Something rare happened this week in Washington. AARP, the mammoth retiree organization, struck out on an issue it had been advocating for years.

The Mighty Casey of special interest groups whiffed in its effort to force companies to provide the same level of benefits for retirees regardless of their age. 

On Monday, March 24, the Supreme Court declined to hear a case that centered on whether the Equal Employment Opportunity Commission can allow companies to offer less medical coverage to retirees who qualify for Medicare than they do to retirees  younger than 65.

The EEOC wrote the rule in 2003 in response to a 2000 decision by the 3rd Circuit Court of Appeals in Philadelphia stating companies that coordinate retiree coverage with Medicare violate federal age discrimination laws.

AARP filed suit against the EEOC rule. That led to several years of litigation. During that time, the Supreme Court ruled on a separate case dealing with the authority of agencies to interpret statutes.

In June, the court effectively reversed itself and upheld the EEOC rule. Now the Supreme Court has stiff-armed AARP’s appeal, ending the legal process.

Business groups hailed the Supreme Court’s lack of action. “Retirees and employer benefit plan sponsors can breathe a little easier,” said James Klein, president of the American Benefits Council, in a statement.

The court found persuasive the argument that businesses and the EEOC make in favor of wrapping retiree benefits around Medicare: Employers might reduce or abandon health care coverage for all retirees if they can’t offer less coverage to their post-65 population and depend on Medicare to make up the difference.

AARP called that approach a double standard.

“By allowing employers to reduce or even eliminate health benefits for retirees when they reach age 65, this rule essentially shifts the costs of all retiree health care onto the backs of older retirees,” said David Certner, AARP legislative policy director.

Don’t look for Congress to jump in and try to clarify the legislative intent of age discrimination legislation to prohibit companies from using a Medicare carve-out.

Although Democratic majorities on Capitol Hill have been eager to push back against court rulings (e.g., a bill to overturn the Supreme Court decision in the Lilly Ledbetter age discrimination case), their ardor is likely to be diminished this time because unions joined business advocates in siding with the EEOC.

Although they opposed AARP in this battle, unions and business have joined AARP in a strange-bedfellow alliance called Divided We Fail, a national advocacy campaign designed to force congressional—and presidential—candidates to deal with health care and entitlement issues.

AARP acknowledges the legal setback it suffered in the Supreme Court this week. But it remains hopeful about setting the election agenda.

The EEOC rule “is an unfortunate byproduct of the bigger problem, which is skyrocketing health care costs,” said Jim Dau, an AARP spokesman. “We’re keeping our eyes on the big picture. Affordable health care and financial security are closely linked.”

This week, the political world (perhaps the whole country) has been riveted by Sen. Barack Obama’s speech on race relations. The leading Democratic contender for president explicitly tackled an issue that his campaign so far has addressed only implicitly.

Even if he fails to secure his party’s nomination, or later this fall to win the White House, Obama has already made history. The country seems enamored of the idea of an African American president. Surely this will make it easier to break down racial and ethnic barriers in the office and on the shop floor, too. 

If Sen. Hillary Rodham Clinton defeats Obama to become the Democratic presidential standard bearer this fall, she will become the first female nominated by either party. If America embraces a woman as president, it provides a powerful incentive to shatter glass ceilings in the workplace.

It may not have occurred yet to most voters, but the Republican nominee also will be historic if elected—and produce implications for the workplace. By November, Sen. John McCain will be 72 years old. He would be the most senior president ever to take his first oath of office.

If McCain is standing at the Capitol with his hand on the Bible in mid-January, he will embody an important workforce trend—the need for people to work longer. If it is true that traditional retirement is a thing of the past, what better place to make that movement a reality than in the White House?

The senator has demonstrated his energy by prevailing in a tough GOP primary. This week, he has toured the Middle East and Europe. When he comes back to the United States, he’ll launch what is likely to be a vigorous round of fund-raising, which will only be successful if the candidate jumps into it with gusto.

Convincing voters that his age will not keep him from performing his duties in office is only McCain’s first challenge. He also has to assuage fears that his skin cancer will come back and debilitate him. McCain showed several years ago that he can maintain his Senate schedule while going through a round of chemotherapy.

So, if McCain becomes president, he’ll force us to consider how productive and effective older workers can be. He’ll also be an example of why it’s not fair to discriminate against those who have battled life-threatening disease. When they recover, they’re ready to join the labor market again. Their supervisors, in this case the American people, can put aside their lingering doubts aside.

No matter your choice for president—Obama, Clinton or McCain—the winner will stand as a strong argument for why U.S. workplaces should be more inclusive.

Usually one of the first casualties of an election year is substantive accomplishments on Capitol Hill. Although legislation suffers, politics thrives. This atmosphere can be a catalyst for bills that have a better chance of making a political point than becoming law. This is the case with immigration. A broad Senate bill that would have strengthened border and workplace enforcement while providing a path toward legalization for undocumented workers that many industries desperately need died almost a year ago.Since then, the immigration issue has become volatile and brittle. Passions tend to cause internal divisions in parties and split interest groups into strange-bedfellow arrangements.Although a comprehensive bill won’t rise out of this political cauldron, many rifle-shot bills could bubble to the surface in the coming weeks. For instance, a measure written by Rep. Heath Shuler, D-North Carolina, has garnered 146 co-sponsors, most of whom are Republicans.

Shuler’s bill focuses solely on enforcement. It cracks down on illegal workplace hiring by mandating that all companies use E-Verify, a government-run electronic verification system that 52,000 employers now use voluntarily.

Employers enter information from I-9 forms into the system, which then checks it against government databases at the Department of Homeland Security and the Social Security Administration.

E-Verify is reviled by many in the HR community. They cite its 4 percent error rate, criticizing it for being inefficient, ineffective and prone to errors that could ultimately cause an economic disruption if all employers use the system.

As an alternative to E-Verify, the Society for Human Resource Management and other HR organizations have worked with Rep. Sam Johnson, R-Texas, to write a bill called the New Employee Verification Act. It has 13 Republican co-sponsors.

The measure would establish a mandatory electronic verification system based on existing new-hire databases in each state. Those databases were originally constructed to track fathers who skirted child support payments. The system would replace I-9 forms, allowing employers to enter information directly or over the phone.

Like the Shuler bill, the Johnson legislation would impose civil penalties on employers who hire illegal immigrants. But the Johnson bill would not hold companies responsible for hiring done by subcontractors and would only require verification of new hires rather than the entire workforce.

The Johnson bill has not yet attracted a Democratic co-sponsor because Democratic leadership is discouraging caucus members from signing on to rifle-shot measures.

Shuler has been able to line up many Democrats from conservative districts because his bill gives them an outlet to prove they are tough on immigration.

But Democratic leaders also are wary of Shuler’s proposal because it’s essentially a Republican vehicle. The bill’s supporters are circulating a “discharge petition,” a document that would send a bill directly to the floor for a vote if it collects 218 signatures. The Shuler petition has 181 so far.

While immigration intrigue unfolds in the House, Senate Republicans have introduced 15 immigration enforcement bills. One of them, written by Sen. Jeff Sessions, R-Alabama, would establish an electronic verification system based on E-Verify. Under quirky Senate rules, Sessions likely will have an opportunity to force votes on his package.

If Shuler and Sessions get the floor action they seek, it will be difficult for any member of Congress—Republican or Democratic—to come out against workplace verification. The question is whether they will be voting for E-Verify or the SHRM-backed system, if Johnson can develop enough support for his bill or get it inserted into Shuler’s bill.

On top of all these political machinations is another important factor. The law that created E-Verify expires in November. One way or another, Congress has to do something on employment verification soon, even though it’s an election year.
 

During this election season, we can add one more certainty to life in addition to death and taxes: Democrats will maintain control of the House and Senate.

Republican retirements in the House and the number of competitive GOP seats in the Senate ensure that Democrats will continue to lead Capitol Hill until at least 2011.

That means that Democrats will advance their agenda, Republican filibusters in the Senate notwithstanding, in two ways: through legislation and oversight.

Corporate executives experienced the latter on March 7. At a hearing of the House Oversight and Government Reform Committee, panel Democrats grilled three current and former financial firm leaders on what they believe is the incongruity of their generous pay packages at a time when the subprime mortgage meltdown is roiling the economy.

It was the second oversight committee hearing on executive pay in three months. A previous session focused on alleged conflicts of interest in pay consulting. Democrats are trying to make the political point that executive remuneration is out of whack with the economic struggle most of their constituents face.

The atmosphere for the latest hearing was made more uncomfortable for the executives by a majority staff report released the previous day.

It included e-mails from Angelo Mozilo, founder and CEO of Countrywide Financial Corp., to the Countrywide board regarding an executive compensation specialist he hired as his own representative as well as an exchange about his wife’s usage of a corporate jet.

During the hearing, Democrats pressed Mozilo for answers about those messages. They also demanded from Richard Parsons, chairman of Time Warner and chairman of the personnel and compensation committee at Citigroup, an explanation of why Charles Prince, former chairman and CEO of Citigroup, received a $10 million bonus on his way out the door last year.

On that point, the politicians had the upper hand. Del. Eleanor Holmes Norton, D-District of Columbia, bored into Parsons. She wanted to know whether the Citigroup board had in fact only spent 20 minutes deliberating about the bonus.

Parsons was no match for Norton. He tried to explain that Prince’s base salary was $1 million. Citigroup would then routinely add a bonus to make his pay more competitive with prevailing rates in the financial industry. His deliberate response lacked the drama that Norton conveyed in posing the query.

Rep. Elijah Cummings, D-Maryland, also made a visceral point about how his constituents face threats to their homes while the CEOs earned tens—or hundreds—of millions of dollars. “Something doesn’t smell right,” Cummings said.

And that’s the point of oversight. The committee has very little legislative jurisdiction. So, it won’t produce an executive pay bill. But the panel can air its grievances and apply moral suasion to any issue it chooses.

By doing so, it might build momentum for legislation introduced by other committees, like a bill that would allow shareholders to vote on executive pay packages.

Or the heat produced by oversight might forge changes in corporate practices. “The bottom line is there needs to be better … accountability” from executives to avoid “economic disruptions,” said Rep. Henry Waxman, D-California and chairman of the oversight committee.

Republicans assert that the committee shouldn’t be meddling in corporate affairs. They say that Democrats are simply scoring political points and providing discovery for potential lawsuits.

Corporate leaders may agree. But if the Democrats stay in power—and they will—the business community had better find a way to address the party’s concerns about executive pay. Otherwise, they should prepare to be hauled up to Capitol Hill for more prickly hearings.

As the clock winds down to the two-minute warning for the Bush administration, the Department of Labor has proposed to modify the Family and Medical Leave Act for the first time in its 15-year existence.

That move drew a predictable reaction—from Democrats who say the changes are an assault on employee leave and from the business community, which sought more profound action. Here is a summary of the situation from February 14:

“Democratic Leaders Oppose Revising FMLA Regulations”

One of the objections that Democrats brought up at the February hearing about the regulatory proposal is that it is coming too late in President Bush’s tenure. The comment period ends April 11. Then there is precious little time to issue a final rule and get the approval of the Office of Management and Budget.

Why did the Labor Department wait so long to offer the 477-page proposal? The answer provides some hope that middle ground can be found between FMLA advocates who don’t want a syllable of the law changed and business interests that would like to see fundamental revisions to two areas most prone to abuse—the definition of a serious condition and the use of unscheduled intermittent leave.

Victoria Lipnic, assistant secretary of labor for the Employment Standards Administration, said the administration came forward with FMLA changes as soon as it could. She notes that the DOL has been engaged in meetings since 2003 with those who use, administer and promote FMLA.

Those sessions produced a raft of questions that became the basis for a survey, concluded in 2007, that produced 15,000 comments. The department then sifted through that feedback, reviewed FMLA court cases during the last 15 years and finally put out the FMLA regulatory proposal in February.

That hefty volume was strengthened because the long gestation gave the DOL a better understanding of how FMLA is working, according to Lipnic.

“We came to this in a deliberative way,” she said in an interview after the February 14 hearing.

A close reading of the regulation shows that the DOL painstakingly included both sides of the story. Within the same paragraph, it quotes champions of FMLA and opponents. Then it offers a recommendation that doesn’t fully please either side.

The proposal is hardly revolutionary. It could have been much better or much worse, depending on your frame of reference. It declines to change the definition of a serious health condition and does not significantly alter rules for intermittent leave, other than to require that employees warn their supervisors before the beginning of their shift that they will be out.

The DOL does allow companies to contact directly an employee’s health care provider to determine whether leave is legitimate. But if the company denies leave, under the new rules, it would have to do so in writing and give the employee a chance to respond.

Despite balancing attempts, tweaking FMLA causes political sparks to fly. “The administration couldn’t publish the current rules without getting into a fight,” said Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce.

But in the midst of political heat, FMLA also generates light. Most HR professionals acknowledge that the leave law works well more often than not. Sen. Christopher Dodd, D-Connecticut and the original FMLA author, wants to enact paid leave but also has indicated in the past that he would listen to calls from the business community for some FMLA modifications.

After the February 14 hearing, Dodd met with Lipnic in private. Perhaps in the quiet of a Capitol Hill office, they inched closer toward middle ground that is overshadowed by politics in congressional hearings.