01-26-2017
By Rhonda Moll, Esq.
Employers, many of whom have made strides in promoting diversity and inclusion in their workplaces in recent years, will face potential changes in both policy and legislation in the coming months as the Trump administration assumes leadership. It is impossible at this juncture to predict the precise changes to come. In this newsletter, we discuss how some of Trump’s positions expressed prior to the election and actions taken post-election, including some of his publicized picks for appointments to high level government positions, may have a significant impact in certain aspects of employment law and human resources for employers.
1. Companies’ Equal Employment Opportunity and Diversity Efforts
Trump’s campaign platform was based on various principles that many perceived as intolerant toward those of certain nationalities, persons of color, women, the disabled community and other minority groups. For example, he vowed to secure the country’s southern border to prevent Mexicans from crossing it illegally to immigrate to the U.S.; he promised to build a wall, at the expense of the Mexican government. In addition, he expressed a desire to deport undocumented aliens; and he proposed a ban on admitting Muslim refugees into the U.S., which ban has now been replaced by a proposed policy of “extreme vetting” of certain individuals from Muslim nations seeking to enter the U.S. Also, Trump’s apparent history of treating women in a disrespectful manner was widely publicized during the election campaign process. For example, a controversial videotape from 2005 was leaked to the press, in which he discussed with Billy Bush of NBC, among other things, his having groped women on occasion.1 The press also released various audio and video clips showing candidate Trump referring to women in derogatory terms and during the campaign, Trump mocked a disabled reporter.
Soon after the election, two open letters were issued about Trump from IBM employees. The first letter was written to Trump by IBM’s CEO Ginni Rometty congratulating him on his victory and offering the President “ideas that… will help achieve the aspiration you articulated and that can advance a national agenda in a time of profound change.”2 These ideas included creating new types of information technology jobs, adding cyber-security to any new infrastructure plans, and using IT to better health and eliminate government waste. Despite the arguably neutral message in the CEO’s letter, an IBM employee, Elizabeth Wood, responded with her own letter to the CEO, announcing she was resigning because she could not be part of a company that backed an “agenda that preys on marginalized people and threatens my well-being as a woman, a Latina and a concerned citizen.”3 Wood told the CEO her life “and those of the several hundred thousand who serve your company worldwide – are too valuable to waste at an organization where we are not respected.”4
More recently, after the management of the Rockettes, the all-female dance group that has for 92 years been performing at New York City’s Rockefeller Center and other venues, committed the group to perform at Trump’s inauguration. Phoebe Pearl, who had been a dancer with the Rockettes for eight years, wrote a private Instagram post, saying “I am speaking for just myself, but please know that after we found out this news, we have been performing with tears in our eyes and heavy hearts.” Pearl told the New York Times that her opposition to the performance was based on her belief that the Rockettes “are a group of women that is encouraging young girls to be strong, independent women, to fulfill their dreams, to go for it,” a mission contrary to celebrating Trump, a man who in Pearl’s view has “a well-established history of objectifying women.” Pearl stated that she viewed her opposition to be “about women’s rights.” Soon after Pearl’s Instagram post, the Rockettes were notified that their performance at the inauguration would not be mandatory. Nevertheless, Pearl left the Rockettes to pursue other interests and her opposition has been well publicized in the media.5
On January 21, 2017, more than one million women, men and children marched in cities in the United States and abroad to voice their support for women’s rights. These marches were prompted in large part as a response to the election and inauguration of Trump.6
The Rometty and Wood letters, the Rockettes incident and the women’s marches illustrate the challenges employers will face in the coming months and beyond in working within the agenda of the new administration while promoting respectful behavior and inclusiveness from employees.
2. The Equal Employment Opportunity Commission (EEOC)
President Trump enters the White House with a Republican majority in both the Senate and the House of Representatives, and that majority will remain throughout at least the first two years of his administration. The President will be able to appoint at least two high level vacancies in the coming months, providing him an opportunity to impact the direction of the EEOC, the agency charged with ensuring equal employment opportunity in American workplaces. First, the President can designate a new Chair of the EEOC. Jenny Yang, appointed Chair by President Obama in September 2014, and whose term ends in July 2017, has focused the EEOC on promoting pay equity and pursuing strategies under Title VII to eradicate discrimination in the workplace based on gender identity and sexual orientation. Recently, the EEOC published Chair Yang’s Enforcement Guidance on National Origin Discrimination,7 which outlines the EEOC’s interpretation of Title VII’s ban on national origin discrimination and how the law would apply in different workplace situations. Examples include unlawfully referring to an employee of Arab descent as a “terrorist” or engaging in “accent” discrimination. It remains to be seen as to whether a Trump appointee will continue Chair Yang’s efforts to curtail such conduct.
In addition to Trump’s opportunity to replace Chair Yang, David Lopez, who has served as the EEOC’s General Counsel, left his post in December 2016, after more than six years in the position. Mr. Lopez has been criticized by Republicans for his litigation choices at the EEOC, among others challenging mandatory retirement policies and practices for partners at professional accounting firms and suing Honeywell over its employee wellness program. Replacements for Mr. Lopez and Chair Yang could well change the direction of the EEOC, including its regulatory and litigation strategies.
Further, if prior administrations are any indication, the EEOC may be subject to increased budget limits under the Trump administration. For example, the Bush administration held the EEOC’s budget flat during its years in office. As in those years, the EEOC may find itself looking for creative ways to pursue its agenda with fewer resources. In the Bush years, the EEOC chose to manage this by pursuing large, high-impact cases addressing patterns and practices rather than individual charges of unfair treatment.
There may also be substantive changes at the EEOC brought by the Trump administration. Changes to the EEO-1 report, which are expected to increase the focus on pay equity issues, were approved in February 2016 along party lines. Notably, Vice President Mike Pence has publicly opposed new pay equity legislation. The new EEO-1 reports would require employers to provide aggregate compensation data and hours for all employees organized by new sex and race/ethnicity-based categories and specified pay bands. Many employers have already taken steps to implement the new reporting requirements. The changes to the EEO-1 report are scheduled to take effect in March 2018. Under a new Republican-appointed Chair, the EEOC could seek to revise or rescind these new regulations before they come into effect.
3. The Department of Labor
President Trump has announced that his selection for Secretary of Labor is Andrew Puzder, CEO of CKE Restaurants, which runs Carl’s Jr. and Hardee’s restaurant chains. Puzder’s confirmation hearing is currently set to take place on February 2, 2017. Confirmation requires only a simple majority; since Senate republicans have 52 votes, Republicans will likely be successful in confirming Puzder. As Secretary, Puzder will oversee the Wage and Hour Division, Occupational Safety and Health Administration (OSHA), the Office of Federal Contract Compliance Programs (OFCCP), and the Employee Benefits Security Administration, among other divisions of the Department of Labor (DOL).
Puzder represents a potentially substantial shift in policy from the prior Secretary of Labor Thomas Perez, who focused on the rights of labor unions and employees during his three-and-a-half-year term in office. Perez lead the implementation of, among other initiatives, the Home Care Rule, which provided for home care workers to receive overtime and minimum wage and the Fiduciary Rule, which imposed a fiduciary standard of care on retirement advisors. Puzder has publicly opposed raising the minimum wage, has promoted replacing workers with automation to cut labor costs,8 and advocates cutting back regulations that in his view stifle the growth of business, including the DOL’s recent rule providing overtime compensation to an increased number of American workers. In late November 2016, the new overtime provisions were enjoined from implementation by a federal judge. State of Nevada v. U.S. Dept. of Labor, No. 4:16-cv-00731-ALM (E.D. Tex. 11/22/2016). This injunction leaves employers in a state of flux about how to treat their workforce about exempt v. nonexempt status. Under the Trump administration, the DOL, which would normally challenge the Texas court ruling, may opt to forego that strategy given the ostensibly pro-business stance of Trump and Puzder.
4. The National Labor Relations Board
President Trump is expected to replace Democratic Chairman Mark Pearce of the NLRB with Philip Miscimarra, currently the only Republican on the Board. He will also likely nominate two new Republican members to the five-person Board, giving the Republicans a majority. The NLRB has issued a number of pro-union decisions during the Obama years, when the Board was dominated by Democrats. Those decisions included, for example, expanding the definition of “joint employer” so that companies that use temporary agencies to hire workers may well find themselves to be joint employers with those agencies, allowing temporary workers to be in the same bargaining unit with the employer’s full-time employees, holding that employment agreements that contain a waiver by employees to pursue or join class actions against their employer are invalid under the National Labor Relations Act, and allowing smaller groups of employees to form a union. Although it is expected that the Trump Board will seek to reverse these and other rulings, it will take years for those decisions to be overturned, as the issues must work their way through the system.
5. The United States Supreme Court
President Trump will have the opportunity to make appointments to the U.S. Supreme Court during his term in office. The first appointment will fill the vacancy left by the death of Justice Anton Scalia in early 2016. One employment law issue that the Supreme Court will likely face in 2017 is whether employers can include class action waivers in employment agreements, thus limiting employees’ abilities to have courts hear cases about employment disputes. Trump is expected to seek the appointment of conservative, pro-business justices during his Presidency.
6. The Affordable Care Act (ACA)
Candidate Trump voiced his opposition to the ACA and vowed that he would repeal the law and replace it with a new health care law should he be elected President. Republicans have already begun the repeal process, by first using a budget measure in Congress to start the repeal of the law. Further, within hours of his taking office, President Trump issued an executive order, directing the Secretary of Health and Human Services to interpret the ACA regulations loosely to minimize the burden of the law on individuals, health care providers and others. On January 22, 2017, two Republican Senators, Bill Cassidy of Louisiana, and Susan Collins of Maine, proposed legislation to replace the ACA, allowing the individual states to decide whether to keep the law.9
These developments have left many American employees and employers in flux about basic provisions of the ACA and how they will be treated under a new health care scheme.10 According to a recent article in the Los Angeles Times, “a growing number of patient groups are warning that millions of Americans are in danger of losing vital health protections and that Republicans need to agree on a replacement plan before they uproot the current system.”11
While the matter of what the new health care scheme will look like takes shape, employers are faced with the daunting tasks of taking steps to ensure they are simultaneously in compliance with the current law, keeping themselves apprised of any new developments, assuring employees that their company intends to stay in compliance with the law, and being flexible in their reactions to any changes that occur.
7. Immigration
President Trump vowed in his campaign for office to strengthen the U.S. enforcement of its immigration laws. One of the areas to be targeted by a Trump administration will likely be the H-1B process, which currently allows certain foreigners to enter the country to perform highly skilled work. Should the H-1B process be curtailed, it may become more difficult for employers to recruit highly skilled and educated foreign workers.
Conclusion
The election of Trump, after a contentious campaign, has left both employers and their employees with numerous questions and concerns. While changes are expected to occur, they will take time to implement, given that President Trump and his appointees will need to propose legislation or regulations and rulemaking will ensue to put new rules in place. In the meantime, employers should be sure that they are in compliance with the law as it exists today, are diligent about staying up-to-date with and prepared for changes that occur, and are clear and reassuring in communicating with employees about the direction of the employer and its strategies going forward.