S. Supreme Court)

Administrative law

The NAM and coalition associations filed a Supreme Court brief in Perez v. Mortgage Bankers Association. On March 9, 2015 the Court issued a decision in this case with a wide ranging impact on administrative law by significantly expanding the authority of regulatory agencies. The case concerned whether a federal government agency must get the public’s reaction before it changes a rule that interprets one of its own existing regulations. As a general rule a federal agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act (APA) before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.

Unfortunately, agencies are able to take advantage of a variety of exceptions to this rule and avoid meaningful public participation by promulgating vague legislative rules and then interpreting those rules to reach the potentially controversial regulatory outcomes that the agencies seek. This strategy is purposefully designed to avoid public input. Further, agencies know they are shielded from legal challenges because the court must accept an agency interpretation as long as they are not patently incompatible with the statutory or regulatory text. The result of this process is ambiguity and uncertainty on how to comply with the law by public. This opinion from the Court allows agencies to reverse their definitive, relied-upon interpretations without notice and comment making the situation even worse.

The NAM brief argued that agencies should be required to follow the requirements of notice and comment before reversing their definitive, relied-upon interpretations because in such situations the agency has effectively amended a legislative rule. Business should be allowed to rely upon the interpretive rules that increasingly affect its day-to-day operations but this decision adds further ambiguity.

Related Documents:
NAM brief  (October 16, 2014)


Labor Law -- 2015

National Association of Manufacturers v. Perez   (D.D.C.)

NAM sues OFCCP over its labor rights poster requirement

Continuing the fight against forced speech and aggressive overreach by federal agencies, the NAM and the Virginia Manufacturers Association (VMA) filed a lawsuit 12/18/13 to stop the Office of Federal Contract Compliance Programs (OFCCP) from enforcing its “posting requirement” rule. The OFCCP, an agency within the Department of Labor, enforces rules and regulations imposed on federal contractors.

The OFCCP rule adversely affects thousands of federal contractors and subcontractors by forcing them to promote unionization of their workforces or risk being debarred from federal contracts. Our lawsuit asked the court to strike down the rule on the grounds that poster is compelled speech and violates the First Amendment.

A similar rule put forth by the National Labor Relations Board (NLRB) was struck down earlier in 2013 by a federal appeals court due to a successful lawsuit from the NAM. In that case, the court ruled that similar posters amount to compelled speech and extend beyond the intent of the National Labor Relations Act. Federal contractors deserve the same protection from this aggressive overreach.

The NAM and VMA filed a joint Motion for Summary Judgment in D.C. District Court on 5/1/14. This case arises from a facial challenge brought by Plaintiffs against Defendant’s Final Rule, at 29 CFR Part 471, 75 F.R. 28368 implementing Executive Order 13496 which forces all federal contractors to post a “Notification of Employee Rights Under Federal Labor Laws”, prominently and conspicuously in places of employment. NAM and VMA argue that the Rule must be vacated as it constitutes compelled speech in violation of the First Amendment of the United States Constitution, has been promulgated in excess of Defendants’ statutory authority, is arbitrary and capricious, and is preempted by the NLRA.

On May 7, 2015, the D.C. District Court denied the NAM’s motion for summary judgment and entered judgment for the DOL. The DOL rule requiring contractor posting of NLRA rights statement was upheld by the Court and does not violate the constitutional rights of covered employers.

Related Documents:
NAM Motion  (May 1, 2014)
NAM brief  (May 1, 2014)
NAM & VMA complaint  (December 18, 2013)


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