October 16, 2020

How will the election affect your business?

Prognosticating is never easy, but in a recent webinar the Association’s Restaurant Law Center (RLC) presented some potential impacts on the restaurant business that could result from the upcoming elections. No matter what the outcome, you’re bound to see changes in laws and regulations affecting the way you conduct business.

While the Presidential election is the most unusual one she’s ever seen, Emily Loeb, partner at Jenner & Block, Washington, D.C., says other elections at the federal and state levels are just as important as the one for the White House. 

Races in Alabama, Arizona, Colorado, Maine, North Carolina, Montana, South Carolina, and Iowa are especially close and key to a Democratic upset in the Senate, she says.

The present split of the Senate is 53 Republicans and 47 Democrats. If Joe Biden wins, Senate Republicans can lose no more than a net of two seats and remain in control of the Senate. If Donald Trump is re-elected, Senate Republicans can lose no more than a net of three seats to remain in control of the Senate. 

In the House, races for 28 seats are competitive, but no matter who wins those contests, Democrats are likely to retain control, with Nancy Pelosi as Speaker of the House.

State contests are important because winners will redraw legislative districts based on this year’s Census count. Up for election are governorships in 11 states, attorneys general in 10 states and 86 state chambers, 22 of which are expected to be closely contested. 

And in one of the biggest shifts to potentially affect business as well as social issues for years to come is the appointment and likely confirmation of conservative judge Amy Coney Barrett to the Supreme Court before November 3.

Pandemic relief 

At this posting, Congress had proposed additional rounds of pandemic relief, including bipartisan legislation in both the House and Senate for $120 billion in grants to restaurants, a second round of forgivable Payroll Protection Program loans, employee retention tax credits, a “healthy workplace” tax credit for increased COVID-related business costs, and other measures. 

While negotiations may be currently stalled, it’s critical for restaurant operators to stay engaged and keep pressing so there’s a breakthrough by the end of the calendar year,” says Aaron Frazier, the Association’s director of healthcare and tax policy. 

After the election, expect increased federal oversight and investigation of where money spent for the CARES Act actually went, says Gabriel Gillett, partner, Jenner & Block, Chicago. 

While the Small Business Administration has only just begun the forgiveness process for PPP loans, the Justice Dept. has begun fraud prosecutions against those who received loans illegally, for example. 

Next up for regulators in the new year, he suggests, will be high interest in issues surrounding workplace health and safety, employment and labor, and privacy. 

In general, he says, election wins that give Democrats either the White House or a majority at federal or state levels will result in more regulation; a Republican win in the national election will result in less federal regulation, but potentially more state regulation. 

Here’s what could be affected:

  • Health & Safety
    • Potential new Occupational Safety and Health Administration rules on PPE, responding to infected persons, hazards to employees, etc.
    • Legislation on vaccine enforcement and discrimination
    • Action on business liability or legal protections for businesses that take measures to comply with CDC and other guidance
    • Legislation responding to outcomes of employee, customer, and nuisance claims
  • Labor & Employment
    • Ongoing litigation, legislative changes and ballot initiative on California’s AB5 Worker Classification Law (in effect since Jan. 1, 2020, it requires companies that hire independent contractors, i.e., gig workers, to reclassify them as employees, with a few exceptions)
    • Potential federal and/or additional state worker classification proposals and legislation
    • Expansion of paid leave laws
    • Benefits for part-time and temporary employees
    • Minimum wage initiatives
    • Increased oversight of employers
  • Privacy
    • Level of federal investigation/enforcement may change
    • Potential introduction and scope of federal data privacy law; impact at state level
  • Other Issues
    • Issues more directly related to opening/remaining open during pandemic
    • Business interruption insurance or similar backstop
    • Food waste regulations
    • Prop 65 expansion beyond California (it requires the state to maintain and update a list of chemicals known to the state to cause cancer or reproductive toxicity)
    • Natural gas bans

For additional information or answers to questions about these issues, email RLC Executive Director Angelo Amador.