January 31, 2017

Trump Spares NLRB From Early Changes — But It Doesn't Look Like Mercy

President Donald J. Trump’s active first 10 days in office spared the National Labor Relations Board (NLRB) from immediate upheaval. 

On January 30, 2017, President Trump signed the “Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs,” which is becoming known as the “one-in, two-out” executive order. Among other things, it prohibits agencies from enacting a new regulation unless the entire cost is offset by elimination of costs from two existing regulations. 

Soon thereafter, the White House clarified that the executive order did not apply to independent regulatory agencies. The NLRB, unlike the Department of Labor and other agencies led by a Cabinet member, is an independent agency. At this early stage, it appears that the NLRB is among the agencies spared by the executive order to reduce regulation. 

Some observers may be surprised that President Trump would spare the NLRB from the “one in, two out” executive order. However, even if the NLRB had been covered by the executive order, it would not have impacted the core mechanism the NLRB historically uses to create new regulations for employers. The NLRB rarely uses the rulemaking procedure affected by the executive order. Instead, it typically changes the law through adjudication — using its five-member, quasi-judicial Board to reinterpret the law by considering cases brought before it. 

President Trump has also not yet taken major action to reshape the five-member Board, which currently has two vacancies and is dominated by two pro-union members appointed by President Barack Obama. President Trump has not yet appointed Board members to fill the vacancies. Instead, he has only shifted the chairmanship of the Board from one of the pro-union members to a pro-management member, Philip A. Miscimarra. Later this year, President Trump will also have an opportunity to replace the NLRB’s General Counsel, a powerful position occupied by a pro-union attorney until November 2017.

If President Trump is able to appoint a majority of pro-management Board members, an NLRB not restricted by the “one in, two out” executive order may work to his favor. The agency could increase its focus on rulemaking to bring about changes to the labor laws sought by the Trump administration. In other words, the absence of immediate changes at the NLRB may be making room for bigger changes down the road.

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