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The New Labor Regulations Make Republicans Cry

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Republicans continue to freak out over the Obama administration’s continuing advancements in giving American workers a fair shake. They are going to do whatever they can to repeal those regulations, even though these strategies won’t work.

Buried on page 523 of the Senate’s proposed National Defense Authorization Act for Fiscal Year 2017 is a provision that would weaken Obama’s “Fair Pay and Safe Workplaces Executive Order.” That July 2014 order, which has not yet been implemented, would require that federal agencies crack down on private contractors who repeatedly violate labor law. The order would also require that private companies disclose recent labor law violations when they apply for federal contracts.

The Senate NDAA stipulates that Defense Department contractors and subcontractors will not be “compelled or required to comply with the conditions for contracting eligibility” outlined in the executive order. The House version of the NDAA, which passed last week, also includes a provision intended to undermine the order.

The proposed exemption for military contractors is part of a broader Republican campaign to roll back the Obama administration’s labor regulations.

Last week, House Speaker Paul Ryan, R-Wis., announced that he would lead the fight to undo a recent expansion of paid overtime eligibility. Business groups have vigorously lobbied against the expansion, which could make 4.2 million workers in the United States newly eligible for paid overtime.

I understand, Republicans need to go to the mat to attack such horrors as overtime pay and disclosing labor law violations. Wait, what? But of course.

No doubt they are extra sad today, because the Seventh Circuit just ruled that companies can’t force workers into mandatory arbitration instead of allowing them to file class action lawsuits.

In a case with major implications for mandatory arbitration agreements, the seventh circuit today struck down an arbitration clause that prohibited employees from pursuing class proceedings. The appeals court, in an opinion by Chief Judge Wood, held that by banning collective actions, such an agreement violates the National Labor Relations Act. The decision, Lewis v. Epic Systems Corp., conflicts with the Fifth Circuit’s holding in D.R. Horton and thus creates a circuit split.

As the seventh circuit correctly observes, Section 7 of the NLRA protects not only collective bargaining but also “other concerted activities.” These “other concerted activities,” moreover, have for decades been held to include “resort to administrative and judicial forums.” Thus, courts and the NLRB have long concluded that filing collective or class action legal proceedings constitutes protected “concerted activity” under the NLRA. By prohibiting workers from pursuing class proceedings, a mandatory arbitration clause with a class action waiver therefore requires workers to waive their section 7 rights, something no employment agreement can do.

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It would be hard to overstate the importance of this decision for the evolving law of mandatory arbitration agreements. Unless and until the Supreme Court intervenes, the decision calls into question the legality of all mandatory employment arbitration agreements in the seventh circuit (Illinois, Indiana, and Wisconsin) that contain class action waivers. It also raises the possibility that other circuits will follow suit.

Since the Department of Labor and the judiciary obviously don’t matter, the only conclusion we can make is that if Bernie doesn’t win the nomination, both parties are the same and therefore it’s Jill Stein or bust.

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