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Clark Hill 2022 Automotive & Manufacturing Industry Outlook: Labor and Employment

April 6, 2022

This is shaping up to be another busy year for Human Resource departments. Beyond the COVID pandemic, there is no shortage of issues Automotive and Manufacturing employers must pay attention to and address. Being proactive in the following areas could be helpful to stave off litigation in 2022 and beyond. 

Labor Relations:  The National Labor Relations Board Pendulum Will Continue to Swing Towards Employees with a Democratic Majority 

As predicted in our July 2021 NLRB Update, the NLRB now has a democratic, pro-union majority that is swiftly announcing employee friendly initiatives. Already, we know that the NLRB will be seeking to make it easier to prove joint employer status, harder to classify workers as independent contractors, and will be seeking injunctions if employers “threaten or coerce employees” during organizing campaigns. The Board has also indicated it is considering whether arbitration agreements and confidentiality clauses violate employees’ rights and whether certain work rules chill employee rights, including investigative-confidentiality rules, non-disparagement rules, and rules prohibiting outside employment. Employers need to remain mindful of the Board’s decisions and guidance to avoid potential unfair labor practice charges.  

Wage and Hour: Incentive Pay Offered During the Great Resignation May Trigger Claims 

Clark Hill PLC’s 2021 Roundtable on the Labor Shortage for Automotive and Manufacturing employers discussed several strategies for retaining and attracting talent. Key among them included providing incentive pay. Employers need to be reminded that most non-discretionary bonuses need to be included in the regular rate of pay for overtime purposes. It is a good idea to conduct a wage and hour audit for all new forms of compensation added in the last two years to ensure compliance and avoid litigation. This is especially important given that on January 6th, 2022, the NLRB and Department of Labor announced an initiative to share information to “help ensure that employers pay workers their rightful wages and that workers can take collective action to improve their working conditions without fear of retaliation.”     

Restrictive Covenants: State and Federal Regulations are Trending Against Enforceability.   

Clark Hill’s Paul Starkman, who has expertise restrictive covenants, reports that “employers in the automotive and manufacturing sectors are waiting to see what the Federal Trade Commission does with President Biden’s request that it consider banning restrictive covenants, such as non-competition and non-solicitation agreements. In the meantime, the states have stepped into the breach. Colorado recently became the latest state, following Illinois, Washington, and others, in enacting new (and differing) laws on the enforceability of restrictive covenants. Consequently, automotive and manufacturing employers may have to rethink their use of one of their primary methods of protecting their confidential information and important customer relationships from employees who may depart during the Great Resignation.” Look for Paul’s 50-state-survey on restrictive covenants soon.   

Drug Testing and Policies: Increased Legality of Marijuana May Lead to Relaxation of Drug Policies and Potential Need to Accommodate  

President Biden has suggested that his Administration will attempt to federally decriminalize marijuana. Many states have already legalized recreational and/or medicinal marijuana. As a result, it is predicted that employers who have not already loosened drug testing policies as a result of labor shortages may consider doing so in 2022. If marijuana is no longer a Schedule 1 Controlled Substance, employers may also need to consider allowing the medicinal use of marijuana as a reasonable accommodation for employees and applicants with disabilities under the Americans with Disabilities Act. Mario Bordogna will explore best practices associated with this trend in a complimentary Clark Hill webinar, Employee Drug Testing for Manufacturers, on March 23rd.       

ADA Accommodations and Long Haul Covid 

The Equal Employment Opportunity Commission updated its Technical Assistance Guidance in December 2021 to clarify that workers suffering from long-haul COVID may have a disability under the Americans with Disabilities Act. Vanessa Kelly adds, “I have observed that the EEOC has been very active in pursuing litigation against employers for alleged violations of the ADA, including failing to make reasonable accommodations. One of the EEOC’s strategic initiatives is to remove barriers to employment for those in underrepresented communities, and those with disabilities. It is critically important that supervisors understand the need to bring requests for COVID-related accommodations, or other workplace modifications, to the attention of human resources.  

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