Policy Impact Series Examines Potential Explosion of Employer Liability

October 16, 2020

Future Workplace Policy Council Chair Johnna Torsone, CHRO of Pitney Bowes Inc., led a wide-ranging discussion about the changes in employment law a Democratic Congress could enact, which would substantially increase damages and exposure to class action lawsuits for large companies.  The panelists observed that the United States is already one of the most, if not the most, litigious countries in the world.

Arbitration agreements under fire:  AT&T Vice President, Associate General Counsel Stephen Mead described the value of employment arbitration agreements and protections most large company programs have in place for employees.  State and local governments are generally preempted by the Federal Arbitration Act from imposing restrictions on such agreements, but a new federal law could be in play.  Mr. Mead expressed hopes that Congress would consider alternatives to an outright ban that would protect programs that provide fair and efficient remedies for employees as an alternative to costly and lengthy litigation.

Potential overhaul of labor law remedies and procedures:  Senior Labor and Employment Counsel Roger King described provisions in the Protecting the Right to Organize (PRO) Act that would create a private right of action of alleged labor law violations.  King and Senior Workplace Advisor Dan Yager noted that such a change would undermine the current ability of the National Labor Relations Board to obtain a quick settlement of most claims with merit while dismissing those without.  The bill also would increase damages for labor law violations and expose company directors and officers to personal liability.

Why it’s important:  While a number of the changes are concerning on their own, the cumulative impact could require extensive increases in legal costs for employers over the long term.  This would be compounded by two other issues discussed on the call: expansion of joint employer liability and widespread conversion of independent contractors into employees.

Changes ahead:  Expansion of employer liability is one among many of the Association’s priority areas that will be impacted by the November election results.  In the weeks prior to the election, we will examine health care (October 21), and executive compensation (October 28).

For the slides used on the labor policy call and an overview of what CHROs need to know, click here.