Employment Law This Week June 5, 2017: Fiduciary Rule Takes Effect June 9, Rescission of Persuader Rule, Title VII & Sexual Orientation, Overhauling the NLRA [VIDEO]
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This week’s stories include ...
(1) No More Delays for Fiduciary Rule
Our top story: The Department of Labor’s (DOL’s) “Fiduciary Rule” will go into effect on June 9. The controversial rule will require financial professionals who advise clients on retirement accounts to promote suitable products and act in the best interests of their clients. Secretary of Labor Alexander Acosta announced in a Wall Street Journal op-ed that there is “no principled legal basis” to delay the rule, although full enforcement won’t begin until 2018. The DOL intends to issue a Request for Information to seek public opinion on revisions and related exemptions. Sharon Lippett has more:
“Most employers will not experience any significant change as a result of the June 9th applicability date of the Fiduciary Rule. And that's because the Fiduciary Rule expanded the definition of ‘fiduciary investment advice,’ and for the most part, employers don't provide investment advice to their employees. They provide investment education, which consists of information relating to the retirement plan, general information about retirement planning, or financial investing. So as long as employers stay in their communications within the parameters of investment education, they won't be subject to the Fiduciary Rule.”
For more, click here.
(2) DOL Takes Steps to Rescind Persuader Rule
While the Fiduciary Rule will stand, the “Persuader Rule” is on the chopping block. The DOL has begun the process of rescinding the Persuader Rule, which would have required employers and consultants, including lawyers, to report activity related to union organizing campaigns and other matters. The Obama-era regulation never took effect because a Texas federal judge issued a nationwide permanent injunction blocking it last year. Before the DOL’s proposal can take effect, it will need to engage in formal rulemaking, which includes publishing its proposed withdrawal of the rule and allowing for public review and comment.
(3) Second Circuit to Reconsider Sexual Orientation Protections Under Title VII
The U.S. Court of Appeals for the Second Circuit will reconsider whether sexual orientation is protected under federal discrimination law. The court has granted an en banc rehearing to address whether Title VII of the Civil Rights Act of 1964 (Title VII) covers discrimination on the basis of sexual orientation. The case involves a skydiving instructor who claims that he was fired after he told a customer he was gay. The three-judge panel was bound in its initial finding by a 2000 precedent, in which the Second Circuit found that sexual orientation discrimination is not covered under the law. Earlier this year, the Seventh Circuit broke with its own similar precedent, becoming the first appellate court to hold that Title VII protections apply to sexual orientation.
(4) New Legislation to Overhaul NLRA
House Republicans introduced new proposed legislation to overhaul the National Labor Relations Act (NLRA). Republicans in Congress have restarted their effort to amend the nation’s labor law. The legislation would make it more difficult for unions to organize workers and easier for workers to “opt out.” This legislation, known as the Employee Rights Act, would usher in the most substantial changes to the NLRA since the 1940s. Also, this legislation would mandate that a union win a government-conducted secret ballot election and would ban the “card check” agreements that many unions have been relying on in recent years.
(5) Tip of the Week
Joan Brunelle, Chief Human Resources Officer for Bessemer Trust, has some advice on best practices for resolving issues between executives:
“When there are issues between executives, I find, as an HR manager, the first key step is to actually get everyone to acknowledge there is an issue. Once that's out of the way, I consider the next place we have to go is the discovery phase and, that, from my perspective, is I play a role of being a very active listener. I want to hear from both of the individuals involved what the issue is. We can now move to the next stage, which is really an action plan. How do we take this and move forward? Have an actionable set of steps that we can take that we can all agree will help resolve this, and we'll all be able to move forward effectively."