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Economy and Society: Pushback against proposed Labor Department ESG rules

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.

In Washington, D.C.

Republican pushback against proposed ESG rules 

In response to the recent Labor Department introduction of a proposed rule that would give retirement-plan managers regulated by ERISA (the Employee Retirement Security Act) greater leeway in using ESG principles in their investment decisions (repudiating the Trump Administration’s plan to insulate retirement savings from investments that it saw as politically motivated and potentially risky), Republicans decided to delay the confirmation process for Biden’s nominee to head the Labor Department’s Employee Benefit Security Administration, Lisa Gomez. According to Bloomberg Law:

“Republican lawmakers’ opposition to a Biden administration proposal to favor environmentally conscious retirement funds is delaying Senate action on President Joe Biden‘s pick to oversee private-sector employee benefits.

GOP members of the committee considering Lisa Gomez’s nomination to run the U.S. Department of Labor’s benefits arm want answers to questions they’ve submitted to her and to the administration about the new rulemaking on the use of environmental, social, and corporate governance factors in retirement portfolios, a senior Republican staffer on the panel told Bloomberg Law.

Sen. Patty Murray (D-Wash.), who chairs the Health, Education, Labor, and Pensions Committee, agreed to a request from Republican senators to delay a vote on Gomez’s nomination, according to the staffer, who requested anonymity because they didn’t have authorization to speak to the media. The extra time will allow Gomez to respond to questions about her ideas on ESG funds.

Gomez, who testified before Murray’s panel on Oct. 7, was omitted from a package of eight nominees who are scheduled to receive a committee vote Oct. 26. That group includes another nominee for DOL who received a joint confirmation hearing alongside Gomez.

A week after that hearing, the agency Gomez is picked to lead, the Employee Benefits Security Administration, released a proposed rule that would allow investors of workplace retirement funds to focus on environmentally friendly investments and cash in on companies combating climate change.”

Proposed rule aims to bring transparency to clients

Last month, the SEC proposed a new rule on “Enhanced Proxy Voting Disclosure by Investment Funds,” which is intended to make proxy voting decisions made by plan officials more transparent to their clients:

“The Securities and Exchange Commission today proposed amendments to Form N-PX to enhance the information mutual funds, exchange-traded funds, and certain other funds report about their proxy votes. The proposed rulemaking would require funds to tie the description of each voting matter to the issuer’s form of proxy and to categorize each matter by type to help investors identify votes of interest and compare voting records. The proposal also would prescribe how funds organize their reports and require them to use a structured data language to make the filings easier to analyze. Funds would also be required to disclose how their securities lending activity impacted their voting.

Further, the rulemaking would require institutional investment managers to disclose how they voted on executive compensation, or so-called “say-on-pay” matters, which would fulfill one of the remaining rulemaking mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Managers generally would be subject to the same Form N-PX reporting requirements as funds with respect to their say-on-pay votes.

“This proposal will make it easier and more efficient for investors to get crucial information about proxy votes from funds,” said SEC Chair Gary Gensler. “I am pleased to support the staff’s recommendations and look forward to putting them out to public comment.””

Retirement fund managers who are enthusiastic about their new freedom to invest their clients’ money in ESG products will have to demonstrate, on an ongoing basis, if that enthusiasm is motivated by purely pecuniary interests or if it is simply the means by which they are attempting to leverage their clients’ retirement resources to advance their own political agendasa key question among ESG opponents who have suggested that this is precisely what ESG managers do. 

On Wall Street and in the private sector

BlackRock encourages SEC to mandate ESG-related disclosures for private companies

According to The Wall Street Journal, BlackRockthe largest asset management firm in the worldand others are trying to persuade the SEC to get involved in forcing privately held companies to embrace sustainability and other ESG practices:

“It’s not enough for socially enlightened masters of finance like BlackRock and Nasdaq to push around publicly traded companies. Now they want the Securities and Exchange Commission to impose their social and political agenda on all companies, including private firms.

The SEC is expected soon to propose rules requiring companies to publicly disclose climate, board diversity and human-capital metrics. Large asset managers and government pension funds have found mixed success pressuring public companies to adopt these disclosures, which is why they are now endorsing government coercion….

Nasdaq CEO Adena Friedman wrote in these pages in February that the exchange’s board diversity rules would help “create momentum toward an approach to capitalism that offers more opportunity to more people” and show this “can be accomplished through a market-driven solution—rather than government intervention.” Now she’s supporting government intervention.

“Were the SEC to consider [board diversity] at more of a regulatory level, we would also hope that they would consider private and public companies,” she told the Council of Institutional Investors last month. “We do think at the end of the day every company should have diversity as part of their consideration, and only the SEC has the ability to establish standards at the private company level. So I think that would be an interesting way for them to expand it very significantly.” Yes, it sure would….

BlackRock wrote in an SEC public comment that “we encourage the SEC to explore its existing regulatory authority to mandate climate-related disclosures with respect to large private market issuers” in order “to avoid regulatory arbitrage.” The Investment Company Institute, which represents large asset managers, echoed its sentiments.

Ms. Friedman, Mr. Fink and friends no doubt recognize that burdensome ESG mandates, which also carry substantial litigation and reputational risks, will cause many companies to shun public markets. This would hurt stock exchanges and asset managers, but most of all retail investors. So now they want to foist their ESG regime on private companies too.”

In the February 16 edition of this newsletter, it was reported that Larry Fink, the CEO of BlackRock, specifically asked the government to stay out of the ESG business and to focus its energies on privately held companies:

BlackRock CEO Larry Fink, who has been hailed by some as a corporate leader in fighting climate change, is putting his weight behind a call for companies to abide by a voluntary global standard instead and is warning against the potential shortfalls of government intervention….

BlackRock’s Fink argues that many publicly traded companies — those accustomed to sharing information widely with investors — are on track to manage their climate risk amid growing market pressure. He says the government should focus on privately held firms that are taking on more carbon-intensive businesses but don’t divulge as many details of their operations….

“We’re going to see a vast change in the public company arena worldwide,” he said at a Brookings Institution event Tuesday. “They are going to move forward. We’re not going to need really governmental change or regulatory change.”

In the spotlight

Harvard’s ESG-focused endowment investment lags S&P 500

Harvard University’s endowment, which is run by Harvard Management Corporation, one of the first management companies to make the case that ESG investment would enhance returns, appears to be starting in a hole. Now that the Federal Reserve has promised to begin tapering its stimulus and even to consider raising rates, the ability of funds to do well by doing good is likely to be tested:

“What investing lessons can be learned from Harvard University’s failure to beat the S&P 500 SPX, 0.57% in its latest reporting period?

It’s a timely question, given the university’s report of its endowment’s investment return in the fiscal year that ended Jun. 30. That return was a gain of 33.6% — 7.3 percentage points lower than the S&P 500’s total return.

Lagging the stock market is nothing new for Harvard; the endowment has done so more often than not in recent years. Cumulatively over the past decade it has lagged the S&P 500 by 5.6 annualized percentage points.”

HMC insists that its lagging performance is a result of what it describes as its conservative approach. Seven years ago, before ESG was all the rage in the investment world, HMC made a commitment to be on the cutting edge of the socially responsible investment movement:

“Harvard Management Corporation (HMC) signed up to the UN-supported Principles for Responsible Investment (PRI) less than a year ago, but the company that manages the $36 billion Harvard University endowment is already moving rapidly to build environmental, social and governance (ESG) factors into every investment decision it makes.

Jane Mendillo, president and chief executive of HMC, told the Fiduciary Investors Symposium at Harvard University that its embrace of ESG factors and the PRI was driven by the changing definition of what it means to be a fiduciary investor, and by a conviction that investing sustainably will improve its portfolio returns….

“We want to be forward-thinking. We want to be successful investors and sustainable investors. We are convinced that doing so will be good for our portfolio and for Harvard, and it will also be good for the world.”

Mendillo said that “over time, ESG factors will be considered in every part of the portfolio”.

“We know there is more we can do as managers to push our thinking about creating a truly sustainable portfolio for Harvard as we choose our investments and manage our risks going forward,” she said….

“Our goal, in pursuing all of our sustainable investment initiatives, in signing the PRI, in seeking more and better information on ESG risks, and on integrating ESG considerations into our investment process, is to reduce risk and to improve economic returns in an ever-evolving world – one where environmental, social and governance factors are becoming more prominent and more economically relevant, and certainly are not going away.””



Special election primary to be held in Massachusetts House district

A special election primary is being held on Nov. 2 for the 4th Essex District of the Massachusetts House of Representatives. Darcyll Dale and Jamie Zahlaway Belsito are running in the Democratic primary. Lisa-Marie Cashman and Robert Snow are competing for the Republican nomination. The general election will take place on Nov. 30, and the winner will serve until January 2023.

The seat became vacant on Sept. 15 when Bradford Hill (R) resigned after being appointed to the Massachusetts Gaming Commission. Hill had represented the district since 1999.

Heading into the special election, Democrats have a 129-29 majority in the Massachusetts House with one independent member and one vacancy. Massachusetts has a divided government, and no political party holds a state government trifecta. A trifecta exists when one political party simultaneously holds the governor’s office and majorities in both state legislative chambers.

As of October, 64 state legislative special elections have been scheduled for 2021 in 21 states. Between 2011 and 2020, an average of 75 special elections took place each year. Massachusetts held 42 state legislative special elections from 2011 to 2020.

Additional reading:



New York City to require vaccination for all city employees

Our weekly summary of state & local news highlights New York City’s vaccination requirement for all city employees and Gov. Abbott’s appointment of a new secretary of state. Read all about it in this week’s edition of the State & Local Tap.

Ballot Measures Update

Thirty-nine statewide measures were certified for the 2021 ballot in nine states.

  • Statewide measures for 2021 are finalized.
    • 24 measures are on the Nov. 2 ballot.
    • 4 measures are on the Nov. 13 ballot.
    • 4 measures were on the ballot on May 18 in Pennsylvania. They were approved.
    • 7 bond measures were on the ballot on March 2 in Rhode Island. They were approved.

Sixty-one statewide measures have been certified for the 2022 ballot in 29 states so far. 

States in session

Seven state legislatures—Massachusetts, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, and Wisconsin—are in regular session.

Local Ballot Measures: The Week in Review

In 2021, Ballotpedia is providing comprehensive coverage of elections in America’s 100 largest cities by population and all state capitals. This encompasses every office on the ballot in these cities, including their municipal elections, trial court elections, school board elections, and local ballot measures. Ballotpedia also covers all local recall elections, as well as all local ballot measures in California and a selection of notable local ballot measures about elections and police-related policies. Recent and upcoming local ballot measure elections are listed below:

  • Oct. 12 – Nebraska: Voters in the Ralston Public Schools District and the Westside Community Schools District approved a $83.75 million bond issue and a property tax measure, respectively.
  • Nov. 2: Ballotpedia is covering over 150 local ballot measures. in 17 different states on Nov. 2. In 2021, Ballotpedia’s local measure coverage scope includes measures that appear on the ballot for voters within the top 100 largest cities in the U.S. and all state capitals, including those outside of the top 100 largest cities; a selection of notable police-related and election-related measures; and all measures in California. Below are some highlighted measures for Nov. 2:
    • Voters in Austin, Texas, will decide an initiative to establish minimum police staffing requirements resulting in the city having to hire additional police officers. The initiative was also designed to require additional police officer training and create certain police hiring guidelines and incentives.
    • Voters in Minneapolis will vote on an initiative to replace the city police department with a department of public safety.
    • Voters in Cleveland will decide an initiative to make changes related to police oversight, discipline, and policies.
    • Voters in Detroit, Michigan, will decide a measure to create a city reparations committee tasked with making recommendations for housing and economic development programs for Black Detroit residents.
    • Voters in Tucson, Arizona, will decide a $15 per hour minimum wage initiative.
    • Voters in both Minneapolis and St. Paul will decide measures concerning rent control.

Special Elections

Sixty-four state legislative special elections have been scheduled in 21 states so far this year. Forty-three specials have taken place already. Heading into those races, Democrats had previously controlled 20 of the seats, and Republicans previously controlled 23. Two seats flipped from Democratic control to Republican control, and one seat flipped from Republican control to Democratic control.

  • In special elections between 2011 and 2020, one party (either Republicans or Democrats) saw an average net gain of four seats nationally each year.
  • An average of 57 seats were filled through special elections in each of the past six even years (2010: 30, 2012: 46, 2014: 40, 2016: 65, 2018: 99, 2020: 59).
  • An average of 88 seats were filled through special elections in each of the past five odd years (2011: 94, 2013: 84, 2015: 89, 2017: 98, 2019: 77).

Upcoming special elections include:

Oct. 26

Nov. 2

San Francisco school board recall elections scheduled for Feb. 15

Recall elections against three of the seven members of the San Francisco Unified School District Board of Education in California have been scheduled for Feb. 15, 2022. Petitions to recall board members Gabriela López, Alison Collins, and Faauuga Moliga were certified in October 2021.

Recall supporters said they were frustrated that schools in the district remained closed for nearly a year in reaction to the COVID-19 pandemic. They also said they were upset that the board had spent time voting to rename 44 buildings in the district rather than focusing on opening schools. At a board meeting on April 6, 2021, members unanimously voted to rescind the approval of the renaming process. At the same meeting, they voted to return students to full-time in-person instruction at the start of the 2021-2022 school year.

All three board members named in the recall petitions were first elected to the board on Nov. 6, 2018. They received the most votes in an at-large election, defeating 16 other candidates. The other four members of the board were not eligible for recall at the same time as López, Collins, and Moliga as they had not served in their current terms for six months. They were elected or re-elected to the board on Nov. 3, 2020.

To get the recall on the ballot, recall supporters had 160 days to collect signatures from 10% of registered voters in the city. The total number of signatures needed was 51,325 per board member, and the deadline to submit them was Sept. 7. If a majority of voters cast ballots in favor of the recall on Feb. 15, the mayor of San Francisco will appoint replacements.

Ballotpedia has tracked 82 school board recall efforts against 212 board members so far in 2021—the highest number of school board recall efforts we have tracked in one year. The next-highest year was in 2010 with 38 recall efforts against 91 school board members.

In the first half of 2021, Ballotpedia tracked 164 recall efforts against 262 officials. This was the most recall efforts for this point in the year since the first half of 2016, when we tracked 189 recall efforts against 265 officials. In comparison, we tracked between 72 and 155 efforts by the midpoints of 2017, 2018, 2019, and 2020.

Gov. Greg Abbott (R) appoints John Scott (R) as secretary of state

On Oct 21., Texas Gov. Greg Abbott (R) appointed John Scott (R) as secretary of state. 

Scott replaces Ruth Ruggero Hughs, who resigned in May of 2021 after the Senate Nominating Commission would not take up her nomination. 

Texas is one of nine states where secretaries of state are appointed by the governor. Scott’s appointment will have to be approved by the state Senate. The legislature adjourned on May 31 and will not convene again until Jan. 10, 2023. 

Gov. Abbott has appointed five secretaries of state during his tenure as governor. 

New York City to require vaccination for all city employees

On Oct. 20, New York City Mayor Bill de Blasio (D) announced that the city’s coronavirus vaccine requirement would extend to all city employees. Previously, the city had vaccine requirements in place for education and healthcare workers.

City employees will be required to be fully vaccinated by Nov. 1. De Blasio also announced that those who receive their first dose before 5 p.m. on Oct. 29 will receive a $500 bonus on their paycheck. 

Prior to this announcement, New York state had required state employees to either be vaccinated or receive regular coronavirus testing by Sept. 27. Three states—Massachusetts, Oregon, and Washington—have state employee vaccination requirements without a testing option.

Nelson (R) and Eisner (D) advance to New Hampshire Rockingham 6 special general election 

A special primary was held on Oct. 19 for the Rockingham 6 District seat in the New Hampshire House of Representatives. Jodi Nelson (R) and Mary Eisner (D) advanced to the general election. Nelson defeated Neil Wetherbee and Thomas Cardon in the Republican primary. Eisner was unopposed in the Democratic primary. 

The general election is scheduled for Dec. 7. The candidate filing deadline passed on Aug. 27.

The special election was called after Anne Copp (R) left office due to moving out of the district on Aug. 5. Copp served from December 2020 to August 2021. She had previously served in the Merrimack 1 District from 2016 to 2018.

As of Oct. 19, five state legislative special elections have been scheduled in New Hampshire in 2021. Special elections were held for the Hillsborough 21 District on April 13, the Merrimack 23 District on June 8, and the Hillsborough 7 District on Sept. 7. A special election is scheduled for the Cheshire 9 District on Oct. 26. 

New Hampshire held 29 special elections between 2010 and 2020. The most held in one year during that period was 10 in 2017. 

Federal court invalidates Illinois’ June legislative maps

A three-judge panel in the U.S. District Court for the Northern District of Illinois ruled on Oct. 19 that Illinois’ legislative maps enacted in June were unconstitutional and violated the Equal Protection Clause of the 14th Amendment. The Illinois legislature initially enacted state legislative maps on June 4 using data from the American Community Survey (ACS), a demographics survey program conducted by the U.S. Census Bureau but distinct from the decennial census. Two sets of plaintiffs—Illinois’ House and Senate Republican leaders and the Mexican American Legal Defense and Education Fund—filed lawsuits challenging the state’s legislative redistricting plans, arguing that the maps were malapportioned since they were based on ACS, rather than official census data.

After the state received data from the Census Bureau in August 2021, the legislature reconvened and adopted revised maps that Gov. J. B. Pritzker (D) signed into law on Sept. 24. The June maps were never explicitly repealed. Both sets of plaintiffs filed amended complaints on Oct. 1, arguing that the September maps violated the Voting Rights Act since they reduced the number of Latino opportunity districts—where Latinos make up more than 50% of the population—despite the growth in the state’s Latino population over the preceding decade. 

The three-judge panel ruled that the maps the state adopted in June were invalid and set a November hearing schedule regarding the plaintiffs’ amended complaints challenging the September redistricting plans. 

Connecticut Reapportionment Commission selects final member

The Connecticut Reapportionment Commission selected former state Auditor Kevin Johnston (D) as its ninth member on Oct. 19. Johnston joins four Democratic and four Republican state legislators on the commission, which is now responsible for developing the state’s congressional and legislative redistricting plans. Johnston also served on the Reapportionment Commission after the 2010 census.

Redistricting in Connecticut was originally the responsibility of the eight-member Reapportionment Committee, which was disbanded after it failed to meet a Sept. 15 deadline for redrawing the state’s districts due to delays in the release of census data. 

The Reapportionment Commission must develop congressional and legislative redistricting maps by Nov. 30. These maps must be certified by at least five commission members and are not subject to legislative approval. If the commission cannot reach an agreement on maps, the responsibility for redistricting falls to the Connecticut Supreme Court, which was also responsible for redistricting after the 2010 census.

Texas voters to decide on an increase to the homestead exemption from school district property taxes in May 2022

On Oct. 18, the Texas state legislature voted to refer to the ballot a constitutional amendment that would increase the homestead exemption for school district property taxes from $25,000 to $40,000. Voters will decide the measure on the May 2022 ballot. It would take effect for the 2022 tax year. The Legislative Budget Board estimated that the increase would cost the state $355 million in fiscal year 2023.

The amendment was filed as Senate Joint Resolution 2 (SJR 2) on Oct. 18, the last day of the legislature’s third special session this year. It was approved by both chambers unanimously. The enabling legislation, Senate Bill 1 (SB 1), also received final approval on the last day of the session.

Texas voters last approved an increase to the homestead tax exemption in 2015 with the passage of Proposition 1. The amendment increased the exemption from $15,000 to $25,000. It was approved by a margin of 86.4% to 13.6%.

This was the second amendment the legislature referred to the ballot for the election on May 7, 2022. Texas voters will also decide on an amendment that would authorize the state legislature to reduce the limitation on total ad valorem taxes imposed on the homesteads of elderly or disabled residents for school maintenance and operations to reflect any statutory reduction from the preceding tax year. The two ballot measures are the first to be featured on an even-numbered year statewide ballot since 2014. Between 1985 and 2020, 10 ballot measures have appeared on even-numbered year Texas ballots compared to 251 ballot measures on odd-numbered year statewide ballots during that same period.



Vice President Kamala Harris casts two tie-breaking votes in Senate

Our weekly summary of federal news highlights Vice President Kamala Harris’ latest tie-breaking votes and the CDC’s approval of Moderna and J&J booster shots. Read all about it in this week’s edition of the Federal Tap.

Congress is in session

Both the House and Senate are in session next week. Click here to see the full calendar for the first session of the 117th Congress.

Members of Congress not seeking re-election in 2022

Twenty-seven members of Congress—five members of the U.S. Senate and 22 members of the U.S. House—have announced they will not seek re-election. Sixteen members—five senators and 11 representatives—have announced their retirement. All five retiring Senate members are Republicans, and of the retiring House members, eight are Democrats and three are Republicans.

SCOTUS is out of session

The Supreme Court will not hear oral arguments next week. To learn about the 2021-2022 term, click here.

Where was the president last week?

On Monday and Tuesday, Biden remained in Washington, D.C.

On Wednesday, Biden delivered remarks on the infrastructure deal and Build Back Better agenda at the Electric City Trolley Museum in Scranton, Pennsylvania. 

On Thursday, Biden celebrated the 10th anniversary of the dedication of the Martin Luther King, Jr. Memorial in Washington, D.C. He also participated in a CNN Town Hall at the Baltimore Center Stage Pearlstone Theater in Baltimore, Maryland.  

On Friday, Biden departed Washington, D.C., for Wilmington, Delaware. 

Federal Judiciary

  • 85 federal judicial vacancies
  • 31 pending nominations
  • 31 future federal judicial vacancies

Upcoming Article III judicial vacancies

According to the latest vacancy data from the U.S. Courts, there were 30 total announced upcoming vacancies for Article III judgeships. The earliest vacancy announcement was on Dec. 1, 2020, when U.S. District Court for the Western District of Arkansas Judge Paul K. Holmes announced that he would assume senior status on Nov. 10, 2021. The most recent was on Oct. 13, 2021, when U.S. District Court for the Northern District of Mississippi Judge Michael Mills announced that he would assume senior status on Nov. 1, 2021. Thirteen vacancy effective dates have not been determined because the judge has not announced the date they will leave the bench. The next upcoming vacancy will occur on Nov. 1, when Mills and U.S. District Court for the Eastern District of Virginia Judge John Gibney assume senior status.

For historical comparison, during the week of Oct. 18-23, 2020, there were 64 federal judicial vacancies and four upcoming vacancies in the federal judiciary reported by the U.S. Courts.

The chart below details active vacancies in the federal courts at the start of each month:

U.S. Senate confirms Gelpí, O’Hearn, and Lin to federal judgeships

The U.S. Senate confirmed three of President Joe Biden’s (D) federal judicial nominees to lifetime Article III judgeships on Oct. 18, 19, and 21:

  1. Gustavo Gelpí was confirmed on Oct. 18 to the United States Court of Appeals for the 1st Circuit by a vote of 52-41. Gelpí was nominated to the court on May 12 to replace Judge Juan Torruella, whose judicial service ended upon his death on Oct. 26, 2020. Gelpí was rated Well Qualified by the American Bar Association (ABA). To read more about ABA ratings, click here.
  2. Christine O’Hearn was confirmed on Oct. 19 to the United States District Court for the District of New Jersey by a vote of 53-44. O’Hearn was nominated to the court on April 29 to replace Judge Robert Kugler, who assumed senior status on Nov. 2, 2018. O’Hearn was rated Well Qualified by the ABA.
  3. Tana Lin was confirmed on Oct. 21 to the United States District Court for the Western District of Washington by a vote of 52-45. Lin was nominated to the court on April 29 to replace Judge Marsha Pechman, who assumed senior status in 2016. Lin was rated Well Qualified by the ABA.

To date, 19 of Biden’s nominees have been confirmed. For historical comparison since 1981, the following list shows the date by which the past six presidents had 19 Article III judicial nominees confirmed by the Senate:

  1. President Donald Trump (R) – Dec. 14, 2017
  2. President Barack Obama (D) – Mar. 17, 2010
  3. President George W. Bush (R) – Dec. 6, 2001
  4. President Bill Clinton (D) – Nov. 20, 1993
  5. President George H.W. Bush (R) – Mar. 9, 1990
  6. President Ronald Reagan (R) – Oct. 29, 1981

As of this writing, eight Article III nominees are awaiting a confirmation vote from the U.S Senate, five nominees are awaiting a Senate Judiciary Committee vote to advance their nominations to the full Senate, and 19 nominees are awaiting a hearing before the Senate Judiciary Committee.

Vice President Kamala Harris casts two tie-breaking votes in Senate

Vice President Kamala Harris (D) cast two tie-breaking votes in the Senate on Oct. 20 to invoke cloture on and to confirm the nomination of Catherine Elizabeth Lhamon for assistant secretary for civil rights of the Department of Education. In both votes, the Senate split 50-50 along party lines.

As of Oct. 20, Harris has cast 11 tie-breaking votes in the Senate. Prior to Oct. 20, the last tie-breaking vote she cast was to invoke cloture on the nomination of Rohit Chopra for director of the Consumer Financial Protection Bureau on Sept. 30.

In the past four decades, vice presidents have cast a total of 43 tie-breaking votes. Vice President Mike Pence (R) cast the most during this time period with 13 tie-breaking votes.

John Adams cast the first tie-breaking vote on July 18, 1789. In total, there have been 279 tie-breaking votes from 37 vice presidents. Twelve vice presidents, including Joe Biden (D) and Dan Quayle (R), never cast a tie-breaking vote during their time in office.

Texas legislature approves congressional, legislative redistricting plans

The Texas legislature approved a congressional redistricting plan at the end of its special session on Oct. 18 and sent it to Gov. Greg Abbott (R) for him to either sign or veto. The state Senate approved the plan by a vote of 18-13 strictly along party lines, and the state House approved the measure, 84 to 59, with 82 Republicans and two Democrats in favor and all votes in opposition by Democrats. Both chambers also approved legislative redistricting plans on Oct. 15. Texas is the only state that gained two districts in the U.S. House of Representatives after the 2020 census.

Two lawsuits were filed on Oct. 18 challenging the state’s congressional district plan. A Texas inmate filed a class action lawsuit against the state in federal court arguing that his assignment under the plan to a congressional district in which he does not live violates his right to equal representation. For redistricting purposes, the Texas legislature counted incarcerated persons as residing at their prison location rather than their previous or permanent address. 

Also, a group of Latino civil rights organizations filed a lawsuit in federal court against Gov. Abbott and Deputy Secretary of State Jose Esparza challenging the congressional district plan as a violation of the Voting Rights Act. The complaint says that although Texas added districts due to population growth, the new map diminishes the voting power of Latino voters by failing “to increase the current number of Latino-opportunity districts.”

Connecticut Reapportionment Commission selects final member

The Connecticut Reapportionment Commission selected former state Auditor Kevin Johnston (D) as its ninth member on Oct. 19. Johnston joins four Democratic and four Republican state legislators on the commission, which is now responsible for developing the state’s congressional and legislative redistricting plans. Johnston also served on the Reapportionment Commission after the 2010 census.

Redistricting in Connecticut was originally the responsibility of the eight-member Reapportionment Committee, which was disbanded after it failed to meet a Sept. 15 deadline for redrawing the state’s districts due to delays in the release of census data. 

The Reapportionment Commission must develop congressional and legislative redistricting maps by Nov. 30. These maps must be certified by at least five commission members and are not subject to legislative approval. If the commission cannot reach an agreement on maps, the responsibility for redistricting falls to the Connecticut Supreme Court, which was also responsible for redistricting after the 2010 census.

CDC approves Moderna, Johnson & Johnson booster shots

On Oct. 21, Centers for Disease Control and Prevention (CDC) Director Rochelle Walensky authorized booster shots for certain Americans who received Moderna’s or Johnson & Johnson’s COVID-19 vaccines. Walensky’s approval means that people 65 and older who initially got vaccinated with Moderna’s or Johnson & Johnson’s vaccine can get an additional shot so long as six months have passed since the last dose. 

Walensky also expanded Moderna and Johnson & Johnson booster shot eligibility to include people 18 and older who live in long-term care facilities, work in settings that make them more likely to be exposed to COVID-19, or have underlying health conditions. 

Additionally, Walensky signed off on allowing people to mix vaccine doses from different pharmaceutical companies. The decision allows people who initially got vaccinated with one type of vaccine to use a different type of vaccine for the booster shot. 

The Food and Drug Administration approved booster shots of Johnson & Johnson’s and Moderna’s COVID-19 vaccine on Oct. 20. The CDC Advisory Committee on Immunization Practices, a committee that develops vaccine recommendations, did the same on Oct. 21, a few hours before Walensky issued her decision.  

On Sept. 23, Walensky approved booster shots for the same categories of Americans who received a Pfizer vaccine. 



West Virginia Supreme Court of Appeals will hear case involving blocked union dues law next week

West Virginia Supreme Court of Appeals will hear case involving blocked union dues law next week

The West Virginia Supreme Court of Appeals will hear arguments on Tuesday, Oct. 26, in a case involving a union dues law that a judge blocked from going into effect earlier this year. The law would prohibit public-sector employers from deducting union dues from employees’ paychecks.

Background

In May, a group of 12 West Virginia unions filed a lawsuit in Kanawha County Circuit Court to block a state law passed in March 2021 from going into effect. The law, Republican-sponsored House Bill 2009, would prohibit “deductions and assignments of earnings for union, labor organization, or club dues or fees” from the paychecks of state, county, and certain municipal employees, including teachers and other school personnel. The unions alleged the law would violate both the state constitution’s equal protection and contracts clauses and union members’ free speech rights. 

In June, Circuit Judge Tera Salango temporarily blocked the law from going into effect, ruling the unions’ case was likely to be successful. Salango was elected in 2018.   

About the case

The West Virginia attorney general’s office appealed Salango’s ruling to the West Virginia Supreme Court of Appeals. The attorney general’s office said the unions “have not shown that they are likely to succeed on the merits of their claims or that they will suffer irreparable harm if this Court enforces the law as the Legislature wrote it. On the other hand, an injunction will irreparably harm both the State and the public interest by unnecessarily delaying implementation of a presumptively valid law.” The attorney general’s office said the supreme court “has now held—twice—that the West Virginia Constitution does not contain any right to collect union dues. This challenge to West Virginia’s Paycheck Protection Act implicates similar interests, yet in a context where any harm to Defendants is even less than in those earlier cases. The Court should reach the same result here and uphold the law.” 

The National Right to Work Legal Defense and Education Foundation filed an amicus curiae brief in support of the appeal. In the brief, attorney Matthew B. Gilliam wrote: “West Virginia has a definite interest in protecting employees from labor organizations’ coercive influence over employees who find it extremely difficult to extract themselves from dues deduction authorizations … The Act does not prohibit employees from paying union dues if they wish and voluntarily consent within the meaning of Janus. It merely requires that the Unions and their members take the initiative to make their own dues payment arrangements through cash, checks, credit card or bank account authorizations.” 

Attorneys for the unions responded, “[T]he preliminary injunction has maintained the status quo that has been in place—without complaint or disruption—for approximately fifty-five years. The status quo should remain undisturbed while the parties undertake discovery and have a hearing on the merits regarding a permanent injunction.” 

The unions’ attorneys summarize their case as follows: “As the circuit court recognized, the implementation of the Act will irreparably harm and significantly burden Petitioners’ ability to collect dues while continuing to allow paycheck deductions for a host of other purposes including, but not limited to, charitable deductions and private insurance. Moreover, the implementation of the Act will violate equal protection and impair contractual rights of Petitioners who have negotiated agreements with public employers for deduction of dues. Finally, it will adversely affect the free speech rights of Petitioners inasmuch as the paycheck deduction of dues arises from a decision by an employee to associate with the Union and pay his or her dues in this manner.”

The West Virginia Deputy Sheriffs’ Association (WVDSA) filed an amicus curiae brief supporting the unions’ case. Attorneys for the Association said, “The WVDSA has a compelling interest in this case because numerous active deputy sheriffs throughout West Virginia have historically had their WVDSA and local DSA dues deducted from their paychecks. … Quite frankly, these voluntary agreements are a convenience to deputy sheriffs and their local associations and do not cost any participating county any more public funds than the myriad of voluntary deductions coming out of the paychecks of other county employees. … [Deputy sheriffs] deserve to have the ability to keep having their WVDSA and local DSA dues voluntarily deducted from their paychecks until this case is fully and finally decided.”

Arguments are scheduled to begin at 10:00 a.m. on Tuesday, Oct. 26. 

The case name and number in the West Virginia Supreme Court of Appeals are James C. Justice, II, Governor v. West Virginia AFL-CIO, et al. (21-0559).

Context

The five-member West Virginia Supreme Court of Appeals is the state’s court of last resort. Supreme court justices are chosen in nonpartisan elections and serve 12-year terms. Our “Ballotpedia Courts: State Partisanship” report, which evaluated justices’ partisan affiliations through their behavior before joining the court, found that the West Virginia Supreme Court of Appeals had four Republican-affiliated justices and one Democratic-affiliated justice. In 2020, the West Virginia Supreme Court heard 899 cases, and decided 91.5% of them unanimously.

West Virginia Gov. Jim Justice (R) was first elected governor in 2016 as a Democrat. In 2017, Justice switched parties, giving Republicans trifecta control of the state. Republicans currently hold veto-proof majorities in both chambers of the state legislature. 

What we’re reading

The big picture

Number of relevant bills by state

We are currently tracking 101 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s) 

Recent legislative actions

Below is a complete list of relevant legislative actions taken since our last issue. 

  • New York A08411: This bill would prevent public employers from firing or disciplining public employees who were selected to represent an employee organization or who commented on related matters.
    • Democratic sponsorship. 
    • Introduced, read first time, and referred to the Assembly Governmental Employees Committee on Oct. 20. 
  • Wisconsin AB614: This bill would:
  1. Allow state and municipal employees to bargain over any increase in wages, 
  2. Allow most state and general municipal employees to bargain over hours and employment conditions, 
  3. Allow for voluntary dispute settlement procedures between municipal employers and labor organizations.
  4. Allow representatives for most municipal and state employees to be selected by a simple majority of employees voting, and 
  5. Repeal an annual certification requirement for bargaining unit representatives.
  • Democratic sponsorship. 
  • Introduced, read first time, and referred to the Assembly Committee on Labor and Integrated Employment on Oct. 14.


Documenting America’s Path to Recovery #309: October 21, 2021

Welcome to Documenting America’s Path to Recovery. Today we look at:

  • An announcement about nonessential travel in Hawaii
  • A bill limiting gubernatorial emergency powers in North Carolina
  • Vaccine distribution
  • School mask requirements
  • State proof-of-vaccination requirements and policies
  • Federal responses

We are committed to keeping you updated on everything from mask requirements to vaccine-related policies. We will keep you abreast of major developments—especially those affecting your daily life. Want to know what we covered Tuesday? Click here.

Upcoming news

What is changing in the next week?

Nebraska (Republican trifecta): On Oct. 21, Gov. Pete Ricketts (R) announced he was allowing inpatient elective surgeries to resume on Oct. 22. Ricketts paused elective surgeries at most hospitals in August because of a surge in coronavirus cases. 

Since our last edition

What rules and restrictions are changing in each state? For a continually updated article, click here.

Hawaii (Democratic trifecta): On Oct. 19, Gov. David Ige (D) announced that vaccinated Hawaii residents and domestic visitors can resume nonessential travel to the state and between the islands beginning Nov. 1.

New Jersey (Democratic trifecta): On Oct. 20, Gov. Phil Murphy (D) issued an executive order requiring employees of new and potential state contractors who enter, work at, or provide services in a state agency location to show proof of coronavirus vaccination or receive a weekly coronavirus test.

North Carolina (divided government): On Oct. 20, the state House of Representatives passed the Emergency Powers Accountability Act 65-45. The Act limits gubernatorial emergency declarations to seven days unless the Council of State—a 10-person group that includes the attorney general and secretary of state, among others—approves an extension. The bill would also require the governor to seek the legislature’s approval for emergencies lasting longer than 45 days. The state Senate passed the Act 27-15 on Sept. 8. It now goes to Gov. Roy Cooper (D) for his signature. 

Vaccine distribution

We last looked at vaccine distribution in the Oct. 19 edition of the newsletter. As of Oct. 20, the states with the highest vaccination rates as a percentage of total population (including children) were:

The states with the lowest rates were:

School mask requirements

Read more: School responses to the coronavirus (COVID-19) pandemic during the 2021-2022 academic year

We last looked at school mask requirements on Oct. 14. Since then, no states have changed their school mask requirement policies.

State proof-of-vaccination requirements and policies

Read more: State government policies about proof-of-vaccination (vaccine passport) requirements

State governments have enacted various rules around the use of proof-of-vaccination requirements. In some cases, states have banned state or local governments from requiring that people show proof of vaccination. Other states have assisted in the creation of digital applications—sometimes known as vaccine passports—that allow people to prove their vaccination status and, in some cases, bypass COVID-19 restrictions.  

Overview

  • Twenty states have passed legislation or issued orders prohibiting proof-of-vaccination requirements at some or all levels of government. 
  • Five states have assisted in the creation of digital vaccination status applications or enacted orders or laws exempting vaccinated people from some restrictions. 

Since Oct. 14, one state has issued a statewide order requiring proof of vaccination in some circumstances. No state has issued orders or enacted laws banning proof-of-vaccination requirements. 

Details

  • On Oct. 18, Washington Gov. Jay Inslee (D) issued an order requiring indoor events with more than 1,000 attendees and outdoor events with more than 10,000 attendees to verify that people 12 and older have received a COVID-19 vaccine or tested negative for COVID-19 within the last 72 hours. The order takes effect Nov. 15.

Federal responses

Read more: Political responses to the coronavirus (COVID-19) pandemic, 2020

  • On Oct. 20, the Food and Drug Administration (FDA) authorized booster shots of Johnson & Johnson’s and Moderna’s COVID-19 vaccines. The FDA also authorized people to mix vaccine doses from different pharmaceutical companies. The Centers for Disease Control and Prevention (CDC) was scheduled to meet Oct. 21 to consider the FDA’s authorization.
  • On Oct. 19, the U.S. Supreme Court declined an emergency request to block Maine Gov. Janet Mills’ (D) healthcare worker vaccine requirement. A group of healthcare workers sued the governor because the mandate does not allow for religious exemptions. The mandate takes effect Oct. 28. 

Additional activity

In this section, we feature examples of other federal, state, and local government activity, private industry responses, and lawsuits related to the pandemic. 

On Oct. 20, New York City Mayor Bill de Blasio (D) announced that the city’s coronavirus vaccine requirement would extend to all city employees. Additionally, individuals who receive their first dose before the Oct. 29 vaccination deadline will receive a $500 bonus in their paycheck.



Documenting America’s Path to Recovery #308: October 19, 2021

Welcome to Documenting America’s Path to Recovery. Today we look at:

  • An order easing healthcare licensing requirements in Nebraska
  • An extended indoor mask mandate in New Mexico
  • Vaccine distribution
  • Lawsuits about state actions and policies 
  • State-level mask requirements
  • COVID-19 emergency health orders

We are committed to keeping you updated on everything from mask requirements to vaccine-related policies. We will keep you abreast of major developments—especially those affecting your daily life. Want to know what we covered Thursday? Click here.

Since our last edition

What rules and restrictions are changing in each state? For a continually updated article, click here.

Illinois (Democratic trifecta): On Oct. 15, Gov. J.B. Pritzker (D) extended the state’s coronavirus disaster proclamation for an additional 30 days.

Nebraska (Republican trifecta): On Oct. 14, Gov. Pete Ricketts (R) issued an order allowing various health workers, including physical therapists and alcohol and drug counselors, to practice in Nebraska without a license if they are licensed in another state. Ricketts said he issued the order to address staffing shortages.  

New Mexico (Democratic trifecta): On Oct. 15, Gov. Michelle Lujan Grisham (D) extended the state’s public indoor mask requirement for vaccinated and unvaccinated individuals through at least Nov. 12.

Washington (Democratic trifecta):  Thurston County Superior Court Judge Carol Murphy declined to block Gov. Jay Inslee’s (D) state employee and healthcare worker vaccine mandate. The mandate’s deadline was Oct. 18. A group of public employees, including ferry workers and Washington state police, sued Inslee, arguing the vaccine mandate violated their constitutional rights. Murphy’s ruling keeps the mandate in place while the lawsuit progresses.  

Vaccine distribution

We last looked at vaccine distribution in the Oct. 14 edition of the newsletter. As of Oct. 18, the states with the highest vaccination rates as a percentage of total population (including children) were:

The states with the lowest rates were:

Lawsuits about state actions and policies

Read more: Lawsuits about state actions and policies in response to the coronavirus (COVID-19) pandemic, 2020

Overview

To date, Ballotpedia has tracked 1,917 lawsuits, in 50 states, dealing in some way with the COVID-19 outbreak. Court orders have been issued, or settlements have been reached, in 596 of those lawsuits. 

Since Oct. 12, we have added four lawsuits to our database. We have also tracked one additional court order and/or settlement. 

Details

Dr. A. v. Hochul: On Oct. 12, a U.S. district court judge ruled in favor of a group of 17 healthcare workers seeking religious exemptions to New York’s COVID-19 vaccine mandate. Judge David Hurd, of the U.S. District Court for the Northern District of New York, issued a preliminary injunction barring the New York State Department of Health “from interfering in any way with the granting of religious exemptions from Covid-19 vaccination going forward or with the operation of exemptions already granted.” The plaintiffs alleged their religious beliefs forbade them from consenting to inoculation with any vaccines “that were tested, developed or produced with fetal cell lines derived from procured abortions.” They said the mandate, absent a religious exemption, violated protections provided under Title VII of the Civil Rights Act of 1964, New York State’s Human Rights Law, and the U.S. Constitution. In his order, Hurd, a Bill Clinton (D) appointee, noted that the mandate had been amended to eliminate a previously permitted religious exemption. Hurd said, “[T]his intentional change in language is the kind of ‘religious gerrymander’ that triggers heightened scrutiny,” Hurd concluded that the “plaintiffs are likely to succeed on the merits of this constitutional claim” and were entitled to an injunction. Hurd said his order did not address “whether plaintiffs and other individuals are entitled to a religious exemption from the State’s workplace vaccination requirement,” but whether they had the “right to seek a religious accommodation from their individual employers.” Hurd had previously blocked the mandate’s enforcement against those claiming religious exemptions on an emergency basis, issuing the plaintiffs a temporary restraining order against the state on Sept. 14. Hurd’s Oct. 12 injunction extends that earlier order. Gov. Kathy Hochul (D) said, “I stand behind this mandate, and I will fight this decision in court to keep New Yorkers safe.”

State mask requirements

We last looked at face coverings in the Oct. 12 edition of the newsletter. Since then, Gov. Michelle Lujan Grisham (D) extended New Mexico’s public indoor mask requirement for vaccinated and unvaccinated individuals through at least Nov. 12. As of Oct. 19, masks were required in 10 states with Democratic governors. Thirteen states with Democratic governors and all 27 states with Republican governors had no state-level mask requirements in effect.

COVID-19 emergency health orders

Read more: State emergency health orders during the coronavirus (COVID-19) pandemic, 2021

Governors and state agencies in all 50 states issued orders declaring active emergencies in response to the coronavirus pandemic. These orders allowed officials to access resources, like stockpiles of medical goods and equipment, unavailable to them during non-emergencies and temporarily waive or suspend certain rules and regulations. 

Overview

  • COVID-19 emergency orders have expired in 24 states. Emergency orders remain active in 26 states.
  • Since Oct. 12, no state has ended or enacted a COVID-19 emergency order. 


Checks and Balances: Federal and state challenges to Biden’s vaccine mandate

The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.

This edition: 

In this month’s edition of Checks and Balances, we review the uncertainty surrounding the status of the federal immigration judge’s union; a new constitutional challenge to adjudication by administrative law judges (ALJs) at the U.S. Department of Labor; and a call from Republican lawmakers to seek congressional review of President Joe Biden’s (D) proposed vaccine mandate on private businesses. 

At the state level, we take a look at Arizona’s legal challenge to Biden’s vaccine mandate; the North Carolina governor’s veto of a bill that would have transferred executive power to state legislators; and the continued executive power struggle between Idaho’s governor and lieutenant governor.

We also highlight recent remarks from Judge Neomi Rao of the United States Court of Appeals for the District of Columbia Circuit regarding executive involvement in the legislative process. As always, we wrap up with our Regulatory Tally, which features information about the 167 proposed rules and 286 final rules added to the Federal Register in September and OIRA’s regulatory review activity.

In Washington

Immigration Judge’s union in administrative limbo

What’s the story? 

The status of the National Association of Immigration Judges (NAIJ) remained uncertain as the U.S. Department of Justice (DOJ) sought to undo the union’s decertification while simultaneously claiming that the union no longer exists—a seeming contradiction that has mystified union leaders, according to NAIJ president Mimi Tsankov.

The Federal Labor Relations Authority (FLRA) ordered the union’s decertification in November 2020, arguing that IJsa type of federal administrative adjudicatorconstitute management officials for collective bargaining purposes. NAIJ filed a motion for the FLRA to reconsider, which the union claims delayed an agency order to implement the decertification. NAIJ officials argue that the DOJ’s subsequent action barring the union’s activities violated NAIJ’s collective bargaining agreement since the FLRA had yet to rule on NAIJ’s motion.

The DOJ changed course in June, both withdrawing its opposition to NAIJ’s motion and seeking permission from the FLRA to rescind the underlying decertification order. Contrary to NAIJ’s position, however, the department claims that the underlying order remains in effect since the FLRA has yet to issue a ruling on NAIJ’s motion to reconsider.

“As the authority has not ruled on any filings post its November 2020 order, the November 2020 order remains in full force and effect,” argued DOJ attorneys. “As a result of the authority’s November 2020 ruling, there are no longer any employees in the bargaining unit. As there are no employees in the bargaining unit, in essence, NAIJ is defunct.”

Want to go deeper?

New constitutional challenge to ALJs 

What’s the story? 

A nonprofit on September 8 filed suit in the United States District Court for the District of New Jersey claiming that the U.S. Department of Labor’s use of administrative law judges (ALJs) to adjudicate certain visa disputes violates Article III of the U.S. Constitution because it allows the department to serve “as prosecutor, judge, and jury.” The case follows in the footsteps of Lucia v. Securities and Exchange Commission (SEC) and United States v. Arthrex Inc., in which the U.S. Supreme Court found constitutional flaws in agency rules governing ALJs.

The organization Institute for Justice appealed a final order from the U.S. Department of Labor’s Administrative Review Board holding that New Jersey-based Sun Valley Farms had violated laws governing the H-2A visa program for agricultural workers. The nonprofit claims that the DOL’s governing statute is silent on the department’s use of ALJs and that Congress never authorized ALJs to adjudicate H-2A visa disputes. The challengers contend that the use of ALJs in such cases violates Article III of the U.S. Constitution, which calls for an independent judicial branch.

“We’re focused in this case on adjudication for H-2A violations, but the implications of these Article III-type challenges extend beyond that to the whole system of ALJs for the Department of Labor,” said Institute for Justice attorney Rob Johnson in an interview with Bloomberg Law. Johnson argued that H-2A cases, which can result in penalties or property loss, should be heard before independent Article III judges.

The U.S. Supreme Court has addressed constitutional challenges to ALJs in two recent cases. In 2018, the court held in Lucia that SEC ALJs qualified as officers of the United States and must be appointed by the agency head in accordance with the Appointments Clause of the U.S. Constitution. In the 2021 Arthrex case, the court held that the statute governing the Patent and Trademark Office (PTO) violated the Appointments Clause because the PTO director lacked direct review power over decisions by administrative patent judges (positions similar to ALJs).

Want to go deeper?

Republican lawmakers call for CRA review of vaccine mandate on private businesses

What’s the story? 

A coalition of Republican legislators aims to challenge President Joe Biden’s (D) vaccine mandate on private businesses by calling for congressional review of the rule through a Congressional Review Act (CRA) resolution. 

Biden on September 9 announced that the U.S. Department of Labor would issue a rule requiring employees of businesses with 100 or more staff to either obtain a coronavirus (COVID-19) vaccination or undergo weekly testing. The Occupational Safety and Health Administration (OSHA) on October 12 submitted the proposed rule to the White House for review.

“We’ve been patient. But our patience is wearing thin, and your refusal has cost all of us,” said Biden during a White House briefing, adding that the “unvaccinated minority can cause a lot of damage, and they are.”

U.S. Senators Roger Marshall (R-Kansas), Mike Braun (R-In.), Dan Sullivan (R-Ark.), Bill Hagerty (R-Tenn.), Mike Lee (R-Ut.), and Congressman Fred Keller (PA-12) stated their intent to seek congressional review of the mandate once OSHA issues the final rule. CRA resolutions create a path for lawmakers to review federal agency rules and vote to reject them. To reject a rule, both chambers of Congress must pass a resolution disapproving the rule and President Joe Biden (D) must sign the resolution into law. 

“The White House continues to ignore the Constitution as well as the science proving the benefits of natural immunity so they can justify an Executive Order that wipes out Americans’ control over their own healthcare options,” said Marshall in a September 15 press release. “Simply put, the Administration is overstepping its authority and we must hold them accountable with a formal challenge under the Congressional Review Act.”

Want to go deeper?

In the states

Arizona attorney general challenges Biden’s vaccine mandate on private businesses

What’s the story? 

Arizona Attorney General Mark Brnovich (R) on September 14 filed a lawsuit in the United States District Court for the District of Arizona arguing that President Joe Biden’s (D) proposed vaccine mandate on private businesses violates the Equal Protection Clause of the U.S. Constitution.

Biden on September 9 announced that the U.S. Department of Labor would take regulatory action to mandate that businesses with 100 or more employees require their employees to either receive a coronavirus (COVID-19) vaccination or undergo weekly testing. The Occupational Safety and Health Administration (OSHA) on October 12 submitted the proposed rule to the White House for review.

Brnovich claims that the proposed mandate violates the Fourteenth Amendment’s Equal Protection Clause by placing vaccination and testing requirements on U.S. citizens that do not extend to immigrants residing in the country without legal permission. The Biden administration’s proposed “policy of absolutely excluding unauthorized aliens from all vaccination requirements, while subjecting U.S. citizens to multiple, unprecedented, sweeping, and intrusive mandates is wildly unconstitutional and should not stand,” argued Brnovich in the lawsuit. 

The lawsuit also suggests that OSHA could be unlawfully exercising legislative power by issuing the mandate.

Want to go deeper?

North Carolina governor vetoes bill requiring legislative approval of agency settlements

What’s the story? 

North Carolina Governor Roy Cooper (D) on September 27 vetoed legislation that would have transferred executive powers to the state legislature by requiring legislative approval of certain state agency lawsuit settlements.

State legislators on September 16 voted along party lines to approve Senate Bill 360, which would have required legislative approval for state agency settlements in cases involving the speaker of the House of Representatives or the president pro tempore of the state Senate. 

The legislation arose after the state Board of Elections in 2020 entered into a settlement agreement that loosened voting requirements in response to the coronavirus (COVID-19) pandemic. Republican leaders described the settlement as a collusive agreement by the Democrat-controlled executive branch that ignored the General Assembly’s decision to require witness signatures on absentee ballots.

In his veto message, Cooper claimed that the legislation would have unlawfully transferred executive branch authority to the legislative branch. “This bill is unconstitutional and unwise, and would have prevented the Attorney General from doing his job,” argued Cooper.

“This bill is necessary to keep corrosive, secretly negotiated rule changes out of future elections,” state Sen. Paul Newton (R) remarked on social media in response to Cooper’s veto. “Governor Cooper just deepened distrust in the electoral process at a time when we should focus on improving it.”

Republican leaders would need to garner Democratic support in order to override Cooper’s veto before the close of the legislative session, according to The News & Observer.

Want to go deeper?

Déjà vu in Idaho executive power struggle

What’s the story? 

The executive power struggle between Idaho Governor Brad Little (R) and Lieutenant Governor Janice McGeachin (R) heated up last month when McGeachin, during Little’s absence from the state, attempted to deploy the Idaho National Guard to the southern border and issued an executive order outlawing vaccine mandates. 

McGeachin took similar action in May when she issued an executive order banning mask mandates in her capacity as acting governor while Little traveled to a conference out of state. McGeachin claimed that the order aimed “to protect the rights and liberties of individuals and businesses.” Little rescinded the order, referring to McGeachin’s action as an “irresponsible, self-serving political stunt.”

McGeachin, who is running for governor in 2022, attempted to issue two further directives during Little’s most recent absence from the state on official business. McGeachin on October 5 released an executive order banning vaccine requirements and mandatory testing in schools. She claimed on social media that the order fixed Little’s April executive order banning vaccine mandates by extending it to cover public schools and universities. 

McGeachin also requested information from the head of the Idaho National Guard, Major General Michael Garshak, about deploying troops to the southern border. Garshak responded that the border states had not requested Idaho’s assistance and stressed that “the Idaho National Guard is not a law enforcement agency.”

Little described McGeachin’s attempted troop deployment on Twitter as political grandstanding. He issued an executive order the following day to rescind McGeachin’s order, referring to her action as a “redundant and unwarranted use of executive powers.” Little’s order could lay the groundwork for a legal challenge over the exercise of executive power in Idaho, according to Fox News

Want to go deeper?

____________________________________________________________________________

Neomi Rao urges executive branch to scale back legislative involvement

Judge Neomi Rao of the U.S. Court of Appeals for the District of Columbia Circuit called for decreased executive involvement in the legislative process during a September conference commemorating the 20th anniversary of Justice Elena Kagan’s “Presidential Administration” hosted by George Mason University’s C. Boyden Gray Center for the Study of the Administrative State. Rao, a former administrator of the Office of Information and Regulatory Affairs under President Donald Trump (R), urged presidents to scale back the use of executive agencies to further their political agenda—a phenomenon highlighted by Kagan that gained momentum during the Reagan and Clinton administrations.

“The Constitution vests the legislative power with Congress and I think, there are a lot of important, deep reasons why it did that,” said Rao, arguing that elected representatives, rather than agency staff, are authorized to exercise legislative power.

Rao also weighed in on the nondelegation doctrine—a legal principle holding that legislative bodies cannot delegate their legislative powers to executive agencies or private entities. “Non-delegation is a very deep principle of the structure of the Constitution and maybe the most important separation of powers principle we have,” she said. 

Want to go deeper

Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

OIRA’s September regulatory review activity included the following actions:

  • Review of 38 significant regulatory actions. 
  • One rule approved without changes; recommended changes to 35 proposed rules; two rules withdrawn from the review process.
  • As of October 1, 2021, OIRA’s website listed 89 regulatory actions under review.
  • Want to go deeper? 


Economy and Society: Labor Department rule makes ESG investing in 401(k) plans easier

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.

ESG Developments This Week

In Washington, D.C.

Labor Department rule makes ESG investing in 401(k) plans easier 

As was reported in previous issues of this newsletter, one of the Biden Administration’s first actson inauguration daywas to suspend a Trump Labor Department rule that, essentially, barred ESG investments from retirement plans. The Trump administration held that many, if not most, ESG-directed investments potentially violate investment fiduciaries’ responsibilities under ERISA (the Employee Retirement Security Act of 1974). In turn, it warned fiduciaries to be careful and judicious in their use of ESG investment criteria. On his first day in office, President Biden signed an executive order asking Labor to reconsider the rule. Labor simultaneously suspended enforcement of the Trump rule and began the process of creating a new regulatory proposal for dealing with retirement plans’ use of ESG. That proposal was released this past Wednesday, October 13.

The new proposed rule not only reverses the Trump rule but, in fact, makes ESG investing in ERISA-covered plans much easier than it had been previously. The Wall Street Journal provides the details:

“The Labor Department on Wednesday proposed a rule that would make it easier for investors to purchase funds focused on environmental, social and governance measures in their 401(k) plans….

The proposal would reverse a Trump administration rule making it harder for 401(k) plans to offer investments based on environmental, social and governance, or ESG, measures.

“ESG factors can be financially material, and when they are, considering them will inevitably lead to better long-term risk-adjusted returns, protecting the retirement savings of America’s workers,” said Ali Khawar, acting assistant secretary for the Employee Benefits Security Administration at the Labor Department….

A statement by the American Retirement Association, which represents retirement-plan professionals, expressed support for the proposal.

“We are pleased that the DOL has established a level playing field for ESG investment considerations in retirement programs,” the group said.”

Does the Labor rule establish a duty to consider ESG factors?

Tara Siegel Bernard, writing in The New York Times’ “Business Briefing,” noted an additional detail that was largely absent from most of the rest of the reporting on the story:

“The Labor Department proposed rule changes on Wednesday that would make it easier for retirement plans to add investment options based on environmental and social considerations — and make it possible for such options to be the default setting upon enrollment.

In a reversal of a Trump-era policy, the Biden administration’s proposal makes clear that not only are retirement plan administrators permitted to consider such factors, it may be their duty to do so — particularly as the economic consequences of climate change continue to emerge….

The new regulations would also make it possible for funds with environmental and other focuses to become the default investment option in retirement plans like 401(k)s, which the previous administration’s rules had prohibited.”

Response to the Labor rule 

In the June 10 issue of National Review, Patrick Pizzella, the Deputy Secretary of Labor (and briefly, the Acting Secretary) penned an article explaining why the Trump administration promulgated its rule and why he believes that reversing the rule is a significant mistake. He wrote:

“Asset managers often apply supposedly “socially conscious” ESG — environment, social, and (corporate) governance — criteria to screen potential investments. Pension funds are the deep pockets for woke capitalism. But ESG or “sustainable” investing is anything but a slam dunk for pension beneficiaries. There are real risks, and many financial professionals have begun to raise serious questions about them….

Since 1994, four different secretaries of labor — two from each party — have issued what’s known as an “interpretive bulletin” (IB), providing guidance for investing in ERISA-managed funds in compliance with the statute. I refer to this as “IB ping-pong” because it is relatively easy for one administration to respond to another administration’s IBs without soliciting formal stakeholder input. In 2020, however, Secretary Eugene Scalia decided that the De­partment of Labor (DOL) should undertake formal rulemaking under the Ad­ministrative Pro­cedures Act — which requires the solicitation of comments from the public — and provide more-enduring certainty to the regulated community and America’s retirees.

The department received over 1,500 comments and revised and tailored a final rule, published last November, that was in part based on them. The rule reminds plan providers that it is unlawful to sacrifice returns or to accept additional risk through investments intended to promote a social or political end. It allows for the inclusion of an ESG fund among other investment options, provided that it is selected based on pecuniary considerations. But ESG factors are often touted for nonpecuniary reasons, as addressing social welfare more broadly. That may appeal to some in­vestment advisers, but it is inappropriate for an ERISA fiduciary managing other people’s retirement funds….

Ironically, the department — without an assistant secretary for the Employment Benefits Security Administration, a solicitor, or a deputy secretary — maintains that it had heard from a wide variety of stake­holders, including asset managers, labor organizations, plan sponsors, and in­vestment advisers. But the rule that the DOL published last November, titled “Financial Factors in Selecting Plan Investments,” wasn’t written just for those stakeholders. It was primarily written for the plan participants and beneficiaries — the people depending on the income once they retire….

We should all keep in mind that annual expenses for so-called sustainable exchange-traded funds (ETFs) are more than ten times higher than those for the cheapest index funds, according to the financial-services firm Morning­star. As Jason Zweig, a well-respected financial analyst, recently wrote in the Wall Street Journal: “ESG is the last best hope for investment firms seeking to hang onto fat fees.”

The skeptics of ESG investing in­clude a growing list of distinguished financial experts, such as Alicia Munnell, executive director of the Center for Retirement Research at Boston College (“I really have no respect for ESG investing”); Tariq Fancy, former chief investment officer for sustainable investing at BlackRock, the largest asset manager in the world (“The financial services industry is duping the American public with its pro-environment, sustainable investing practices. This multitrillion dollar arena of socially conscious investing is being presented as something it’s not. . . . In truth, sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community”); and Securities and Exchange commissioner Hester Peirce (“The first issue is we don’t even know what ESG means”; “Not only is it difficult to define what should be included in ESG, but, once you do, it is difficult to figure out how to measure success or failure”)….

As for plan fiduciaries considering ESG factors when selecting investment options, they should curb their enthusiasm. The Biden administration’s ability to shield fiduciaries from legal exposure may be very limited without congressional action or a sudden change of heart by the Supreme Court, whose long-established ruling on the matter is that ERISA’s duty of loyalty requires fiduciaries to act for the exclusive purpose of providing financial benefits to participants. Fidu­ci­aries would be wise to act very prudently and document their decision-making processes.”

On Wall Street and in the private sector

Canada’s six largest banks join Net-Zero Banking Alliance

This past Friday, Canada’s six largest banks announced that they had entered into an agreement to align their lending and investment portfolios with a net-zero-carbon future. The banks all joined Mark Carneythe former governor of the Bank of England, former governor of the Bank of Canada, and one of the first global bankers to advocate using the banking system to fight climate changein his organization, Net-Zero Banking Alliance:

“The commitment by the banks, which include Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia and TD Bank, comes ahead of the UN climate summit set to start in Glasgow at the end of the month and where a major focus will be on finding the finances to fund the climate promises.

The industry-led alliance commits signatory banks to aligning their lending and investment portfolios with net-zero emissions by 2050, as well as to setting intermediate reduction targets for 2030 or sooner….

Carney said in a statement that the financial systems needs to transform to ensure a “prosperous and just transition to net-zero” and that by joining the alliance, Canadian banks are “bringing their deep expertise and strong balance sheets to drive solutions for the sustainable economy.”

The alliance has, however, come under criticism for not going far enough, including ads published last week by more than 90 environmental groups that urged Carney to be more ambitious with membership requirements.

The groups want to see more immediate targets laid out to phase out fossil fuel funding, a prohibition on financing any new fossil fuel projects, and a goal of halving financed emissions by 2030.”

Response to Net-Zero Banking Alliance

Mark Carney, the brainchild of net-zero banking and originator of the idea that banking is not merely an available tool but a necessary tool in the fight against climate change was described by independent investment-market analyst Rusty Guinn of Epsilon Theory as, in his words, the “first mission-creep missionary” in the creation of the narrative that banks must do something about perceived climate change. In a note for clients, Guinn wrote:

“[W]hat interests us is Goldman alum Carney, the first mission creep missionary. From a June 2016 article in Canada’s Globe And Mail, he was already active establishing the idea that something must be done (emphasis in original) to create a connection between regulatory policy – more to the point, monetary policy – and climate change. And he did so in a way that was crafted for an audience of institutional investors….

Carney’s September 2016 speech in Berlin was a masterpiece in narrative construction, explicitly conflating climate change with terms of art in the world of financial risk management. He begins:

Your invitation to discuss climate change is a sign of the broadening of the responsibilities of central banks to include financial as well as monetary stability. It also demonstrates the changing nature of international financial diplomacy.

That is, I believe, what we call saying the quiet part out loud. Still, to really appreciate the skill being applied here, take note of the effective redefinition of climate change in the most well-known memes of financial risk….

[In Carney] we had a missionary – or perhaps a prophet – alone in the wilderness, shouting that something must be done to address the risks of climate change through monetary policy (emphasis in original).

In the spotlight

ESG goes royal

On October 12, the New York Times’ financial column “Dealbook” reported on the newest ESG royaltyliterally:   

“Prince Harry and Meghan, the Duchess of Sussex, are getting into the investment business. They are joining Ethic, a fintech asset manager in the fast-growing environmental, social and governance space, as “impact partners” and investors. Ethic has $1.3 billion under management and creates separately managed accounts to invest in social responsibility themes.

The couple could attract more attention to sustainable investing (emphasis in original). Harry and Meghan can make E.S.G. investing part of pop culture in a way that, say, BlackRock’s Larry Fink can’t. “From the world I come from, you don’t talk about investing, right?” Meghan told DealBook in a joint interview with Harry. “You don’t have the luxury to invest. That sounds so fancy.”



Documenting America’s Path to Recovery #307: October 14, 2021

Welcome to Documenting America’s Path to Recovery. Today we look at:

  • A law allowing workers to opt out of vaccine mandates in Arkansas
  • A law in Ohio prohibiting public schools from mandating vaccines that haven’t been fully authorized
  • Vaccine distribution
  • School mask requirements
  • State proof-of-vaccination requirements and policies
  • Federal responses

We are committed to keeping you updated on everything from mask requirements to vaccine-related policies. We will keep you abreast of major developments—especially those affecting your daily life. Want to know what we covered Tuesday? Click here.

Since our last edition

What rules and restrictions are changing in each state? For a continually updated article, click here.

Arkansas (Republican trifecta): On Oct. 13, Gov. Asa Hutchinson (R) allowed a bill permitting employees to opt out of employer vaccine requirements to become law without his signature. 

Massachusetts (divided government): On Oct. 12, the Massachusetts Department of Elementary and Secondary Education announced that Hopkinton High School was the first school in the state allowed to lift its indoor mask requirement. Schools in Massachusetts can lift their mask requirements if at least 80% of students are vaccinated.

Ohio (Republican trifecta): On Oct. 13, House Bill 244, which prohibits public K-12 schools and universities from mandating vaccines that haven’t received full Food and Drug Administration approval, took effect. Gov. Mike DeWine (R) signed the bill on July 14. 

New Hampshire (Republican trifecta): On Oct. 13, the Executive Council, a board of elected officials that advises the governor and approves expenditures in the state budget, voted 4-1 to reject $27 million in federal funding earmarked to promote COVID-19 vaccines. Gov. Chris Sununu (R) supported using the funding for vaccine outreach. 

Vaccine distribution

We last looked at vaccine distribution in the Oct. 12 edition of the newsletter. As of Oct. 13, the states with the highest vaccination rates as a percentage of total population (including children) were:

The states with the lowest rates were:

School mask requirements

Read more: School responses to the coronavirus (COVID-19) pandemic during the 2021-2022 academic year

We last looked at school mask requirements on Oct. 7. Since then, Massachusetts began allowing school mask requirement exemptions for schools with at least 80% of students vaccinated.

State proof-of-vaccination requirements and policies

Read more: State government policies about proof-of-vaccination (vaccine passport) requirements

State governments have enacted various rules around the use of proof-of-vaccination requirements. In some cases, states have banned state or local governments from requiring that people show proof of vaccination. Other states have assisted in the creation of digital applications—sometimes known as vaccine passports—that allow people to prove their vaccination status and, in some cases, bypass COVID-19 restrictions.  

Overview

  • Twenty states have passed legislation or issued orders prohibiting proof-of-vaccination requirements at some or all levels of government. 
  • Four states have assisted in the creation of digital vaccination status applications. 

Since Oct. 7, two states have issued orders or enacted laws allowing people to opt out of providing COVID-19 proof of vaccination. 

Details

  • On Oct. 13, Arkansas Gov. Asa Hutchinson (R) allowed Senate Bill 739/House Bill 1977 to become law without his signature. The law requires employers to allow workers to opt out of vaccine requirements if they undergo weekly COVID-19 testing or prove they’ve had a prior infection. The law is scheduled to take effect 90 days after enactment.
  • On Oct. 11, Texas Gov. Greg Abbott (R) issued an order prohibiting public and private organizations and businesses from requiring customers or employees to get a COVID-19 vaccine if they object on personal, religious, or medical grounds.

Federal responses

Read more: Political responses to the coronavirus (COVID-19) pandemic, 2020

  • On Oct. 12, Department of Homeland Security Secretary Alejandro Mayorkas announced he would lift restrictions on nonessential travel at the Canadian and Mexican borders for fully vaccinated individuals in early November. Mayorkas, who did not specify a start date for the policy, said travelers entering the United States would be required to show proof of vaccination. Under the revised policy, the prohibition on nonessential travel remains in effect for unvaccinated people. The U.S., Canada, and Mexico agreed to close their borders to nonessential travel in March 2020.