Trump Administration Already Creating More Business-Friendly Legal Environment

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By Adam Doerr, Jackson Lewis P.C.

By sunrise on November 9, 2016, business professionals and lawyers across the country were scrambling to re-write their stories on how the next president will impact labor and employment laws. The consensus was clear: Mr. Trump’s administration will be more business-friendly than President Obama’s was (or Hillary Clinton’s would likely have been). But nobody knew exactly what that meant.

Over the past couple months, and with inauguration day fast approaching, we have begun to see just how Mr. Trump’s administration is shifting the legal landscape back in favor of businesses. While Mr. Trump is clearly targeting banking, health care, energy and immigration laws and regulations, his administration will also significantly impact labor and employment laws and regulations.

National Labor Relations Board

In recent years, labor and employment law attorneys got used to advising business clients that the Obama Administration was one of the most union-friendly in decades, as the National Labor Relations Board (“NLRB” or “Board”) went to great lengths to protect employees’ rights to unionize and engage in other “concerted activity.”

The tides are shifting. Dramatically.

Over the next year, Mr. Trump will get to appoint two members to the National Labor Relations Board, which currently enjoys a 2-1 Democratic (and very pro-union) majority. That shift, to a 3-2 Republican (and likely very pro-business) majority, will allow the Board to revisit, and ultimately undo, a wide range of union-friendly issues and decisions, including the:

  1. Illegality of class action waivers, which makes it harder for businesses to mitigate future costly litigation through contractual settlements and employment agreements;
  1. Expanded “joint employer” test, which allows the NLRB to hold one employer liable for the conduct of a separate employer so long as the putative “joint employer” has even an indirect right to control the workers’ terms and conditions of employment;
  1. Narrowing employers’ ability to alter the scope of a union’s requested bargaining unit, allowing unions to carve out and focus on “micro-units;” and
  1. Expanding the scope of “protected concerted activity” by striking down “overly broad” work rules and policies, including those requiring (a) employees to be professional in the workplace, (b) confidentiality of company information and investigations, and (c) employee access to company resources for union-related activity, among others.

Although it will take some time for these changes to take effect, Mr. Trump’s NLRB will be at least as business-friendly as the current Board has been labor-friendly.

Department of Labor

Andrew Pudzer

In addition, Mr. Trump’s U.S. Department of Labor (“DOL”) in general will be far more business-friendly than President Obama’s.

To start, Mr. Trump appointed Andrew Pudzer, CEO of the parent company of Carl’s Jr. and Hardees fast-food restaurants, to head the DOL as Secretary of Labor. Mr. Pudzer will undoubtedly slam on the breaks and reverse the course that current Secretary Perez has taken.

Mr. Pudzer has lambasted “government mandate[s]” that “mak[e] labor much more expensive,” including mandatory paid family leave, minimum-hours legislation, and increasing minimum wages, among others. Mr. Pudzer is critical of “business-burdening labor regulations” and calls for a “freer market…to improve worker’s lives.” Speaking specifically of unions, Mr. Pudzer noted “[b]usinesses create jobs; labor unions do not. To the contrary, labor unions often discourage businesses from creating jobs…by increasing the cost of labor.”

As Secretary of Labor, Mr. Pudzer will enjoy significant control over the DOL, and will be primarily charged with enforcing federal workplace laws.

Already, President Obama’s new overtime rules are in grave danger. Those rules would have about doubled the minimum salary threshold an employee must earn before being able to be deemed “exempt” from receiving overtime pay. But right before they were to take effect, a federal court in Texas struck down the rules as an unlawful attempt to legislate from the executive branch. Although litigation continues over that decision, the court of appeals will not likely be able to issue a ruling before Mr. Pudzer’s DOL takes over, at which point it could (and probably would) drop the appeal entirely, letting the lower court’s blocking of the new overtime rules stand.

Mr. Pudzer’s DOL may also start rolling back more liberal policies through the issuance of “opinion letters,” which do not have the force of law, but provide persuasive input from the agency charged with overseeing and enforcing labor laws, rules and regulations regarding their scope and application.

Business is Looking Up

Mr. Trump has built his fortune and fame on being a businessman. He is now filling his Cabinet with fellow business executives, from the Secretary of State (Rex Tillerson, CEO of Exxon Mobil) to Small Business Association (Linda McMahon, WWE co-founder). Through his own business-oriented policies, executive actions, and Cabinet appointees, businesses have reason to be optimistic about the next four years.

About Adam Doerr

Adam Doerr is an Associate at Jackson Lewis P.C.’s St. Louis office where he advises and represents management on workplace law matters and in litigation.  Jackson Lewis P.C. is dedicated to representing management exclusively in workplace law. With 800 attorneys practicing in major locations throughout the U.S. and Puerto Rico, Jackson Lewis is a leader in educating employers about the laws of equal opportunity and, as a firm, understands the importance of having a workforce that reflects the various communities it serves.  Adam may be reached at 314-827-3945 or Adam.Doerr@JacksonLewis.com.

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