Federal Salary Transparency Act. Much has been written recently regarding the various salary transparency and reporting laws that have sprouted from state Houses across the Nation (we spoke to California's onerous requirements here). Seyfarth published a webinar on the various requirements and current trends in this space. Now, Congress wants in on the action, though we are doubtful we will see a federal mandate materialize in this term. Specifically, Representative Eleanor Holmes Norton (D-DC) recently introduced H.R.1599, or the "Salary Transparency Act," which would require all job postings to include the applicable wage range for the position, among numerous other requirements, such as an anti-retaliation provision and a provision providing for statutory penalties, attorneys' fees, and a private right of action. Around the same time, Representative Holmes also introduced H.R.1600, or the "Pay Equity for All Act of 2023," which prohibits employers from inquiring about candidates' prior salaries and benefit history, or relying on that information to make hiring decisions or determine wages. Like H.R. 1599, this measure also provides for statutory penalties, attorneys' fees, and a private right of action. Outside of their introduction, these measures have not seen any significant action, and are not likely to see real movement in light of the House's composition, but the mere introduction at the federal level is a good signifier of the salience of the issue.
Battle Lines Drawn Along . . . ESG? ESG, and all that entails, remains in the news as companies gear up for the release of SEC climate disclosure rules. The SEC recently released its 2023 Examination Priorities, which maintain that the SEC "will continue its focus on ESG-related advisory services and fund offerings, including whether the funds are operating in the manner set forth in their disclosures. In addition, the Division [of Examinations] will assess whether ESG products are appropriately labeled and whether recommendations of such products for retail investors are made in investors' best interest." The SEC is expected to release finalized regulatory reporting requirements in the near future.
What can companies do? Back in February, Seyfarth released its Human Capital Disclosure Report: Moving Forward While Still Waiting, which reported that ESG (environmental, social, and governance) has safely become "part of the business lexicon and continues its march from a 'nice to have' to a way of doing business." The comprehensive report took a look at the scope of information and topics made by publicly-traded companies in their SEC findings and generally found that "companies — on the whole — understand the need to mitigate employee loss and resource mismanagement risk by aligning the investments in and approach to talent management with changing social norms and client and customer demands. Simply put, ESG programs, including best-in-class programs directed at managing and optimizing the ability to rely on crucial human resources, can no longer be underestimated as a retention tool." ESG is "here to stay" despite the noisy fighting around the edges.
Seyfarth recently issued a legal update spelling out the acronym, what it means, and detailing its relation to corporate purpose, as well as the risks behind it. The "ES" of ESG has evolved as a way of referring to certain areas of high risk to the interests of corporate stakeholders and the corporation in maintaining the sustainability and long-term value of the corporation for the benefit of shareholders and other stakeholders. The "G" of ESG relates to the principles of corporate governance which broadly set forth the way in which corporations should be and are managed.
Learn more by registering here for our upcoming May 2, 2023 webinar where we plan on navigating the DEI (diversity, equity, and inclusion) and ESG landscapes in order to explore opportunities and risks.
CA Legislative Update. On April 10, 2023, the California legislature reconvened from spring break and now faces over 2,600 pending bills for consideration as we move into the summer months. Of those are a substantial numbers of employment bills, including, for example, those impacting FEHA protected classes (AB 524), leaves and accommodations (SB 616), background checks (SB 809), and layoffs (AB 1356). Last week, Seyfarth released its 2023 California Legislative Update, providing a sweeping overview of these and other notable employment bills in the works; an important read for California employers whose businesses will undoubtedly be impacted by the 2023 legislative cycle.
While speaking about California, the Civil Rights Department (formerly known as the DFEH) recently announced that it will now allow employers to request an "enforcement deferral period" (i.e., an extension), which, if granted, gives employers until July 10th to submit the new Labor Contractor Employee Report before the Agency seeks a court order requiring the employer to comply. Read Seyfarth's Legal Update discussing the announcement here.
And, in other California news, just in time for summer, the Cal/OSHA has issued a proposed indoor heat illness prevention standard, which is set for hearing in front of the Cal/OSHA Standards Board on May 18, 2023.
Moving from West Coast to East Coast, on April 27, 2023, Seyfarth is hosting a micro-webinar series where we will review recent legislative developments affecting Washington, DC employers, starting with the DC Human Rights Act, which introduces an expanded definition of harassment, new protections for independent contractors, and new enforcement mechanisms. Be sure to register here.
FTC Proposal Draws Historic Interest. Unless living under a rock, most in the employer community are now well aware of the substance of the FTC's notice of proposed rulemaking, proposing an unduly broad prohibition on anything even resembling a non-compete agreement. After releasing the proposed regulations, the FTC was inundated with public comment, and as such, voted to extend the public comment period for its proposed new rule from March 20, 2023 to April 19, 2023. In the open period, the FTC received almost 25,000 public comments, reflecting not only the business community's strong opposition to the proposed rule, and Labor's desire for such a rule, but also the general saliency of the issue. The comments delineate, for the most part, arguments likely to be pressed once this proposed rule is finalized and ends up in litigation. The pure volume of public comments related to this proposal underscores just how much of a sea change such a rule portends.
A More Direct Path Toward Dismantling the Administrative State. Since the Supreme Court's decision in West Virginia v. EPA, many Supreme Court commentators have been laser focused — including us at the PMN — on the highest Court's handling of issues relating to regulations promulgated by federal agencies (or the so-called Administrative State). To that end, last fall, we discussed oral argument in two cases — Securities and Exchange Commission v. Cochran and Axon Enterprise, Inc. v. Federal Trade Commission — where the central issue before the Supreme Court was whether federal district courts can hear judicial challenges before the federal agencies decide them in the first instance, or in other words, before a Plaintiff exhausts administrative remedies. At the time, based on our review of the oral arguments, we surmised that "SCOTUS seems prepared to permit people and companies subject to agencies' enforcement actions to raise constitutional objections to the agencies' structures in federal trial courts without having to first exhaust administrative remedies." Well, that supposition turned out to be correct: On April 14, 2023 SCOTUS issued its decision in the consolidated cases, removing the administrative exhaustion requirement whenever the petitioner challenges the underlying constitutionality of the administrative process leading to the challenged regulation. And SCOTUS may go further in its next term: both Justices Thomas and Gorsuch wrote that they would require any challenge to agency action to proceed through an Article III court.
Appeals Court Blesses Vaccine Mandate for Federal Contractors. While SCOTUS struck down this Administration's attempt to require vaccination against COVID-19 or weekly testing for private employers, the same cannot be said of the Administration's similar requirement for federal contractors. Specifically, in Mayes v. Biden, the 9th Circuit held that "President Biden was justified in concluding that requiring federal contractors who worked on or in connection with federal government projects to be vaccinated against COVID-19 would promote economy and efficiency." Two important factors reduce the significance of this decision. First, because this was an as-applied challenge out of Arizona, the injunction only applied to businesses and contractors based in Arizona. Second, because this was purely executive action, not from an agency, issues regarding the Administrative State were not applicable: "[W]e find that the Major Questions Doctrine is not relevant here because the Contractor Mandate is a Presidential — not an agency — action," referring to the doctrine given outsized life in West Virginia v. EPA, as detailed above.
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