Donald Trump’s election to be the 45th President of the United States means many of President Obama’s regulatory actions in the labor and employment field will likely be slated for reform or complete rescission. Trump campaigned on regulatory reform and specifically stated that he would, “Require each federal agency to prepare a list of all of the regulations they impose on American business, and rank them from most critical to health and safety to least critical. Least critical regulations will receive priority consideration for repeal.” Here are a few actions that have recently been imposed on business, are in the “least critical” category above, and should be considered for immediate rescission. The U.S. Department of Labor’s “Persuader” regulation should be high on the list. This regulation requires public reporting of many types of services that lawyers provide to employers. The regulation makes it much harder for employers to obtain legal advice and to stay out of legal trouble. This regulation is the subject of a permanent nationwide injunction that was issued by a U.S. district court in Texas on November 16. An appeal of this injunction by the Obama Administration is likely as they have already appealed the preliminary injunction in the case. A final resolution of appeals is not likely to occur before the end of the Obama Administration. The Trump Administration should end any appeals in process after the Inauguration on January 20 and abide by the holding of the district court. Another Labor Department action, the “Blacklisting” regulation, adds an estimated $454 million to the cost of doing business for federal contractors. The regulation requires federal contractors to compile and report on a range of enforcement activity against them. The Department all but said that the regulation was unnecessary, but pushed ahead regardless. This regulation and a guidance document come as a result of Executive Order 13673 that was issued by President Obama on July 31, 2014. Upon taking office, President Trump could rescind the Order. This regulation is also in litigation in another U.S. district court in Texas and is also currently the subject of a preliminary injunction. Other actions affecting employers that have caused problems could be reversed with an executive order or a change in enforcement policy. Among these are many actions taken by the Labor Department’s Office of Federal Contract Compliance (OFCCP). The OFCCP has pursued actions against federal contractors for having too many or too few employees with a particular skin color or ethnicity. In many of these cases, OFCCP has not alleged any wrongdoing, but instead claims discrimination because they believe the racial composition of the employer’s workforce does not match that of the surrounding geographic area or applicant pool. In some instances OFCCP has alleged that the employer discriminated by giving preference to Asians and Pacific Islanders, and in other instances they have alleged the employer was discriminating against Asians. These allegations while publicly described as wrongdoing are actually built on statistical models. Due to the high cost of defending against such allegations, many companies simply settle to make the matter go away. One such company was FedEx. In their statement they stated, “While we admitted no wrongdoing and believe the DOL’s position was not supported by the law, we agreed to pay $3 million to avoid what would have been certainly a prolonged and much more expensive resolution process.” This, to fend off allegations that “were based on computer statistical analysis rather than on individual complaints or investigations.” These are just a sampling of the many regulatory challenges that will face the Trump Administration. In order to fulfill the President-Elect’s vision to remove strangling regulations, these, and many other areas, should be carefully examined with an eye toward rescinding the harmful regulatory activity of the last several years. Nathan Mehrens is President of Americans for Limited Government Foundation and previously served in the U.S. Department of Labor.
