September 2019 Government Update

President Trump Delays Tariff Rate Increase on Chinese Imports

On September 11, President Donald Trump announced he was delaying the proposed 5% tariff rate increase on Chinese imports for Lists 1-3 from October 1 to October 15.  The President said he was taking this action in a show of good faith to China during their government’s 70th anniversary.  China also announced they would exempt American soybeans and pork from their latest round of retaliatory tariffs.  

Last month, the President announced that his Administration planned to increase the rates for all current and proposed Chinese tariffs pursuant to the Section 301 investigation.  Specifically, the tariff rate for $250 billion worth of Chinese imports on Lists 1-3 will be increased from 25% to 30%.  In addition, the List 4 tariffs on $300 billion worth of Chinese imports, which went into effect on September 1 and also December 15 later this year, will be increased from 10% to 15%.

Trade officials from the U.S. and China were originally scheduled to meet in Washington, D.C. this month but the negotiations were pushed back to October.

Congress Likely to Pass Short-Term Continuing Resolution to Fund the Government

With a government shutdown looming on October 1, Congress is expected to consider a short-term Continuing Resolution to keep the government open through mid-November while they negotiate a spending agreement for fiscal year (FY) 2020.  The Senate has yet to vote on any of the 12 required appropriations bills for FY 2020 which is causing a delay in negotiations with the House of Representatives. 

In August, President Trump signed a new budget deal which establishes the top-line spending levels for the next two years.  However, Congress must still come to an agreement on to appropriate the money for the upcoming fiscal year by September 30.

NLRB Relaxes Standard for Employer Changes to Employees' Terms and Conditions of Employment

Recently, the National Labor Relations Board (NLRB) made it easier for employers to change the terms and conditions of their workers' employment without permission from the union. 

Previously, NLRB held that the relevant collective bargaining agreement had to give the employer "clear and unmistakable" permission to unilaterally change a term or condition of employment. Under that standard, absent "clear and unmistakable" permission, employers were required to bargain with the union before changing any bargained-for terms or conditions of employment.

In a ruling published September 10, 2019, NLRB voted 3-1 to adopt the "contract coverage" standard that has been followed by several circuit courts already.  Under this standard, an employer may unilaterally change a term or condition of employment if the collective bargaining agreement can be said to "cover" the change in dispute. To determine this, "the Board will examine the plain language of the collective bargaining agreement to determine whether action taken by an employer was within the compass or scope of contractual language granting the employer the right to act unilaterally."

Employers should examine the language in their collective bargaining agreements, or consult with legal counsel, on a case-by-case basis to determine whether they will fall under the contract coverage standard and therefore have the flexibility to unilaterally revise or implement certain rules and policies.