While some races remain undecided, it is clear at this point that Democrats will control the U.S. House of Representatives in the next Congress. At this writing, House election results show 222 Democrats and 199 Republicans have won their races, with 14 spots undecided. In the Senate, Republicans have picked up a net of at least two seats, with several races still too close to call. What does this new House Democratic majority, and strengthened Republican majority in the Senate, mean for labor and employment policy over the next two years?
Changes in the House of Representatives
Representative Bobby Scott (D-VA), who is widely anticipated to be the Chair of the House Education and Labor Committee, is expected to pursue an aggressive oversight and legislative agenda on the labor front. Employers can anticipate a stream of hearings in early 2019 examining Trump administration departments and agencies, including the Department of Labor (DOL), the National Labor Relations Board (NLRB), the Occupational Safety and Health Administration (OSHA), and others. Committee hearings and congressional subpoenas will serve to focus attention on Democratic priorities, and may also, as a practical matter, distract these agencies and consume staff time and resources, delaying action on pending regulatory initiatives, such as the DOL’s overtime and regular rate rules, expected to be issued in the near future, or the NLRB’s recently proposed joint-employer rule.1
In addition to greater levels of oversight, we believe it is likely that House Democrats will make labor and employment issues a key focus of their domestic agenda, and initiate legislative proposals on a number of hot-button labor and employment issues. House Democrats are likely to pursue an aggressive legislative agenda through hearings and committee consideration, with a number of bills potentially making it to the House floor for consideration.2 Leading legislative priority contenders include:
- Ban Compulsory Arbitration. Long a focus of employee advocates – and given new weight by way of the #MeToo movement – we expect to see efforts to limit if not ban completely compulsory arbitration of sexual harassment cases and workplace disputes more generally.
- Increase Entitlement to Overtime. Another likely initiative from House Democrats will be to codify Obama-era white collar overtime rules (struck down by a federal court), which would have raised the minimum salary threshold for overtime eligibility to $47,476 (more than double current law), and provided indexed updates of the minimum wage every three years.
- Promote Workplace Unionization. Foremost, the so-called “Workplace Democracy Act” would make it easier for workers to form unions by way of “card check” procedures, contrasting with the current secret-ballot process and potentially subjecting workers to union pressure and intimidation. The bill would also expand the definition of joint employment for collective bargaining purposes, require mandatory arbitration to obtain a first contract, and generally tilt NLRB union election rules in workers’ favor.
- Expand Liability of Joint Employers. If card check proves too far a reach for some moderate congressional Democrats, we can be reasonably certain that legislation will be reintroduced to codify the Obama-era NLRB definition of “joint employer,” which would impose liability and bargaining obligations on a broad range of employers that have little or no control over the working conditions of independent contractors or franchisee employees.
- Raise the Minimum Wage. In the midst of a national campaign by organized labor to raise the federal minimum wage to $15/hour, House Democrats are likely to make legislation increasing the minimum wage and indexing it in the future a front-and-center piece of their legislative agenda.
- Require Mandatory Sick and Paid Leave. Supporters of increased leave mandates can be expected to highlight legislative proposals requiring employers to provide paid sick leave, and paid family and medical leave, through a government-run (and potentially employer-financed) system.
Given that Republicans will continue to control the Senate, the chance of any of these bills making it to the president’s desk (where they would almost surely face a veto) seems slight. That said, we fully expect that House Democrats will use these “message” bills to frame issues for the 2020 elections, and highlight key policy priorities.
What about the Senate?
In the Senate, conventional wisdom held true, with Republicans maintaining control of the upper chamber, and increasing their margin by at least two seats, and potentially more (Republicans picked up Senate seats in Missouri, Indiana, and North Dakota, while Democrats flipped one seat in Nevada; several states, including Florida, Montana, Arizona, are still too close to call definitively).
Although their number has increased, the Republican majority still falls short of the 60 votes necessary to defeat a legislative filibuster, suggesting that few of the controversial or high-profile “message” bills the Democratic House sends over will be considered or passed (and, in the unlikely event that one does, we can safely predict a White House veto, and insufficient votes to override it).
In the face of two more years of gridlock, there is a chance that Senate Republicans, House Democrats, and the White House may compromise and come together on measures enjoying broad bipartisan support, such as infrastructure improvement, although the two sides differ widely on how best to pay for these investments. Lacking such cooperation, Senate Majority Leader Mitch McConnell (R-KY) will likely focus the Senate on doing what it has done best in the last two years: confirming presidential nominations, most notably, federal judges. Prior to the election, the Senate had confirmed 84 judicial nominations (53 U.S. District Court, 29 U.S. Circuit Court of Appeals, and two Supreme Court Justices), and Sen. McConnell has indicated that he anticipates confirming another 25 or so by the end of the year.
At the same time, two years into the Trump administration, hundreds of key political appointee slots remain unfilled or pending Senate confirmation, slowing the progress of the administration’s regulatory agenda. If no “grand bargain” is struck in the lame duck session of Congress (by which a number of Republican and Democratic nominees would be agreed upon to be “packaged” and confirmed in short order), the next Senate session will be pressed to turn to filling a number of still-vacant positions, including the Assistant Secretary for Occupational Safety and Health, the Department of Labor’s Wage and Hour Administrator, and open seats on the Equal Employment Opportunity Commission, National Labor Relations Board, and other agencies.
Of final note, at the state level, State Houses across the country saw an increase in Democratic governors, with Democrats picking up at least seven statehouses (Illinois, Kansas, Maine, Michigan, Nevada, New Mexico, and Wisconsin). Particularly in the face of sustained federal legislative gridlock and congressional inaction, we predict that, as in recent years, states and localities will continue to pursue labor and employment proposals across a range of topics that go beyond the requirements of federal law, and subject multi-state employers to a patchwork of state and local mandates and liabilities.