Elections have consequences: Changes in the employment arena are on the horizon

by Judith E. Kramer and Sean D. Lee

With the election of Donald Trump, there is no question that there will be upheaval in many areas of the law. Even in the discrete area of labor and employment law, the prognostications could fill many blog posts. In this article, we focus on the employment-related Executive Orders (EOs) issued by President Barack Obama that are fair game for revocation or alteration by the incoming administration and on upcoming changes in key personnel in agencies that enforce federal labor and employment laws.

EOs in peril?

The following chart lists the employment-related EOs issued by President Obama and the status of regulations issued to effectuate those orders:

There is certainly precedent for an incoming president to revoke EOs issued by his predecessor. The fate of a particular EO provides an instructive example.

On February 17, 2001, President George W. Bush issued EO 13201, Notification of Employee Rights Concerning Payment of Union Dues or Fees. Under the order, contractors were required to post so-called Beck Notices informing employees who were not union members that they could object to the use of union fees and dues for certain purposes and could be required to pay only their share of union costs related to collective bargaining, contract administration, and grievance adjustment.

On January 30, 2009, 10 days after taking office, President Obama issued EO 13496, Notification of Employee Rights under Federal Labor Laws. EO 13496 revoked President Bush’s EO 13201, ordered executive agencies to “revoke expeditiously any orders, rules, regulations, guidelines, or policies” implementing EO 13201, and required agencies to issue regulations mandating that contractors post notices of employees’ right to organize and exercise other rights under the National Labor Relations Act (NLRA).

On March 30, 2009, the U.S. Department of Labor (DOL) issued a final regulation revoking President Bush’s regulations under EO 13201. The revocation stated that because EO 13201 had been revoked, the authority for the regulations no longer existed and there was no need to engage in notice-and-comment rulemaking to revoke them. On August 3, 2009, the DOL published a notice of proposed rulemaking to implement President Obama’s EO 13496. The final regulations were issued on May 20, 2010.

We expect that once President-elect Trump is in office, he will revoke some or all of President Obama’s employment-related EOs. Of particular note is the Fair Pay and Safe Workplaces EO, also known as the “blacklisting” rule. The EO—and the regulations issued under it—has been particularly unpopular with the contracting community. Furthermore, on October 24, 2016—the day before the regulations were to take effect—a federal judge in the eastern district of Texas issued a preliminary injunction blocking the implementation of most parts of the regulations. It remains to be seen whether the U.S. Department of Justice will appeal the ruling. Even if it does, the Trump administration’s attorney general could drop the appeal, which would be made moot by the revocation of the underlying EO and regulations.

It should be noted that one aspect of the Fair Pay and Safe Workplaces EO regulations—namely, the paycheck transparency requirements—was not enjoined. The regulations require contractors to provide covered employees detailed wage statements regarding hours worked, overtime hours, rates of pay, gross pay, and additions to and reductions from gross pay. The requirements will take effect on January 1, 2017, for all new contracts and modifications and renewals of previous contracts.

Personnel decisions
It remains to be seen whom President-elect Trump will choose to fill key roles in the agencies that enforce federal labor and employment laws.

Major news outlets have reported that President-elect Trump’s shortlist for secretary of labor includes Victoria Lipnic, an Equal Employment Opportunity Commission (EEOC) commissioner since 2010, and Andrew Puzder, CEO of several fast-food restaurant chains.

Although we have heard no reports about who will be the next director of the Office of Federal Contract Compliance Programs (OFCCP), former Director Patricia Shiu stepped down in early November, and Dr. Marika Litras was named the agency’s inaugural director of enforcement. Similarly, it’s too soon to tell who will lead the DOL’s Wage and Hour Division (WHD), which is tasked with administering the Fair Labor Standards Act (FLSA), or the Occupational Safety and Health Administration (OSHA), which oversees working conditions.

The following charts summarize the current composition of the EEOC, the Occupational Safety and Health Review Commission (OSHRC), and the National Labor Relations Board (NLRB):

EEOC

OSHRC

NLRB

*Asterisk indicates chair.

Importantly, those individuals serve fixed terms and cannot be forced to leave, although they may resign.

Bottom line
President-elect Trump will have an opportunity to make a significant impact on the NLRB. Not only will he fill two vacancies on the Board with Republican nominees (who are widely anticipated to be employer-friendly), but he also will name a replacement for General Counsel Richard Griffin, Jr. (D), when his term ends in November 2017. We expect that under President-elect Trump, the NLRB will revisit many of the prolabor changes it made during the Obama administration.

Sean D. Lee is an associate with Fortney & Scott, LLC. He may be contacted at slee@fortneyscott.com.

Judith E. Kramer was an attorney with Fortney & Scott, LLC.

Want to learn more? Listen to BLR’s on-demand webinar The Trump Presidency: What Will Survive—and What Won’t—from the Obama Regulatory Agenda. During this in-depth on-demand webinar, Washington insiders David Fortney, Nita Beecher, and Leslie Silverman of Fortney & Scott, LLC will explain how employers can manage their regulatory requirements amid the transfer of presidential power. For more information, click here.