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Republican landslide alters legislative, regulatory landscape in 2015 and beyond

by Burton J. Fishman

The sweeping Republican victory in the midterm election promises to have a significant impact on employment legislation and regulations in the next two years. Because of the number of Republican governors and Republican-dominated state legislatures now in place across the country, the most immediate impact may be at the state level in the form of right-to-work laws, laws curbing the collective bargaining rights of public employees, and legal barriers to various forms of business or environmental regulation. This article, however, focuses on the federal landscape. 

The most immediate impact of the election is that the legislative agenda is now in Republican control in both the U.S. House of Representatives and the Senate. Mitch McConnell (R-Kentucky), not Harry Reid (D-Nevada), will decide what comes to a vote and when. Even though Republicans did not win a filibuster-proof majority in the Senate, they will now be in a position to block any presidential appointment and exercise greater oversight of government agencies through hearings and legislation in addition to controlling how budgets are spent. As a result, it is certain that during the lame duck session, Senator Reid will bring the attorney general nominee and all other pending federal nominees to a quick vote before the end of the 113th Congress.

Practical impact
Legislation. Although there have been many speeches about finding compromise positions from which to pass legislation, it remains to be seen if sufficient comity can be found to achieve that result. Possible areas of legislative movement include modifications to the Affordable Care Act (ACA), approval of the Keystone XL pipeline, and corporate tax reform. However, it is by no means certain that progress will be made in Congress.

The ideological divides of the past two decades have hardened to a point that undermines consensus-building. As for more controversial issues such as immigration reform, even if Senator McConnell is so inclined, he may have the same difficulties as Speaker of the House John Boehner (R- Ohio) in garnering a Republican majority. Further, President Barack Obama continues to have veto power to reject laws that threaten his legacy issues, such as those that might alter the core of Obamacare or further erode the power of organized labor.

Complicating matters in Congress is the looming presidential election. There are perhaps as many as six potential Republican candidates for president currently serving in Congress. The degree to which any of them will yield to McConnell’s or Boehner’s leadership on particular issues or will choose to follow an individual course in furtherance of personal election goals is unknown.

Oversight. With greater certainty, we can expect vigorous congressional oversight hearings of the U.S. Department of Labor (DOL), the National Labor Relations Board (NLRB), and the Equal Employment Opportunity Commission (EEOC) from both houses of Congress. Senator Lamar Alexander (R-Tennessee), who is expected to become chair of the Senate Committee on Health, Education, Labor and Pensions, will make sure the bill he recently introduced with Senator McConnell to reform the NLRB will be given a full hearing, even if he is ultimately unsuccessful in getting it passed. Those efforts are a likely precursor to hearings on the NLRB General Counsel’s positions on the legal status of franchise operations and the definition of “employee.” Representative John Kline (R-Minnesota), who is expected to remain as chair of the House Committee on Education and the Workforce, will continue to expand his oversight of not only the NLRB but also the Office of Federal Contract Compliance Programs (OFCCP) and other agencies of the DOL.

Executive Orders and proposed regulations. For his part, the president has pledged that he will continue to issue Executive Orders and push through regulations affecting the workplace and federal contractors. The promised executive action on immigration reform he issued will set the tone for relations with Congress for the entire 114th session. Because immigration reform is an unlikely legislative option, the Republican leadership will use the presidential initiative as a rationale for continued opposition to other presidential initiatives and as a campaign issue in 2016.

On other fronts, proposed DOL regulations overhauling the overtime exemption rules, proposed NLRB rules creating “quickie elections,” and an Executive Order providing for “blacklisting” of federal contractors are widely thought to be scheduled for spring 2015. Those initiatives would set the stage for appropriations riders to prohibit or restrict funding to enforce the new undertakings and will test the president’s willingness to repeatedly use his veto on large appropriations bills. Brinksmanship may return despite current assurances to the contrary.

Is it a sea change or a shifting wind?
Finally, despite the Republicans’ electoral landslide, this election may not have been a sweeping approval of a conservative agenda. When issues rather than people or parties were on the ballot, a different message was sent. Wherever they were put to a vote, increases in the minimum wage were approved. Marijuana was legalized in three more jurisdictions. A “personhood” amendment was defeated. Paid sick leave was approved in Massachusetts.

There is no doubt that the voters are fed up with the president and his party. But Republicans may have prevailed more because of what they are not rather than what they are. That creates an incentive for the new congressional leadership to move beyond gridlock. In 2016, the electoral map, so detrimental to Democrats in 2014, will shift entirely in the other direction. If voter dissatisfaction with Congress persists, the majorities may shift again.

Burton J. Fishman is of counsel to Washington, D.C.’s, Fortney & Scott, LLC, and is recognized as one of the nation’s leading authorities on workplace law. A former deputy solicitor of the U.S. Department of Labor, his experience extends to the full spectrum of employment and labor matters.