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How will a Trump presidency affect labor and employment law?

How President-elect Trump will impact labor and employment law is, of course, just speculation. But there are several areas in which signals have been sent by both Trump and those who appear to be speaking on his behalf. Two clear areas where the impact is likely to be direct are in regulatory reform and on the Supreme Court.

According to the President-elect’s transition website, Trump’s regulatory reforms will include a “temporary moratorium on all new regulation, canceling overarching executive orders,” and eliminating “unnecessary regulations that kill jobs and bloat government.”

As for his Supreme Court picks, Tom Goldstein of Goldstein & Russell, the publisher of the SCOTUSblog and a veteran of numerous appearances before the Supreme Court, noted that President Trump would need to make two selections to the Court to change the current balance and give the Court a decidedly more conservative bend. Goldstein said that in addition to the vacancy on the Court caused by the death of Justice Antonin Scalia, there are currently two Justices over 80 years of age, Ruth Bader Ginsburg and Anthony Kennedy. Those appointments are likely to have an impact on the legal landscape of the country for 25 years or more, depending on whether the new president serves four or eight years.

However, Goldstein cautioned that change would not be that direct. To the casual observer, the Court has been made up of four moderate/liberal Justices and four conservative Justices, with Justice Kennedy as the swing vote. But decisions of the Court are more subtle than that. While some conservative Justices might favor sweeping changes in the law, Chief Justice John Roberts favors incremental change—so that the law evolves over time. The doctrine of stare decisis is also important to the Court. That means that longstanding precedent, such as Roe v. Wade, are in far less peril than more recent decisions, such as the affirmative action case of Fisher v. University of Texas, which a more conservative Court may elect to revisit.

Here are some potential scenarios.

Impact on the DOL

By Ronald Miller, J.D.

One of the primary goals of the Obama Administration’s Department of Labor was an increase in the minimum wage. Although the federal minimum wage has not been increased since 2004, the Republican-controlled Congress balked at proposals to pass an increase, reasoning that it would kill jobs for newer workers entering the job market. However, President Obama did issue an executive order that impacted the minimum wage paid by government contractors. Executive Order 13658, “Establishing a Minimum Wage for Contractors,” signed by President Obama on February 12, 2014, raised the hourly minimum wage paid by contractors to workers performing work on covered federal contracts to $10.10 per hour, beginning January 1, 2015. Unless rescinded by the Trump Administration, beginning January 1, 2017, the EO minimum wage rate will increase to $10.20 per hour and to $6.80 per hour for tipped workers.

Overtime rule. The Department of Labor also revamped the white collar exemptions from overtime pay. After rulemaking and comment, the DOL issued new white collar exemption regulations. Of course, the recent elections prompted questions about the impact on the regulations that would result from the change in administration. While President-elect Trump has not made any comments suggesting his position on the regulations, it was noted that one of his senior advisers considers the regulations to be “job killers.”

However, in a crucial blow to the Obama administration’s labor and employment legacy, a federal district court in Texas granted an emergency motion for a preliminary injunction barring the Department of Labor from enforcing its revised overtime rule that had been scheduled to take effect December 1, 2016. The Obama administration DOL has appealed to the Fifth Circuit, known to be a conservative court. Could an appeal be heard and decided before January 20, when President Trump takes office? Even though the Fifth Circuit has agreed to an expedited briefing and hearing schedule, that schedule will not conclude before the new president takes office. In any event, the incoming Trump administration could either pass legislation—some of which has already been introduced—to nullify or modify the DOL rule, which would make any appeal moot, or the Trump administration could simply choose to abandon the appeal.

Secretary of Labor. Meanwhile, President-elect Donald Trump has picked Andrew Puzder for the job of Secretary of Labor, according to numerous media reports. As the comments have been steadily rolling in, there is a conspicuous absence of forecasts that would include anything less than a near about-face in policy should the CEO of CKE Restaurants, which operates Hardee’s and Carl’s Jr., be confirmed to head the DOL. More than one commenter likened the nomination to a powerful punch—in the nose or the gut. On the other hand, Puzder does come with business experience that may portend a more pragmatic, realistic approach, according to some.

Perhaps the largest looming question with the upcoming transition at the White House has been whether the Labor Department’s new overtime regulation will survive. Many predict it will not, citing Puzder’s position on wages. Others have expressed concerns about Puzder’s views on the minimum wage and other worker protections. Congressman Bobby Scott (D-Va.), Ranking Member on the House Committee on Education and the Workforce warned: “President-elect Trump’s nomination of Andrew Puzder for Labor Secretary should signal concern for workers and employers who support fair pay, worker protections, and equal opportunity on the job. As the CEO of CKE Restaurants, Mr. Puzder has opposed raising the minimum wage or strengthening overtime protections. Mr. Puzder’s record indicates that he will not support proposals that strengthen worker health and safety protections.”

How business works. Jackson Lewis management-side wage and hour lawyer Paul DeCamp said that if confirmed, the nominee can bring to the DOL a “deep understanding of how businesses operate, especially small businesses. He appreciates how regulatory burdens and agency interference can stifle ingenuity, suppress job creation, and make workers worse off than they would have been without government involvement. He knows how businesses respond to regulation and is unlikely to be caught by surprise with unintended consequences such as the Affordable Care Act leading to reduced working hours as employers try to bring workers below the coverage threshold, or businesses shifting to automation as increasing minimum wage and other employment law pressures make it more cost-effective for companies to replace low-skilled workers with computers.”

Shift in focus at the EEOC

By Pamela Wolf, J.D.

Under a Donald Trump Administration and Republican-dominated Congress, the focus of the Equal Employment Opportunity Commission is likely to shift with a change in key players and legislative initiatives aimed at increasing transparency and curbing systemic litigation, among other things.

Musical chairs. Chair Jenny R. Yang, whose term ends July 1, 2017, will undoubtedly be replaced, given her role in expanding the agency’s data collection to include pay data by sex, race, and ethnicity, and her focus on systemic barriers to equal opportunity. Likewise, Commissioner Chai R. Feldblum, whose term expires one year later, is not likely favored for reappointment, given her considerable efforts at advancing LGBTQ rights and her role as an original drafter of the first version of the Employment Nondiscrimination Act.

Moreover, given that the EEOC’s transformative General Counsel David Lopez will depart the agency in December, Trump will also pick his replacement, who will steer the agency’s litigation program. With the change in key players, the agency may focus less on pay discrimination and LGBTQ rights and become less expansive in terms of its litigation agenda.

Limiting litigation. During the Obama Administration, some employers and lawmakers complained of overreach on the part of the EEOC, particularly in the context of its systemic litigation program and certain regulatory actions. Going forward, unsuccessful efforts to implement agency oversight by requiring a majority vote by Commissioners before commencing or intervening in litigation that involves multiple plaintiffs or systemic or pattern or practice allegations, as well as public posting requirements about the litigation and the votes, may be revitalized and enjoy much better odds of becoming law. Likewise, proposed legislation that would bar the EEOC from commencing suit unless it has exhausted its informal conciliation obligation and certifies that the parties are at an impasse, with the question of whether the agency actually engaged in bona fide conciliation subject to judicial review, may now find legs and become law.

Pay transparency. On the regulatory scene, there may be changes ahead for the new EEO-1 report incorporating pay data, with its first reporting deadline on March 31, 2018. The EEOC developed the controversial data collection expansion in partnership with the OFCCP in a move that would purportedly help narrow the persistent gender pay gap. A reshaped Commission may modify the data collection, or rescind it altogether.

Course correction at the NLRB

By Lisa Milam-Perez, J.D.

The National Labor Relations Board has consistently rankled employers during President Obama’s eight years at the helm, proving a stalwart supporter of organized labor and ushering in change, in degrees both incremental and sweeping, to that end. Much to the chagrin of employers, the Obama Board has chipped away at once-reliable Board precedents on important and apparently settled issues, such as the permissibility of union-gerrymandered “micro-units,” the right of employers to control their company email systems and bar their use for protected union activity, the employment status of university graduate students under the National Labor Relations Act and, perhaps most significantly, the test for determining whether an entity is a “joint employer” under the Act.

The NLRB also boldly expanded its reach into nonunion terrain, policing employee handbooks and policies, of both union and nonunion employers alike, and brazenly took on the seemingly sacrosanct Federal Arbitration Act (FAA) with its insistence—given surprising credence in several circuit courts—that employers’ use of mandatory class action waivers in arbitration agreements violated employees’ statutory right to engage in protected, concerted activity. In even broader strokes, in a rare and controversial instance of NLRB rulemaking, the agency revised its longstanding representation election procedures to dramatically shorten the time frame in which employers may respond to a union organizing campaign and restrict their right to challenge adverse determinations regarding the conduct of the election or the composition of the bargaining unit.

Much of this will be undone under Donald Trump’s administration, most labor practitioners confidently predict. A business owner himself (famously so), the President-elect has had his own run-ins with the NLRB and will surely view such matters through an employer’s lens. As naturally occurs when an administration turns from Democratic to Republican (and vice versa), the Board’s makeup turns with it, with the majority of its Members adhering to the party in power. Such is the case with the incoming administration. But expect a more dramatic pendulum swing than usual—in part because the Board under President Obama had veered so sharply left that a more assertive course correction will be needed—in part because the President-elect, by personal constitution, makes no small gestures. A Trump Board will surely be comprised of majority Members with similar pro-business bents and a sense of mandate.

Class action waivers. Among the new President’s first orders of business will be to nominate a Supreme Court Justice who, once seated, will join his or her colleagues in deciding whether the Board’s stance on class-action waivers, first set forth in its 2012 D.R. Horton ruling, holds water. Should the High Court take the case (which is quite likely given the current circuit split and the importance of the issue), a conservative Trump nominee will almost certainly join a majority in reaffirming the supremacy of the FAA and the right to enter into voluntary agreements to use individual arbitration—to the considerable relief of employers desperate to control skyrocketing litigation costs and runaway class action verdicts.

Joint employer standard. Another early agenda item will be to undo, via legislation, the NLRB’s 2015 Browning-Ferris(BFI) decision, which loosened the Board’s standard for determining joint employer for union election purposes. After BFI, a secondary “employer” (e.g. a corporate client of a staffing agency, for example) need merely retain the right to control the work of bargaining unit employees (per the terms of a staffing agency contract, or the like); the employer needn’t actually exercise that control. That test will revert to the prior, more demanding standard, under legislation Congressional Republicans have been chomping at the bit to pass. Trump’s ascendancy virtually assures the measure will find an eager taker in the oval office next year.

Other Board reversals will necessarily be undertaken with more deliberate speed, through the gradual making of Board common law, as a Republican NLRB takes on-point cases percolating up from the regions to overturn those Obama-era precedents that had themselves upended prior caselaw.

Quickie elections. And what of the NLRB’s “quickie election” rule? While there was much sturm und drang among employers when the agency first implemented the revised election procedures, the rule change has not, perhaps, proven quite the boon for union organizing as predicted. At any rate, an appeals court has upheld the rule’s legality in the face of an employer challenge. Still, expect to see employers file petitions for rulemaking, giving the Board an opening to undo its nascent rule. At minimum, a Trump Board will surely chip away at some of the rule’s more troublesome provisions over time as opportunities to do so arise.

Workplace safety

By Lorene D. Park, J.D.

With respect to workplace safety, Jackson Lewis attorneys speculate the new administration will rescind some Executive Orders, chiefly the Fair Pay and Safe Workplaces Executive Order, which requires prospective federal contractors to disclose labor law violations, including OSHA citations, when bidding on certain projects (The DOL has issued a Guidance on EO 13673). Significantly, on October 24, a federal court preliminarily enjoined key elements of the executive order, including reporting requirements concerning labor law violations.

Jackson Lewis also suggests that under the new leadership, OSHA may ease back on enforcement, including efforts regarding the rule protecting workers from respirable silica and the electronic recordkeeping rule slated to take effect in July 2017. Likewise, Fisher Phillips attorneys predict recordkeeping and other OSHA initiatives will meet their demise under a Trump administration, including the walking-working surfaces and fall protection rule issued in November 2016, and OSHA penalty increases that took effect August 2, 2016 and apply to violations occurring after November 2, 2015.

Employers are well-advised to stay abreast of the latest developments and to ensure compliance. For example, on November 28 a different federal court refused to enjoin the anti-retaliation provisions of OSHA’s “Improve Tracking of Workplace Injuries and Illnesses” rule, which took effect December 1.

The legal rights of LGBTQ individuals

By Kathleen Kapusta, J.D.

While Trump the candidate claimed to support LGBTQ rights, and even argued that he would be a better president for LGBTQ individuals than Hillary Clinton, what does the election of Donald Trump mean for the LGBTQ community? Of particular concern to many may be Trump’s early choice of key individuals who could well have a significant impact on shaping his domestic policies. These individuals include Vice President-elect Mike Pence, who not only opposed marriage equality and voted against the repeal of “don’t ask, don’t tell,” but as governor of Indiana, signed into law the controversial Religious Freedom Restoration Act, a law that opponents argued would create widespread discrimination against lesbian, gay, bisexual, and transgender individuals.

Although he later signed a separate measure clarifying that the law could not be used to discriminate against lesbian, gay, bisexual, and transgender individuals, this “fix” did not go as far as opponents would have liked as it did not add a broadly applicable antidiscrimination law to protect LGBTQ individuals in Indiana. The absence of such a provision was a big part of the problem, critics argued, since the religious freedom law could easily be interpreted to make discrimination against LGBTQ individuals lawful under the guise of religious exercise.

Key appointments. Also of concern to many is Trump’s selection of Steve Bannon as his Chief Strategist. The highly controversial executive chair of the ultra-conservative website Breitbart News, which has featured anti-LBGTQ rhetoric, recently made anti-transgender comments in reference to Target’s policy of allowing people to use the bathroom consistent with their gender identity. In addition, Trump’s nominee for U.S. Attorney General, Senator Jeff Sessions, has not only opposed pro-LGBTQ legislation throughout his 20 years in Congress, he co-sponsored the First Amendment Defense Act, a law Trump the candidate pledged to sign if elected. Introduced in 2015, FADA prohibits the federal government from taking discriminatory action against a person on the basis that the person believes or acts in accordance with a religious belief or moral conviction that: (1) marriage is or should be recognized as the union of one man and one woman, or (2) sexual relations are properly reserved to such a marriage.

Marriage equality. There is also concern over how a Trump presidency might affect marriage equality. As a candidate, Trump said he would consider appointing Supreme Court Justices who would overrule Obergefell, the Supreme Court’s same-sex marriage decision. However, he has since changed his mind, stating after the election that marriage equality is settled. But given the current vacancy on the Court, plus the ages of three other Justices who voted to legalize same-sex marriage—Ginsburg, age 83; Kennedy, age 80; and Breyer, age 78—and Trump’s stated desire to appoint Justices “in the mold” of deceased Justice Antonin Scalia, the President-elect could significantly reshape the Court into a much more conservative Court.

State law. And while filling the current Court vacancy may not have any immediate impact on Obergefell, there could be a potential impact down the road on emerging state laws like HB 2 in North Carolina, which regulates access to bathrooms for transgender individuals, and laws similar to Indiana’s Religious Freedom Restoration Act. While there are currently no such laws before the Court, it has agreed to hear a case involving a transgender high school student who was barred from using the boys’ bathroom, and the make-up of the Court will certainly impact the outcome of this case and other future cases for a long time to come.

Executive Orders. There is also a possibility that President-elect Trump might rescind President Obama’s pro-LGBT executive order, EO 13672, which prohibits federal contractors from discriminating based on sexual orientation and gender identity. Although he has not specifically stated that he would rescind this particular E.O., he has stated that he will repeal many of Obama’s executive orders and could easily do so shortly after taking office.

Finally, the likely dismantling of the Affordable Care Act will also have repercussions on the LBGTQ community, as it currently prohibits health insurers from discriminating based on gender identity.

Paid leave for new mothers

By Joy P. Waltemath, J.D.

As a candidate, Donald Trump espoused a plan to enhance unemployment insurance (UI) to include six weeks of paid leave for new mothers so that they can take time off of work after having a baby. He said his plan would triple the average two weeks of paid leave received by new mothers. However, the maternity leave plan is not a part of the President-elect’s transition website, greatagain.gov.

Eliminate UI fraud. Trump the candidate’s website noted that providing a temporary unemployment benefit for eight (not six) weeks through the UI system would cost $2.5 billion annually at an average benefit of $300 per week. It suggested that this cost could be offset through changes in the existing UI system, such as by reducing the $5.6 billion per year in improper payments or implementing the proposals included in the administration’s FY 2017 budget regarding program integrity. In other words, his plan would recoup this expense by eliminating existing fraud, although how is not specified.

As a result, the Trump plan contends that providing the benefit through UI, which would be “paid for through program savings,” would not be the financial burden on small businesses that mandating paid leave would be. His website cited an unnamed analysis of a similar program in California that unmarried, nonwhite, and non-college educated mothers received the most benefit.

Open questions. Pundits as well as practitioners have noted that there are a number of open questions from the Trump plan, including whether it would cover adoptive mothers. As written, it would not provide any paid leave for fathers. Lisa Horn, director of congressional affairs for the Society for Human Resource Management, said in an article published by SHRM that it was “unclear whether reforms of unemployment insurance would be sufficient to fund this program.” This concern was echoed by Bobbi Kloss, director of human resources management services for the Benefit Advisors Network, also quoted in the SHRM article. Is there enough fraud to cover the costs of Trump’s proposal? Kloss noted that it was “not a self-perpetuating funding source. If you end the fraud, where then does the funding come from?”

Tom Spiggle, founder of the Spiggle Law Firm, which focuses on pregnancy discrimination and the Family Medical Leave Act, among other workplace issues, offered a broader perspective of parental leave under a Trump presidency. Currently the only federal parental leave policy is the Family Medical Leave Act, which provides 12 weeks of unpaid leave to those who qualify, typically those who have worked for more than a year for a company of 50 or more employees. “If Trump follows through on his campaign promise, there will be some federal legislation that, for the first time in our nation’s history, offers paid leave. But it will be limited,” Spiggle pointed out. “While the policy is unclear, fathers, parents who adopt, and many same-sex couples could be excluded.”

Employees will, however, have access to some state courts for violations of more robust state parental-leave laws. States and municipalities have proposed and, in some cases, passed paid family leave bills, including California, New Jersey, and Rhode Island. New York has passed a paid family leave law, although it will not take effect until 2018. “Expect this to continue if the Trump administration passes a fig-leaf family leave measure while largely leaving unaddressed the pressing need for broad-based paid family leave,” Spiggle remarked.

Urging Congressional leaders to reject the plan, Senator Gayle Goldin (D-RI) and Ellen Bravo, writing in The Hill, said that the proposed policy “would give only partial pay for six weeks through a state unemployment fund to employed women who give birth. That’s too little time, too little money, covering too few people, relying on a program that is already severely under-funded, and adds rather than removes barriers to women.”

Immigrant and non-immigrant foreign workers

By Lorene D. Park, J.D.

The president-elect’s website provides a “ten-point plan” on immigration, which is a non-detailed list, the top item of which is to build a wall along the southern border of the U.S. Further down the list, there are items more likely to impact employers, including “Cancel Unconstitutional Executive Orders & Enforce All Immigration Laws;” “Suspend the Issuance of Visas to Any Place Where Adequate Screening Cannot Occur;” “Turn Off the Jobs and Benefits Magnet;” and “Reform Legal immigration to Serve the Best Interests of America and its Workers.”

How this will actually play out remains to be seen. However, the list suggests employers wanting to sponsor individuals for work visas may face additional hurdles. In addition, Jackson Lewis attorneys suggest the new administration may increase enforcement of existing immigration laws by, among other things, working with Congress to expand the mandatory use of E-Verify to verify eligibility for employment in the U.S. Under current federal law, E-Verify is voluntary for employers, except as mandated by executive order for federal government contractors.