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In what some have called the most surprising election of our era, Donald Trump is expected to win the electoral college vote (306-222) to become our next President (although he lost the popular vote by almost one million votes to Hillary Clinton).  In the Senate, it appears that Republicans will lose only two Senate seats (although there were many more Republican senators who stood for re-election) so that the new count is expected to be 52-48.  In the House, although Republicans were expected to lose seats, it appears they will lose only approximately six seats, with the new count looking something like 240-195. 

Republican gains were even greater at the state level.  Republicans gained three governors, bringing their total to 33.  The GOP also picked up majorities in several state legislatures, so the total now stands at 66 for Republicans and 30 for Democrats.

The President-Elect ran an unorthodox campaign, setting a tone most considered as populist, and rejecting traditional Republican support for free trade, immigration, and a limitation of entitlements.  President Obama in the week following the election characterized Donald Trump as one who will be driven by pragmatism, not ideology, as President.  He stated that the President-Elect is coming into office with fewer set, hard-and-fast policy prescriptions than prior presidents, describing this characteristic as something that "can serve him well, as long as he’s got good people around him."

Many commentators suggested the surprising election results were based on a desire of the electorate for change, with prospects for a better economy and more jobs.  A big change from the Mitt Romney loss to President Obama was the fact that so many working class persons swung over to the GOP, with commentators suggesting their change may reflect their belief that trade and immigration had hurt domestic employment.  The President-Elect even made slight gains among minorities, including African-Americans and Hispanics.

Trump has said very little about the labor and employment policies his Administration will promote.  He has advocated "building a wall" to keep out illegal immigrants, but his statements about illegal immigrants already in the country have not always been consistent.  He has released a paid maternity leave plan and indicated there will be no cuts in Social Security.  Of course, Trump has also promised to amend or repeal ObamaCare, although he has recently softened his position somewhat on this issue by favoring keeping the prohibition against insurers denying coverage because of pre-existing conditions and the provision that allows parents to provide additional coverage for children until age 26.   Trump’s labor transition team is led by an attorney and accountant who focused his career on tax, benefits and retirement issues, suggesting that these issues will be subject to scrutiny in the new Administration.  Indeed, cutting both individual and corporate taxes across-the-board has been a theme of Trump’s campaign.

The President-Elect seems also to support investments in infrastructure, including public transportation and the like.  One wonders how financing infrastructure development can be used to improve the economy, while at the same time taxes are reduced, without significantly increasing the federal budget deficits.  There seems to be some bi-partisan interest in these seemingly inconsistent goals by encouraging American corporations to return their profits held abroad to the U.S. through some sort of reduced taxation, which may accomplish goals of reducing taxes and promoting American jobs.  Currently, the U.S. has the highest corporate tax rate of any industrial nation in the world, thus encouraging American corporations to hold their profits abroad. 

Labor and employment lawyers believe that the new Administration will have a different view of labor and employment issues that may be more hospitable to employer concerns. Some expect more pro-business decisions from the Labor Department, the National Labor Relations Board, and the Equal Employment Opportunity Commission.  Officials at those agencies must be replaced, some only when their terms expire, and undoubtedly the new appointees will be consumed with undoing many controversial positions.  President Obama largely relied on executive orders and directives or interpretations of the federal regulatory agencies to bring about change.  The new Administration is more likely to emphasize education rather than punishment of employers.  Trump has repeatedly emphasized that too much regulation has been hurting the American economy.

In some areas, changes instituted while the Democrats were in power allow the Republicans more leeway.  Tax bills may now be passed with simple majorities in the House and Senate.  The same applies to many lower court and executive branch appointments.  Other congressional actions are subject to the filibuster, as the Republicans still lack the 60-vote threshold to cut off debate in the Senate. 

Trump may use executive authority to issue or revoke executive orders and to set immigration "enforcement priorities," tactics used by President Obama.  President-Elect Trump likewise could affect parts of certain laws without turning to Congress, such as by changing the government’s position in pending litigation on ObamaCare, portions of the new salary test for white collar overtime exemptions, and challenges to federal regulatory actions.  The Administration could also take a series of steps to start a formal process to withdraw implementation of upcoming regulatory requirements and take steps to relax the compliance requirements. 

Let’s now look as some specific areas and how they might be affected by the Trump Administration. 

            1.         The Courts: The U.S. Supreme Court is now evenly split between four Justices generally considered conservative, and four generally considered liberal.  Justice Scalia’s seat remains vacant, and the President will likely move early in his Administration to appoint a successor.  Appointments to the Supreme Court are subject to filibusters, however, which cannot be shut off without a 60-vote majority.  Some of the areas a new Court with a majority of conservatives might affect change include the constitutionality of public-sector unions requiring mandatory dues payments and certain immigration issues.  In some cases, the new Administration may simply change regulatory policies or positions in the litigation and cause the cases to be removed from the Supreme Court docket.  Pointing in the other direction, the Supreme Court supposedly has not accepted review of certain issues because they expected the issues to be deadlocked, but with a full group of nine justices, reviews in other areas may be more likely.

            2.         Wage-Hour Law:  The elections will not affect the December 1 effective date for the new regulations requiring employers to pay overtime unless a salaried exempt employee is paid $47,476.00 or more annually.  While there is a pending lawsuit concerning the validity of this new law, it is not expected to change the enforcement date.  The Trump campaign did not address the new overtime rule, but in any event a new rule-making process would have to begin that would take a year or two to make a change.  While there might be a bill to delay or rescind the new rule passed during the Trump Administration, by that time employers would have already taken steps to comply and the new system would be in place.  A more likely candidate for change is the provision allowing inflation-based adjustments in the salary threshold every three years.  Regarding the minimum wage, Trump has stated that the minimum wage should be $10.00, but added that this is an issue that should be left up to the states.

            3.         Labor Relations: As the new Administration appoints members to the National Labor Relations Board, it is likely that many of the changes during the last eight years overturning precedent in favor of more pro-union rulings, will themselves be overruled and doctrines returned to their status prior to the Obama Administration.  Major candidates for change include those decisions attacking common employer personnel policies as overbroad, policies attempting to allow so-called "quickie" strikes, policies discouraging exercise of union decertification rights, policies regarding joint employer and micro-units, and policies finding individual employment agreements requiring individual arbitration of employment disputes to be unlawful.  It is also likely that the new NLRB "quickie election" rule will be changed, although as indicated earlier, changing federal regulations requires one to two years to implement.

            4.         Equal Employment: The President-Elect has taken few positions on equal employment issues.  He says that he supports women’s rights, and has proposed federal mandatory paid maternity leave.  He has said that transgender people should be able to use the bathroom they feel is appropriate, suggesting he has a moderate position on LGBT rights.  However, he has repeatedly stated that federal regulations are choking the economy, suggesting that he may oppose some of the Obama measures instituted by federal executive order or by federal regulatory requirements. 

            5.         Government Contractor Issues and Other Regulatory Requirements: Perhaps two of the most "endangered species" of the Obama regulatory requirements are the so-called persuader rule that requires disclosure requirements for employers that use advisors to help concerning union issues, and the Fair Pay and Safe Workplaces Executive Order for government contractors that requires contractors to disclose certain employment law violations  as part of consideration of getting a government contract.  Federal judges have already issued injunctions to stop these laws and therefore they are subject to easier removal when the President-Elect takes office.  The EEOC’s pay data disclosure obligations in EEO-1 reports will likely be reviewed by the new Administration as well as the rule limiting incentives for workers who participate in employer wellness plans.  It will be interesting to see how the new Administration addresses the prevailing wage requirements on various government contractors, as traditionally Republicans have opposed such requirements as increasing infrastructure costs, but Trump has supported in some aspects the concept of prevailing wages.

            6.         Immigration Measures: While Trump’s overall position on immigration is well-known, the specifics of his position are less well-known.  For example, he has talked about deporting large numbers of illegal immigrants, but also said that his enforcement priorities will include removing criminals, gang members, security threats, visa overstays, and public charges.  While he said that illegal immigrants are subject to deportation, he has also said the government will set priorities.  One area that may be supported by the new Administration is mandatory E-Verify, an electronic employment verification system that matches employees’ records with government databases, which currently is voluntary.  These issues are particularly interesting since many Republican voters don’t support all the campaign promises on immigration. 

            7.         Government Regulatory Penalties:  Legislation was passed by Congress in 2015 requiring federal agencies to adjust their penalties to account for inflation.  In response, government agencies increased their penalties for immigration, OSHA, and other violations.  Since these penalties are set forth in a federal statute, they will be difficult to change, although the agencies may find it easier to change the continuing increases in penalties based on inflation.  It will be much easier for the agencies to be more cooperative during investigations and prosecutions and concentrate more on educational measures.

Given Trump’s populist leanings and lack of specifically-defined programs, many uncertainties remain for the labor and employment community.  However, plans to improve the economy and lessen burdensome regulations will benefit the employer community.

Wimberly, Lawson, Steckel, Schneider & Stine

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