How Much Will Employment Law Change?

With the Presidential change comes several anticipated changes to federal employment agency initiatives. We are likely to see federal agencies, including the Federal Trade Commission (FTC), the National Labor Relations Board (NLRB), the Department of Labor (DOL), and the Equal Opportunity Employment Commission (EEOC), rescind employee-focused rules implemented during the Biden-Era and return to an employer-friendly scheme over the next four years.

Here are some potential changes employers can monitor under a new presidential era:

FTC: Nearing the end of President Biden’s term, the FTC honed in on its initiative to promote business competition by adopting a final rule that amounted to a near-total ban on noncompetes nationwide. However, on August 20, 2024, a federal court in Texas set aside the FTC’s impending rule before it was set to take effect on September 4, 2024. Since then, the FTC has appealed that decision to the Fifth Circuit Court of Appeals, and subsequently, the FTC appealed a similar decision from a federal court in Florida to the Eleventh Circuit Court of Appeals.

On December 10, 2024, a newly elected Trump announced his selection of current FTC Commissioner Andrew Ferguson as the incoming Commission Chair. Ferguson has been vocal about his opposition of a blanket noncompete ban and instead supports FTC anti-competition efforts only on a company-by-company basis. It is likely that Ferguson will direct the Department of Justice to withdraw the FTC’s pending appeals seeking reinstatement of the pending rule or lead a vote for the FTC to repeal or amend the rule. In any event, it is unlikely that the FTC’s non-compete ban will survive under the new administration.

DOL: Experts are projecting various changes to DOL initiatives under the new administration. Recall in p.s. attorney Steve Rowe’s recent employer alert that on November 15, 2024, a federal court in Texas struck down the DOL’s final rule raising the salary thresholds for the “white collar” overtime exemption under the Fair Labor Standards Act. That ruling vacated the first phase, already taking effect on July 1, 2024, and requiring that employers increase exempt salaries to a minimum of $844 per week ($43,888 annually) from the previous $684 per week ($35,568 annually). The new administration is unlikely to disrupt this ruling given its pro-business focus. Employers can anticipate minimal changes to the salary exemption thresholds for the foreseeable future.

The DOL is also expected to re-implement the 2021 independent contractor rule developed under Trump’s previous term. That rule focused on five economic reality factors to determine a worker’s status: with a primary focus on (1) the nature and degree of control over the work and (2) the worker’s opportunity for profit and loss. Under this test, businesses had more latitude to classify individuals as independent contractors. However, on January 10, 2024, the DOL published a final rule under Biden’s administration that broadened the relevant factors resulting in an increased number of workers classified as employees with accompanying rights. Analysts are projecting yet another reversion to the business-focused 2021 standard to take place soon.

NLRB: President-elect Trump is expected to almost immediately replace the current Board General Counsel Jennifer Abruzzo, with a newly appointed Republican Board General Counsel. Abruzzo issued 26 memorandums driving a more-employee friendly body of opinions during Biden’s presidency. Some of these current memorandums relate to limiting employee surveillance practices and narrowing confidentiality and non-disparagement provisions in severance and settlement agreements. A new general counsel is expected to rescind many of these memos. Subsequent staggered changes to the composition of the Board are likely to result in more conservative, pro-business decisions throughout the next presidential term.

EEOC: The EEOC faces the least amount of immediate change as the Commission is locked under a Democratic majority until 2026. Analysts are suspecting that President-elect Trump will appoint Commissioner Andrea Lucas, the sole Republican commissioner, as chair. Lucas has been critical of the Commission’s DEI efforts, especially in light of the Supreme Court’s recent decisions resulting in the overturn of affirmative action in college admission processes. The Commission is likely to take a more conservative stance on DEI initiatives under Lucas’s potential leadership.

Additionally, employers are likely to see a shift in the enforcement of the recently enacted Pregnant Worker Fairness Act (PWFA). Most notably, the PWFA requires employers to provide reasonable accommodation for employees with limitations related to pregnancy, childbirth, or related medical conditions. Recall that the EEOC has taken the stance that abortion is a pregnancy related medical condition covered under the PWFA with its final regulations and interpretative guidance issued in 2024. The EEOC’s broad interpretation of the PWFA is likely to be narrowed with regard to the hotly contested issue of employers accommodating abortions.

Only time will tell exactly which appointment projections and anticipated policy changes will take place following the presidential inauguration.