LEGISLATIVE OUTLOOK: Midterm Elections, Drive Legislative Action on Workplace Issues

The upcoming 2022 midterm elections will dictate the legislative agenda as Democrats aim to retain unified control in Washington and Republicans seek a red wave that could flip one or both chambers of Congress.

Expect legislative action on Democratic priority proposals including the Build Back Better Act (BBBA) and on workplace issues which have bipartisan support, like limiting arbitration agreements as they relate to claims for sexual harassment/assault arising during employment. In addition, anticipate messaging bills from both parties as they aim to garner support from voters.

Build Back Better Act will impact employers: The current version of the BBBA includes new civil monetary penalties for directors and officers for company labor violations under the National Labor Relations Act (NLRA) and up to four weeks of federal paid caregiving leave for private sector workers. More details on the BBBA provisions are here.

Build Back Better outlook: The BBBA is now awaiting action in the Senate, where it faces an uncertain future. With a slim majority in the Senate, Leader Schumer cannot risk any defections to reach the 51 vote (including that of the Vice President) threshold to enact the bill under "reconciliation" rules. Senator Manchin (D-WV) has already expressed opposition to provisions in the BBBA, including paid leave. When the bill is considered, Senate Republicans are expected to challenge the NLRA civil penalty provisions as beyond the scope of a reconciliation bill.

Arbitration agreements under increasing scrutiny: Previous efforts in Congress to enact a federal law limiting or outright prohibiting arbitration in the employment setting have not advanced very far. However, some recent bills have bipartisan support and may have a chance at passage. One example: Senators Kirsten Gillibrand (D-NY) and Lindsey Graham (R-SC) jointly sponsored Ending Forced Arbitration of Sexual Assault & Sexual Harassment Act of 2021 (S. 2342). The Act would amend the Federal Arbitration Act (“FAA”) to prohibit pre-dispute arbitration agreements, including agreements with class- or collective-action waivers, for claims involving sexual assault or sexual harassment. The Act is now ready for consideration by the full Senate and House and could receive action this year.

Midterm election outcome will impact future workplace policies: History favors Republicans in the 2022 congressional elections as they try to wrest control of the House and the Senate from the Democrats. There are 34 Senate seats and all 435 House seats up for grabs in the 2022 midterm elections. Since 1934, the party out of power in the White House has gained an average of 28 seats in the House, winning 19 of 22 midterm elections. Democrats presently hold the House by eight seats. The historical trend is not quite as strong in the Senate, where the party out of power has prevailed two-thirds of the time. The Senate is now tied 50-50. Notably, several employer-friendly members of Congress in key committees of jurisdiction over workplace policies have already announced retirements, which will impact future workplace legislative actions. Find the latest list of retiring Members of Congress here.