Published Article

Employment Law Developments to Expect From the Second Trump Administration

December 30, 2024

There is some comfort in knowing what policies may be enacted based on actions taken during the first Trump administration from 2016 to 2020. For employment lawyers, insight can also be gleaned by analyzing the developments from courts and federal agencies during the Biden administration.

As the start of the second Trump administration approaches, the country remains in a state of uncertainty about what to expect. There is some comfort in knowing what policies may be enacted based on actions taken during the first Trump administration from 2016 to 2020. For employment lawyers, insight can also be gleaned by analyzing the developments from courts and federal agencies during the Biden administration.

The most immediate changes to expect affecting employment law will be with federal agencies, including the Equal Employment Opportunity Commission (EEOC), Federal Trade Commission (FTC), Department of Labor (DOL), and National Labor Relations Board (NLRB). President Donald Trump’s appointments thus far have indicated a trend toward lessening the authority of federal agencies, which, coupled with the U.S. Supreme Court’s recent decision curtailing the rulemaking powers of regulatory agencies, means that such agencies will be weaker from an enforcement perspective. Developments related to immigration law are also likely, given the incoming president’s past rhetoric and continued challenges on several immigration policies. We also expect Trump to challenge the constitutionality of diversity, equity, and inclusion (DEI) efforts nationwide.

EEOC and DEI

The EEOC is responsible for enforcing federal anti-discrimination and anti-retaliation laws that relate to hiring, firing, promotions, harassment, training, wages, and benefits. Under the 2016 Trump administration and the leadership of corporate attorney Janet Dhillon as chairperson, the EEOC shifted to a pro-business approach, allowing the EEOC to become more selective with which cases to pursue.

The current EEOC is locked into a Democratic panel majority—only one Republican is on the commission—that will remain in place until 2026. Trump will most likely appoint a Republican chairperson again. This indicates that current protections in place for minority employees will be consistent for at least two years; after that, we can expect additional resistance to employee claims of discrimination.

As for other developments, administrative activity has been geared towards whistleblower and retaliation claims rather than traditional discrimination. Discrimination claims face a higher bar of proof on a plaintiff, based on the prima facie requirement that plaintiffs must be able to prove direct evidence of discrimination or otherwise face a higher burden of proof. Retaliation claims are favored because there is a high likelihood of factual dispute unless the employer can demonstrate a clear, nonretaliatory purpose for whatever employment decision was made.

Whistleblower claims remain strong due to increased whistleblower protections under both federal and state law. A challenge also remains pending regarding the EEOC’s implementation of the Pregnant Workers Fairness Act, a bipartisan bill being challenged because of its designation of abortion as a medical condition that employers must accommodate.

As for DEI efforts, the Supreme Court’s June 2023 decision to strike down race-based affirmative action in college admissions has raised questions about the legality of such programs in the workplace. The decision did not directly address employer DEI programs, but it has emboldened challenges to them. It is expected that Trump will promote the expansion of the ban on affirmative action or DEI programs.

Several state attorneys general have written letters to large private employers stating that race-based preferences “whether under the label of diversity, equity, and inclusion or otherwise” may violate federal and state anti-discrimination laws. Several Republican states have passed anti-DEI legislation banning certain DEI practices in state agencies. Trump is also likely to enforce executive orders prohibiting federal contractors from providing diversity training or discussing “divisive” topics. The protection of diversity initiatives, particularly with respect to sexual orientation and gender identity, will likely be deprioritized if not eliminated.

FTC

The largest employment-related development from the FTC in years was its proposed Rule banning non-compete agreements nationwide. The rule, issued on April 23, 2024, was immediately challenged, with a federal court in Texas issuing a nationwide injunction, finding that the rule went beyond the FTC’s rulemaking authority, which is currently pending appeal.

Trump’s appointment of a new FTC chair may impact the implementation of this rule, given the narrow 3-2 vote passing it—the two Republican commissioners voted no. Still, the more likely area to watch is the court system, with the worker-friendly rule now facing an uphill battle against the conservative majorities of the U.S. Fifth Circuit and Supreme Court.

In the meantime, employers can safely continue to enter into and enforce non-compete agreements that remain compliant with state law.

DOL

Trump recently nominated Congresswoman Lori Chavez-DeRemer (R-OR) to serve as Secretary of Labor, a uniquely positioned appointment of a congresswoman who has championed at least some worker-friendly bills during her tenure. Still, Trump’s first term saw significant rollbacks in worker protections. Some changes to expect include the classification of independent contractors and the rules determining the salary threshold for overtime provisions. Trump has also vowed to reinstate “Schedule F,” an executive order that would reclassify the employment status of thousands of federal workers to be at-will.

In 2024, the DOL implemented the “economic dependency” test for the distinction between independent contractors and employees under the Fair Labor Standards Act (FLSA). Under that test, six nonexclusive factors are considered in determining whether a worker is correctly classified as a contractor: the worker’s opportunity for profit or loss depending on managerial skill; investments by the worker and the employer; the degree of permanence of the working relationship; nature and degree of control; extent to which the work performed is an integral part of the alleged employer’s business; and skill and initiative. One major development expected under the new administration is an employer-friendly return to the former Trump-era rule, making it easier to classify individuals as independent contractors, potentially by overturning this rule.

As for wage and hour issues, beginning July 1, 2024, the DOL increased the salary threshold for exemptions to the wage and hour protections of the FLSA from $35,568 ($684 per week) to $43,888 annually ($844 per week). A second increase was planned for January 2025, making millions of previously exempt employees nonexempt from overtime pay unless employers raised the salary to meet the new threshold.

On Nov. 15, 2024, the Eastern District of Texas issued a nationwide injunction vacating the FLSA’s overtime rule that would have increased the salary threshold. The court stated that the salary increase was too steep and intentionally kept low to account for regional differences, finding that it was not a substitute for an analysis of an employee’s duties. As such, the previous Trump administration’s lower salary requirement stands and is expected to remain in place, along with the existing federal minimum wage.

NLRB

Under the Biden administration, labor advocates and unions have enjoyed favorable actions over the past few years. Under the current Democratic NLRB Chairman Lauren McFerran, new standards for what is considered concerted protected activities are in place, making it harder for employers to enforce workplace misconduct rules. The current rules make it more difficult to decertify unions, give the green light for third parties like union representatives to accompany safety inspectors during facility walkarounds, permit workers to promote political and social causes on their workplace uniforms, and create a labor-friendly framework for determining when employers are required to bargain with unions without a vote by employees.

Once in office, Trump is expected to remove NLRB General Counsel Jennifer Abruzzo and overturn a number of NLRB decisions and policies to strengthen employers again, including decisions that very broadly define what constitutes “protected concerted activity.” Trump has also expressed the intent to eliminate the employer’s ability to voluntarily recognize a union after a card check, allow decertification petitions while a collective bargaining agreement is in effect, and revise NLRB jurisdictional standards.

Immigration

Trump announced that he would challenge many immigration regulations and policies, including the Deferred Action for Childhood Arrivals (DACA), which is aimed to protect undocumented immigrants who came to the United States as children, a policy implemented by the Obama administration, and other immigration issues. This could lead to mass deportations of individuals who have lived and worked in the United States for many years or even decades, significantly impacting the workforce. DACA alone accounts for more than 500,000 workers.

Furthermore, employers can expect that business immigration regulations will be put back in place, raising the bar for employer-sponsored green cards and expanding penalties for employers harboring undocumented workers. Employers should ensure compliance with I-9 employment eligibility verifications and ensure that their employees are working legally, particularly for employers reliant on unskilled labor.

The Takeaway

While all of these changes may not take place on day one of the second round of Trump’s presidency, he has indicated that his intent is to move full-speed ahead starting on Jan. 20, 2025. Challenges and disagreements are sure to abound; however, a few things will likely stick. The most important takeaway is that employers should monitor developments and make sure their policies remain compliant with an ever-changing landscape.

Reprinted with permission from the December 30, 2024 issue of The Legal Intelligencer. © 2024 ALM Media Properties, LLC. Further duplication without permission is prohibited.  All rights reserved.