The Election is Over, Now What?

Labor & Employment Newsletter

Client Alert

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Now that the election is over, many clients and friends are asking what labor and employment law might look like under the soon to be President Trump. Of course, no one can predict exactly what will happen in the coming term. Congress is nearly equally divided, and administrative action takes time. However, there are topics that came up a lot during President Obama’s final term which also came up during the campaign. We in the Bradley Labor and Employment Group thought that some of those would be worth mentioning. As always, our thoughts are merely thoughts and should not be relied upon as legal advice. When actual legal developments occur, we will do our best to let you know.

1. Executive Orders

Several Executive Orders issued by President Obama likely will be reviewed by President Trump during his first year in office. They could be rescinded or amended by new Executive Orders.

Executive Order 13502 promoted pre-hire collective bargaining agreements. Opponents of these “project labor agreements” argue that they negatively impact competition for project bids and can lead to higher costs. If one of President Trump’s top priorities is job creation and stimulation of the economy, a return by Executive Order to contract neutrality with regard to union involvement can be anticipated.

President Obama’s Executive Order 13496 required contractors to inform employees of their rights to unionize or refrain from unionizing. This order rescinded a prior Executive Order issued by President George W. Bush informing employees that unions could not use member dues for purposes unrelated to union contract administration without the members’ consent. President Trump could rescind EO 13496.

Executive Order 13672 and its Final Rule, which became effective on April 8, 2015, provided that covered federal contracting agencies must include gender identity and sexual orientation in their list of protected classifications under EEO law. Likewise, the EEOC has taken the position that Title VII’s prohibition of sex discrimination includes discrimination based on gender identity, gender transition, and sexual orientation. This issue is now before several courts and will continue to be litigated. While it is not anticipated that a Republican-controlled Congress will pass legislation prohibiting discrimination based on gender identity and sexual orientation, it is also clear that any scaling back of the EEOC’s strategic enforcement plan to support LGBT employee rights would not occur immediately under the new administration. President Trump could rescind EO 13672, but the likelihood of that is not clear at this time.

Executive Order 13706 requires employers with certain types of federal contracts to provide employees working on those contracts up to 56 hours of paid sick leave per year (one hour of leave for every 30 hours worked on the contract). It applies to contracts stemming from solicitations on or after January 1, 2017 and existing contracts replaced or amended after that date. Executive Order 13658 requires federal contractors to pay covered workers at least $10.20 per hour starting on January 1, 2017. Because employers have already made adjustments to comply with these EOs, rescission of them may not be a top priority of the new administration.

Executive Order 13673 , the Fair Pay and Safe Workplaces Order, requires federal contractors and subcontractors to report an “administrative merits determination arbitral award or decision, or civil judgment” against the contractor in the preceding three years. This so-called “blacklisting” order requires disclosure of potential violations under the FLSA, NLRA, OSHA, FMLA and other anti-discrimination laws and requires the contracting officer to consider such violations when awarding or extending contracts. Litigation to enjoin the rule is pending and will not be decided quickly, but President Trump could rescind the EO, making the issue moot.

Executive Order 13495 creates hiring rights of first refusal for current employees of federal contractors when the contract changes hands. The new administration will review this in light of whether it promotes or hinders growth and job creation.

Executive Order 13494 prevents the government from reimbursing contractor employers for costs associated with union campaign activities. This is one the employer community would like to see rescinded.

2. Administrative Actions

The Obama Administration greatly affected the nature of the employer-employee relationship. Initiatives driven by administrative agencies whose members and leadership reflect the Executive Branch’s priorities had a significant impact. Some of those priorities may remain with the new administration, to the extent they reflect the general views of a majority of Americans. To the extent the Obama Administration’s priorities differ from a perceived consensus following the election results, they will yield to different priorities of the new Trump Administration.

In addition to Executive Orders from the president, the NLRB and DOL handed down rules and decisions which the new administration may seek to change. The NLRB implemented a rule that shortened the time for an election following a union’s filing of a representation petition. The so-called “quickie election” rule is seen as pro-union. While President Trump’s position on specific rules may not yet be clear, the Republican Party is expected to push back against this perceived overreaching, perhaps by restricting funding to the NLRB for enforcement or reintroducing legislation to protect employees’ rights to secret ballot union elections.

The NLRB currently takes the position that class action waivers in arbitration agreements violate the NLRA. This position may change as the Board is realigned under the Trump Administration.

The NLRB’s decision in the Browning-Ferris Industries case last year presented a new standard for determining whether two or more entities are joint employers of a single workforce. Indirect control and “unexercised potential control” could establish joint employer status, which has potentially wide-ranging implications for franchisee and independent contractor relationships. To the extent that the new administration views this as detrimental to economic growth, it will seek to appoint board members who hold a more employer-friendly view.

The so-called “persuader rule” requires employers to file public reports with the DOL when employees obtain advice from consultants and lawyers regarding labor activities, even if such advice involves no direct contact with employees. This was a change from the prior disclosure rules. Lawsuits have been filed challenging the rule which have just led to an injunction against it, and President Trump also will have an opportunity to reshape the NLRB to address this issue.

3. Immigration

Candidate Trump signaled that his administration would take a tough stance on immigration, promising to “build a wall” along the U.S.-Mexican border and to deport millions of undocumented workers. Pinning down the details of the president elect’s immigration policy has proven to be somewhat elusive, however, and it is too early to make many hard and fast predictions.

That said, it is clear that President Trump’s immigration policy agenda will have a significant impact on employers. For starters, the new administration is expected to take a much more aggressive approach on workplace immigration compliance. Employers should anticipate that Form I-9 audits and investigations will be stepped up considerably. Some observers have also expressed concern that ICE will be given the green light to resume the more high-profile worksite raids that were prevalent during the Bush era but that were halted by President Obama. The president elect has done little to assuage these kinds of concerns, proposing to hire hundreds of new ICE agents to ramp up the government’s immigration enforcement efforts.

President Trump also has pledged to end the Deferred Action for Childhood Arrivals (DACA) initiative, which the Obama Administration rolled out in 2012. Under DACA (administered by USCIS), more than a half million young, undocumented aliens have been shielded from deportation and provided legal work authorization. The new president could terminate the DACA program with the stroke of a pen, although his precise intentions are not clear. He could simply order USCIS not to accept or approve any new DACA applications or he could take more drastic measures to revoke already approved DACA applications and work permits. The new administration could also use the information previous DACA applicants provided to institute deportation proceedings against them, although the president-elect has not specifically stated that this is in his plans.

Other changes impacting employers may come later, through some form of immigration reform legislation. President Trump has voiced support for making E-Verify mandatory for all employers, and it’s almost certain that any proposed legislation will include mandatory E-Verify. Additionally, some of the president-elect’s closest advisors have pressed for changes to the existing legal immigration landscape, including the visa programs commonly used by U.S. employers to secure foreign talent. Some of those within President Trump’s inner circle have been particularly critical of the H-1B program for temporary “specialty occupation” workers and have floated proposals designed to make the use of that program more difficult, such as by increasing the wage requirements and instituting a labor market test. During the campaign, however, the president-elect was more equivocal about these legal immigration programs, sometimes making remarks that seemed contradictory. At this point, it is not possible to predict how these issues will shake out, but employers certainly need to stay tuned.

4. Affordable Care Act

During the campaign, Candidate Trump consistently stated that he would repeal and replace the Affordable Care Act (ACA). In recent interviews following the election, President Trump has indicated that he would consider keeping certain popular provisions of the Act, such as those preventing pre-existing condition limitations and those allowing coverage of adult children to age 26. These provisions are also generally popular among members of Congress and will likely remain in place. Congress likely will eliminate other aspects of the ACA, such as the employer mandate and the penalties for not offering or providing insurance coverage to employees. A guiding principle for designing a replacement plan could involve encouraging insurance industry competition through mechanisms such as President Trump’s proposal to allow insurance companies to compete across state lines. President Trump has also proposed a few means for reducing the costs of health insurance, including allowing the full deduction of health insurance premiums from taxes and expanding the availability of health savings accounts. In sum, developing and maintaining a system that includes certain popular reforms without coverage mandates will be a challenging task, and it is quite possible that the transition out of the ACA will take a few years.

5. Social Issues Such as Parental Leave, Marriage Equality, and Transgender Bathrooms

President Trump commented about many other issues that could affect employment policies. During his campaign, he proposed a parental leave policy requiring six weeks of paid leave for mothers following childbirth. This policy would not apply to fathers or to parents who welcome children through adoption or surrogacy. As part of the policy, President Trump also said that he wants to offer a tax deduction to employed individuals for care expenses for up to four children and elderly dependents.

With respect to same-sex marriage, employers should not expect White House efforts to disturb the Supreme Court’s June 26, 2015, Obergefell decision legalizing same-sex marriage. While candidate Trump did not spend much time discussing LGBT rights on the campaign trail, in a recent 60 Minutes interview the president-elect said he did not have a problem with same-sex marriage and felt that the Obergefell decision was settled law, rendering it a non-issue.

President Trump has flip-flopped on the issue of transgender bathroom policy. In the Spring of 2016, President Trump said that he thought that transgender individuals should be able to use whatever bathroom they preferred. He later criticized, however, President Obama’s executive order requiring public schools to allow transgender students to use the opposite sex’s bathroom and said he thought that individual states should make those decisions. Several weeks ago, the Supreme Court granted certiorari to review a lawsuit that would test the validity of the executive order on transgender bathrooms. If President Trump rescinds the executive order, this could moot the case or require the Supreme Court to remand it to the Fourth Circuit for reconsideration.

6. Judicial Appointments

President Trump’s election injects uncertainty into the Supreme Court’s makeup and future rulings, including employment-related cases. Because the Senate has not held confirmation hearings on Merrick Garland, President Obama’s pending nominee, President Trump will have the opportunity to nominate a new justice. Considering the advanced age of several other members of the Court—particularly Justices Ginsburg (83), Kennedy (80), and Breyer (78)—there is a significant likelihood that President Trump will have at least one additional nomination.

The election results also guaranteed that Republicans will narrowly retain a majority in the Senate. They enter the next congressional term controlling either 51 or 52 seats, depending upon the pending Louisiana runoff election to be held on December 10. This result will significantly shape the debate over the coming Supreme Court nomination. The rules of the Senate still allow for a filibuster of a judicial nomination, which, if exercised, would prevent a vote on the nominee unless 60 senators voted in favor of proceeding. However, Republican control of the chamber significantly enhances the prospects for approval of the president elect’s preferred nominee.

In September, candidate Trump released a list of 21 potential nominees, including Judge William Pryor of the Eleventh Circuit. Any nominee from this list would likely tilt the Court in a conservative direction.

A Trump appointee would immediately affect the Court’s decisions in a number of significant labor and employment cases in the upcoming term, including:

  • Epic Systems Corporation v. Lewis (16-285), Ernst & Young LLP v. Morris (16-300); National Labor Relations Board v. Murphy Oil USA, Inc. (16-3070), and Patterson v. Raymours Furniture Company, Inc. (16-388). These consolidated cases present a common question: are class action waivers contained in mandatory arbitration provisions enforceable under the Federal Arbitration Act and National Labor Relations Act? The Ninth and Seventh Circuits have held that mandatory class action waivers violated the NLRA; the Second, Fifth, and Eighth Circuits have held them to be lawful.

  • National Labor Relations Board v. SW General, Inc. (15-1251). In this case, the Court will review the D.C. Circuit’s ruling that Lafe Solomon, the former Acting General Counsel of the National Labor Relations Board, violated the Federal Vacancies Reform Act when he continued serving as Acting General Counsel after President Obama nominated him to a full term as General Counsel. If the Court agrees that Solomon was ineligible to continue as Acting General Counsel, actions taken after his nomination could be invalidated. Oral arguments were held in this case on November 7, 2016.

  • McLane Company v. Equal Employment Opportunity Commission (15-1248). This case asks the Court to resolve a circuit split on the proper standard of review applied to a district court decision to quash or enforce an EEOC subpoena. The Ninth Circuit has used a de novo standard of review, while eight circuits have held that the district court decision should be reviewed with deference.

  • Serna v. Transport Workers Union of America (16-484). Here the Court will consider whether a union has the right to collect compulsory fees from represented employees who are non-members, where the employees are subject to the Railway Labor Act. The Fifth Circuit held that a union could, under its agreement, collect fees from those non-member employees.

In addition to his influence over the direction of the Supreme Court, President Trump will have the opportunity to reshape the federal judiciary by nominating judges for the nearly 100 empty seats in federal district and appellate courts. His preferred nominations for the Cabinet and regulatory agencies have not been announced, but EEOC Commissioner Victoria Lipnic is a name rumored as a potential nominee for Secretary of Labor.

So, anyway, stay tuned.