Legislative Update: E-Verification and Joint Employer Bills Move Forward in U.S. House of Representatives, and Senate Stops Rule Barring Certain Class-Action Lawsuits

    This article discusses recent legislative activity in the U.S. House of Representatives and Senate that reflects a move toward employer-friendly legislation, as well as tighter mandates concerning verification of employees to work in the United States.

    Bill Could Reverse NLRB Joint-Employer Rule: On October 4, 2017, the House Workforce Committee approved a bill that would reverse the National Labor Relations Board’s (“NLRB”) Browning-Ferris Industries of California Inc. decision.[1] In Browning-Ferris, a majority of the NLRB voted to change its joint employer status and held that an entity could be a joint employer if it exercised direct or indirect control over working conditions, had the unexercised potential to control working conditions, or where “industrial realities” otherwise made joint employer status essential to meaningful bargaining. The Save Local Business Act (H.R. 3411) would amend the National Labor Relations Act (which governs collective bargaining and employees’ rights to engage in protected, concerted activities) and the Fair Labor Standards Act (which mandates payment of minimum wage and overtime) to clarify that two or more employers must have actual, direct, and immediate control over the essential terms and conditions of employment to be considered joint employers.

    The Browning-Ferris decision is being challenged on several fronts. The decision is being appealed before the U.S. Court of Appeals for the D.C. Circuit. Additionally, business-leaning attorneys and trade organizations have asked Labor Secretary Alexander Acosta to issue a regulation clarifying the proper test.[2]

    Rejection of Class-Action Waivers in Banking Arbitration Rule May Signal Direction for Employment Arbitration Class Action Waivers: On October 24, 2017, the Senate rejected a Consumer Financial Protection Bureau rule that banned class-action waivers in mandatory arbitration clauses found in banking and financial agreements.[3] The House previously voted to rescind the rule, and President Trump is expected to sign the measure into law.

    Although the Senate’s action concerns banking and financial consumer agreements, the move reflects Republicans’ and the Trump Administration’s position supporting class-action waivers in employment arbitration agreements. This month, the U.S. Supreme Court heard arguments regarding the propriety of class-action waivers in employment agreements, and a decision is expected this term.

    Law May Make E-Verify Mandatory: On October 25, 2017, the House Judiciary Committee approved legislation that would make E-verify mandatory for all employers. E-verify is an internet-based system that allows businesses to determine the eligibility of their employees to work in the United States. The system compares employees’ I-9 data with data in United States government records. The Department of Homeland Security touts E-verify as “fast, free and easy to use.”[4] E-verify is currently a voluntary program for employers under federal law.[5] The Legal Workforce Act (H.R. 3711) would require the largest employers to enroll in E-verify six months after the bill is effective, and would phase in E-verify requirements for other-sized employers over a two-year period.[6]

    Campbell Litigation will provide updates about the progress of this and other employment law legislation.

[1] Browning-Ferris Indus. Of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015).

[2] http://news.bna.com/dlln/display/batch_print_display.adp?searchid=30713159

[3] See https://www.theatlantic.com/business/archive/2017/10/cfpb-mandatory-arbitration/543918/; http://www.npr.org/sections/thetwo-way/2017/10/25/559950275/senate-kills-rule-on-class-action-suits-against-financial-companies.

[4] https://www.uscis.gov/e-verify

[5] Some federal contractors are required to use E-verify. Approximately 20 states also require the use of E-Verify for some or all employers.

[6] See https://www.congress.gov/bill/115th-congress/house-bill/3711