On the employment front, what changes are likely under Trump?

Donald Trump

Whether the feeling is a breath of fresh air or a sense of doom, change is in the air in Washington following Donald Trump’s decisive election victory to re-take the White House.By most accounts there will be policy shifts accompanied by strong disagreements, and that means one thing: more work for lawyers.Trump’s initial announcements on his choices for adminstrative positions portend coming controversy in Washington on a number of fronts. The president-elect’s picks for top positions have been called “social vigilantes” who will “create a climate of fear and intimidation” according to Maryland Congressman Jamie Raskin, remembered for playing a key role in Trump impeachment proceedings. The primary target of the new team promises to be any sense of “woke” policies in business and government.Hugh Murry, chair of McCarter & English’s labor and employment practice in Hartford, said one of the key battlegrounds will be at the National Labor Relations Board, particularly with the precedent set by President Joe Biden, who broke with tradition and fired NLRB General Counsel Peter Robb shortly after taking office. Current NLRB General Counsel Jennifer Abruzzo will likely suffer the same fate. “The NLRB has become more and more partisan and political in recent years,” Murray said. “It was always that to an extent, but now the pendulum swings going back and forth between each administration are higher. Biden fired Abruzzo on his first day in office, which was something new and different, so I expect that will happen again at the beginning of Trump2.0.Following that likely decision, many initatives of the current NLRB are likely to be “out the window,” Murray said, including the banning of most noncompetes.“Back in the Obama administration, the NLRB didn’t have a quorum, and for a long time they tried to fake it, until the Supreme Court told them they couldn’t,” Murray added. “The president may decide not to appoint someone, and if the board drops below three members, it cannot function. I suspect there will be decreased funding for enforcement activities across the board, but I do expect a lot of the core functions of the agencies and laws will continue.”At the Federal Trade Commission, non-competes also stand to be on the chopping block, as an effort to outlaw to outlaw them is likely to die outright. Current FTC Chair Lina Khan’s term has expired, but under statute she will serve until her replacement is confirmed by the Senate, which should happen in January. In the past several years, some Republicans have proposed their own legislation dealing with non-competes, including Vice President-elect J.D. Vance and Florida Sen. Marco Rubio, Trump’s reported pick for Secretary of State. Still, the issue is unlikely to be taken again with Trump in the White House.“Some of the actions of the FTC have also been to try and limit the reach of Big Tech. I think it will be interesting, but I’m not sure if it will be wholly explainable by traditional left-right politics,” Murray said. “I think it will be something new and interesting.”Whether it’s at the NLRB, the FTC or the Department of Labor, the tone is likely to shift to one that is pointedly more pro-business, Murray said, but that doesn’t always mean wholesale changes. “Traditionally, 90% of unfair labor practices will not change. People handling those will be acting within the statute and doing what they’re supposed to do, but some innovations will probably go by the wayside. I expect we’ll return to some of the things from the end of Trump’s first term,” Murray said.That includes a push to shut down diversity, equity and inclusion requirements, which Trump has hinted at in his announced plan to “purge” the military. “There have been a number of privvate lawsuits saying DEI initiatives have gone too far,” Murray noted.Experts and legal observers have said that Americans can also expect a more measured Securities and Exchange Commission, unlikely to test the boundaries of its enforcement authority. “We’ve already seen what the SEC in a Trump 1.0 administration looked like, where the SEC focused on bread-and-butter cases focused on addressing harm to retail investors, such as offering frauds, Ponzi schemes and excessive fees charged by investment advisory firms,” said Jennifer Lee, a Jenner & Block partner who formerly spent 12 years with the SEC, rising to assistant regional director of its enforcement division. “By contrast, the SEC under current Chair Gary Gensler has been more willing to bring individual compliance cases against public companies and investment firms it regulates, even if there is no investor harm,” she said.In his three years as chair, Gensler has steered the commission into uncharted territory, pushing initiatives on climate change disclosure, environmental, social and governance investing and corporate greenwashing. Preemptive compliance measures were at the center of Gensler’s ambitious regulatory agenda as the commission expanded its authority.“The SEC under Chair Gensler has been aggressive in terms of really putting in prospective requirements in emerging substance areas like cybersecurity, ESG and also AI,” Lee said. She added that, under the Trump administration, the SEC will likely pull back on rulemaking and adopt a less stringent stance on enforcement, particularly when it comes to pushing the bounds of existing rules.Trump has vowed to fire Gensler “on day one” and appoint a replacement. One potential successor is Robinhood Chief Legal, Compliance and Corporate Affairs Officer Dan Gallagher, who was an SEC commissioner from 2011 to 2015, according to people familiar with the discussions.At the Department of Labor, Americans can also expect a change in tone, but not necessarily as drastic a change in policies. The Trump II DOL may not roll back recently increased salary levels to establish exemptions from overtime under the Fair Labor Standards Act, but it will almost certainly eliminate the automatic increase to those salary levels every three years.Related: Who will hold the key Trump administration benefits positions?“The new regulation is in place and set to increase salaries Jan. 1,” Murray said, “but I suspect the automatic thing will go away. The difficult thing with regulations that are in place and finalized is you have to go through the entire notes and comments sections to change regulations. By the time that happens there would be a lot of people entitled to overtime. I don’t think they’re going to want to take that away from people.”As was the case in the first Trump administration, businesses will have a much harder time hiring and retaining foreign workers, Murray noted. While much of the political rhetoric has been around undocumented immigrants, the processes for high-skilled legal immigrants was severely constricted in 2017-20. Immigration at all levels is expected to become more difficult.“I think that’s an area where the rhetoric is different than reality,” Murray said. “The entire immigration system became very difficult from 2016 to 2021. The quotas were stronger and the waits were longer, and it was just a difficult time for businesses that wanted to have workers. I suspect there will be a crackdown at the border and a lot of workplace raids.” But that may not be the best decision for companies that want to stay competitive.In the end, Trump’s announced choices for cabinet members suggest what many already know—that he wants people who will agree with him. “I think he’s going to go with people who do what he wants. I don’t think he’s going to have people in the room who tell him things he doesn’t want to hear.”In states like Connecticut that voted overwhelmingly for the Harris-Walz ticket, Murray said he does not expect a great deal of payback. “If there’s a disaster where we need FEMA money it might be a day slower, but I don’t think we’re on Trump’s radar in the Northeast and California. One of the good things about our federal system is different states can do different things, and I’m sure many of them are happy the federal government doesn’t control everything.”Maria Dinzeo contributed to this story.