The Presidential Election: How Will It Affect Your Workplace and Your Business?
Michael G. Trachtman
Powell Trachtman Logan Carrle & Lombardo, P.C.
MEA General Counsel
The 2016 election will be extremely consequential for businesses in general, but especially for small (i.e., under 500 employees) businesses. Setting aside the party stereotypes and the negative, sometime visceral reactions both candidates seem to engender, the question is whether one party and candidate will be materially better for business than the other. Especially when it comes to small businesses, that is not an easy question to answer. But getting it right has rarely been more important.
What follows is my effort to highlight, from a lawyer’s perspective and without regard for the “common wisdom” that is so often wrong, three of the issues that small business owners should seriously consider when making their choice.
The Supreme Court
The Supreme Court under Chief Justice Roberts is the most pro-business Court in decades – according to some analysts, the most pro-business Court since the 1930s.
Many of the Supreme Court’s headliner decisions have been decided by a 5-4 margin: four Republican-appointed “conservative” justices are on one side; four Democratic-appointed “liberal” justices are on the other side; and Justice Kennedy, the “swing vote,” is in the middle. This has been the pattern in, for example, the decisions on campaign finance reform, gun control, same-sex marriage, religious freedom, abortion, affirmative action … and many more. (Shameless plug: I deal with these and related issues in a newly revised edition of my book, The Supremes’ Greatest Hits, which will be released in September.)
However, while the Roberts Court, as a whole, has been decidedly pro-business, the Democrat\Republican — liberal\conservative pigeonhole has not always been a reliable predictor of how individual Supreme Court justices will vote on business issues.
For example, in 2013, the Minnesota Law Review exhaustively studied the Supreme Court’s business decisions, and concluded that while the so-called conservative justices usually favored business interests, some of the most so-called liberal justices were only slightly less likely to vote in favor of business than the median justice in their survey. And in cases involving retaliation and discrimination claims, several of the “conservative” justices rejected the efforts of employers to limit employee rights and have instead voted to facilitate these kinds of employee claims.
Barring an unforeseen turnaround by the Senate, the next president will have the right to choose the next justice, who may shift the Court’s tenuous balance one way or the other. But as significant as that is, consider also the fact that Justice Ginsburg was born in 1933, Justice Kennedy in 1936, and Justice Breyer in 1938. The actuarial reality is that the next president will probably have the ability to make two or three appointments to the Court – and that will influence the nature of the Supreme Court’s business and other rulings for at least a generation.
In respect to the Supreme Court, therefore, the stakes have rarely been higher.
Both nominees and both parties extol the need to promote the interests of small business. But the genuineness and wisdom of their respective positions remains a subject of significant debate and disagreement. In February 2016, Fortune Magazine called Mr. Trump “the worst president for small business.” At the same time, The Huffington Post published an article, “Why Small Business Owners are Backing Trump.” The same divergence holds true for Mrs. Clinton, who has declared that she will be “the small business president.” In May 2016, CNBC published an article, “Trump vs. Clinton: Small Business Owners Divided”.
In my mind, apart from an informed gut feel and common sense analysis (which should not be minimized), the debates, more than the candidates’ party affiliations, labels, speeches, commercials and published positions, will (hopefully) be the best window into their true predilections, and the criteria they will utilize in appointing future Supreme Court justices.
So what, you say? Is this really worth your serious attention? To get an idea of how important the Supreme Court is to businesses, consider the following decisions of the Roberts’ Court, many of which may be in the cross-hairs of a future Supreme Court majority.
- Employee class action suits against employers. The Roberts Court has made it very difficult for employees to band together in a class action to sue their employers for discrimination, wage disparities, and an array of other issues.
- Arbitration agreements. The Roberts Court has endorsed the right of businesses to force employment claims into private arbitration, outside of judges and juries.
- Liability for actions of “supervisors”. Employers are liable for harassment by their “supervisors.” The Roberts Court has narrowly defined who qualifies as a “supervisor,” which greatly limits potential employment law liabilities.
- Age discrimination. The Roberts Court has made it more difficult for employees to win age discrimination lawsuits.
- Equal pay. In the much-debated Lilly Ledbetter case, the Roberts Court imposed a very short statute of limitations on equal pay claims.
Executive Orders, the EEOC, the NLRB, and the Department of Labor
In the face of a long term Congressional stalemate, it has been the president (through Executive Orders), and the federal agencies (the leadership of which is appointed by the president) which have attempted, and in many respects succeeded, in changing the business and employment law landscape.
Again, wondering why this election matters? Here is a sampling – a small sampling – of the Executive Orders and the agency regulations and rulings that the next president will have the authority to change – or retain, and build on.
- In 2016, President Obama issued an Executive Order requiring many companies that do businesses with the federal government to provide paid sick leave to their employees, starting January 1, 2017.
- The Department of Labor vastly expanded the number of employees to whom employers must pay overtime.
- The EEOC made it much easier for employees to bring retaliation claims, it has attempted to restrict the right of employers to do background checks on applicants, it has expanded the reach of the ADA, it has expanded the right of employees to bring gender-based discrimination claims … and much more.
- The NLRB has made it much easier for unions to organize workplaces, and it has made it much more difficult to discipline employees for what had always been considered cardinal offenses.
To close this loop and bring us back where we started, the president’s orders and the regulations issued by government agencies can be (and are often) challenged in Court, and it is the Supreme Court that makes the final call, as it recently did when it vacated President Obama’s Executive Order on immigration.
The Other Issues
Small business owners obviously have concerns that range beyond their business interests. In this realm, there are some clear choice, all of which center on the Supreme Court’s tenuous, 4-4 composition. For example, if you feel strongly that campaign finance reform should be implemented, a Democratic nominee would likely shift that balance in your favor, by a 5-4 vote. If you are opposed to gun control, a Republican nominee would likely reinforce recent decisions validating gun rights, again by a 5-4 margin. And so it will go with a panoply of other issues, from religious freedom to the rights of corporations.
No one said this would be easy. And it surely is not. But, as many politicians have paraphrased Dante in other election years, “the hottest place in hell is reserved for those who take a position of neutrality in times like these.”
Michael G. Trachtman is MEA’s general counsel and the President of Powell Trachtman Logan Carrle & Lombardo P.C., a 30+ attorney King of Prussia-based law firm that has represented businesses and business people for over twenty-five years. He can be contacted at email@example.com. See www.powelltrachtman.com for more information.