The Blue Wave. Employers should brace for impact.

The political pendulum inevitably swings from left to right, and back again.

In 2024 the pendulum swung right, and a Red Wave resulted in a landslide victory for President Trump and Republican control of Congress.

With that power came changes to the leadership at the  Equal Employment Opportunity Commission, the U.S. Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Commission, and other agencies having great power over employers and their employees. Many of the changes made by those agencies favored employers.

Then came last Tuesday’s Blue Wave. Not only did the Democrats gain control of both chambers of Congress, but we also have newfound Democratic “trifectas” in Arizona, Michigan, Minnesota, Nevada, Pennsylvania, and Wisconsin, to go along with existing Democratic trifectas in 16 other states.

In the world of horse racing, a trifecta means picking, in order, the first-, second-, and third-place finishers in a race. Doing so typically pays a handsome return on a wager.

In the world of state politics, a trifecta means majorities in both legislative chambers and the Governor’s office.

Make no mistake. Great change is on the horizon for most employers.

It’s the economy, stupid

In 1992 James Carville was a strategist for Bill Clinton’s Presidential campaign.

To keep the campaign on message, Carville hung a sign in the campaign’s headquarters that read as follows:

1. Change vs. more of the same.
2. The economy, stupid.
3. Don't forget health care.

Although the sign was intended for Clinton’s campaign workers, the second phrase morphed into “It’s the economy, stupid” and became the de facto slogan for the campaign.

Based on reports of exit polling by most news agencies, three of the primary drivers for last week’s Blue Wave were the cost of living (including health care), perceived excesses in immigration enforcement, and government corruption.

I won’t address immigration or corruption, but the economic plight of employees is another story and something that all employers should pay attention to. You can bet that the U.S. Congress and state governments will be focused on trying to improve the economic well-being of the voters who just gave them the reins.

Brace for impact

The shift in power at both the federal and state levels creates the potential for new legislation aimed at increasing minimum wages, providing paid family leave or improvements to existing paid leave, providing greater access to health insurance, limiting or banning the use of non-compete clauses and restrictive covenants, promoting unionization of workers, providing greater safety protections for workers, and restricting the use of independent contractors and staffing companies.

I am not suggesting that the U.S Congress will pass laws touching on all these issues, or that President Trump will sign any into law.

Nor am I suggesting that every state with a Democratic trifecta will do the same.

But between the federal and state governments, some combination of these things is likely to become law. If so, they will have a significant impact on employers, some of whom may struggle to comply.

What’s an employer to do?

I wish I could tell you what laws will be enacted, where and when.

But if I could do that, I probably could pick a winning Trifecta at Pimlico Racetrack, near where I grew up in Baltimore, take my winnings and move to a tropical island. Alas, that is not to be and, like you, I need to wait and see what 2027 holds.

But to display my keen grasp of the obvious, I offer the following:

• Starting in January, monitor the legislation being introduced, on both federal and state levels, related to the hot topics of “affordability” and health care. Consider making advance plans to comply with the initiatives likely to become law.
• If you use independent contractors and staffing agencies, (1) make sure your contracts do not contain language undermining your ability to avoid joint employer status; (2) avoid engaging in conduct that would support such a finding; and (3) monitor governmental efforts to limit the use of such contractors and agencies.
• If your employees sign non-compete agreements or other types of restrictive covenants, make sure they comply with current legal requirements. Also, be prepared to make changes needed to comply with future laws and regulations.

Simply put, change is coming. You need to be ready to deal with it.