On January 6, 2022, the U.S. Department of Labor’s Wage and Hour Division (DOL/WHD) and the National Labor Relations Board (NLRB) announced a memorandum of understanding (MOU) between the agencies to share information, collaborate, and coordinate on investigations of potential violations of federal labor and employment laws. 

The partnership, pursuant to a new Memorandum of Understanding (“MOU”) between the two agencies, is an effort to create mechanisms “to share information efficiently and establish a process for referral, joint investigation, and cross training of personnel.”  The MOU took effect immediately, with the DOL/WHD announcing that it was reviewing cases currently under investigation that may have some overlap with the NLRB.

This “partnership” builds off a joint initiative by the NLRB, EEOC, and U.S. DOL announced on November 10, 2021 combatting retaliation against workers who are exercising their legal rights in the workplace. In a press release published by the NRLB, DOL, and EEOC, NLRB’s General Counsel Jennifer Abruzzo explained that there was a need for a joint initiative, because “[retaliation] issues cut across multiple worker protection agencies, which is why it is so important to work collaboratively to effectively prevent and forcefully address retaliatory acts against workers.”  These agencies will be taking a more significant approach to educating on their rights and sharing information.

With respect to the MOU between the NLRB and Wage and Hour and enforcement, Section 3 identifies three ways enforcement of violations could be handled:

1.       When, during an investigation DOL/WHD personnel has reason to believe that there may be unlawful conduct that falls within the jurisdiction of the NLRB, they will advise the employee(s) that an opportunity may exist to file a charge with the NLRB. DOL/WHD personnel will further provide the employee(s) with informational materials prepared by the NLRB which includes information about rights and remedies under the NLRA, along with contact information for the NLRB.

2.       When, during an investigation NLRB personnel has reason to believe that there may be unlawful conduct that falls within the jurisdiction of DOL/WHD, they will advise the employee(s) that an opportunity may exist to file a complaint with DOL/WHD. NLRB personnel will further provide employee(s) with informational materials prepared by the DOL/WHD, which includes information about rights and remedies under the statutes enforced by DOL/WHD, along with contact information for the DOL/WHD and may also refer the case to the regional DOL/WHD office for investigation.

3.       In appropriate cases the agencies will determine whether to conduct coordinated investigations of matters arising within both agencies’ jurisdictions. If the agencies decide to conduct coordinated investigations, and both DOL/WHD and NLRB find overlapping statutory violations, they shall explore whether it is appropriate for one agency to settle or litigate the matter while the other holds it in abeyance, considering under which statute it would be most feasible and practical to proceed. If one agency holds its case in abeyance, the other agency will consult with the former agency before a case is settled. If the case is litigated, the litigating agency will timely advise the agency holding its case in abeyance of the final determination.

The key takeaways for HR with respect to this MOU is that compliance is greatly elevated.  The agencies have sufficient incentive to implement the MOU, as a previous one between the U.S. DOL and IRS concerning misclassification was highly criticized in 2018 by the IRS Inspector General for failing to really implement it. 

Further, David Weil, a public opponent of independent contractor relationships was renominated as Wage and Hour Administrator, and it’s easily observable what direction he will take with the agency in regards to enforcement.  Moreover, Jennifer A. Abruzzo, the General Counsel for the National Labor, issued a series of memorandums which indicate taking highly controversial and expanded positions on a variety of labor issues.  Therefore, HR needs to review all independent contractor situations as well as other alternative work arrangements and their rate of pay.  It’s not inconceivable to get hit with an IC misclassification as well as a wage and pay disparity claim – a domino effect.

Source:  Ogletree Deakins 1/10/22, The National Law Review 11/16/21