How a Trump Presidency Impacts Labor Relations in the Hotel Industry
By Dana Kravetz Managing Partner, Michelman & Robinson, LLP | November 20, 2016
President-elect Trump is unlikely to support continued federal labor and employment agency activism in wage and hour and other employment-related matters. What does this mean in the context of the hotel industry? Can hotel owners and franchisors expect immediate relief?
In the wake of the 2016 presidential election, we forecast a clear pro-business shift in labor and employment policy under Donald Trump. Republicans will assume control of not only the presidency, but both houses of Congress in 2017. Mr. Trump will also likely act quickly to appoint a conservative justice to the Supreme Court to replace Antonin Scalia, and he will possess the power to fill open seats as they arise on the 12 federal circuit courts. This consolidation of conservative perspectives will have significant consequences for the hotel industry's management-labor relationship, as Republicans will control federal agencies that govern wage and hour laws, union formation, and other significant employment issues.
Remaking the NLRB
Employers are eager to learn how this expected shift in policy will affect their business model and workforce. This sense of anticipation is no more pronounced than in the hospitality industry, where recent rulings by the National Labor Relations Board (NLRB) have upended the traditional hotel franchisor/franchisee model by lowering the bar for a finding of joint-employer liability. Two of the NLRB's five slots are currently vacant and another member's five-year term will expire next December. Mr. Trump will almost certainly fill the two immediate vacancies on the NLRB with Republicans, thus shifting majority control of the agency very early in his presidency. The new administration will no doubt act swiftly to slow or roll back some, if not most, of the labor-related actions of the Obama administration.
Despite his working class support base, President-elect Trump is not likely to support significant pro-labor legislation or regulation that could potentially be perceived as impeding business objectives. After all, in April, the NLRB certified a union for workers at the Trump International Hotel in Las Vegas, over management's objections, and on November 3, the agency officially ordered hotel management to bargain with the workers. Mr. Trump is no stranger to the NLRB's pressures on hotel owners and operators.
In order to understand what a Trump presidency may mean to the industry, it is helpful to examine the following three specific examples of ongoing national disputes related to federal labor rules that will be greatly affected by an increase in Republican executive, legislative and judicial authority. They include: 1) The NLRB's rulings on joint employer liability; 2) The Department of Labor's (DOL's) "persuader rule;" and 3) The NLRB's crack down on mandatory arbitration provisions. There are many other employment-related issues triggered by the recent presidential election, but the three addressed here should be front-of-mind for hotel owners.