Welcome to the New Year. 2017 promises to be momentous year for employment lawyers—as it will be for lawyers of every stripe.
The election of Donald Trump as President can reasonably be expected to upend the current established order of things in the world of employment law. In fact, President-elect Trump's election campaign, in large measure, was founded on arguments and issues that are uniquely the province of labor and employment lawyers.
He promised to get tough on immigration. He adopted the Republican narrative of abolishing the Affordable Care Act. He overtly appealed to blue-collar white males, many of whom feel threatened by gains of minorities and women in the workplace and by what they view as inadequate efforts to protect against jobs flowing from the United States as a result of free trade agreements. And, he applauded the stonewalling of President Barack Obama's nomination to the U.S. Supreme Court.
Thus, immigration law, health care, and discrimination law are likely to be scrutinized anew by a Trump Administration, and by what will likely become, in relatively short order, a Republican-nominee dominated Supreme Court.
What employment-law related issues are likely to receive new attention?
The scope of whistleblower remedies available under federal laws such as the Sarbanes-Oxley and Dodd-Frank Acts, which expanded greatly under the Obama Administration, are likely to come under challenge. The Department of Labor's Administrative Review Board has steadily whittled away at Bush Administration-era interpretations that limited federal whistleblower remedies. The remedies available under the Sarbanes-Oxley Act, viewed as relatively toothless prior to Obama's election, have expanded markedly in the current Administration's DOL.
The President-elect has nominated as new chairman of the U.S. Securities and Exchange Commission a corporate partner at Sullivan & Cromwell, Walter J. Clayton. Is it likely that Clayton's SEC will take the same aggressive approach to whistleblower remedies provided by the Sarbanes-Oxley and Dodd-Frank Acts as has that agency under, for example, former federal prosecutor Mary Jo White, the current SEC chair?
President Obama's current Secretary of Labor is Thomas Edward Perez, a former civil rights lawyer, Democrat, and former Clinton Administration Assistant Attorney General for the DOJ's Civil Rights Division. It is probably not too far-fetched to guess that his views of labor law issues differ somewhat from those of the current nominee, Thomas Puzder, the CEO of a chain of fast-food restaurants that includes Hardees, and who was a major donor to the Trump campaign.
Puzder, as head of the DOL, will in turn appoint the members of that agency's Administrative Review Board, which issues final agency decisions in whistleblower, wage-and-hour, immigration, and a variety of other cases. He will also appoint the heads of OSHA and the DOL Wage-and-Hour Division, among other critical DOL agencies.
A significant open question is what Puzder's DOL will do about the recently enacted regulations that increased the minimum pay levels for exempt personnel under the Fair Labor Standards Act, and court challenges to those regulations.
President-elect Trump's nominee for Attorney General is Sen. Jeff Sessions of Alabama. He is a strong proponent of strict immigration enforcement, and his nomination for a federal judgeship in 1986 was rejected because of racially charged comments and actions. Sessions has reportedly referred to the American Civil Liberties Union and the NAACP as "un-American" for "trying to force civil rights down the throats of people."1
The NAACP recently orchestrated a sit-in, at Sen. Sessions' Mobile, Ala. office, of individuals protesting his nomination. NAACP President Cornell W. Brooks participated in the sit-in, which ended with Brooks' arrest along with the arrest of five others.
How likely is it that an Attorney General Sessions will appoint an individual with anything remotely like the background of Vanita Gupta, the current head of the DOJ's Civil Rights Division? Prior to her appointment, Gupta was a civil rights lawyer and the ACLU Deputy Legal Director, and was previously the NAACP Legal Defense and Educational Fund Assistant Counsel.
President Trump will also appoint the Chair, the Vice-Chair, and the three Commissioners of the Equal Employment Opportunity Commission (EEOC).
Thus, while President Trump will undoubtedly challenge the status quo on matters of free trade, taxes, foreign policy, and the environment, and will seek to move the status quo further to the right on abortion rights and perhaps even further on gun rights, he is also likely to be quite active on matters that directly pertain to employment and labor law.
The result of an expected rightward shift of federal laws and remedies affecting employees will be an increasing emphasis on state and local laws, which have in many cases provided remedies that go beyond those provided by their federal counterparts. Thus, while the new FLSA regulations appear to be on hold as a result of a federal lawsuit challenging their implementation, states such as New York have passed their own laws and regulations that provide similar and even greater remedies.
How will the Trump Administration respond to state challenges of this nature? Some who are studying the issue expect that a Trump Administration will challenge these laws as being preempted by federal law. Such a challenge to states' rights may run counter to the long-held conservative view of the primacy of states' rights under the 10th Amendment to the Constitution—but this historical position may give way to new priorities, just as have prior "conservative" views regarding issues such as sexual impropriety, a serious bugaboo of the Republican party during the Clinton era, but not so much during the Trump campaign.
Meanwhile, there are several significant labor and employment cases pending before the court this term. A series of cases involves the enforceability of class action waivers contained in mandatory arbitration provisions under the Federal Arbitration Act and the National Labor Relations Act.2
Another case represents an opportunity for the Court to address the scope of presidential authority to make appointments. The D.C. Circuit concluded that former Acting NLRB General Counsel Lafe Solomon had served in violation of the Federal Vacancies Reform Act because he continued in that role after being nominated to a full term in the same position. An affirmance of the appellate court's decision could jeopardize the legitimacy of a number of key cases in which Solomon participated.3
The Supreme Court is also slated to resolve a circuit split concerning the standard of review applied to district court decisions to either quash or enforce subpoenas issued by the EEOC. The Ninth Circuit applied a de novo review in the underlying case, while eight other circuits review orders on these subpoenas deferentially.4
President-elect Trump is expected to bring with his Administration a dramatic shift in labor policy. He will likely rescind President Obama's Executive Order promoting project labor agreements (PLAs), otherwise known as "pre-hire" collective bargaining agreements, and re-issue the Bush-Era Executive Order which banned requiring or prohibiting contracting bidders to enter into or adhere to agreements with one or more labor organizations.
A Trump Administration is also expected to strongly support right-to-work laws, a position that was included in the 2016 Republican Party Platform.
The NLRB's so-called "quickie election" rule, implemented in 2015, shortens the time between a union's filing of a representation petition and the holding of an election. Widely perceived as a pro-union measure, the rule makes it harder for employers to oppose representation in the condensed timeframe. Under a Trump Administration, the rule would be more vulnerable to attack.
Members of the LGBTQ community openly wonder how a Trump Administration and its appointees will respond to the Supreme Court's decision in Obergefell v. Hodges,5 holding that the fundamental right to marry is guaranteed to same-sex couples by both the Due Process Clause and the Equal Protection Clause of the 14th Amendment to the U.S. Constitution.
President-elect Trump has stated that gay marriage is "the law of the land", but there are many ways in which a Republican Congress can erode related principles.
The EEOC has identified protecting the rights of LGBT employees as a top priority. The EEOC considers sex discrimination to include failing to hire an applicant because of their transgender status or gender transition, denying an employee access to a restroom corresponding to the individual's gender identity, and denying available spousal health insurance benefits to same-sex spouses.
While courts are starting to agree with this interpretation, there is no federal law codifying that stance.
The Employment Non-Discrimination Act (ENDA), which would prohibit employment discrimination on the basis of sexual orientation or gender identity, has been introduced over the years, and even cleared the Senate in 2013. Even if ENDA were to be reintroduced during the Trump Administration, its chances of passage are slim.
President Trump will undoubtedly get tougher on immigration reform. Employers can expect the Department of Homeland Security's Immigration and Customs Enforcement (ICE) to ramp up enforcement of employment verification documentation. He will focus on individuals who overstay their visas.
He will also very likely seek to restrict legal immigration. Sen. Sessions, as Chair of the Senate Judiciary Committee's Immigration Subcommittee, has proposed restricting key visa categories commonly used by U.S. employers. Among potential reforms are changes to the H visa category by elevating current prevailing wage (PW) requirements, and restrictions on "green card" processing, by stopping all employer-sponsored green card issuance.
President-elect Trump has not supported the Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans (DAPA), two initiatives issued that seek to protect certain types of aliens from deportation and to permit them to work lawfully in the country. Numerous states challenged DAPA and DACA, and a Texas court has preliminarily enjoined their implementation while that lawsuit plays out. President-elect Trump is not expected to defend either action.
The President-elect purports to be a populist, and so it is by no means clear that he will pursue without question policies that have been embraced as reflecting Republican dogma. Nevertheless, it is to be expected that a President Trump will reverse many of President Obama's policy initiatives. How he goes about doing this will undoubtedly make for four very interesting years.6
1. "What Are You Hiding, Jeff Sessions?," New York Times, Jan. 9, 2016, available at http://www.nytimes.com/2017/01/08/opinion/what-are-you-hiding-jeff-sessions.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-left-region®ion=opinion-c-col-left-region&WT.nav=opinion-c-col-left-region&_r=0.
2. See Ernst & Young v. Morris(16-300); Epic Systems v. Lewis (16-285); NLRB v. Murphy Oil USA (16-307); Patterson v. Raymours Furniture Company (16-388).
3. National Labor Relations Board v. SW General (15-1251)
4. McLane Co. v. EEOC (15-1248)
5. 576 U.S. ___ (2015)
6. Some of the materials in this article draw upon the excellent research found in the Littler Workplace Policy Institutes Post-Election Report (November 2016), available at https://www.littler.com/files/wpi_post-election_report_3.pdf. For a fuller discussion of the issues identified in this article, and additional related issues, please see that report.
Philip M. Berkowitz is a shareholder and U.S. co- chair of Littler Mendelson's international law practice. This article is reprinted with permission from the January 11, 2017 issue of the New York Law Journal.© ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.