By: Edmund O’Meally, Chair, PK Law Labor, Employment and Education Group
The election of a new President, particularly from a different party, always results in some changes in federal employment laws and regulations. That is especially so where the President’s party also controls one or both chambers of Congress. In light of the election victory of President Trump, there are a number of short and long-term impacts that may be on the horizon with respect to federal labor and employment laws.
For one, we can expect some swift changes on the make-up of the National Labor Relations Board (NLRB) shortly after inauguration day. NLRB Chair Lauren McFerran’s term expires on December 16, 2024, and, although President Biden has nominated her for another five-year term, it is questionable whether the Senate will be able to confirm before new senators take their seats in early January. If not, her replacement will then be nominated by President Trump after he is inaugurated with certain Senate confirmation. There is also a current vacancy on the NLRB which President Biden also will be unlikely to fill before he leaves office, thus leaving an opportunity for another Trump appointee. With the addition of current NLRB member Marvin Kaplan, who was appointed and confirmed in July of 2020 during President Trump’s last term, we will very likely see a majority of Trump appointees on the NLRB in early 2025. During the Biden administration the NLRB has been aggressively pro-union. We can anticipate that President Trump’s appointees will return to a more pro-management approach. One certain change will be the replacement of NLRB General Counsel Jennifer Abruzzo who has pushed enforcement to new levels – particularly on the prosecution of unfair labor practice claims under Section 7 of the National Labor Relations Act dealing with employee concerted action and the prohibition of non-compete agreements for non-managerial employees whether in a unionized workplace or not. Of note, President Biden replaced Abruzzo’s Republican predecessor Peter Robb immediately after the inauguration, and might expect President Trump to follow the same course of action with Abruzzo.
The impact of a change of NLRB policy will not only affect private sector workplaces but Maryland public sector workplaces as well since the newly enacted Maryland Public Employee Relations Act specifically provides that the labor rights of Maryland public sector employees is intended to follow the rights of employees under the National Labor Relations Act and that decisions of the NLRB may be afforded persuasive weight by the Maryland Public Employee Relations Board.
Another anticipated change will be a pull back of the Federal Trade Commission’s 2024 final rule prohibiting non-compete agreements for anyone other than senior executives. You can expect that this will be at the top of the U.S. Chamber of Commerce’s agenda when lobbying the new Trump Administration. Here, however, the FTC’s five commissioners each have seven-year terms, and only one commissioner’s term is expected to expire in 2025, so it may take longer for the Trump Administration to push a change. In the meantime, the United States District Court for the Northern District of Texas has issued a nationwide injunction in Ryan, LLC v. Federal Trade Commission, barring enforcement of the Rule. Although the FTC has appealed that decision, the change from the Biden Administration to the Trump Administration may have an impact upon the prosecution of the appeal.
Another possible change concerns the campaign promises to eliminate federal income tax on tips and overtime. Stay tuned on that! If overtime pay is exempt from federal income tax, that will certainly have implications under the Fair Labor Standards Act (FLSA). The recent changes to the exempt salary levels under the FLSA regulations raising the weekly salary basis for most exempt employees from $684 to $844 per week as of July 1, 2024 and with an additional increase again to $1,128 per week on January 1, 2025, may cause some employers who are contemplating increasing exempt employee salaries to meet these new levels to consider converting some employees to non-exempt status if overtime pay becomes exempt from federal income tax. The change of federal tax laws may be a heavy lift for Congress if the House majority flips from red to blue (which, as of the morning after the election, appears uncertain), but it will be worth careful consideration for employers if this campaign promise comes to fruition.
PK Law’s Labor and Employment Attorneys
Edmund O’Meally is Chair of PK Law’s Labor, Employment and Education Department. He has worked closely with superintendents, boards of education, private schools, and private sector employers for over 36 years on a wide-variety of matters including collective bargaining, employment litigation, Title IX, civil rights litigation, construction and procurement issues, and Open Meetings Act compliance. Mr. O’Meally can be reached at eomeally@pklaw.com and 410-339-6757.
