With the election of billionaire Donald J. Trump as the 45th U.S. president, the business community can almost certainly expect a new era.
Although many of Trump’s policies on labor and employment-related laws and regulations have yet to be fully developed, there are many Obama-era initiatives that could face significant changes under the new Republican administration.
In some instances, the courts may become involved, and several judges have already weighed in with injunctions against some recent regulations enacted by the Obama White House in the waning months of the administration. Other changes may take effect soon now that Trump has assumed office. But some changes may take longer as Congress looks at a slew of issues, cases work their way through the court system, and the new president considers his priorities.
Over the course of the last eight years, the Obama administration has made a series of rule changes that critics say have led to more economic and regulatory burdens for businesses, while often seen as benefiting organized labor. Many of these changes could be undone, rolled back or, at least, revised. They include:
- White-collar salary exemption. On Nov. 22, 2016, a federal judge blocked a U.S. Department of Labor rule that would have taken effect Dec. 1, raising the overtime pay threshold and extended mandatory overtime pay to more than 4 million salaried workers. U.S. District Judge Amos Mazzant of Texas agreed with 21 states and an assortment of business groups that the rule was unlawful.
Many organizations had already changed employee salaries and job classifications to comply with the new rule. On a practical level, it could be difficult for employers who proactively instituted changes to cut salaries or rearrange work schedules for employees. However, if competitors did not adjust salary levels, some employers may find it necessary to roll back any salary changes.
The Labor Department has appealed the ruling to the 5th U.S. Circuit Court of Appeals.
- The “persuader rule.” On Nov. 16, 2016, another federal judge in Texas issued a permanent nationwide injunction blocking the so-called persuader rule. The rule would have required “indirect service providers,” such as consultants and law firms, to publicly disclose any work they do for employers that relate to union-organizing activities.
The permanent injunction by U.S. District Judge Sam Cummings of Texas followed a preliminary injunction that he issued in June. The injunction has already been appealed.
Changes by the National Labor Relations Board. Over the last eight years, the NLRB has made many significant rulings that have been often perceived as pro-union. Among the rulings that could be targeted for change:
“Quickie” election rules. The NLRB’s so-called quickie union election rules, which took effect in April 2015, accelerated the time between the filing of an organizing petition and a union election. Despite concerns that the new election rules would lead to more union wins, it appears those concerns have not yet been realized, which may mean that the rule will not be among the administration’s top priorities.
Purple Communications decision. In 2014, the NLRB ruled that employers should open their corporate email to union organizing by employees, except in very limited situations. The decision involving Purple Communications overturned a 2007 NLRB decision that found that corporate email systems are the employer’s property, so employers could ban all non-business email communications. There is still some confusion over the ruling, so it could be one that the NLRB targets for reconsideration sooner rather than later.
Specialty Healthcare decision. In August 2011, the NLRB adopted a new standard for determining appropriate union bargaining units that found that the NLRB would presume a union bargaining unit was appropriate. If an employer sought to argue that a unit should include more employees, the employer needed to show that employees in a larger unit share an “overwhelming” community of interest with those in the petitioned-for unit. This is likely to be rolled back.
Some of the most far-reaching actions by the NLRB recently have been around joint-employer standards.
In August 2015, in a ruling involving Browning-Ferris Industries, the NLRB found that in a relationship between two companies, an “indirect relationship” was enough to make both companies joint employers. The relationship between joint employers extends to temporary employees and franchisors and franchisees.
A Republican-controlled Congress could take action to pass legislation that revises the definition of a joint employer.
Under the Obama administration, the NLRB has aggressively challenged agreements between companies and workers that require employment-related disputes to be settled in arbitration. Appeals courts have been split over the NLRB’s decisions regarding mandatory arbitration agreements, with three circuit courts finding such agreements enforceable and two others agreeing with the NLRB, so the issue could possibly end up being resolved by the U.S. Supreme Court.
Federal contractor rules
Another Obama order — this one covering pay and workplaces — has also been partially enjoined by a preliminary injunction, issued by another district court in Texas before it was scheduled to take effect. The rule would require companies working on federal contracts to disclose information about labor violations when participating in the bidding and selection process.
While there will be many changes in the regulatory, legislative and enforcement environment under Trump, employers need to be aware that changes may not come about immediately. It’s likely that regulators will continue enforcement for the foreseeable future. However, over the next several years, many of the Obama-era administrative regulations may be subject to repeal and reversal.
Employers must be vigilant about the potential for enforcement actions and work carefully with legal and human resources experts until it becomes clear what the new administration will focus on and how regulations will be revised.
Richard D. Alaniz is senior partner at Alaniz, Schraeder, Linker, Farris, Mayes LLP, a national labor and employment firm based in Houston. His 30-year work history includes stints with the U.S. Department of Labor and the National Labor Relations Board. He is a regular writer on labor and employment law, and conducts frequent seminars to client companies and trade associations across the country. Questions about this article or requests to subscribe to receive Alaniz’s monthly articles can be addressed at (281) 833-2200 or firstname.lastname@example.org.
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