Department of Labor reconsiders overtime expansion, joint-employer rules

In March and April, the U.S. Department of Labor issued notices of proposed rulemaking on two of the most hotly contested issues of its predecessor Obama department, overtime for junior managers and the joint-employer rule. Tammy McCutchen:

The DOL proposes to increase the minimum salary for exemption from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized)…. If adopted, the proposed rule would replace the final rule issued by the DOL on May 19, 2016, but enjoined by the Eastern District of Texas just weeks before its December 1, 2016 effective date. The 2016 final rule would have increased the minimum salary for exemption to $913 per week ($47,476 annualized)

Earlier here and here. In addition, DoL is proposing to clarify what times of compensation and benefits employers must include in the overtime calculations.

Separately, DoL’s proposed rule on joint employment

would replace the January 2016 Administrator’s Interpretation on joint employment, which did not go through the notice-and-comment rulemaking process and was withdrawn in June 2017.

Under the FLSA, companies found to be joint employers are jointly liable for all minimum wage and overtime violations. The statute does not include a definition of joint employment and has left this determination to the courts.

The joint employment issue has become increasingly important since the National Labor Relations Board (NLRB) dramatically expanded the definition during the Obama administration in the Browning Ferris decision, recently partially affirmed but remanded to the NLRB by the D.C. Circuit. The Trump NLRB has undertaken a rulemaking of its own, proposing to narrow the joint employer definition under the National Labor Relations Act, so as to restore the law, essentially, as it stood prior to Browning Ferris. The NLRB is currently poring over thousands of comments filed for and against its proposed rule. A final joint employer rule is expected from that agency by year end.

The joint employment concept is important because, among other matters, it determines when one employer (typically larger) can be held liable for the actions of another, such as a contractor or franchisee. The proposal would adopt a definition of joint employer originating in a 1983 Ninth Circuit decision in Bonnette v. California Health and Welfare Agency, which does not sweep as broadly as the later definition adopted by the NLRB in Browning-Ferris and by the Obama administration. More: McCutchen podcast on all three issues.

Kisor v. Wilkie: high court toughens scrutiny of agency legal positions

Although the Supreme Court in yesterday’s case of Kisor v. Wilkie did not overturn its Auer deference precedent, as Justice Neil Gorsuch and three colleagues wanted it to do, it did adjust the law in a promising direction. Ilya Shapiro explains:

All nine justices agreed that courts need to work harder to ensure that a regulation truly is ambiguous before giving the agency re-interpreting it any sort of deference.

In other words, the Court limited the number of cases where judges defer to agencies, while setting out standards for evaluating those cases that boil down to “when the agency is correct and brings its expertise to bear, having considered the reliance interests of those being regulated” rather than just making legal or political judgment calls willy-nilly. That sounds like reining in the administrative state!…

At bottom, Kavanaugh makes the perfect analogy that sums up the unanimous Court’s position: “Umpires in games at Wrigley Field do not defer to the Cubs manager’s in-game interpretation of Wrigley’s ground rules.” Administrative agencies are now on notice that it’s not “anything goes” when they decide to rewrite their own rules, that judges will hold their feet to the statutory fire.

In short, while Kisor didn’t overturn Auer, it represents a pretty good start at limiting executive-agency overreach….

Earlier here and here.

June 26 roundup

  • European authorities may order social media platform to prevent Euro users from seeing allegedly defamatory comments maligning an Austrian politician. Can they also order the comments kept from American users, even if American law would treat them as protected expression? [Scott Shackford, Reason]
  • By 6-3 margin, with three Justices concurring in part and dissenting in part, Supreme Court rules that First Amendment bars rule against registration of “scandalous” trademarks; Cato had submitted a humorous brief [Melissa Quinn, Washington Examiner, Ilya Shapiro, earlier; Iancu v. Brunetti]
  • Mexico files charges of cultural appropriation against Carolina Herrera fashion house over native-inspired designs [Julie Zerbo, Fashion Law, AFP, related earlier on indigenous cultures and intellectual property]
  • Schumpeterian innovation and the campaign to break up Big Tech [Ryan Bourne, Cato, earlier]
  • “Another survey of consumer law professors fails to find any who always reads consumer contracts before signing them” [Jeff Sovern, earlier]
  • Settlement of trademark, copyright claims over Star Control game series specifies that litigants must exchange honey and mead [Lee Hutchinson, ArsTechnica]

“Congress Passes Bill To Protect Small-Business Owners from IRS Seizures”

On June 13 “the U.S. Senate unanimously approved legislation that stops the Internal Revenue Service from raiding the bank accounts of small-business owners. The Clyde-Hirsch-Sowers RESPECT Act, passed as part of the Taxpayer First Act (H.R. 3151), is named after Institute for Justice clients Jeff Hirsch and Randy Sowers, two victims of the IRS’s aggressive seizures for so-called ‘structuring.’ Through structuring laws, the IRS has routinely confiscated cash from ordinary Americans simply because they frequently deposited or withdrew cash in amounts under $10,000. And by using civil forfeiture, the IRS can keep that money without ever filing criminal charges.” [Nick Sibilla, Institute for Justice] We’ve covered the problems with structuring law, as well as asset forfeiture, for many years.

“Supreme Court Nixes Sentencing Law as Unconstitutionally Vague”

Crossing to join his four liberal colleagues, Justice Neil Gorsuch wrote the opinion in yesterday’s Davis v. U.S., finding unconstitutionally vague a federal sentence-enhancement provision prescribing “harsher penalties for those who use guns ‘in connection with certain other federal crimes.'” [Jack Rodgers, Courthouse News] His opinion begins:

In our constitutional order, a vague law is no law at all. Only the people’s elected representatives in Congress have the power to write new federal criminal laws. And when Congress exercises that power, it has to write statutes that give ordinary people fair warning about what the law demands of them. Vague laws transgress both of those constitutional requirements. They hand off the legislature’s responsibility for defining criminal behavior to unelected prosecutors and judges, and they leave people with no sure way to know what consequences will attach to their conduct. When Congress passes a vague law, the role of courts under our Constitution is not to fashion a new, clearer law to take its place, but to treat the law as a nullity and invite Congress to try again.

It was the third rights-of-the-accused case this term in which Gorsuch took the liberal side, and put him at odds once again with Justice Brett Kavanaugh. In his dissent yesterday, after crediting tougher federal laws with at least partial responsibility for the drop in crime since the 1980s, Kavanaugh noted that the sentence enhancement has been applied without seeming difficulty in thousands of cases of violent offenses since its enactment:

The Constitution’s separation of powers authorizes this Court to declare Acts of Congress unconstitutional. That is an awesome power. We exercise that power of judicial review in justiciable cases to, among other things, ensure that Congress acts within constitutional limits and abides by the separation of powers. But when we overstep our role in the name of enforcing limits on Congress, we do not uphold the separation of powers, we transgress the separation of powers….

The Court usually reads statutes with a presumption of rationality and a presumption of constitutionality.

While both were appointed by President Trump, Gorsuch and Kavanaugh have been anything but in lockstep.

Social media law roundup

  • “The Moral Panic Behind Internet Regulation” [Matthew Lesh, Quillette] New Congressional Research Service report on free speech and the regulation of social media content [Valerie C. Brannon, Congressional Research Service]
  • “A social media campaign from the French government has been blocked by Twitter – because of the government’s own anti-fake-news law” [BBC via Elizabeth Nolan Brown]
  • European authorities misidentify many pages on Internet Archive as “terrorist,” demand takedown [Mike Masnick, Techdirt]
  • Armslist case is one in which Section 230 protected Second Amendment rights (that’s not a misprint for First) [John Samples, Cato; Eugene Volokh]
  • Sen. Josh Hawley (R-MO)’s bill to require the largest social media firms to obtain certification of their political balance from the FTC, on pain of making them liable for all content posted by users, met with hail of dead cats from knowledgeable observers [Elliot Harmon/EFF, John Samples/Cato and more, Cathy Gellis, Joshua Wright thread, Eric Goldman, Raffi Malkonian on retroactivity and more, Elizabeth Nolan Brown/Reason] Related: Daphne Keller (“Build Your Own Intermediary Liability Law: A Kit for Policy Wonks of All Ages”);
  • “We sympathize with Plaintiffs — they suffered through one of the worst terrorist attacks in American history. ‘But not everything is redressable in a court.'” [Sixth Circuit, Crosby v. Twitter, affirming dismissal of lawsuits seeking to hold Twitter, Facebook, and Google liable under Anti-Terrorism Act for abetting self-radicalization of perpetrator of Orlando Pulse attack]

Read the label: part N in a series

A Fayette County, Pennsylvania woman whose use of a hair relaxer left her partially bald admitted that she hadn’t read the instructions, but said Optimum Salon Care Defy Breakage No-Lye Relaxer is in any case too dangerous to be allowed on the market. Judge Thomas Hardiman, writing for a Third Circuit panel, rejected her contentions that the product was defective or, in the alternative, that a reasonable consumer would not have heeded the label warning and directions for use. [Matt Miller, PennLive; Nicholas Malfitano, Penn Record; Chandler v. L’Oreal]

No more poor relation: SCOTUS accords Bill of Rights handling to takings claims

Yesterday’s Supreme Court decision along 5-4 ideological lines in Knick v. Township of Scott, on whether owners whose property is taken must first exhaust state remedies before seeking relief in federal court, is a big win for property owners. It overrules the unsound 1985 precedent to the contrary of a case called Williamson County Regional Planning Commission v. Hamilton Bank. It also represents the second time this term the Court has overruled one of its precedents, following Franchise Tax Board of California v. Hyatt, in which it overturned an earlier precedent on the scope of state tax power. The Court this term has declined to overturn precedent in a third case (Gamble v. U.S., on double jeopardy) and has yet to decide whether to overturn two notable administrative-law precedents in the still-pending case of Kisor v. Wilkie.

In some legal contexts, it can make sense to condition court relief on exhaustion of administrative remedies. But as Chief Justice Roberts wrote for yesterday’s majority, claims under the Bill of Rights are in general allowed direct access to federal courts. In creating an exception, Williamson had “relegate[d] the Takings Clause ‘to the status of a poor relation’ among the provisions of the Bill of Rights.”

Cato actively urged the property owner’s case in Knick, a case arising from a Pennsylvania law that imposed various uncompensated mandates, barbed by fines and penalties, on the owners of land on which persons are buried. Pennsylvania is known for its rural practice of “backyard burials.” Ilya Shapiro has one quick reaction and Ilya Somin, who has written extensively on Knick and the constitutional issues it raises, has another.

Great moments in slip and fall claims

The First Circuit has upheld a trial court’s dismissal on summary judgment of an outside worker’s suit against an auto dealership over a slip-fall injury he incurred on the floor in its garage and service area. The court noted that the reason for his presence at the dealership was that his company had been hired to clean it, and that he had said in his deposition that “typically there would be oil and grease everywhere” on that part of the floor after a day’s operations. Besides deeming the hazard to be open and obvious, the trial court had “noted Massachusetts precedent holding that a property owner does not owe a duty of care to a plaintiff where ‘the danger presented to the plaintiff was one that he had been hired to cure.'” [LaPointe v. Silko Motor Sales, First Circuit]

Religious establishment and improper delegation at the Supreme Court

Yesterday’s biggest news from the Supreme Court was not its 7-2 upholding of the Bladensburg, Md. Peace Cross (American Legion et al. v. American Humanist Association et al.; earlier). That outcome could readily have been foreseen given the result in earlier cases: Justices Stephen Breyer and Elena Kagan, to say nothing of the five conservatives, are prepared to uphold “longstanding monuments, symbols, and practices” that may include religious content but do not impose any significant harms on those of other faiths or none. This World War I memorial qualifies.

Instead, the big news is the outcome in Gundy v. U.S. (earlier), a case over whether Congress can delegate to the Department of Justice the power to decide how severe the penalties will be in one application of the sex offender registration law. While the critique of excessive delegation did not carry the day this time (the vote was 4-3-1 with Justice Brett Kavanaugh not participating), Justice Samuel Alito indicated that he would be inclined to look at the issue in a future case, and Kavanaugh is thought (from his D.C. Circuit jurisprudence) to be similarly minded. If so, then a future case could establish the important principle that Congress must spell out penalties and prohibitions in law itself, rather than punt such issues to executive agencies, at least in criminal matters and perhaps also in some regulatory ones. That’s huge, since the Court has rejected improper-delegation theories since the New Deal.
Gorsuch dissent in Gundy v. U.S.
Justice Neil Gorsuch’s dissent in Gundy, together with his scalding dissent (earlier) in the double jeopardy/dual sovereignty case Gamble v. U.S. on Monday, makes him the libertarian hero of the week.
Gorsuch dissent in Gamble v. U.S.