Authored by Corey L. Franklin
Dec 28, 2016
After a Tough Regulatory Year for Employers, Positive Signs Appear for 2017
By any measure, 2016 was a challenging year for employers. Regulations issued by the U.S. Department of Labor, National Labor Relations Board, Occupational Health and Safety Administration, Equal Employment Opportunity Commission, and Executive Orders issued by the White House imposed a wide array of new workplace rules that posed significant compliance obstacles. However, with the change in presidential administrations after the New Year, the pendulum will likely shift again. As is typical with any presidential transition, the Trump administration has vowed to reverse many of President Obama’s Executive Orders.
The DOL’s new overtime rules were foremost on everyone’s mind as 2016 began. Employers strategized how to develop new policies and practices to comply with the rules in advance of the Dec. 1, 2016 effective date, but on Nov. 22, a federal judge entered a preliminary injunction blocking implementation of the new overtime rules. While the Department of Justice filed a notice of appeal seeking review of the preliminary injunction on the DOL’s behalf, the rules’ fate is now in the hands of the incoming administration.
It appears unlikely that the new administration will continue the Justice Department’s defense of the DOL’s revisions to the overtime rules and white collar exemptions. While the incoming Secretary of Labor may push for more moderate changes to the Fair Labor Standards Act consistent with policy proposals espoused by President-elect Trump during the campaign, such changes will likely impose less onerous obligations on Employers.
In the labor relations and union avoidance world, the DOL’s “persuader rule” went into effect in April with a caveat that it excluded engagements that preceded July 1, 2016. Though many labor lawyers and their clients formalized engagements in advance of the deadline to avoid the rules’ onerous and intrusive reporting obligations, a federal judge issued a preliminary injunction in June (which was made permanent in November) finding the rule unlawful and prohibiting the DOL from applying it. The election of a Republican president hammers the last nail in the “persuader rule’s” coffin.
NLRB Placed its Thumb on the Scale of Justice to Benefit Unions; Trump May Change the Rules
As in years past, the NLRB spent the waning summer months and early fall issuing a wave of decisions invalidating otherwise innocuous personnel rules, punishing employers for disciplining union employees for engaging in racist/discriminatory conduct, ruling that graduate students can participate in union elections, that instructors at religious institutions are covered by the National Labor Relations Act, imposing its new “joint employer” standard, limiting employer expressions of opinion regarding the potential impact of union organization, and expanding the scope of permissible employee solicitation.
President Trump will appoint two new members to the NLRB (giving Republicans a majority on the five member Board) and a new NLRB General Counsel. Extreme pro-union decisions and initiatives – such as the “ambush election rules;” the attack on class action waivers in arbitration agreements; the decision permitting employees to use office email for union organizing during non-working time; the broadened definition of “joint employer;” the establishment of “micro-units” in union organizing contexts; the NLRB’s expansive intrusion into personnel policy-making; requirement of limited bargaining with newly certified unions over imposition of discipline; and the General Counsel’s initiative to persuade the Board to limit an employer’s ability to hire permanent replacements for economic strikers are subject to revision or reversal following the Trump administration appointments.
What the Future Holds for Obama’s Executive Orders
The Department of Labor issued guidance on the “Backlisting” Executive Order (a/k/a Obama’s Fair Pay and Safe Workplaces Executive Order), which requires that companies competing for government contracts must disclose labor law violations under 14 federal statutes, executive orders, and equivalent state labor laws from the past three years (phased in incrementally). It also prohibits federal contractors from requiring that employees enter into pre-dispute arbitration agreements for claims brought under Title VII or tort claims relating to sexual assault and/or harassment. We expect the Trump administration will revoke this Executive Order in 2017.
President Obama issued his Paid Sick Leave for Federal Contractors Executive Order in 2015, with the final rule being issued in 2016. This Order requires federal contractors to pay one hour of paid sick leave for every 30 hours worked (up to a maximum of 56 hours). Given Ivanka Trump’s advocacy for paid leave – maternity leave in particular, it remains an open question whether President Obama’s Paid Sick Executive Order will be revoked or modified.
OSHA’s Anti-Retaliation Rules
One development under the prior administration is sure to survive the transition. OSHA’s new anti-retaliation provisions that took effect on Dec. 1 restrict employers’ ability to perform post-accident drug testing unless drug use is “likely to have contributed to the incident” and testing can “accurately identify impairment caused by drug use.” The new rule also suggests that certain safety incentive programs (e.g., disqualification from monetary bonus if employee has safety-related injury) may also discourage employees from reporting work-related injuries and may violate OSHA’s new rule.
The new rule also requires that certain employers electronically report injury and illness data and significantly increases penalties. OSHA’s anti-retaliation rules were not enjoined and they will remain in effect. The agency’s enforcement guidance regarding these rules remains the subject of speculation, however, and these rules may be subject to further refinement under the new administration’s watch. Ultimately, President Trump’s administration will define the parameters of employer compliance with these rather ambiguous regulatory obligations.
Past is but prologue and 2017 certainly appears to be looking up for employers. While many of the rules, regulations, and administrative decisions will change under the Trump administration, these changes will not occur overnight. As the law enters an unsettled period, it is critical for HR and Labor Relations professionals to keep abreast of the current standards and agency interpretations while preparing for likely impending changes.
To learn more about what to expect in 2017, join us on February 15th from 8:00 – 10:30 a.m. at the Drury Inn, Brentwood for our annual Labor Law Seminar. We’ll offer an engaging and fast-moving discussion of the most current and important employment and labor law developments and how employers can prepare for a future under the new administration. Register Here.