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.

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.