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The Advocate - May
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The Advocate - May 2018

The Advocate is the monthly informational newsletter of the National Wooden Pallet & Container Association.

The Advocate is tailored for NWPCA members and affiliates, and provides the latest information on what’s happening with the public policy issues and meetings that have the potential to impact you - or are impacting the day-to-day tasks and operations of the pallet industry. These government affairs updates strive to "Give you a heads-up, while you're putting the hammer down.”

In this Edition

  • Advocacy Activity & White House/Administration News: Farm Bill, Budget Talks, NWPCA Meetings on the Hill
  • Association Health Plan Rule Under Review
  • Labor Dept to Let Teens Work Longer Hours in Hazardous Jobs
  • Joint-Employer Bill Finds Roadblock in Senate
  • Labor Board Considering Joint Employer Regulation
  • Virginia Tech/Forest Service Report

  • Advocacy Activity & White House/Administration News

    Today, the push for the 2018 Farm Bill failed in the House of Representatives on a vote of 198 YEAS to 213 NAYS. While the Farm Bill was not perfect, it certainly included a lot of helpful policy and funding for private forest conservation in the United States and programs helpful to the wooden pallet and container industry. The House Leadership will certainly review the issues surrounding the bill. The concern over immigration reform was a driving factor by conservatives in votes against the bill. The GOP opponents included the chairman of the House Freedom Caucus and members of the hard-line conservative group who decided to use their votes on the farm bill as leverage to get a vote on sweeping immigration measures. After the vote, Republicans moved to postpone a vote to reconsider the bill, giving the GOP leadership time to plan their next steps and possibly force another vote on the legislation. Under House rules, the house has two legislative days to vote on the motion to reconsider the farm bill.

    White House – The administration released its 2018 Spring Unified Agenda, which details near- and long-term agency plans. Included were plans to pursue rulemaking on the joint employer standard and an update on the status of the ambush election RFI and rulemaking. You can read our analysis here.

    Office of Management and Budget – President Trump has requested rescissions to the federal budget, including $22.9 million in cuts to the Department of Labor’s Employment and Training Administration. At this time no other part of the DOL is facing budget cuts under the proposed rescission.

    Senate – Bernie Sanders (I-VT) and Congressman Mark Pocan (D-WI) introduced the Workplace Democracy Act, legislation which is designed to increase union and collective bargaining participation rates. You can read the text of the legislation here and a summary here.

    Recap - Last month saw Congress making efforts to return to "regular order". After the President almost vetoed the Omnibus because he was unhappy with the size of the spending package, Congress has an incentive to pass the individual spending (appropriations) bills. However, it has been a very long time since Congress passed all twelve appropriations bills and the likelihood that they will succeed this year is low. Going forward, we anticipate that the bandwidth on the Hill will be filled with appropriations negotiations, confirmation hearings in the Senate, negotiations on FAA reauthorization, and the Farm Bill. These next few months will be a flurry of activity as Congress tries to complete its business in time to leave for full time campaigning at the end of the summer for the very important mid-term elections.

    Meetings on the Hill - As part of our continuing outreach to the Democrats on the House Agriculture Committee, NWPCA’s lobbying team took a meeting with Representative Sean Maloney's office (D-NY-18th District). We emphasized our support for healthy forests and the prevention of invasive species but that any legislation passed on the issue should be done thoughtfully and with consideration of the potential fallout for the wood industry, particularly pallet and container manufacturers. His staff was on board with our position and encouraged us to keep in touch and let them know if any concerning developments came up.

    NWPCA also took a couple of meetings to determine what the key Members in Congress on the marketplace fairness issue are planning for the coming months. We met with the Judiciary Committee staffer who is lead on the issue for the Majority. He is of the opinion that the Supreme Court will protect Quill (The Court's 1992 landmark decision in Quill Corp. v. North Dakota effectively barred states from imposing sales tax collection obligations on remote retailers by requiring businesses to have a non-trivial, physical in-state presence for states to require them to collect and remit buyers’ sales taxes on purchases) and force everyone to come back to the table and negotiate. So, the Judiciary Committee is not inclined to take up any bill until that point, which they believe will give them the necessary leverage to build support for the compromise bill they currently have. However, Representative Kristi Noem (R-SD At-Large), who is the lead sponsor on the main House bill to address this issue, thinks that Quill will get struck down and that her fix is urgently needed. She has increased incentive to see her bill become the solution to the problem, as she is currently running for Governor of her state. Finally, Senator Enzi is of a similar opinion to the Judiciary Committee Chairman, Representative Goodlatte. She is taking more of a wait-and-see approach, believing that the pressure to act will be heightened after the Court decision and that it is likely Quill will be upheld and all stakeholders will be interested in negotiating.

    Legislative & Regulatory Highlights plus Economic Reports

    Association Health Plan Rule Under Review At OMB, Expected Out By Summer

    The Trump administration's controversial proposed rule promoting association health plans (AHPs) is under review by the White House and is expected to be released this summer.

    If finalized, the rule would loosen the definition of an employer under ERISA to encourage creation of AHPs that could cover workers from various industries and include sole proprietors and their dependents.

    Republican lawmakers and other AHP supporters have praised the rule as a way to provide more affordable coverage choices. But Democrats and advocacy groups see it as another way to undermine the Affordable Care Act, and have asked the Department of Labor to scrap the proposal, or at the very least rewrite it in a way that would protect consumers from harmful insurance practices.

    Labor Dept to let teens work longer hours in hazardous jobs

    The Trump Labor Department wants to loosen protections that prevent teenagers from working longer hours at hazardous workplaces, Bloomberg Law has reported.

    Sources familiar with the move have said that the Labor Department is going to propose relaxing some decades-old Hazardous Occupations Orders (HO).

    The current rules allow some 16- and 17-year-old apprentices and high school students to receive very limited exemptions to work in hazardous occupations - usually no more than an hour a day.

    Some of these dangerous jobs include roofing work or operating chainsaws and other powerful machinery deemed too dangerous for those under 18.

    According to a draft regulatory notice, obtained by Bloomberg, the Department of Labor expects to introduce by October to the hazardous occupations provisions of the Fair Labor Standards Act.

    "The Department proposes to safely launch more family-sustaining careers by removing current regulatory restrictions on the amount of time that apprentices and student learners may perform HO-governed work," the document reportedly states.

    Joint-Employer Bill Finds Roadblock in Senate

    There's slim chance a House-passed joint-employer bill could pass the Senate any time soon.

    That's the message Senate Health, Education, Labor and Pensions Committee Chairman Sen. Lamar Alexander (R-Tenn.) told an audience at the International Franchise Association Legal Symposium in Washington, D.C.

    "The all-likely solution is the NLRB revisits the rule because that's after all how it was changed in the first place," Alexander said, suggesting that the GOP-controlled National Labor Relations Board is more likely to act on the joint employer question than the Senate. Alexander said there's not currently enough Democrat support to move legislation to undo a 2015 NLRB decision expanding joint employer liability for affiliated businesses.

    The House in November passed legislation (H.R. 3441) to restrict joint employer liability in a vote that included eight Democrats crossing the aisle to vote in favor. At least nine Democrats would have to support the measure to pass it in that chamber. Joint employer liability is at the center of one of the most heated labor policy and legal questions in recent years. Supporters of expanded liability say it prevents businesses from hiding behind complicated contractual relationships to avoid responsibility for labor and wage and hour violations. Critics argue it makes businesses in franchise and staffing arrangements potentially on the hook for other employer's workers.

    A Democrat-majority board in Browning-Ferris Industries of California Inc. ruled that organizations with indirect control over contractors, franchisees, or staffing agency workers may be considered their joint employers under federal labor law.

    The NLRB in a December 2017 ruling briefly reverted to a restricted, "direct control" test for joint employer liability for unfair labor practice and unionization purposes. That move was short-lived: the board later dropped the decision because of ethics concerns related to Member William Emanuel's (R) participation in the case.

    Big Hurdle for Bill - The pending legislation would amend the National Labor Relations Act and the Fair Labor Standards Act, laws that give workers the right to organize and require employers to pay minimum wages and overtime.

    The measure has not drummed up any public support from Senate Democrats, shrinking hope the measure could pass the chamber in the near future. Republicans need support of nine Democrats to achieve the 60 votes needed to pass legislation.

    The IFA is among several employer advocates seeking passage of the bill, which they say would reverse board overreach. Others argue that the current approach to joint employment gives workers a seat at the table with the companies actually setting the terms and conditions of their jobs.

    The Browning-Ferris decision is currently on appeal.

    Labor Board Considering Joint Employer Regulation

    The National Labor Relations Board may eventually use a regulation to resolve the hotly contested joint employer liability debate. The board is "considering engaging in rulemaking to establish the standard for determining joint-employer status under the National Labor Relations Act," according to the 2018 regulatory agenda released May 9. The item is listed under "long-term actions," and the description doesn't include a target date for a proposed regulation.

    NLRB Chairman John Ring said in a May 9 tweet that the board's Republican majority "will work to issue a proposed rule ASAP, and we will consider the views of all interested parties."

    "How could anyone argue against notice and comment rulemaking?" Ring said. "It's the most fair process and best way to get everyone's views on the joint employer standard."

    Democratic board member Lauren McFerran tweeted shortly afterward that decisions as to the regulatory agenda are Ring's prerogative, not formal board action. And Jennifer Abruzzo, the board's former acting general counsel under a Democratic majority, told Bloomberg Law May 9 that "NLRB rulemaking is done very infrequently, particularly with regard to reversing case precedent, which is typically done through adjudicatory action."

    The announcement comes as the board is still grappling with how to determine one business's liability for another business's workers under federal labor law. An Obama-era NLRB decision making it easier to tag companies as joint employers for unionization purposes remains in effect, despite Republican control of the five-member board.

    The board dropped a December decision to revert to a more limited joint employer standard as a result of conflicts-of-interest concerns related to Member William Emanuel's (R) participation in the case. Abruzzo suggested that the rulemaking is "perhaps" a way "to get around potential recusal issues of current board members."

    Some observers and former board appointees have previously said it's doubtful the NLRB will actually use the regulatory process to clarify joint employer liability. That's because of the long and drawn-out public comment process required for rulemaking and the possibility of immediate legal challenges.

    "It can't be entirely aspirational, otherwise they wouldn't have bothered to put it on there," Michael Lotito, an attorney with management-side firm Littler Mendelson, told Bloomberg Law. But simply flagging the issue for a possible regulation won't immediately resolve the debate, he said. "Even if engaged in rulemaking, that doesn't stop them from having to process cases under the existing standard."

    Several Paths to New Policy - The board typically creates or changes labor policy by reinterpreting the federal statute it's responsible for administrating on a case-by-case basis. A precedent set in one particular case can then apply to other cases involving similar allegations. The NLRB often changes those precedents in a partisan manner when a new administration takes control, creating a continuous flip-flopping on important workplace policies.

    A federal court could also weigh in on the joint employment issue, by ruling in an appeal of the board's 2015 decision to expand joint employer liability. Alternatively, the board could take up a new unfair labor case and use it to update the joint employment standard. A third route, through Capitol Hill, appears to be blocked indefinitely. Legislation to address the issue has stalled because it lacks Democratic support in the Senate.

    VIRGINIA TECH/ FOREST SERVICE HOUSING REPORT

    Below, please find two links to the Virginia Tech - U.S. Forest Service housing market commentaries for March 2018. These commentaries contain in-depth data and comments on the U.S. housing market.

    The housing report is a free service of Virginia Tech, Virginia Cooperative Extension, and the U.S. Forest Service. The reports are intended to help you gauge future business activity. Click to read all past housing reports.

    State Highway Programs Ranked – The Reason Foundation has issued the 23rd of its annual reports on the quality of state highway programs across the United States. As with state rankings on so many subjects these days, the worst states in this category are clustered in the Northeast and on the West Coast, while the best are clumped in the Great Plains and Intermountain West. North Dakota ranked first overall, New Jersey last. Among the data analyzed for each state are disbursements per mile of roadway, and road conditions, both rural and urban, as well as fatality rates. M. Gregory Fields, Baruch Feigenbaum, and Spence Purnell, Ranking the Best, Worst, Safest, and Most Expensive State Highway Systems, issued February 8, 2018, and available online here.

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