While no one knows exactly how Donald Trump’s election as President will impact labor and employment laws in the country, it is a safe bet that there will be changes. Because Trump was virtually silent on the campaign trail regarding the specifics of any employment law policies, we are left to speculate on any upcoming changes. We provide a brief overview of our best educated guesses on what changes could be in store given the election results. Given Trump’s position on government enforcement and his pro-business stance, there is an expectation of changes to several employment-related laws.
EEOC Enforcement Priorities
Earlier this year, the EEOC unveiled its proposal to collect annual summary pay data and aggregate hours worked data from employers with 100 or more employees on the Employer Information Reports (EEO-1 form) to reduce pay disparity. Under the EEOC’s proposal, employers would be required to report pay by gender, race and ethnicity across pay bands starting with the 2017 EEO-1 report. Although Trump has noted the importance of equal pay, Vice President-Elect Mike Pence has previously opposed pay equity legislation. It remains to be seen if Trump will do away with the new pay reporting requirements or if they will remain intact in some form. For now, employers should prepare to collect pay data for the new EEO-1 forms as currently proposed.
More generally speaking, Trump will select the EEOC’s new chair in 2017 and nominate its new general counsel to replace David Lopez, who is leaving in December 2016. Given the change in leadership at the EEOC, the agency’s enforcement priorities and litigation decisions will most certainly shift. For example, there could be a change in course with respect to the EEOC’s position on LGBT rights under Title VII. There is also the chance that the EEOC will be subject to a budget freeze or cut, which may result in fewer lawsuits and investigations, but may also increase processing times for discrimination charges.
Department of Labor Regulations
Although the Department of Labor made significant changes during the Obama administration, Trump did not directly address these changes during the campaign. Most recently, these changes include the new overtime rules raising the minimum salary threshold for federal “white collar” exemptions from $23,660 per year to $47,476 per year (we previously discussed the changes here). However, on November 22, 2016, a Texas federal court blocked the enactment of the amendments to the federal “white collar” exemptions that were set to go into effect on December 1, 2016. More about the injunction can be found here. Other Obama-era changes include the 2011 tip-pooling rule, which extended the rules for valid tip-pools to those employers that do not take a tip-credit under the FLSA, and the so-called “Misclassification Initiative,” under which the DOL has ramped up independent contractor misclassification enforcement efforts and signed memoranda of understanding with 35 states to assist with joint and coordinated enforcement efforts.
Despite Trump’s silence on the DOL, some insight may be gained by his general criticisms of federal regulation and his anticipated appointment of EEOC Commissioner Victoria A. Lipnic as Labor Secretary. A Republican, Commissioner Lipnic served as the Assistant Secretary of Labor for Employment Standards from 2002-2009. Commissioner Lipnic has generally taken traditional Republican positions in her work at the DOL and EEOC. Notably, however, Lipnic oversaw the DOL’s last overtime rule update in 2004, simplifying the employee duties test and raising the minimum salary threshold from $8,060 per year to $23,660 per year. In any event, any DOL regulatory changes under the Trump administration would take significant time to implement.
Department of Labor’s Persuader Rule
On November 16, 2016, a Texas federal court issued a permanent injunction blocking the Department of Labor’s “persuader rule,” which required consultants and law firms to disclose work they do for companies involved in union elections. The persuader rule was issued under the Obama administration to provide increased transparency to unions and workers, but was criticized by many. It appears that the persuader rule may no longer be an immediate issue given the recent injunction. But many believe the rule’s chance of survival under the Trump administration would have been slim in any event.
Federal Contractors and the OFCCP
Under the Obama administration, federal contractors were faced with increased regulatory requirements as well as aggressive enforcement of the laws enforced by the Office of Federal Contract Compliance Programs (the OFCCP). For example, under President Obama, the OFCCP expanded the obligations of federal contractors to recruit, hire, retain and employ veterans and individuals with disabilities. President Obama also issued a new Executive Order that included nondiscrimination provisions for workers based sexual orientation or gender identity (in addition to the previously protected race, color, religion, sex, and national origin categories). The OFCCP also issued updated guidance regarding sex discrimination, which explicitly provides that the term “sex includes, but is not limited to, pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping.”
It is difficult to see how anyone would be opposed to the hiring or nondiscrimination of veterans individuals with disabilities, or women, but it is unclear how the new administration will respond regarding rights to LGBT individuals. Trump has made comments suggesting he is supportive of LGBT rights, yet Pence has a record to the contrary. Further, Trump has stated that he will revoke most of President Obama’s executive orders in his first few days in office. Regardless, Trump may decide to ease some of the regulations for federal contractors. That said, regardless of what happens at the federal level, we expect to see more city and state laws passed to provide nondiscrimination protections to LGBT workers.
NLRB’s Joint Employer Test
The National Labor Relations Board is another federal agency that, while it received little attention on the campaign trail, could be ripe for overhaul under Trump. Specifically, the Board’s new joint employer standard under Browning-Ferris Industries of California, Inc. could be reversed over the coming years. Browning-Ferris broadened the joint employment standard to include relationships where the potential joint employer has the mere ability to control an employee’s essential terms and conditions of employment—even if it never actually exercises such control. The Board currently has two vacant seats, both of which Trump is likely to fill with more employer-friendly members. Likewise, the term of the NLRB’s current General Counsel will expire in November 2017. Although it is currently unknown who Trump will eventually appoint as General Counsel of the Board, it seems more than likely that he will appoint a more employer-friendly GC. These three appointments could potentially result in a Board opinion overturning Browning-Ferris, but whether and when that happens remain to be seen.
Paid Maternity & Sick Leave
During his campaign (alongside his daughter, Ivanka Trump), Trump proposed a policy to provide six weeks of paid maternity leave for mothers who do not receive paid leave from their employer. As proposed, the paid maternity leave would be fully funded through the existing Unemployment Insurance system. It remains to be seen if this policy will go through and the details of such plan moving forward.
President Obama also issued an Executive Order which requires certain federal contractors to provide one hour of sick leave for every 30 hours worked. This is meant to provide paid time off in the event of injury or illness to care for a sick family member. Though President-Elect Trump has made a generic statement to revoke most of President Obama’s Executive Orders, it will be interesting to see how the administration reacts on this matter. In any event, many states and cities have passed paid sick leave (and even parental leave) laws. As in the case with LGBT legislation, we expect states and cities to continue to expand paid leave laws.
Impact of Supreme Court Nomination(s)
With his win, Trump will nominate the late Justice Antonin Scalia’s replacement on the U.S. Supreme Court. In addition to the immediate replacement, Trump may also get to nominate any future replacements for some of the justices who may retire during his presidential term. Late in his campaign, Trump provided a list of 21 potential candidates to sit on the highest court. Based on his list of candidates, Trump’s ultimate nomination will almost certainly be a conservative judge.
Trump’s appointment (or appointments) will impact the labor and employment law landscape moving forward, and likely in a conservative way. For example, Trump’s appointment could impact the enforceability of class action waivers in arbitration agreements. The Supreme Court has recently been asked to resolve the current circuit split regarding whether such class action waivers are unlawful. If the Supreme Court leans more conservatively in light of Trump’s appointment, it may ultimately uphold the use of class actions waivers as a term and condition of employment.