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Articles

Trump v. Biden: The Winner’s Impact on Employers

Originally published in The New York Law Journal on October 30, 2020

What will the employer world look like post the presidential election? This article summarizes the positions the candidates have taken on various leading employment issues and how key employment related matters may be addressed under the respective administrations.

As we write this article, the presidential election is two weeks away. It will be imminent at the time of publication. The outcome will impact employers for years to come. So let’s take a look at how the victor and his administration will impact employment laws on the national level. As we know, presidents do not make the laws; however, their agendas greatly impact the direction Congress and administrative agencies move. They also often lead a shift in the control of the Legislature and thus their impact is further enhanced. Moreover, with growing regularity, presidents are using executive orders, which often have the same effect as law, to bypass Congress in order to promote their agendas.

Accordingly, the next president wields great power in setting the agenda for many matters impacting employers. This article summarizes the positions the candidates have taken on various leading employment issues and how key employment related matters may be addressed under the respective administrations.

President Donald Trump’s agenda is clear and unchanged. His actions have been pro-employer since he took first office, rolling back many of his predecessor’s pro-employee executive orders and working with government agencies like the NLRB and EEOC to press his agenda. He has also implemented his agenda by issuing his own executive orders and pursuing agency initiatives that serve his purpose.

Additionally, the president has also been able to put his stamp on the Supreme Court and lower federal courts like few presidents have in modern history, having had the opportunity to nominate three Supreme Court justices and almost 200 federal judges.

Just as clear as Trump’s pro-employer stance is Joe Biden’s pro-worker position. Biden has repeatedly outlined the employment related issues he cares most about. We can also look back on his time as vice president in the Obama administration and recently passed legislation in the House of Representatives and democratically supported initiatives in the Senate to glean further insight as to where he will head.

With that said, one thing is certain, Biden is pro-employee as much as Trump is pro-employer and the two stand on opposite ends of the political spectrum.

Before we dive into the presidential candidates agendas, it may first help to understand how those agendas can/could be implemented.

First, we need to look at whether either presidential candidate will have the benefit of controlling both houses of Congress, often a necessary first step in getting full implementation of one’s agenda. For Trump, this seems unlikely. However, if Biden can win, his coattails may be long enough to bring both Houses with him. The next legislative hurdle for both candidates is to ensure their Senate majority is filibuster proof, meaning their party holds as least 60 seats in the Senate. The 60-seat threshold is needed to end debate for most bills and move to a vote. For Trump this seems very unlikely to occur and almost as unlikely for Biden, even if he had a big last minute surge. As a result, many agenda items the candidates wish to have signed into law may not come to be. Thus, whoever wins will probably continue the tradition of using executive orders to side step legislative roadblocks.

Now that we have set the stage, let’s discuss how we see the winning candidate’s impact on key employment law issues:

Unions and Labor

Biden, as was the case with President Barack Obama before him, is taking a very strong stance with his desire to strengthen unions and collective bargaining. Initiatives he supports include:

Restoring Obama’s Fair Pay and Safe Workplace Executive Order which Trump revoked. This executive order required employers’ compliance with various employment laws be considered when issuing and retaining federal contracts. Additionally, Biden would seek to require companies with federal contracts sign “neutrality agreements” committing not to hold anti-union campaigns. As part of this initiative, Biden would only have contracts awarded to companies who pay a minimum of $15 per hour.

Further, Biden would look to hold corporations and executives personally accountable for interfering with union organizing efforts, negotiating with unions in bad faith and for violating labor laws. All these initiatives are as promoted in the Protecting the Rights to Organize Act’s (the PRO Act), which passed the House of Representatives earlier this year but failed to go beyond that. In contrast, days before the PRO Act’s passage in the House, the president’s administration issued a Statement of Administration Policy recommending the president veto the bill should it make it to his office.

Collective Bargaining. Biden is a strong proponent of collective bargaining and believes the federal government should encourage employees to unionize as postulated in the National Labor Relations Act. Trump has overturned such efforts.

Biden is also in favor of establishing a federal right to union organizing and collective bargaining for all public sector employees, which he hopes to accomplish through the passage of the Public Service Freedom to Negotiate Act, another act Trump has vowed to veto should it reach his desk.

Taft-Hartley Act and Right to Work. Currently, almost half the states have what are known as “right to work” laws which prohibit unions and employers from agreeing employees must join the union in order to keep their jobs at unionized employers. Biden has stated he will seek to repeal the provisions of the federal Taft-Hartley Act that permit such state laws, while Trump stands steadfastly in support of keeping the status quo.

Joint Employer: NLRB and DOL. Under Trump, the federal Department of Labor (the DOL) implemented a rule updating the joint-employer standard under the Fair Labor Standards Act (the FLSA). The rule significantly limits the instances where a business can be classified as a joint employer, reducing instances of shared liability for multiple companies that arguably control or “employ” the worker at issue. Since its implementation, a federal court has struck down many of the rule’s provisions. However, the rule in and of itself is a clear indication of the direction Trump wants the DOL (and other agencies) to move.

Similarly, under Trump, the National Labor Relations Board’s (NLRB) test for finding two employers to be “joint employers” was significantly weakened. This followed over six years of litigation started during the Obama administration and only ended when Trump’s administration gave the order to resolve this case. (Brody and Associates represented the New York State employers in this litigation.)

If elected, Biden will seek to restore the broad definition of joint employer within all federal administrative agencies and as outlined in the PRO Act.

The NLRB. Obama appointed a NLRB that supported expanding all workers’ rights, and one which was pro-union. The Obama NLRB regularly issued decisions dramatically impacting union-free companies. We had seen this occasionally before, but it became commonplace during the Obama administration. President Trump has appointed an NLRB that is considerably less favorable towards union and worker’s rights. Biden has indicated he will seat an NLRB similar to President Obama’s.

Independent Contractors v. Employees. Biden will look to return to increased enforcement efforts regarding the classification of workers as employees and not independent contractors. These increased efforts were a major initiative under the Obama administration, but were all but abandoned during Trump’s first term. Biden will do this through increased budgets and an increased number of enforcement agents. Further, Biden will bring together the NLRB; the Equal Employment Opportunity Commission; the Internal Revenue Service; the Justice Department; and state tax, unemployment insurance and labor agencies, in a collaborative enforcement effort.

Many of these agencies saw their budgets slashed and their headcount reduced during Trump’s first term, which led to reduced enforcement. We assume Biden’s administration will look to return staffing levels and budgets to their Obama administration levels.

Gig Workers. As part of “properly” classifying independent contractors and employees is the need to create clearer standards and definitions involving Gig workers. Last month, Trump’s Department of Labor proposed new regulations, that, if implemented, would make it easier for employers to classify workers as independent contractors (rather than employees). Such a classification would remove these workers from the purview of the Fair Labor Standard Act, thereby eliminating a variety of workplace protections, including minimum wage and overtime pay. This move is in stark contrast to recent legislation passed in California (Assembly Bill 5) and a recent California court decision, which, if upheld, will reclassify Uber and Lyft drivers as employees. California’s Assembly Bill 5 is designed to give greater protections to Gig workers through a new three-part test (the “ABC Test”). Biden is in support of creating a national law which applies the elements of California’s ABC Test.

OSHA and Workplace Safety

In the first three years of the Trump administration the number of Occupational Safety and Health Administration (OSHA) workplace inspections and safety enforcement efforts dropped precipitously as compared to the Obama administration. And, currently, OSHA has the fewest number of inspectors in recent history. Additionally, Trump’s administration rolled back the implementation of an Obama era rule, The Improve Tracking of Workplace Injuries and Illnesses, which required most employers to electronically submit detailed reports of all workplace injuries on an annual basis. This rule was intended to help regulators identify inherently dangerous working environments. Trump’s watered down version of this rule only requires a summary and no longer requires a detailed report, which pundits argue will make it harder for OSHA to do their job. Biden will look to reinstate the original provisions of this rule.

Employee Benefits

If elected, Biden’s goal would be to increase paid and family leave benefits on a national level through passage of the Healthy Families Act. If passed, the Healthy Families Act will require either paid or unpaid sick leave to employees (depending on the size of the employer). Additionally, Biden is looking to institute a national 12-week paid family and medical leave program. It is unclear how these two new initiatives would be funded, but businesses fear that the cost will fall to them.

Additionally, Biden hopes to transform unemployment insurance into a national Employment Insurance program. This short-time compensation program, known as work sharing, is designed to keep workers employed at reduced hours, while the federal government helps make up the difference in wages. This concept was championed by the Obama administration and currently 27 states have adopted state based short-time compensation programs. 

Finally, there is Obamacare. While not an “employee” benefits, it will impact employment. If it is overturned, there will be more pressure on employers to provide healthcare. If it expands, there may be even less pressure on employers to provide this benefit. The Trump administration continues to push to destroy this program, with hopes that the new Supreme Court may finally rule that it is unconstitutional. Biden is committed to enhance it and his election would likely ensure its existence for four more years and maybe the foreseeable long-term future.

The Supreme Court

We save maybe the most important issue involving every administration for last—the Supreme Court. In his first term, Trump was able to appoint three justices to the Supreme Court to tip the balance of the court conservative by a 6-3 margin. (While Amy Coney Barrett is not confirmed as of the time of this writing, we believe it is a fait accompli). Thus every case that goes before the court will be viewed through a relatively conservative, pro-employer lens.

Many believe the court will stay conservative for years to come, but with three justices currently over 70 years old (two conservative and one liberal) multiple seats might become vacant during the next presidential term. Beyond this natural process, many Democrats are outraged by Trump’s push to get Amy Coney Barrett confirmed before the end of his first term. They may not want to wait to see what happens over the next four years and point to another option to swing the court liberal—court packing. Court packing is simply expanding the court from nine Justices to a larger number by passage of federal legislation. If this occurred, the next president would fill all those new vacancies. If Biden were to go this route he could very quickly turn a conservative court liberal. However, most see court packing as a nuclear option that should be avoided at all costs. The Supreme Court has been set at nine justices since 1869 and many feel court packing in today’s hotly partisan political arena is a slippery slope which should not be traversed. This is a big unknown.

Conclusion

As of this writing, who wins the Nov. 3 election is anyone’s guess. National polls in 2016 foretold the story of a Clinton blowout victory over Trump only for the world to be astonished by a Trump win. Today, these same polls show Biden ahead by a similar double digit lead Clinton enjoyed three weeks before the 2016 election. While the outcome is unknown, one thing is certain, the employment law landscape come January 20, 2021, and beyond, will be very different based on who wins.

Robert J. Brody is the founder and managing member of Brody and Associates, a management-side labor, employment, and benefits law firm. Mark J. Taglia is counsel with the firm.