With the election of Donald Trump as the 45th president of the United States, the business community can almost certainly look forward to 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.
Over the last eight years, the Obama administration has made a series of changes that have led to more economic and regulatory burdens for businesses while often strengthening unions. Many of those changes could be undone, rolled back, or at least revised.
Those might include:
• White Collar Salary Exemption
On Nov. 22, a federal judge blocked a U.S. Department of Labor rule that would have taken effect on Dec. 1 and extended mandatory overtime pay to more than 4 million salaried workers. U.S. District Judge Amos Mazzant of the Eastern District 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 Department of Labor has appealed the ruling to the Fifth Circuit Court of Appeals.
• The Persuader Rule
On Nov. 16, another federal judge in Texas issued a permanent nationwide injunction blocking the so-called “persuader rule.” The rule, which the Department of Labor put forward as part of the Labor Management Reporting and Disclosure Act of 1959, 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 the Northern District of Texas followed a preliminary injunction that he issued in June. The injunction has already been appealed to the Fifth Circuit.
• Changes by the National Labor Relations Board
Over the last eight years, the National Labor Relations Board (NLRB) has made significant rulings that have often been pro-union. Among the rulings that could be targeted for change:
Purple Communications Decision
In 2014, the NLRB ruled that employers could 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 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 Health care Decision
In August 2011, the NLRB adopted a new standard for determining appropriate union bargaining units: 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.
Joint Employer Rulings
Recently, some of the most far-reaching actions by the NLRB 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, franchisors, and franchisees.
Once Obama is out of office and the threat of his veto disappears, a Republican-controlled Congress could take action to pass legislation that revises the definition of a joint employer.
Under Obama, 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 Circuit Courts agreeing with the NLRB. The issue could end up being resolved by the U.S. Supreme Court.
While there will be many changes in the regulatory, legislative, and enforcement environment under President 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 a Trump administration will focus on and how regulations will be revised. There is no doubt that most employers are looking forward to less regulation and less red-tape.
Richard D. Alaniz is senior partner at Alaniz Schraeder Linker Farris Mayes, L.L.P., a national labor and employment firm based in Houston. Alaniz has been involved in labor and employment law for over 30 years, including stints with the U.S. Department of Labor and the National Labor Relations Board.
He can be reached at 281-833-2200 or [email protected]