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On January 28, 2025, Kristofor Hanson and Kevin Terry hosted a complimentary live webinar, "NLRB Update: How the New Administration May Impact Labor Laws." Their discussion highlighted key legal, regulatory, and procedural shifts employers, employees, and labor unions can anticipate under the new Administration. The following* is a condensed version of the discussion. <a href="https://register.gotowebinar.com/recording/5005255551028503300" target="_blank" rel="noreferrer noopener">Watch the full recording here</a>.

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<cite>*Information provided below is for general information purposes only and is not intended to be legal advice. While we strive to ensure the accuracy and timeliness of the information, laws and regulations are subject to change. We recommend contacting your Michael Best attorney for advice specific to your situation. </cite>

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During the Biden Administration, the National Labor Relations Board (NLRB) had a democratic majority. They issued many pro-union Board decisions and pro-employee advice memoranda that impacted all aspects of labor law. We saw an increase in the number of petitions filed by unions and in the number of unfair labor practice charges.

Now, the current Administration is making sweeping changes that will impact every aspect of labor law once again. While the changes are happening at a record pace, we can anticipate the following are likely to occur in some capacity.

Expectation one: Until a quorum is appointed, there will be a backlog in cases before the NLRB

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President Trump’s unprecedented termination of Gwynne Wilcox leaves the current NLRB Board with only two members.

Kristofor Hanson: “In 2010, the Supreme Court ruled that the Board cannot act without a quorum, and a quorum requires three members...With only two members, the Board is not able to issue decisions and is not able to create rules. The last time there wasn’t a quorum was during the Obama Administration. What resulted was a significant backlog of cases."

Expectation two: A new interim General Counsel is likely to rescind many of the previous Administration's advice memoranda

President Trump will likely appoint a more ideologically-aligned interim General Counsel and ultimately nominate a new General Counsel for approval by the Senate.

Kevin Terry: "It's likely we will see from an interim, many of the same rescissions of those advice memoranda (from the Biden Administration)...One point to mention as well is while the memos are rescinded, it also means that the interim General Counsel and the acting General Counsel are likely to be more limited in their pursuit of cases, but there are some changes that the Board made during the Biden Administration that were not through advice memorandum, but rather through Board decisions that are likely to require further Board decisions and further litigation. Those changes are not likely to occur through an interim General Counsel and may not likely to occur until a new case gets in front of the Board.”

Expectation three: There will be changes to Non-Compete and Stay-or-Pay Provisions in Employment Agreements

Kevin Terry: "Many employers during COVID were competing for talent and offering sign-on bonuses for employees with upfront payments but seeking a commitment from an employee to stay for a period of time, and if they didn't, to return those monies. The same tool is used in tuition reimbursement policies and other policies that provide upfront payments to employers. The prior Administration and leadership found that the enforcement of those agreements infringed on employees' Section 7 rights."

Kevin Terry key takeaway: "I think we are going to see this Administration loosen those restrictions on employers and may allow for either the advancement or the reinstitution of those tools by employers to help with things like retention and recruitment for employees.”

Expectation four: Adjustments to Consequential Damages and "Full Remedies" for Unlawful Conduct will favor employers

Kristofor Hanson: "One significant expansion of employee rights initiated by General Counsel Abruzzo (Biden Administration) was the expansion of damages available for unfair labor practices. This “full remedies” for unlawful conduct mindset was really driven by the fact that if somebody loses their job due to unfair labor practice, there's far more damages that flow from that than simply potential reinstatement. As part of this, these damages included things like late fees for mortgages, rent, taxes, overdraft fees, job search costs, tuition reimbursement, if such thing was part of an employment package, childcare expenses."

“I think one of the issues too that was pointed out in the briefing in the Third Circuit was the fact that there isn't any discovery in trials before the National Labor Relations Board. As a result, these consequential damages or “full remedies” that the Board was seeking for employees who allegedly suffered unfair labor practices were unknown to employers. With these “full remedies” issues, it was nearly impossible to cost what the risk was to an employer."

Kristofor Hanson key expectation: A recission of the prior Administration's memorandum that expanded the scope of damages available for unfair labor practices. Allowing employers to better understand the cost and risk. "That's one thing that employers can be more certain of going forward. If they're going to pursue a case in the event that it doesn't go the employer's way, they would have a better idea of just exactly what the images might be available to an employee under the circumstances."

Expectation five: Employers will be able to electronically monitor employees with fewer restrictions, including the use of AI to review employee applications

Kristofor Hanson: "Another area that's bound to see change, and Kevin alluded to this earlier, is electronic monitoring of employees. This General Counsel Memorandum 2302 would be one of those that would be rescinded because there are a litany of legitimate reasons why an employer would utilize this type of surveillance and type of equipment and having sort of broad-based, widespread prohibitions on employers' ability to use that, I think creates far more problems than it intends to remedy by issuing the memorandum in the first place.”

Kristofor Hanson key expectation one: "I think employers can be less concerned about any sort of prosecutorial efforts by the National Labor Relations Board to enforce anything that was within this memorandum. Whoever is appointed interim General Counsel probably would be the one to rescind the memos who has ever ultimately put into the General Counsel seat is unlikely to take this approach and probably would issue a memorandum, him or herself reversing course on this type of effort by the Board.”

Kevin Terry key expectation two: "AI is now the vast unknown, but it's certainly a tool that employers are going to be using moving forward, particularly in the hiring process and the interplay of the use of AI with respect to the Section 7 rights is one that we would love to see an advice memoranda coming forward over the coming years. I don't anticipate that to be something that's part of the rescission of this particular General Counsel memo but it's an area to monitor in terms of whether or not the NLRB takes the lead on providing some guidance, at least with respect to Section 7 rights, on the interplay of use of AI by the employer in the hiring process.”

Expectation six: Return to the previous Administration’s settlement agreement remedies

Kevin Terry: “The last four years were very difficult for employers to navigate litigation. Kris stated that not only was it difficult to first identify the scope of potential remedies, but often employers were faced with unfair labor practice charges that were something short of termination, something that alleged potential surveillance of employee activity, maybe enforcement of non-solicitation provisions that were overly broad, something minor.”

Kevin Terry key expectation one: “We anticipate that this Administration will rescind this memorandum, creating the opportunity for employers to make business decisions with respect to unfair labor practice charges in the way that they had been doing for decades prior to this memorandum. I believe that they will be in a better position to make business decisions with respect to some of these charges that a resolution is in the best interest of the employer, even if it includes some change to policies, some provision of back pay. But knowing that they're able to incorporate things like a non-admissions clause into a settlement agreement with the Board.”

Kristofor Hanson key expectation two: “I think too there's also the greater possibility that there will be settlement options available to employers that simply don't involve the Board what are known as non-Board settlements.”

Anticipated Long-Term Impacts of a New NLRB Board

Likely change: Revert to the longstanding principle that employers are entitled to communicate with their employees on work time about subjects that include unionization. Reestablishing one of employers most effective tools in a union organizing campaign.

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Likely change: Company rules classified into three categories

Likely change: Return to a standard that placed the onus on the union to file a petition for election and ordered bargaining in only the most egregious of situations. Kevin Terry: “I don't think unions will slow down in their organizing efforts, but the employers risk and concern about what managers will do and what supervisors will do during a campaign and how that may come back to impact the relationship with a union, we think should be calmed over the next four years with a reversion back to a pre-Cemex procedure.”

Likely change: Return to a standard that would allow the parties to lawfully contract for meaningful confidentiality and non-disparagement provisions.

Likely change: Return to the previous test for determining independent contractor status, centering on entrepreneurial gain or loss as the overriding factor.

Likely change: Return to standard more reachable for employers and less likely to allow unions to single out particular job classifications for organizing.

Likely change: Return to standard providing property owners broader rights to prohibit its off-duty employees or contractors from accessing their private property is likely under a new Trump Board.

Likely change: Propose a rule that seeks to return to an approach designed to clarify legal issues prior to an election being held.

Likely change: Propose a return to the first Trump Board’s 2020 rule regarding election procedures that directs elections to be held as scheduled, regardless of a pending unfair labor practice charge.

Kevin Terry: “Kris and I and our colleagues at Michael Best will be monitoring everything that’s on in the Trump Administration with respect to labor law and providing updates <a href="https://sites-michaelbest.vuturevx.com/5/2428/landing-pages/subscribe.asp?_gl=1*hveeys*_ga*NjI3NTEyNTcyLjE3MzI2NDkxOTA.*_ga_H30M0JWHW0*MTczODc3ODIxMS4yNDAuMS4xNzM4Nzg3OTM5LjAuMC4w" target="_blank" rel="noreferrer noopener">through our e-alerts</a>.”

For more information, or to discuss how these changes may impact your business, please contact our team.

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Webinar Recap NLRB Update: How the New Administration May Impact Labor Laws

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