What a Shift in the Supreme Court Could Mean for Recruitment
By: John Rossheim
With a new administration and Congress poised to take charge in Washington, many in the business community are pondering the possible impact on employers. The same anticipation surrounds the potential impact of new Supreme Court nominees on 2017 recruitment and the staffing industry.
If President Donald Trump’s first nomination to the Supreme Court is conservative and pro-business, the court may return to an approximation of its composition before the February 2016 death of conservative Justice Antonin Scalia.
“Trump’s first nominee might not make a difference; Kennedy would still be the swing vote,” says Jo Bennett, a labor and employment partner with Schnader Harrison Segal & Lewis.
But if any of the court’s three eldest members are replaced during Trump’s term, the court is likely to shift to a decisively conservative majority. Staffing firms should take note. “A lot of our Supreme Court justices are elderly, and who is put in there will be pivotal,” says Rena McDonald, attorney and owner of McDonald Law Group in Las Vegas.
Here’s how some Supreme Court scenarios could play out for 2017 staffing.
Employers may be less motivated to curb W-2 employment. In recent years, “employers have been reaching out to staffing agencies because of all the regulatory requirements in how they treat employees,” says Nancy Hammer, senior government affairs policy counsel at the Society for Human Resource Management.
With a more conservative top court, staffing firms could see some of their clients keep more jobs in-house. While Hammer sees this impact as very industry-specific, “we’re going to see changes in how employers behave if they are relieved of some of that burden.”
Government may retrench on co-employment claims. “A more conservative court may back off on controlling the workplace, going back to existing statute,” says Hammer. “Joint employment is at the top of the list, because Browning-Ferris was a real sea change. Staffing agencies have a fear of being considered a joint employer.”
“I think the Federal government will go back to a more traditional view: that the host employer must exercise control for there to be joint employment,” says Fiona Coombe, director of legal and regulatory research at Staffing Industry Analysts. “Maybe employers shouldn’t fear joint employment but rather recognize that it exists,” adds Coombe, and ensure that their staffing employees fall outside the criteria for co-employment.
More employers may be able to count on arbitration to resolve disputes with employees. In many cases, under President Obama, the NLRB ruled against employers who attempted to force employees to arbitrate disputes.
The evolving NLRB and Supreme Court may be friendlier to arbitration as an acceptable alternative to expensive legal battles as a means for resolving disputes between employers and employees, Hammer says. This could, in turn, give companies one less reason to turn to staffing firms.
The legal and regulatory gap between the U.S. and progressive states may widen. With a conservative Federal government and dozens of blue states heading in opposite directions, the patchwork regulatory environment of these divided United States is a possible source of concern for both staffing firms and their clients.
Differences among workers’ rights in Federal, state and local jurisdictions "may well be a greater strategic consideration” in coming years, says Coombe.
Across the country, for example, “there are now 39 jurisdictions, cities and states, with respect to paid sick leave. This creates a lot of work for employers, and it’s a selling point for staffing firms. It’s not just the extra pay; it’s administering requests for leaves and ensuring coverage for workers on leave.”
Although the gap between Federal paid-leave mandates and the requirements of some states like California may widen over the next four years, “employers who have treated employees better have gotten payback in the form of employee loyalty,” says Deborah Widiss, a professor of law at Indiana University.
Less aggressive protection for workers on sexual and gender orientation. “I do think the configuration of the court will be important to cases involving discrimination by sexual orientation,” says Widiss.
If the court is less aggressive about protecting the workplace rights of people with minority sexual orientations, staffing firms may feel competitive pressure to accommodate client companies that have discriminatory hiring policies.
Lower court appointments could accelerate change. Supreme Court replacements are not the only judicial appointments of interest to staffing firms and their customers. The labor and management law agenda is shaped first in Federal trial courts.
With many of his nominations stalled by partisan politics, President Obama leaves office with approximately 100 vacant judges’ benches in Federal district and appellate courts. That’s about twice as many lower-court vacancies as were left by President George W. Bush. With the GOP in control of the Senate, President Trump is likely to see his judicial nominations confirmed relatively quickly.
“Appointments in the lower Federal courts matter a lot too,” says Widiss. “We’re likely to see more pro-business judges.”