Employers taking ‘wait and see’ approach before US presidential election

The United States presidential election takes place in a little over 4 months’ time on 5 November. Voters will decide between incumbent President Joe Biden and his Democratic Party, and former Republican President Donald Trump with the winner inaugurated on January 20, 2025. The polls suggest it is a tight race which means there is uncertainty over the country’s legislative programme. Legislation, which is currently making progress may, or may not, become law by 5 November and, even if it does become law, a Tump administration could reverse it very quickly. 

That uncertainty is a problem if you are a business with a presence in the US trying to plan ahead. For example:

The FTC’s non-compete rule on course to become law on 4 September unless one of the many legal challenges to it proves successful. The rule operates to ban most post-employment non-compete agreements between employers and their workers. It’s a very big deal for employers concerned about how to protect the business if the rule passes.

There is also Biden’s plan to extend mandatory overtime pay to an estimated 4 million salaried workers. That would require employers to pay overtime premiums to workers who earn a salary of less than $1,128 per week, or about $58,600 per year, when they work more than 40 hours in a week. 

There is also the expansion of what constitutes protected employee concerted activity under Section 7 of the National Labor Relations Act. This is where two or more employees act together to improve the terms and conditions of their employment. Over the past decade, the parameters of protected concerted activity have expanded and contracted, based on the objectives of the NLRB under different political administrations making compliance challenging and means employers need to be cautious when taking disciplinary action against employees who have complained about their wages, hours, or working conditions.

So let’s get a view on how the current uncertainty is affecting employers. Scott LeBlanc is an employment lawyer in the US at law firm Husch Blackwell in Wisconsin and earlier he joined me by video-link phone to discuss it. First the election in November:

Scott Le Blanc: “Right, so obviously we have the presidential elections and with that comes the congressional elections coming up at the beginning of November and so anytime we are only a couple months away from an election, an election that, particularly this year, but you know, anytime that we have a large federal election, if there's a change in power there's going to be a lot of changes with respect to laws in many different areas, labour and employment included. So we've got a couple of different things that are going on right now that our clients are wrestling with and they're asking us, what do we do in the meantime between now and the election and a lot of times our answer is it's really wait and see.”

Joe Glavina: “One of the areas of uncertainty, Scott, is around the expansion of what constitutes Protected Concerted Activity under Section 7 of the National Labor Relations Act. Can you tell me about that and the role of the NLRB?”

Scott Le Blanc: “So, the National Labor Relations Board, of all of the federal agencies that we have, and we talked a little bit about the Federal Trade Commission which is the agency that covers the non-compete rule, the Department of Labor which is the agency that enforces the salary basis rule. The National Labour Relations Board, which is concerned with, essentially, union organising activity in the United States is the one federal agency in the labor and employment space that is probably the most affected whenever there's a change in power in the White House. When there is a Republican administration in the White House we tend to have a very hands-off National Labour Relations Board and when there is a Democratic administration in the White House we tend to have a National Labor Relations Board that does everything in their power to try and encourage employees to exercise their rights to unionise and to give unions a leg up in negotiations. So we had four years of a National Labor Relations Board under President Trump from 2016 to 2020. That was followed up by President Biden coming in with a lot of organised labor support and his national Labor Relations Board has been very activist as far as going after employers for things like independent contractor misclassification, electronic monitoring of communications, cracking down on things like non-disclosure agreements. You mentioned Protected Concerted Activity, and this was a theme that first came up in the Obama-Biden administration from 2008 to 2016, which is essentially this concept of non-union employees having certain rights under the National Labor Relations Act to get together and to discuss terms and conditions of their employment and that's called Protected Concerted Activity. So these are the union rules that apply even to non-unionised workplaces and that that is difficult for clients because usually our clients that have unionised workforces understand the scheme and how to work with unions but non-union employers generally tend to think that they don't have any obligations with respect to union rights and so this is something that often is sort of off their radar. So the Obama-Biden administration kicked off this real push toward protecting concerted activity and back then it was really focused on social media policies. The idea that social media is a water cooler for employees to be able to get together and discuss terms and conditions of their employment and gripes that they might have about unfair conditions in the workplace and that's come back under the Biden administration with, I think, even more aggression from an enforcement standpoint at the National Labor Relations Board than we saw under President Obama. We had a recent case that involved an employee at Home Depot who was disciplined for writing Black Lives Matter on their on their work gear and that was determined by the National Labor Relations Board to be protected concerted activity because they interpreted that as a statement of looking for mutual aid and protection in the workplace, not necessarily just a political statement. So they've looked for these opportunities to advance this idea of protected concerted activity. I think, ultimately, the goal is they want employees to feel empowered and, ultimately, that's going to lead to more employees getting together, realising that they have the ability to collectively bargain and form a union. So that's the ultimate goal here and they're trying to open the doors for that type of activity as much as possible in these non-union workplaces.”

Joe Glavina: “So given the uncertainty around this which you’ve talked about, what is the problem facing employers?”

Scott Le Blanc: ”Where this tends to trip up employers is in things like employee handbook policies that speak to things like you can't make statements on behalf of the company, non-disparagement language in employee handbooks, codes of conduct that talk about things like maintaining proper decorum in the workplace. That's the kind of language, this sort of civility language in the workplace, that the National Labor Relations Board is getting really touchy about which they think has the chilling effect on protected concerted activity. Certainly if you're in the middle of an NLRB audit, or an issue that you're dealing directly with the NLRB, where they've highlighted those types of policies as a problem you're going to want to make those changes but if you've so far stayed off the National Labor Relations Board’s radar, and you're not particularly inclined to pick through your employee policies to make sure that none of your language around decorum and appropriate activity and, you know, talking through the right channels in the workplace which may or may not fall foul of what the NLRB is looking at here you might want to wait until making those handbook policies. Generally, if we're asked to do an employee handbook we'll look at that kind of stuff and we'll point it out to clients and we can make a decision about whether or not they want to incorporate, or make certain changes to their policies, but because we're getting closer and closer to an election, and if the Trump administration were to come into power, I think those policies would almost certainly fall off the radar for the NLRB with respect to enforcement. It might be a time where you might want to wait to update your employee handbook until January of 2025.”

Scott went on to talk about those two other major areas of uncertainty in the US, the FTC’s non-compete rule, which is set to come into force on 4 September, if it survives legal challenge, and also Biden’s plan to extend mandatory overtime pay to an estimated 4 million salaried workers. We’ll be covering both of those next week so do watch this space.