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What a Trump Presidency May Mean for US Employers

HR Column
The opinions expressed in this article of those of the author alone and not ACC.

T ensions remain high following one of the most contentious elections in recent memory. European responses resulted in a mix of cautious congratulations, expressions of uncertainty, and declaratory reminders of historical allegiance by world leaders. China seemed delighted at the prospect of a protectionist United States, while Russia expressed interest in restoring ties with the country. On November 8 and 9, the Canadian immigration website crashed under heavy traffic as some Americans contemplated a move to Canada, while others considered a “Trexit” to Europe.

Amidst the drama, lawyers still have to get up, go to work, and protect their clients. What lies ahead for employment practitioners and how do we prepare for potential changes in the legal landscape?

Supreme Court

Republicans blocked US President Barack Obama’s attempts to fill the Supreme Court vacancy left by the late Justice Antonin Scalia, age 79, in February. Note that Justices Kennedy, Ginsburg, and Breyer are 80, 83, and 78 respectively, and there are many judicial vacancies on the federal bench. President-elect Trump’s short list upholds his promise to select conservative judges. His appointees will be more likely to preserve strict class action certification standards and more conservatively interpret issues such as the Americans with Disabilities Act, union agency shop fees, the reach of Title VII, immigration programs, wage and hour law, and administrative agency powers.

Affordable Care Act (ACA)

US President-elect Trump’s ACA position seems to have migrated from repeal to revision. Alternatives such as market-based universal coverage, private healthcare savings accounts, and insurance plans across state lines have been suggested, but no Republican consensus on a viable ACA alternative has emerged. For now, prudent employers will stay the course.

Diversity and inclusion

Diversity and inclusion are fundamental to corporate innovation and profitability. Diversity programs are not likely to be affected by the new administration, as they are driven less by federal policy and more at the corporate level by market forces, customer and labor demographics, and profitability considerations.

However, Trump’s widely criticized rhetoric, sometimes referred to as “misogynistic” or “racist,” has seemingly resulted in an increase in post-election hate crimes, suggesting that we may see an increase in workplace harassment and hostile environments despite the president-elect’s admonition to offenders to “stop it.”

Dodd-Frank Act

US President-elect Trump promised to overhaul the Dodd-Frank Act of 2010 on grounds that it discourages bank lending and hampers job creation. Partisan battles aside, such a repeal might increase congressional and Securities and Exchange Commission (SEC) reliance on the Sarbanes-Oxley Act of 2002 whistleblower provisions, increase emphasis on corporate self-regulation, and decrease SEC enforcement actions regarding confidentiality agreements.

EEO-1 Pay Data Reporting

Beginning early 2018, employers and federal contractors with 100 or more employees must report detailed information on employees' total wages and hours worked. Rescission must comply with the Administrative Procedure Act. Even with quick executive action after January 20, 2017, employers should plan to comply with impending requirements for some time.  

Equal pay may remain a hot topic, given Ivanka Trump’s representation of her father’s administration’s commitment to closing the gender gap. Many states have recently enacted equal pay laws and we are likely to see litigation highlighting this as an ongoing issue in the workplace.

Fair Pay, safe workplaces, and notification

To address unsafe working conditions and unfair pay practices, US President Obama signed Executive Order 13673, requiring government contractors to report labor law violations during the pre-award bidding stage and post-award violations found by legal tribunals. Executive Order 13201 requires certain federal contractors to inform employees of their rights under the National Labor Relations Act (NLRA). Employers have opposed these mandates, and the new administration may repeal these executive orders or significantly reduce their scope.

Federal agencies

New leadership in departments, like the Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC), Office of Federal Contract Compliance Programs (OFCCP), and the filling of two vacancies on the National Labor Relations Board (NLRB), should result in more employer-friendly regulation and less scrutiny on employer practices.

Watch for changes to the EEOC’s enforcement activity, as well as its position on the Americans with Disabilities Act, Pregnancy Discrimination Act, and Title VII’s application to Lesbian, Gay, Bisexual, Transgender issues.

The NLRB may decline to extend Weingarten rights to non-union workplaces, or to make employee misclassification a separate violation of the National Labor Relations Act (NLRA). The new board may also revisit recent rules and decisions, including those covering:

•    Joint employers;
•    Quickie elections;
•    Composition of bargaining units and inclusion of temporary workers with regular workers;
•    Class action waivers;
•    Definition of protected concerted activity; and,
•    The status of college/university adjunct faculty, graduate students, and student athletes.

With respect to the Occupational Safety & Health Administration (OSHA), Congress, which was already controlled by the Republicans, enacted the 78 percent penalty increases that became effective in August 2016. These are unlikely to change. While a new head of OSHA should be more employer-friendly, inspections typically increase under Republican administrations. Expect more consultation over enforcement, but since many OSHA employees won’t change, don’t expect dramatic position changes.

Immigration and global footprints

Who can forget the fights over immigration? US president-elect Trump promised to repeal many of US President Obama’s executive orders, including those on immigration.

Expect to see increased enforcement actions, including both I-9 audits and raids by the US Immigration and Customs Enforcement agency. In November 2014, US President Obama announced a series of executive orders to crack down on illegal immigration, by prioritizing deporting felons not families, and requiring certain undocumented immigrants to pass a criminal background check and pay taxes in order to temporarily remain in the United States without fear of deportation. Executive orders passed under that initiative, such as the Deferred Action for Childhood Arrivals (DACA) and the Deferred Action for Parents of Americans (DAPA), could be repealed.

During his campaign, Trump promised to mandate E-Verify and alter temporary work visa programs (such as H1-Bs), which allow employers to sponsor highly skilled foreign workers. Expect issuance of visas to certain “high risk” countries to be suspended pending development of “extreme vetting” mechanisms.

How these promises will be executed and what countries will make the “high risk” list is unclear, but US employers can expect greater difficulty in hiring and retaining workers from outside the United States. For multinational employers, global mobility may become more difficult if increased US restrictions result in reciprocal treatment of US nationals attempting to enter foreign nations. Perception of a more nationalistic United States may also increase difficulty with negotiations in countries utilizing works councils, and decrease deference to the United States in dealings with foreign vendors, suppliers, and customers. Already some auto makers have begun to worry about the impact of increased tariffs.

Parting thoughts

Mixed results are ahead. On one hand, a Republican president and Republican controlled House and Senate (albeit by a slight majority in the Senate) should bode well for employers, as will conservative court appointments. More conservative legal interpretations should result in greater employer discretion on various issues, particularly under Title VII and the NLRA.

On the other hand, OSHA inspections may increase, and companies engaged in import and export trade will likely experience increased tariffs intended to discourage foreign enterprise, prevent employing and retaining foreign talent, and protect against potential backlash if other nations react negatively to more protectionist US policies.

For now, employers should remember that campaign promises are just that — promises, which, even if pushed hard in their original form, depend on governmental bureaucracy, compromise, and time, to come to fruition. Put your sneakers on and ear to the ground.

Sidebar References

What Trump wants to do in his first 100 days in office
Top 10 Workplace Law Developments to Expect from the Trump Presidency
How Changes to the Fair Labor Standards Act will Impact Employment Practices
9 Tips for Accommodating Transgender Employees in the United States
Top 10 Economic Facts of Diversity in the Workplace
Why Trump Should and Shouldn’t Dismantle Dodd-Frank

About the Author

Spiwe PierceSpiwe Pierce is general counsel of ChristLight Productions Ltd., LLC and a member of the ACC employment & labor, small law department, and information governance sections.

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.