President-Elect Donald Trump offered little specifics about employment
law policies on the campaign trail, except for Ivanka’s idea of six weeks of
paid maternity and elder care leave, coupled with child care tax benefits. But
Trump painted enough broad brush strokes to offer some possibilities. He also
energized whites, a demographic group not emphasized since George Wallace’s
failed candidacy. That reality points all of us in a starkly new direction for
employment law.
Important, too, he chose a running mate who championed a
religious freedom law that allowed certain private businesses to discriminate
against the LGBT community. Little noticed beyond Indiana, Vice President-Elect
Mike Pence helped to enact one of the nation’s harshest right-to-work laws.
Looking to the future in this column, I view Pence as the main shaper of
specific labor and employment laws while Trump plays the ceremonial role of figure
head for the U.S. government. What follows are not predictions, but extrapolations
from campaign themes, Trump rallies, and Pence’s track record.
The White Vote
While immigration is the lead story, it’s important to
contemplate the possibilities of tectonic change for Title VII. Essentially,
the law can be turned upside down because Republicans control the three
branches. So what’s possible here?
First, disparate impact theory is probably going to undergo
legislative scrutiny. Specifically, Congress might enact a bill to repeal its
previous codification of Griggs v. Duke
Power. That seminal decision ruled that employment practices which are
neutral on their face but have differential impact by race are discriminatory
unless the employer has a substantial business justification. A good example is
the employer who does a background check on applicants for arrests and
convictions. The practice is neutral on its face but has strong disparate
impact on black males. A one sentence bill, passed by Congress and signed by
President Trump, would end 50 years of bedrock antidiscrimination law. It’s
hard to imagine this would not also adversely affect the employment
discrimination bar, on the plaintiff and defendant side.
Next, whatever remains of affirmative action after Ricci v. DeStefano is now on life
support. The origins of affirmative action are relevant: the concept originated
in Truman, Eisenhower, Kennedy and Johnson executive orders that pertained to
federal contractors. These orders trace to F.D.R’s bold executive order to racially
integrate military contractors. A president’s procurement powers are immensely potent.
It’s reasonable to guess that Trump will redline existing executive orders that
have been expanded beyond race to include sexual orientation.
What about a white worker union? If you doubt this, visit
the Southern Poverty Law Center and click near the top, a tab for “Hate Map.”
As I write, there are 892 hate organizations arrayed all over the U.S.
Intriguingly, the highest concentration of groups mirrors Trump’s strongest
voter areas. I recently clicked on an Indiana neo-Nazi party. The new piece for
me was its emphasis on “white economics,” the idea (which I emphatically
disavow) that it’s important to support your race. If you think it’s
far-fetched to believe that this group would try to form a union, recall that “Nazi”
stands for “National Socialist German Workers
Party.”
Would the NLRB certify a neo-Nazi group as a bargaining
representative? That’s a tough call. Duty of fair representation case law emanates
from racist unions that excluded blacks. But suppose the neo-Nazi union is in a
rural area and this workplace has only whites. Further suppose it keeps race
out of the campaign for a union and focuses strictly on economics. If the group
were denied representation rights by the NLRB, how could this action be reconciled
with the First Amendment right to assemble and speak?
Immigration: This
has been Trump’s signature policy stance; but apart from talking tough on a
wall and deportation, he hasn’t offered much.
A Trump administration and Republican Congress would possibly
criminalize the employment of unauthorized aliens. This has been tried by
several states, foremost, Arizona. That state enacted a sweeping law that
criminalized the hiring of unlawful immigrants.
What does that mean exactly? 1. If you knowingly hired this
person, you face criminal fines and possible prison time. 2. If you are this
person (unlawful alien), you also face criminal fines and prison time. The
catch, however, is that you also face expedited deportation.
Few, if any people, were ever criminal defendants in
Arizona—even before the Supreme Court struck down the state law as a violation
of federal policy. But it led to a large exodus of aliens (called “self-
deportation”) and labor shortages—plus rising wages—in agriculture, tourism,
construction, and landscaping.
In U.S. v. Arizona,
the Supreme Court ruled that the state’s criminalization of the hiring process
for unlawful aliens is preempted by the federal law that governs immigration.
In short order, the overruled language of the Arizona law could be proposed in
Congress as an IRCA amendment. It would seem likely to pass and be signed.
Along the way, a policy expert might tell President Trump that is a more
effective and cheaper substitute to building a wall and sending Mexico the
bill.
Arizona offers another potent and harsh tool to thwart
unlawful immigration. Its Lawful Arizona Workers Act requires employers to use
the federal E-Verify system. In contrast, however, IRCA makes use of the system
voluntary. It allows employers to verify worker eligibility by using approved
documents. If a company knowingly hires an undocumented worker on two
occasions, Arizona law permanently bars the firm from doing business in that state.
The law was upheld in U.S. Chamber of
Commerce v. Whiting.
However, Justice Breyer’s dissenting opinion noted that
Congress didn’t require use of E-Verify because “if E–Verify were made
mandatory nationwide, 164,000 newly hired workers each year would erroneously
be adjudged ineligible to work because of name mismatches, as when the worker’s
first or last name is incorrectly spelled in government databases or on
identification documents.” He also noted that discrimination against Hispanics
increased when employer penalties increased under IRCA.
Congress could enact a federal version of the law by barring
employers who violate IRCA as federal contractors. Employers would likely err
in the direction pointed out by Justice Breyer than face these highly punitive
sanctions.
Bankruptcy Loopholes:
Trump famously explained that Hillary Clinton and other political insiders
passed tax and business laws that allowed people like him to take advantage of others.
If elected, he promised to close those loopholes.
Chapter 11 bankruptcy is a subject Trump knows well. The law
allows a company whose debts exceed assets to file for court protection from
creditors—a group that usually includes retirees and employees. In a successful
restructuring, a bankrupt company discharges debt—in this case, walks from
pension obligations. A government corporation called PBGC (Pension Benefit
Guaranty Corp.) pays up to $60,136 (in 2015) of a pension plan that is thrown
off the corporation’s balance sheet.
How is this a loophole? The company, such as a casino,
survives and is recapitalized by new investors. Pensioners lose some of their
retirement—everything over an annual payment of $60,136. Who pays for this? Solvent
companies who administer defined benefit plans. Taxpayers are on the hook for
debts that PBGC cannot pay.
Economists call this moral hazard. The legal system punishes
others (good companies; taxpayers) to pay for the bad risks of bankrupt
companies. The PBGC would be under Trump’s control. He might order the
corporation to “charge back” the bad pension plans to the bankrupt firms. This
would close a big “loophole,” allowing Trump to deliver on his promise.
But it would mean that many more Chapter 11 bankruptcies
would fail; they would therefore convert to liquidation. PBGC, healthy
companies and taxpayers would be off the hook—a good thing. However, in a
liquidation scenario, pensioners would lose everything; and liquidating companies
would lay-off their entire workforce.
“PC” Policies:
Trump’s popularity derives in no small measure from people who are tired of
“political correctness.” This concept is generally found in EEOC regulations
that prohibit employers from creating a “hostile work environment.” That term
applies to sexual harassment, but also racial, national origin, and religious harassment.
A Trump EEOC could redline “hostile work environment,” thereby signaling that
no federal employment policy prohibits the type of degrading language that
Trump has used against women, Mexican, Muslims, and other groups.
English-Only Rules
for Contractors: The federal government has an immense proprietary role
when it wears its hat as a “contractor.” If you’re thinking that this term
applies only to military employers, think again: It covers companies too
numerous to mention, but includes firms that sell paper, cleaning supplies,
computers, food, clothing, building materials, and so on. It is no stretch of
imagination that a Trump administration would require all contractors to ban
the speaking of all languages other than English in the workplaces of
contractors. Penalties could include debarment.
Religious
Freedom-LGBT Discrimination: The federal religious freedom law would likely
be amended along the lines of Indiana’s recent law that sparked an outcry and
boycotts. One might anticipate the law would be broadly crafted to allow
employers free reign to discriminate in employment based on sexual orientation and
transgender status.
Overall
In teaching employment and labor law for 28 years, I have
instructed my students that this field is dominated by four pillars: 1.
Employment-at-will. 2. Title VII. 3. The Fair Labor Standards Act. 4. The
National Labor Relations Act. A Trump presidency will crack Title VII and the
National Labor Relations Act (with expanded right-to-work and union
decertification). Going forward, the only certainty for lawyers in this field
is great structural change in the types of problems that clients will present for
advice and solutions.
