By Lawrence Z. Lorber, Leon Rodriguez, Samuel P. Sroka, and Scott P. Mallery

Seyfarth Synopsis: This special post-election report is brought to you by Seyfarth’s Policy Matters Newsletter. With so much at stake, we have collected the top-of-mind issues to watch as the election results take shape. 

The Current State

While the nation hoped for a rapid resolution to this year’s election, it is, after all, 2020, and we should have known better. Indeed, as Charlie Sykes of the Bulwark put it: this election will be decided by the Big Ten, not the SEC. Millions of votes are still being counted in battleground states across the Country, but at this juncture, Joe Biden has a clearer path to the White House than the current President, but it is far from over. While it was understood relatively early Tuesday that the House of Representatives would remain in Democratic control — although apparently with a reduced majority — we learned today that in all likelihood the Senate will remain under Republican control. Thus, while final results will have to be certified and we will undoubtedly have to go through a thunderstorm of lawsuits, it appears that we face four more years of divided government, although now the administration will likely be under control of Mr. Biden and the Democrats. In light of Republican continued control of the Senate, we assume that policy changes will primarily be delivered by executive action, through regulation, or through Executive Order rather than legislation. Because of this, changes will be more nuanced and somewhat slower in occurring. Therefore, this piece will attempt to address some scenarios that may be relevant to employers in a Biden administration, with some discussion of what the Trump administration has done, or would likely do, in the somewhat unlikely case that he prevails.

What is going to happen to the Senate?

As it stands as of the publishing of this piece, the Senate is composed of 2 Independents who caucus with Democrats, 45 Democrats and 48 Republicans, with Sara Gideon’s recent concession to Susan Collins. Democrats picked up two seats with the defeats of Cory Gardner in Colorado and apparent defeat of Martha McSally in Arizona; Republicans flipped a seat with the defeat of Doug Jones. Republicans were also able to hold onto seats in Montana, Iowa, Maine, and South Carolina with Steve Daines victory over Steve Bullock, Joni Ernt, Susan Collins, and Lindsey Graham, all Republicans, able to hold on to their seats. Senator Thom Tillis (R., N.C.) has declared victory in his reelection bid against Democrat Cal Cunningham and Gary Peters is leading in his race in Michigan. That leaves the two races in Georgia, where one Senate race will advance to a January runoff between Republican Sen. Kelly Loeffler and Democrat Raphael Warnock; the other race, between incumbent Republican David Perdue and Democrat Jon Osoff remains too close to call. Under Georgia law a candidate must receive 50% of the vote or the top two finishers go into a runoff, now on January 5, 2021. As of now, Senator Perdue is slightly above 50%.

Based on the foregoing, it looks unlikely the democrats regain control of the Senate. Even if the Senate evens to a 50-50 split, and Joe Biden wins, making Kamala Harris the deciding 101st vote, the exceedingly thin margin of power makes it unlikely Joe Biden will be able to press some of his more progressive policy priorities. For example, even in the aforementioned scenario, it would be exceedingly difficult to convince moderate democrats in the mold of, say, Joe Manchin , to vote for example to support the PRO Act as currently drafted. Readers should also be aware of the ever-present filibuster and cloture rules, each of which would necessitate 60 votes and with the Senate in its apparent 2021 configuration, any attempt to abolish the filibuster as it applies to legislation appears to be shelved.

How the makeup of crucial Federal Employment Agencies may look.

While the temporal terms are set for the membership of National Labor Relations Board (“NLRB”) and the Equal Employment Opportunity Commission (“EEOC”), which Administration ultimately parks in the White House will have significant influence on the policy direction of those crucial agencies.

Currently, the makeup of the NLRB is as follows:

  • John Ring (Rep), current chair – term ends Dec 16, 2022;
  • Marvin Kaplan (Rep) – term ends Aug 27, 2025;
  • Bill Emanuel (Rep) – term ends Aug 27, 2021;
  • Laura McFerrin (Dem) – term ends Dec 16, 2024;
  • Peter Robb, General Counsel – term Ends  Nov 17, 2021;
  • one democratic seat remains open.

The EEOC is currently comprised as follows:

  • Janet Dhillon (Rep), current chair – term ends July 1, 2022
  • Keith Sonderling (Rep), current Vice Chair – term ends July 1, 2024
  • Andrea Lucas (Rep) – term ends July 1, 2025
  • Charlotte Burrows  (Dem) – term ends July 1, 2023
  • Jocelyn Samuels (Dem) – term ends July 1, 2021
  • Sharon Gustafson, General Counsel – term ends Aug 2023

Interestingly, both the NLRB and the EEOC will remain under Republican control for the initial period of a Biden Administration. A Trump Administration would likely see additional membership pressing policies intended to reduce obligations on business. A Biden administration, conversely, would result in eventual Democratic control on the boards of these crucial agencies, which would likely mean attempted rescission of Trump initiatives and replacement with prior Obama era rules and other initiatives set out in the Biden campaign policy agenda. However, notwithstanding the fact that Biden will appoint one of the Democratic Commissioners as Acting Chair of the EEOC, the Republican majority will undoubtedly stop any new initiatives such as resurrecting the Component 2 compensation data collection requirement.  The NLRB primarily is a case deciding agency. However, the NLRB did issue new election regulations reversing the Obama so-called “Ambush Regulations.” If the Democrats take over the NLRB this summer, it perhaps can be expected that the reconstituted Board will quickly move to rescind or change the regulatory regime established by the Republican Board.  Especially as the Senate results makes enactment of the PRO Act doubtful, expect a Biden board to move as expeditiously as it can to reformulate NLRA processes and procedures to open up union organizing and union bargaining authority.

What About OSHA? The fate of a critical agency during a pandemic.

Throughout the entirety of the Trump Presidency, OSHA has operated with a vacancy in its top leadership post — assistant secretary of labor for occupational safety and health. Last year, the President nominated FedEx’s vice president of safety, sustainability, and vehicle maintenance, Scott Mugno, to the top post, but because there was no progress on his confirmation, he withdrew his nomination, leaving Deputy Assistant Secretary of Labor Loren Sweatt in charge of the agency through the remainder of the Trump first term. OSHA has been criticized for a lack of enforcement during the pandemic. The Democrats have long called for OSHA to issue an Emergency Temporary Standard requiring that Pandemic safety guidance be converted into mandatory safety practices. Such a requirement was included in the so-called Heroes Act  —which we wrote about here — passed by the House in May (it was never taken up in the Senate). So a Biden appointee at the Department of Labor and at OSHA can be expected to move quickly on a pandemic initiative.  Also expect reinstatement of the injury reporting regulations and a more aggressive enforcement posture. Publicity of violations would also likely increase as Dr. Michaels — assistant secretary of OSHA under Obama — has touted the importance of deterrence through publication.

Could Bernie Sanders be named Secretary of Labor?

It has been widely reported that, despite their noted policy disagreements, Bernie Sanders would happily accept a position as Secretary of Labor in a potential Biden Administration, an idea endorsed by a number of left-leaning organizations. While Bernie Sanders and Joe Biden have notable policy differences — particularly when it comes to healthcare policy — the two share a focus on workers, expanding health care, and expanding the social safety net. Since losing the primary, and despite their noted differences, Sen. Sanders has been hard at work to elect Joe Biden and influence the Democratic platform. As astute readers of this newsletter are aware, back scratching is nothing new in presidential politics — really, in politics in general — and Sen. Sanders will likely be looking for a scratch in the form of a secretarial appointment for all of his work on the campaign. Indeed, the DOL is a particularly fitting perch for Sanders to attempt to implement his ambitious labor and employment policy agenda.

The Secretary of Labor holds significant power over policies that affect employers. For example, the Secretary of Labor oversees the enforcement of key laws that require employers to pay workers a minimum hourly wage and overtime, and investigates wage theft and recovery of back wages (between 2009 to 2016 the DOL collected more than $2 Billion in back wages). The secretary can direct the agency to expand or curtail these protections. For example, the Obama Administration took action to raise the wages of low-wage workers by changing overtime rules to raise the salary threshold for workers receiving overtime from $23,660 to $47,476, affecting an estimated 4.2 million additional workers. In 2017, a federal judge in Texas struck down the administration rule, agreeing with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule was unlawful and granted their motion for a nationwide injunction. Instead of appealing the ruling, the Department of Labor under the Trump Administration released a final rule lifting the salary limit from $23,000 to about $35,000 and scrapping the cost-of-living increases. Even if it is not Sanders, a Biden administration likely would also come with an aggressive appointment to this key post; if that happens, employers should embrace for An aggressive regulatory enforcement and policy initiative regime.

Of course, if the Senate majority remains Republican, a Biden administration may forego the quixotic adventure of a Sanders DOL nomination. The Democrats may very well need his vote in the Senate.