FCPA Enforcement in the Trump Administration: Nevertheless, It Persists

Whenever a new president transitions into the White House, there is almost always a level of uncertainty around how the new administration will handle certain hot button issues now in their purview. As logic dictates, we often look to the newly minted president’s campaign promises to ascertain their stance on these issues. But with the election of President Donald Trump, many of us looked to Twitter and old interviews from the then-businessman turned reality TV maven to determine what would come of a myriad of laws and loose ends. One of the laws that many speculated could come under attack is rooted in preventing corporate corruption, and geared towards the promotion of respectable business practices, both domestically and internationally – the Foreign Corrupt Practices Act of 1977 [“FCPA”].

What is the FCPA?

The FCPA ascended from a cauldron of toil and trouble – or more aptly stated, came into existence as a result of corruption, scandal, and an unveiling of the pervasive bribery of foreign officials perpetuated by U.S. companies. The botched break in of the Democratic National Committee (DNC) Shaking hands with hidden moneyHeadquarters at the Watergate office complex ultimately led to the discovery of slush funds used to bribe domestic political parties and certain foreign government officials. In order to conceal these payments, companies misrepresented their corporate financial statements, allowing the cycle of corruption to continue domestically and internationally. These findings not only tainted the view of U.S. businesses, but revealed just how awful corruption is for business. Recognizing the need to restore confidence in U.S. businesses and mitigate future corruption, Congress enacted the FCPA.

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Uber Retirement

Although by no means a new question regarding retirement, the noteworthy growth of gig companies in the sharing economy has renewed concerns that even more American workers will lack access to employment-based retirement plans.  Although some argue that the gig economy offers workers advantages including more independence and flexibility, company-sponsored retirement saving is not one of them.  This is a dangerous state of affairs, as employment-based retirement plans make up a critical part of an individual’s strategy for retirement security.

Such retirement plans, like the nearly-ubiquitous 401(k) plans, provide a necessary bulwark against destitution in old age, especially given that Social Security provides only partial income replacement and few Americans have put away much in private savings.  Yet, independent contractors, which is how most gig companies classify their workers, are approximately two-thirds less likely than standard employees to have access to an employer-provided retirement plan.

Much academic and judicial ink has already been spilt over whether Uber drivers and other members of the sharing economy are members of the so-called “contingent” workforce or “precariat” (part-time, leased, temporary, and per diem workers), not entitled to receive retirement benefits as part of their employment.  Whether these employees are statutory employees is of utmost importance because it largely determines whether gig workers are covered by employment laws, as most such laws center on the employer-employment relationship.

What all these jobs have in common is that the work activity is happening outside of the traditional safety net of employment and are highly unstable.  Whereas statutory employees are covered in the United States by numerous labor and employment law statues that provide security and protection in the workplace, workers in these alternative work arrangements are not.  Once stable employment relationships have given way to relationships that are much more arms-length, regardless of whether it is a contractor situation, temporary employment, or a one-time encounter.

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That Extra Incentive

Most of us are familiar with wellness programs—programs sponsored by our employer or health plan that try to incentivize us to eat healthier, sleep well, and get more exercise.  If you’re anything like me, it helps to have that extra push or incentive, especially around the holidays when sweets abound, to stay on track—or at least, to not stray too far from health goals. Most of these programs have the added advantage of lowering health care costs, both by providing financial incentives to reduce immediate costs to the individual employees and by boosting the overall health of the employees as a whole, which could reduce future health care costs.   However, extensive technical regulations and recent litigation by the AARP make implementing health and wellness programs increasingly tricky for employers.

Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”) and the regulations promulgated by the U.S. Equal Employment Opportunity Commission (the “EEOC”) thereunder, generally prohibit “an employer [from] request[ing], require[ing], or purchas[ing] genetic information [which includes an individual’s family medical history] with respect to an employee or a family member of the employee.”  42 U.S.C. § 2000ff–1(b). However, there is an exception for wellness programs, as long as employers jump through a set of hoops. 29 CFR § 1635.8(b)(2).  While not without its own problems and excesses, the exception in the EEOC regulations at least allows employers to provide incentives to those employees willing to participate in employer-sponsored wellness programs.

The AARP doesn’t like this whole “incentive” idea to begin with. It recently filed a lawsuit against the EEOC in an attempt to vacate the regulations entirely.  AARP v. U.S. Equal Employment Opportunity Commission, No. 1:16-cv-02113 (D. D.C. 2016) (hereafter the “AARP Complaint”).  This actually might not be a bad idea, except for the fact that the AARP thinks that the regulations do not have enough hoops.  In fact, the AARP would prefer that the regulations abolish any permission for any incentives or penalties to induce participation in employer-sponsored wellness programs. The AARP alleges in its complaint that all employer incentives or penalties to induce participation in employer-sponsored wellness programs violate Title I of the ADA and Title II of GINA.  AARP Complaint at 3. 

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