Federal Agencies Over Employment Matters Announce Aggressive Moves

As we enter the second full year of the Biden Administration, nearly every federal agency that regulates employment in the United States have begun to hit their stride and is hard at work with various initiatives and rulings which seek to expand worker protections and reverse guidance, regulations and decisions issued during the Trump era. This article highlights just a few of these developments.

We have previously reported on the “crackdown” actions taken by the Federal Trade Commission (“FTC”) to invalidate the noncompete provisions used by three companies that covered hundreds of employees, not all of whom were “low wage” employees.[1] The  consent decrees which required the rescission of all of the noncompete provisions used with many classes of employment have since become final.[2] Likewise, we also discussed the FTC’s announced plan to implement a nationwide ban on the use of noncompete agreements with employees by adopting new regulations that will almost certainly be subject to legal challenge.[3] On March 6, 2023, the FTC announced the public comment period on the proposed regulations has been extended from March 20 to April 19, 2023.[4]

The Department of Labor’s Office of Federal Contract Compliance Program (“OFCCP”) recently announced that as of March 31, 2023, the 2020 Religious Exemption Rule adopted during the Trump era was being rescinded. Under Executive Order 11246, the OFCCP enforces the rules that prohibit a federal contractor (and its subcontractors) from discriminating in employment decisions based on race, color, religion, sex, sexual orientation, gender identity or national origin. This Executive Order contains a religious exemption for religious corporations, associations, educational institutions, and societies with respect to the employment individuals of a particular religion, which is modeled on the religious exemption provided by Title VII of the Civil Rights of 1964. The 2020 Religious Exemption Rule broadened the exemption significantly, and OFCCP is now rolling back this broader rule. This change will not directly impact the pre-existing exemption that applies to religious corporations, associations, educational institutions, and societies. For more information on the Religious Exemption Rule, visit the OFCCP’s website.[5]

On March 7, 2023, the National Labor Relations Board (NLRB) signed a Memorandum of Understanding with the Consumer Financial Protection (“MOU”) to facilitate increased collaboration in order to address employer practices involving surveillance, monitoring, data collection, and employer-driven debt (where a worker goes into debt to their employer for the purchase of equipment, supplies or required training). For more information on this MOU and this initiative see the NLRB’s News Release. [6] Notably, on February 21, the NLRB announced that it had reversed a 2020 decision and ruled in McLaren Macomb that employers may no longer offer severance agreements that require employees to waive certain labor law rights, including  provisions that prohibited a separated employee from making disparaging statements about the employer and from disclosing terms of the separation agreement. For more information on this decision, see the NLRB’s news release.[7]

On March 13, 2023, the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) announced that during the period February 1, 2022 – January 31, 2023, it had issued citations to 23 Dollar General stores following inspections in Alabama, Florida and Georgia with a total of nearly $7.5 million in penalties. In addition, in February 2023, OSHA announced it had cited Dollar General with having created an unsafe workplace in several different locations when it reportedly found merchandise obstructing exit routes and fire extinguishers, as well as an automatic sliding door that had been disabled and locked, which exposed workers to fire and entrapment hazards. As a result, OSHA issued five (5) repeat violations and a proposed $710,947 in penalties. This and two other citations issued against stores in Georgia are still subject to contest. For more information on OSHA’s enforcement actions against Dollar General go to OSHA’s website.[8]

Also, on March 13, 2023, the Equal Employment Opportunity Commission (“EEOC”) issued its Annual Performance Report for fiscal year ending September 30, 2022, which also included the Office of General  Counsel’s Annual Report (“EEOC GC Report”) which focuses on the EEOC litigation “achievements” during the prior fiscal year. From October 1, 2021, to September 30, 2022, the EEOC filed 91 new employment discrimination lawsuits which included 13 suits claiming systemic discrimination. Notably, 68% of these lawsuits involved claims of alleged Title VII violation. The primary focus of the EEOC’s new litigation last fiscal year fell into four (4) main areas: claims of sexual discrimination (49.5%), retaliation (35.2%), disability (29.7%) and race (18.7%). In addition, the EEOC resolved 96 employment discrimination lawsuits, including ten (10) suits involving allegations of systemic discrimination and it obtained just under $40 million in monetary relief for 1,461 claimants. The EEOC GG Report can be found on its website.[9]

In summary, the federal agencies charged with enforcing the employment laws are hard at work. These development and other actions will be discussed at our firm’s annual Labor & Employment Symposium on May 2, 2023 in Lynchburg and May 9, 2023 in Roanoke. For registration information visit our website here. If issues arise involving a federal investigation or you have other employment law questions, please feel free to contact me or any other member of our Employment Team.

[1] https://www.gentrylocke.com/article/ftc-wastes-no-time-takes-enforcement-action-while-proposing-nationwide-rule-to-invalidate-noncompete-agreements/
[2] https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-approves-final-orders-requiring-two-glass-container-manufacturers-drop-noncompete-restrictions; https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-approves-final-order-requiring-michigan-based-security-companies-drop-noncompete-restrictions
[3] https://www.gentrylocke.com/article/ftcs-proposed-rule-to-ban-noncompete-agreements-initial-reactions/
[4] https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-extends-public-comment-period-its-proposed-rule-ban-noncompete-clauses-until-april-19?utm_source=govdelivery
[5] https://www.dol.gov/agencies/OFCCP/religious-exemption
[6] National Labor Relations Board and Consumer Financial Protection Bureau Announce New Partnership to Address Employer Surveillance, Monitoring, Data Collection, and Financial Practices in the Workplace | National Labor Relations Board (nlrb.gov).
[7] Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights | National Labor Relations Board (nlrb.gov)
[8] https://www.dol.gov/newsroom/releases/osha/osha20230313.
[9] https://www.eeoc.gov/office-general-counsel-fiscal-year-2022-annual-report