Five Labor and Employment Rollbacks That May Happen Under Trump
Here are five initiatives that labor and employment counsel said could be at risk come January 2017.
November 22, 2016 at 11:46 AM
6 minute read
Originally published on Corporate Counsel. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
For nearly eight years under President Barack Obama, labor and employment practitioners have been kept busy by a host of new federal policies—largely promulgated through regulations—that have changed everything from the legal definition of “joint employer” to how federal contractors report alleged labor violations.
But with the election of Donald Trump and a Republican majority in both the Senate and House of Representatives, some of these policies may not last.
“There's no doubt that this was a historic election, in not only the political sense, but in its implications for employers and employees,” said Mark Kisicki, a shareholder at Ogletree Deakins' Phoenix office who represents employers.
Trump already has said he would like to repeal many parts of the Affordable Care Act and some believe he may seek to eliminate the U.S. Department of Labor's Fiduciary Rule, which set new standards in the retirement planning industry to limit conflicts of interest. But there are other labor and employment rules and regulations that could be eliminated by Congress, by federal regulatory agencies, or with the stroke of Trump's pen.
Here are five initiatives that labor and employment counsel said could be at risk come January 2017:
Executive Orders
The Fair Pay and Safe Workplaces order, which requires companies to disclose data about labor violations as part of the bidding and selection process for federal contracts, was slated to take effect Oct. 25 but is partially enjoined nationally by a preliminary injunction from a Texas federal court. Under the order, companies would be forced to disclose any adverse findings from courts and agencies under 14 federal labor laws and their state equivalents with a three-year lookback period, even if the case remains under appeal or unresolved
Steven Suflas, a partner in Ballard Spahr's Denver and Cherry Hill, New Jersey, offices, believes that the order, dubbed the “blacklisting rule” by detractors, is the most likely executive order to get eliminated by the new administration. “On my list that would be the first one,” he said.
Joint Employer Standard
The National Labor Relations Board standard on joint employment, recently modified, is another likely candidate for modification or elimination, labor and employment lawyers said. The NLRB decided in its Browning-Ferris Industries ruling in August 2015 that a relationship between one company and another need not involve direct control—only “indirect control”—for the two to share liability for one company's labor and employment violations as joint employers. The joint employer change has also affected franchisers and their franchisees as well as companies that use staffing agencies.
The new NLRB standard, which was echoed by the Department of Labor in its own January 2016 joint employer guidance, has raised the ire of employers and in Congress. Even before the election, Republicans in Congress drafted legislation to dismantle the joint employer rule. Kisicki said that after Obama has left office in January and a veto from him is no longer an obstacle to passing the bill, the measure could be “easily adopted” by the Republican-controlled legislature.
“If there's a contractor on premises, it's much easier for companies to be found to be joint employers of that contractor's employees and be found liable for labor, wage and hour and other kinds of potential violations,” said Philip Rosen, a principal at Jackson Lewis' New York office, of the new joint employer standard.
“Quickie” Union Election Rules
Attorneys say that the NLRB's so-called “quickie” union election rules could also be overturned by Trump's appointees over the next few years. These rules, which went into effect in April 2015, have tightened the timeframe between the filing of a petition to unionize and a union election.
There may be less motivation to overturn these rules than others, however, as employers' fears that they would greatly increase the union win rate were not realized. The Wall Street Journal reportedearlier this year that even though the time from petition to election is faster—dropping from about five weeks on average to three weeks—the actual union election win rate hasn't changed significantly.
DOL Overtime Rules
New overtime rules slated to take effect on Dec. 1 could also be targeted by the Trump administration. The Labor Department finalized the rules in May, and estimates the new rules would expand overtime coverage to more than 4 million additional workers.
Today, under the Fair Labor Standards Act, employers must pay their nonexempt employees time-and-a-half for working more than 40 hours per week only if the employees make less than $23,660 per year. But as of Dec. 1, more employees will get this mandatory overtime, as the exempt salary threshold will be raised to $47,476.
Two lawsuits seeking injunctions of the rule have already been filed—one from a coalition of 21 U.S. states and another from the U.S. Chamber of Commerce.
Suflas said that even if the new overtime rules are voided eventually, it might not be easy for companies to undo changes they've already made to employee salaries in order to come into compliance with the new rule by the beginning of December. For instance, if employee pay has been raised to get over the overtime salary threshold, most employees likely wouldn't be happy to have their paychecks reduced.
Arbitration Agreements
Marcia Goodman, a partner at Mayer Brown in the firm's Chicago office, said President-elect Trump will face the challenge of balancing populist campaign promises to support working people with pro-business Republican Party values.
She suspects “more structural and less obvious” policies, such as the less-often discussed but still significant issue of mandatory arbitration agreements, are the most likely targets for change.
Over the last few years, Obama's NLRB has challenged agreements between companies and workers that require all employment-related disputes to be settled in arbitration. The board and other plaintiffs have argued that the right to litigate in these cases is covered by the National Labor Relations Act.
An NLRB under Trump could curry favor with businesses by no longer pursuing these cases. “If they were to stop taking a position on arbitration agreements, that would have a big impact on the workplace and on employers,” Goodman said. “It seems to me that could well happen.”
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