By Hal Coxson
, Shareholder in Ogletree Deakins' Washington, D.C. office
The results of the historic 2016 presidential election have far-reaching implications for labor and employment policy. This article provides ten important insights for employers regarding labor and employment law under the Trump administration.
1. Be Patient - Think Long Term and Short Term
President-Elect Donald Trump's remarkable election was all about "change." As an "outsider," he promised to be the "change agent" who would take on the entrenched Establishment in Washington and "drain the swamp." Now, with President-Elect Trump poised to take office on January 20, and with Republicans in the majority in both houses of Congress, many of his supporters expect "change" will occur overnight.
Not so fast! It will take time to turn around the ship of state. There are certain actions within the President's powers that he can exercise on his first day in office - such as overturning the numerous Executive Orders issued over the past eight years. Notable among them is the Fair Pay and Safe Workplaces Executive Order 13673 (also known as government contractor "blacklisting"). Currently, the Executive Order's implementing regulations have been enjoined, but President-Elect Trump has the power to simply revoke the Executive Order.
There are a number of other Executive Orders dating from the first days of the Obama presidency which bypassed Congress, such as:
- promoting project labor agreements;
- non-reimbursement for labor relations costs on federal projects;
- paid family sick leave for federal contractors; and
- special minimum wage rates for federal contractors.
Many of these could be revoked by President-Elect Trump on January 20 as well.
However, final federal regulations promulgated during the Obama administration cannot simply be revoked by the President but will require "reverse rulemaking" under the Administrative Procedure Act, unless Congress intercedes. This is the case with the Fair Labor Standards Act's Part 541 overtime exemption, which also has been enjoined preliminarily in court.
2. No Not Overreact
Organizations should not overreact in light of the coming changes. Rather, stay up-to-date on the current status of the various laws impacting the workplace, and make adjustments accordingly.
For example, the Labor-Management Reporting and Disclosure Act's revised "persuader activity" exemption has been permanently enjoined on a nationwide basis and thus appears dead without an appeal, which on good authority the government will not pursue. However, that does not mean that the reporting requirements of the former persuader regulation have been enjoined as well. Employers and outside labor relations counsel still must report "persuader activities" where consultants communicate directly with employees.
Furthermore, in anticipation of the new salary level going into effect under the revised Part 541 overtime regulation, many employers increased their supervisors' salaries. As a practical matter, it is difficult to "put the genie back in the bottle" and rescind those increases. Employers who did not put the increases into effect should wait and see how the issue develops before making changes.
3. Any Change at the NLRB Will Happen Slowly
According to one recent study, the National Labor Relations Board (NLRB) overturned a total of 4,559 years of labor law precedents over the past eight years. Re-addressing these decisions will take time for a "live case" to reach the Board (the Board cannot issue "advisory opinions") after the filing of a charge, issuance of a complaint, hearing before an administrative law judge, and review by the full Board, followed by appeals to the federal circuit courts. Current General Counsel Richard Griffin, whose term does not expire until November 2017, will continue to insist that the law be enforced by the Board's regional offices as currently written. Also, the Board chairmanship must be reassigned to the lone Republican on the Board - Phil Miscimarra - and the two vacancies on the Board must be filled to change the majority. None of these things will happen overnight.
As a result, there will be a delay in revising issues through the standard unfair labor practice process (C-Cases), including the NLRB's "joint employer" standard, which would make franchisors liable for the unfair labor practices and collective bargaining obligations of their franchisees. Unfair labor practice decisions parsing the wording of handbook statements, work rules, and policies will remain in place unless and until the two vacancies on the Board are filled and the new Board formally overrules them. The current "quickie election" rules governing union representation elections may be tweaked on requests for review in R-Case proceedings, which bypass the General Counsel, but cannot be totally undone without reverse rulemaking. The General Counsel will continue to hold the position that Board settlements of unfair labor practice complaints require instatement or reinstatement, full back pay, and unconditional default language for future violations as a rule.
4. Be Proactive
Your active involvement in the policy-making process will be important for whatever change occurs. Whatever your labor policy priorities may be, encourage change through communications and advocacy with the White House and Congress. If you represent a business, support your trade associations and become active on their policy-making committees and litigation arms. Not every company is alike, so trade associations are not the only answer.
5. Keep Your Expectations Realistic
Make sure that your labor and employment policy objectives are realistic and achievable. The Affordable Care Act will likely be repealed. What are your goals for replacing it? For example, popular provisions such as no insurance restrictions on coverage based on pre-existing conditions and the ability for dependents to remain on their parents' health insurance up to age 26 likely will be part of the replacement package.
Also, there will likely be major changes to immigration policy. What do you want to preserve to enable your company to recruit a legal workforce?
6. Consider and Watch for New Tactics and Strategies
Unions will continue to press for a minimum wage increase, which may gain bipartisan support. They may also find bipartisan support for increasing the salary basis test for the overtime exemptions under the Fair Labor Standards Act, though bipartisan support is unlikely at the new salary level, which dramatically increased under the new regulation. Unions may also be able to get bipartisan support from the White House for paid family leave at some level.
Organized labor will likely have to fight hard to stop additional right-to-work laws beyond the current 26 states and to preserve their ability to force payment of union dues in the public sector, which will be under attack in the Supreme Court once its vacancy has been filled.
7. Be on the Lookout for State and Local Initiatives, New Alliances, International Pressures, and Litigation
Unions may increasingly turn to the following strategies:
- Lobbying state and local government levels for passage of laws, referendums, and ordinances for such things as "labor peace agreements," higher minimum wages, paid leave, independent contractor status, etc.
- Forming new alliances with other activist groups in alt-union organizations to press for pro-union goals. Some may form at the company level or around an issue.
- Forming new alliances with global union federations (GUFS) and seeking ways to convince companies to sign international framework agreements incorporating International Labor Organization (ILO) worker rights standards such as Conventions 87 (Freedom of Association) and 98 (Freedom of Association and Collective Bargaining). Also, unions will likely put forth on-going effort to incorporate those standards with product certification requirements as a sine qua non for certification of business products.
8. Continue to Practice Positive Employee Relations
Positive employee relations are important in every workplace, unionized or not. For union-free organizations that wish to remain union free in the face of union organizing pressures from the bottom up or from top-down "corporate campaigns," the single most effective defense is a positive employee relations program. Most union organizing campaigns are won or lost not on the basis of the economics - wages and benefits - but on the basis of poor supervision, perceived unfair or unequal treatment, and the lack of a "voice" or "respect" at work. All of those should be addressed by a positive employee relations program well in advance of any organizing campaign.
9. Recruit and Train
New pressure for job creation, especially through emphasis on infrastructure, manufacturing, and technology, will require trained workers. Often that training comes through technical schools rather than four-year college education. Unions will likely encourage union apprenticeship programs, but the federal government cannot and should not do it alone. Employers can take steps such as underwriting training programs for their workplace needs to recruit qualified workers with job skills.
10. Anticipate Changes
The world of work is changing. New technologies are evolving, such as driverless vehicles, robotics, and automation of production. Employers are well-advised to seek labor and employment policies that reflect these changes.
Workforce demographics are changing as well, with employees who are more diverse, more computer literate, more interested in work-family balance, more mobile and willing to change jobs, and less dependent on the old institutions such as labor unions and hierarchical management. New workplace labor and employment policy should adapt to changes in the workplace.