Employment Law 2017: Potential Expectations in a Year of the Unexpected

So a New Year is fast approaching – and with it, a new administration in Washington.  A lot of questions are being asked about what to expect in the world of labor and employment law.  While no one really knows until it actually happens, for what they’re worth in that world of the unexpected, here are some thoughts from attorneys around our law firm about some of the primary areas of employer concern.

Happy holidays and a (hopefully) happy and prosperous New Year to all!

Litigation (By Randy Loftis and Ken Carlson, Winston-Salem office) From a litigation perspective, the largest impact will be the appointment of judges. There will obviously be new Supreme Court justices, with one seat open already, and the strong possibility that some additional justices will retire during a Trump term. Although the impact in the federal district courts and U.S. Courts of Appeal will not be immediate, there could be a significant impact over time. Long-term, it may be easier for employers to get summary judgment and other more employer-friendly rulings.  We might also expect a more disciplined EEOC that focuses more on compliance and working with employers to correct any unlawful discrimination, harassment and retaliation in the workplace, rather than continuing its highly adversarial path of employment law enforcement that in many ways pushes the proverbial envelope with new and novel theories of discriminatory treatment.

(By Maureen Knight, Metro Washington, DC, office) A Trump Administration will have an impact through federal judicial appointments. Although Mr. Trump supports LGBT rights, it remains to be seen whether he will support federal legislation expressly covering LGBT rights.

Trade Secrets/Unfair Competition (By Ken Carlson, Winston-Salem office) Especially given President-Elect Trump’s focus on promoting U.S.-based business and industry, we can likely expect even greater attention to trade secret and unfair competition concerns – in particular, economic espionage by foreign companies (and governments).  While state trade secret statutes and covenant not to compete laws will likely still dominate the litigation, the federal Economic Espionage Act, Theft of Trade Secrets Clarification Act, Foreign and Economic Espionage Penalty Enhancement Act, and the new 2016 Defend Trade Secrets Act could become major players on the field of unfair competition law in federal courts.

Wage and Hour (By Jim Coleman, Metro Washington, DC office) With a Trump Administration come January 2017, I think we can expect to see a much more employer-friendly Department of Labor and Wage and Hour Division. The big question will be what a Trump Administration and Trump-appointed Secretary of Labor may ultimately do with the overtime exemption regulations under the Fair Labor Standards Act, which were set to take effect on December 1 but have been temporarily enjoined by the courts.  If a Trump Administration wishes to rescind or modify the new regulations, it will have to do so in compliance with the Administrative Procedure Act – so stay tuned.

A Republican president and Republican control of both houses of Congress – albeit only a slight majority in the Senate – should bode well for employers, and certainly for filling the current vacant seat on the Supreme Court, and potential replacements over the next four years. President-Elect Trump will have a great opportunity to affect the make-up of the Supreme Court, which in turn, can affect the outcome of many issues of significance to employers.

I would urge employers not to put on the lampshade hats and break out the champagne just quite yet, as the federal government is a behemoth, and even more so after the last eight years. It will take time to reverse course, and employers will need to be patient.

Immigration (By Penni Bradshaw, Winston-Salem office) An estimated 5 percent of the current U.S. workforce consists of undocumented workers. Hundreds of thousands of young people have applied for and received Deferred Action for Childhood Arrivals, which permits them to receive Employment Authorization Doctrine work cards. So President-Elect Trump’s promises to take steps to remove (deport) the undocumented and do away with the DACA will obviously have an impact on employers. His stated intention to make E-Verify mandatory for all employers would make it more difficult for undocumented persons to be hired, but would also probably mean that some employers cannot hire all the workers they need. The impact of mandatory E-Verify could be particularly acute for employers in agriculture.

What remains to be seen is how Mr. Trump might strike a balance between his “they are taking our jobs” rhetoric and businesses’ need for foreign talent, especially in STEM fields, as current quotas for the H-1B professional work visa program have prevented many employers from being able to retain their foreign workers.

(By the Immigration Practice Group) It is also hoped that the U.S. Immigration and Customs Enforcement and the Office of Special Counsel will be instructed to ease up on employers who make minor paperwork or inadvertent procedural errors. We have routinely seen ICE fines in the hundreds of thousands of dollars in cases where there were errors on I-9s but not a single undocumented worker was found.

Labor Relations (By Cliff Nelson, Atlanta office) The National Labor Relations Board has lurched to the left under the Obama Administration, including the areas of quickie elections, employee handbook policies, protected concerted activity, and “micro” bargaining units. President-Elect Trump will have the opportunity to appoint a majority of Republican Board members, which should stop the “lurch” dead in its tracks. We also hope that this means the “Persuader Rule” is not only dead, but buried as well. In other words, we hope to see the U.S. Department of Labor in a Trump Administration abandon its appeal of the preliminary injunction that was issued this past summer, barring the Rule from taking effect.  That very well might happen now that the same federal judge in Texas has recently issued a permanent injunction prohibiting the Rule, which amazingly enough would have required employers, labor consultants, and attorneys retained by employers to report detailed financial and other information with respect to broadly-defined labor “persuader activity” related to union campaigns and activity in the workplace.  Among other legal problems such as constitutional free speech and association rights, the costly regulation would have also intruded on the time-honored and nearly sacred attorney-client privilege, and enjoining its enforcement can only be a positive development for companies and their employees facing ever-increasing levels of competition.

(By Zan Blue, Nashville office) Sixty million voting employees want something to be fundamentally different. Some years ago an employer won a union election by a ratio of about 2-1. The company’s president, considering the results at 2 a.m., concluded a third of the employees were so unhappy with their employer that they were willing to take a chance on something they didn’t understand. He didn’t celebrate the win—he focused on the need to address the things that brought the company to the edge. He was wise.

Sixty million voting employees want something to be fundamentally different. Most basically, these voting employees want their needs and wants considered when decisions are made by the powerful. Many, if not most, probably don’t have specific things in mind because collectively they know they were not voting on specific things. Each person considering the election results will see something different. Consider all the facts you know, all of them, and find out what motivation explains all the facts in the most simple and clear way. Be thoughtful. Make time to think about this. What do the employees in your organization want to be different, and what will you do about it?

(By David Phippen, Metro Washington, DC, office) Enough is enough. Eight years of deliberate attack on employers and business models systematically destroying employment opportunities of and for millions of Americans will be coming to an end. President-Elect Trump will bring sanity and fact-based employment and labor law enforcement and regulation instead of the cognitive distortion of reality, the “us against them” mentality, and the routine denial of basic laws of economics. The everyday prosecutorial attack on employers that has negatively affected workers for the last eight years will be replaced by a more balanced, even-handed, common-sense approach, consistent with the laws as written, and not as the regulators wish they were written. The increased job opportunities created by Mr. Trump’s policies can be expected to rain economic gains down on labor and management alike, which organized “big labor” will be forced to begrudgingly accept. In a Trump Administration, the federal government, employers, and workers will have the incentive to work in partnership to make things better.

Affirmative Action/OFCCP Compliance (By Cara Crotty, Columbia, SC, office) Will President-Elect Trump take some pressure off federal contractors? For the past eight years, as President Obama was unable to push much of his legislative agenda through Congress, federal contractors have faced an onslaught of increasing regulatory burdens and an aggressive enforcement agency. Will the positions of the Office of Federal Contract Compliance Programs soften under a Trump Administration?

* Fair Pay & Safe Workplaces – The Executive Order and its regulations requiring contractors to report labor law violations when bidding on government were recently enjoined. Given Corporate America’s steadfast opposition to and the cost of these mandates, the new administration may either abandon efforts to enforce this or significantly change the scope to reduce the impact on contractors.

* Paid Sick Leave – Although Mr. Trump has voiced support for paid maternity leave, his administration may determine that the new sick leave rules are overly expansive and exceedingly difficult to administer. A complete rescission may be too much to hope for, but perhaps a modification of the recordkeeping and tracking requirements could be in the works.

* Pay Transparency – Don’t expect any changes here! Not controversial, and largely in line with existing law anyway.

* Sex Discrimination Regulations and LGBT Non-Discrimination – Again, I would not expect significant changes here. Mr. Trump has espoused general support for LGBT rights, and most of the OFCCP’s rules are consistent with the stance taken by the Equal Employment Opportunity Commission anyway.

* New Regulations Implementing Section 503 and VEVRAA – Don’t hold your breath waiting for these to be rolled back. Who’s not in favor of hiring more veterans and individuals with a disability?

* TRICARE Jurisdiction – It is possible that a new Secretary of Labor may decide to accept Congress’ interpretation of the National Defense Authorization Act and decline to assert jurisdiction over TRICARE network providers.

* EEO-1 Reporting – Employers and federal contractors will be required to report detailed information on employees’ total wages and total hours worked. Given Mr. Trump’s (and Ivanka Trump’s) clearly articulated position on equal pay, this may be here to stay.

Class Action Litigation (By Maureen Knight, Metro Washington, DC, office) From a class action perspective, I think the biggest and most immediate impact of a Trump Administration will be the Supreme Court nominees and whether they will be appointed in time to affect the split in the U.S. Courts of Appeal regarding the enforceability under the National Labor Relations Act of class waivers in arbitration agreements.

(By Steve Moore, Los Angeles office) Focusing just on class action litigation, Mr. Trump will have the power to appoint the next justice to the Supreme Court and restore a conservative majority that will affect the landscape of labor and employment law for years to come. In recent times, the Supreme Court has issued a series of decisions that have made it difficult for the private plaintiffs’ bar to file class and collective actions. These decisions have included, for example, Wal-Mart v. Dukes (which made it more difficult to certify an employment class action) and AT&T Mobility v. Concepcion (which found that the Federal Arbitration Act preempts state laws that invalidate class action waivers in arbitration). At one of the presidential debates, Mr. Trump said that he would appoint someone “in the mold” of the late Justice Antonin Scalia.

Workplace Safety (OSHA) (By Bill Principe, Atlanta office) The 78 percent increase in penalties that went into effect on August 2 was the result of an act of Congress, which was already controlled by the Republicans, so that seems unlikely to change. There will be a new head of OSHA who will obviously be more employer-friendly, but typically in Republican administrations there are more inspections conducted than under Democratic ones.

The Agency will go back to promoting consultation, as opposed to enforcement. Most of the people who run the Agency are obviously people who have been put into their positions in the last eight years. They are unlikely to suddenly change their mindset just because there’s a new President.

There will probably be fewer if any new standards, and it’s possible that some of the ones that are being challenged or are close to being promulgated will be buried, like the new anti-retaliation regulation that limits post-accident drug testing and safety incentive programs. There’s also a regulation in the works that would try in essence to change the statute of limitations to allow more expansive enforcement of recordkeeping violations, and one that would require OSHA 300 Log data to be sent to the Agency on an ongoing basis throughout the calendar year.

In sum, there may be a substantive difference with respect to new standards, and the day-to-day operation of the Agency may appear to be a somewhat more hospitable to employers. That said, I would not expect any dramatic changes.

(By Pat Tyson, Atlanta office) In addition to what Bill has said, I would expect for Voluntary Protection Programs to get much higher priority under a Trump Administration.

This article was written by Ken Carlson of Constangy, Brooks, Smith & Prophete, LLP