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President Trump’s Effect on the Workplace

When President-elect Trump takes office, what can employers expect? What will be the effect of his presidency on the workplace and workforce? The probabilities and possibilities range from minor to major changes, with both short and long-term effects.

Supreme Court

The Trump presidency will have long-term, pro-employer effects. Trump will present a conservative nominee to fill the opening to replace Justice Scalia. Justice Anthony Kennedy, who fluctuates between conservative and moderate, will revert to his role as the 5th vote to swing tight cases. Justice Kennedy is 80 years old. Two other liberal justices, Justice Breyer and Justice Bader Ginsburg, are 78 and 83 years old, respectively. There is a real possibility that Trump may make more than one conservative appointments, particularly if he serves two terms.

The expected employment matters before the SCOTUS will include the following:

  • Arbitration agreements
  • Waivers of class action litigation
  • Wage and hour laws
  • Expansion of Title VII
  • Immigration programs
  • Union fees
  • NLRB and other administrative agency powers

While it would seem that employers are in a position for a string of overwhelmingly pro-employer decisions, a word of caution: Trump wants to appoint justices similar to Justice Scalia. The decisions of Justice Scalia were not universally pro-employer; in fact, Justice Scalia wrote the Court’s decision which interpreted Title VII of the Civil Rights Act of 1964, and held that same-sex sexual harassment creates a cause of action for sex discrimination. Nonetheless, it is likely that the cases involving arbitration agreements and waivers of class action will be decided in favor of employers.

Overtime Rules

The Trump presidency may not be able to stem the implementation of overtime rules, but he will likely carve out exceptions. The new FLSA overtime regulations are set to be implemented on December 1, 2016. As reported by the Daily Labor Report, David Malpass, senior economic advisor to Trump, told reporters after an October 20 National Economists Club discussion that “Trump has said that’s a harmful regulatory change.” He added, the “regulation is very harmful to job creation because it forces companies to rethink whether they’re going to hire people, and the companies around the country begin reducing their hiring in anticipation of that December 1 deadline.” Malpass would not commit the administration to repealing the entire regulation.

Whether the overtime rule goes into effect on December 1 depends upon the decision of a federal court in Texas where an injunction proceeding is pending. Oral arguments are on November 16. If the injunction fails and the rules go into effect, Trump can rescind the rules by beginning the notice-and-comment administrative rulemaking process all over again. This would leave the rules in effect for years while the rulemaking process runs its course.

Instead, look for Trump to create small-business exemptions to the FLSA overtime rules. While he discussed the small-business exemptions during his campaign, he has not presented a formal plan.

NLRB

Everything is in play before a Trump appointed National Labor Relations Board (“NLRB”). The current Board has two (2) pro-union members, and one (1) pro-employer member. The lone conservative has been, at times, tenaciously critical of the liberal majority. However, those criticisms have languished in dissenting opinions. A full NLRB has five (5) members. Trump can immediately appoint two (2) pro-employer voices to control the majority. What would that mean?

  • “Concerted protected activity” interpretations will be scaled back to reality. The “concerted protected activity” doctrine is the gateway by which NLRB has sanctioned both union and non-union employers, particularly regarding Employee Handbooks and Social Medial Policies.
  • Clients of temporary staffing companies and other joint employers can begin to relax because the expansion of “employee status” will be restrained. The current Board has expanded “employee status” to impose collective bargaining obligations on non-union employers with temporary or joint employees.
  • The determination of “supervisory status” for collective bargaining purposes has also been significantly modified. The pro-union Board has narrowed the definition of “supervisor” and thereby expanded collective bargaining units to include supervisors who previously fell outside of the terms of the National Labor Relations Act. A pro-employer Board will revert to the broader, employer-friendly evaluation of whether supervisors hold collective bargaining rights.
  • The “Blacklisting Rules,” which were created by executive order, will be revoked and their requirements on government contractors to publicly disclose the past three (3) years of any violations of 14 federal workplace laws will be eliminated.
  • Quickie election rules may be curtailed. This would provide a further drop in union participation.

A word of caution, however, is that Trump’s success in the election was due, in part, to the votes of union members. Also, in his private business, he has maintained friendly relationships with unions. It would not be surprising for Trump to provide some beneficial policies to organized labor. Also, keep in mind that these are relatively short-term effects and will remain in place until pro-union NLRB changes them all.

Restrictive Covenants

Based upon Trump’s business background, it is highly unlikely that he will endorse Obama’s recent “call to action” for states to enact laws to diminish the power of non-competes and other restrictive covenants.

OSHA

Trump promised to remove regulations which impede business. OSHA’s electronic reporting rule, which takes effect on July 1, 2017, is an unnecessary burden on employers since they already track injury and illness information on OSHA 300 logs. The electronic reporting rule is a bureaucratic imposition on employers to post injury and illness information for public viewing. It seems like the exact type of regulation Trump will reject.

Likewise, the OSHA penalty increases are immediate, onerous, and will continue to rise. The OSHA maximum penalty requirements will also be a target.

Paid and Unpaid Leave

Trump promised six weeks of paid maternity leave for new mothers. Also, during the first presidential debate, Trump agreed with Hillary Clinton’s proposed expansion of the Family and Medical Leave Act (FMLA). However, with the dramatic increase in local government activism regarding leave, the expansion of leave rights on a federal level is not a battle Trump would need or want. Vice President Pence has repeatedly voted against Democrat efforts to expand FMLA. GOP lawmakers have historically opposed expanded leave as restrictive on business and an improper expansion of government. It is unlikely that a bill to expand leave will be presented to Trump.

Workforce Enforcement of Immigration Laws

This is not about a wall. Trump supports the mandatory nationwide use of E-Verify by all employers. E-Verify is an employment eligibility verification system authorized by Congress that is used by state and local employers, as well has many private employers. Congress will likely present Trump with a bill to impose mandatory E-Verify program requirements on employers.

This list is non-exhaustive and doesn’t even touch upon ACA. Many of the effects will be fact-specific and will involve the interpretation, application, guidance and enforcement of federal laws. Remember – Trump will be appointing federal judges and the new head of the EEOC

We will keep you informed of all developments as they progress. For any specific questions or clarification, please contact the Labor and Employment Team – John Childs at (330) 253-1946 or Jeffrey Miller at (216) 287-5265.

CLIENT ALERT: CMS Unveils New Price Transparency Rules

On November 15th, the Trump administration put forth two long-anticipated rules that increase price transparency for both hospitals and insurers. These rules are a step toward price transparency across the health care industry and are in furtherance of the Trump administration’s goal of empowering healthcare consumers. The finalized rule and the proposed rule strive to make pricing information more available to healthcare consumers so they can make informed health care decisions. Through price transparency, consumers should expect to see a reduction in healthcare costs in the future. In order to provide hospitals enough time for compliance with the new requirements, the effective date of the finalized rule is January 1, 2021. The comment period for the proposed rule is open until January 14, 2020.

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CLIENT ALERT: U.S. Department of Labor, Wage and Hour Division Sets Enforcement Record

In advance of Halloween, the U.S. Department of Labor announced the results of its Wage and Hour Division's (WHD) recovery efforts for Fiscal Year 2019, and it reads like a horror story. The good news to lull you into a feeling of safety was that the 18,844 Complaints Registered was the fewest amount over the past 22 years or published records.

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OHIO SUPREME COURT WILL HEAR CASE INVOLVING CLASS ACTION FOR ALLEGED HIPAA VIOLATIONS: Will Ohio Recognize a Biddle Claim in a Post-HIPAA World?

CLIENT ALERT: Proposed New Rules to both the Stark Law and the Anti-Kickback Statute

On October 9, 2019, as part of the “Regulatory Sprint to Coordinate Care,” the Centers for Medicare and Medicaid Services (“CMS”), along with the US Department of Health and Human Services, Office of Inspector General (“OIG”), proposed new rules to both the physician self-referral law (“Stark Law”) and the Anti-Kickback Statute (“AKS”). Rule changes are aimed at fostering innovative arrangements for coordinating care consistent with a shift to a value-based system. Both proposed rules are expected to be published to the Federal Register on October 17, 2019. Public comments are due 75 days after publication.