Regulatory Update 2026: Policy Reversals and Judicial Battles

Analysis & Commentary

What a difference a year makes. The first year of President Donald Trump’s second administration saw sweeping policymaking change interrupted by fits of confusion and stasis. It also was hallmarked by heightened partisan division that sometimes led to violence, high-profile judicial interventions and the President’s application of novel legal theories to support his aggressive actions.

This occurred in the midst of a furious opposition mounting a campaign of resistance that often manifests itself in a reflexive impulse to deploy extreme hyperbole and the impulse to reach for the court door handle in almost all cases where opposition to the President’s policies could be expected to arise.

This has been evident in the flood of litigation following in the wake of the huge numbers of executive orders issued by Trump, the wholesale firing of Democratic independent agency officials, and an aggressive campaign to deport many of the illegal immigrants who flocked across our borders during the Biden administration.

The rough and tumble accompanying this high-speed policymaking process has had a real impact on how businesses are managed. This even extends to the world of mergers and acquisitions. “A renewed surge in workplace enforcement is reshaping deal dynamics across labor-reliant industries,” observes Amy E. Lott, an attorney with the law firm of Barnes & Thornburg.

This year’s immigration reforms have added urgency for business owners to ensure their compliance readiness when it comes to pursuing M&A activity, she stresses. “With Temporary Protected Status [visa] rollbacks, expanded enforcement zones, and stricter visa eligibility rules, buyers are scrutinizing workforce authorization more deeply than ever. For sellers, proactive compliance, especially around I-9 documentation, subcontractor vetting, and contingency planning, is essential to preserving deal value and momentum.”

Of course, the impact of Trump Administration policy change in some cases has been amplified by the fact that it is simply reversing some of the government envelope-stretching activities that were frequently engaged in by agencies during the Biden years.

Until that Administration, the Federal Trade Commission (FTC), originally created to battle antitrust and consumer abuse, hadn’t been on the radar because its jurisdiction was believed to extend only to employers engaged in merger activity or who were believed to pursue prohibited noncompetitive practices. But in the Biden era, then-Chairman Lina Khan worked hard to expand the commission’s reach into labor relations enforcement, including her fumbled attempt to ban employee noncompete agreements and seeking to work closely with other federal agencies to promote union interests through joint policy memoranda and teaming FTC employees with other agencies’ staff.

Since leaving the commission Khan has served as a top advisor and co-chair of the transition team for the new mayor of New York City Zohran Mamdani, which reportedly has made some business leaders in the Big Apple nervous given the reputation she developed by promoting unionism when she was at the helm of the FTC.

FTC Member Makes History

However, it is another Biden-appointed FTC commissioner, Democrat Rebecca Slaughter, who is likely to make more significant and lasting history following her firing by President Trump before her five-year term was due to expire. He also has fired Democratic members of other federal agencies that Congress had created to be independent of the President’s management control, granting these commissioner and board members set terms of service (usually of five years unless they took their seats in the middle of an exiting member’s term).

Slaughter sued to be reinstated and her case went all the way to the Supreme Court, which is expected to overturn more than 100 years of regulatory tradition by ruling that members of these bodies were previously considered independent federal boards and commissions must come under the direct administrative control of the President because of the way the Constitution is written.

Questions directed to the opposing attorneys during public oral arguments in late 2025 strongly indicate that the court is likely by a six to three margin to support the Administration’s position that these agencies should be returned to presidential control. A decision by the court may not be delivered until later this spring.

If the High Court upholds Slaughter’s firing by Trump, it will signal that he can do the same at any of these agencies, including the Surface Transportation Board (STB), the successor independent agency to the old Interstate Commerce Commission (which was the first independent agency created by Congress in 1887 to stem abusive practices by the railroads of that time).

The STB currently is under intense public pressure while it considers whether it should approve a proposed merger between the Union Pacific and Norfolk Southern railroads. The President already has expressed support for the merger and will have enormous influence over the process if the Supreme Court allows him to replace commissioners who disagree with him any time he wishes. The STB announced that it received a formal application for approval of the merger and it opened a proceeding to accept public comment on Dec. 19.

UP President Jim Vena met with Trump in the Oval office and got the President to say the merger sounds like a good idea in a video that immediately went out on the Internet. So far, only three backbench Democratic members of the House have come out publicly for the merger: Reps. Troy Carter and Cleo Fields of Louisiana and Bennie Thompson of Mississippi.

UP is seeking an expedited STB approval process for the merger and has negotiated the support of unionized carmen, the largest of the rail unions. However, the other rail unions and an overwhelming majority of rail customers remain adamantly opposed to the two lines being combined into one, enormous transcontinental railroad.

Trump Nominees’ Logjam Ends

At least the STB could proceed with its deliberations because it already had a quorum of three out of the five board members allotted to it by law in 2025. Not all federal agencies were that lucky, including the National Labor Relations Board (NLRB). While part of the delay in approving Trump’s nominees can be attributed to the 42-day government shutdown, the Republican-majority Senate—legally responsible for approving those who have been nominated—was moving slowly as well.

In the fall, congressional leaders had promised faster movement on Trump’s nominees but this did not occur until Dec. 19 when the Senate Republican majority voted to confirm 97 of Trump’s nominees that had been blocked by Democratic members deploying Senate procedures. Of course, in the case of the NLRB, it didn’t help that the President didn’t get around to sending his nominees to the Senate for approval until late July.

Among those who were confirmed just before Christmas were the Republican NLRB members James Murphy and Scott Mayer, as well as Crystal Carey to serve as the board’s General Counsel, who like the board members also is nominated by the President, requires Senate approval and serves for a five-year term.

One change that can be expected now that the board has these new members is for Blue States like California to be unable to assert their control over enforcement of federal labor law. Some had argued in 2025 that because of the board’s lack of a quorum, it could not act on cases brought before it or generate new regulations, thus allowing individual states to step in, although it didn’t seem that courts were likely to agree.

However, don’t necessarily expect radical pro-employer policy changes now that the NLRB finally has a quorum with a Republican majority under a Republican President. At this point it is realistic to question about how far the new majority is willing to go in seeking to reverse many of the pro-union decisions the board made under Biden. This may not be a priority for them given the quiet but significant support that Trump received from some unions in the presidential election, most notably the Teamsters, who asserted neutrality but whose General President Sean O’Brien was a featured speaker at the 2024 Republican National Convention that nominated Trump.

So far no one associated with the current Administration has remarked on the fact that as of mid-November 2025 unions had won 80% of 1,162 representation elections conducted last year, which comes close to being a record high for victorious labor-organizing campaigns. (The most successful union in rolling up organizing victories during this period was the Teamsters.)

So far, the Department of Labor (DOL), under the leadership of Secretary Lori Chavez-DeRemer, whose nomination was supported by the Teamsters’ O’Brien, has been busying itself with other matters, like lending a helping hand to the Trump Administration’s efforts to dismantle the Department of Education (DOE), something that he promised to do during the campaign, and which had been a long-term goal of his more conservative supporters.

Chavez-DeRemer recently announced that she has agreed to take over the Education Department’s workforce development responsibilities as well as to absorb into DOL the DOE’s elementary, secondary and postsecondary education offices.

Under these circumstances, it seems unsurprising that no one in the Trump Administration seems to have been all that impassioned about seating new NLRB members who may be want to dismantle the pro-union changes wrought by the previous board under Biden.

EEOC Reverses Course

By contrast, the Equal Employment Opportunity Commission (EEOC) in 2025 had forged ahead to decisively reverse most of the former policies that the previous commission advanced under Biden. EEOC Chair Andrea Lucas also had served as the commission’s chair during Trump’s first term, and in 2025 served as acting chair before she was confirmed last summer. (Trump’s nominee for EEOC General Counsel, M. Carter Crow, was not confirmed by the Senate until Dec. 19).

In Trump’s second term, the EEOC under Lucas’ leadership has been particularly aggressive in regard to advancing the Administration’s campaign to dismantle diversity, equity and inclusion (DEI) requirements that previously were imposed on employers. On Dec. 17, Lucas released a video urging employees who believe they have been treated unfairly because they are white males to file formal discrimination complaints with the agency.

The commission’s choice of plowing this new ground was supported by a Supreme Court decision rendered earlier in 2025 establishing the members of majority population groups in civil rights law categories can legally assert discrimination as well as minorities.

In 2025 the commission also chose to stake out a position declaring that it will pursue complaints filed by Christians who believe they have been discriminated against in the workplace because of their religion.

In their latest joint effort, EEOC and DOL together have announced they will no longer recognize claims of “disparate impact” discrimination, a civil rights legal theory that, although not found stated anywhere in federal law, has grown up over the years in the process of civil rights enforcement.

The idea is that discrimination can be found in situations where there was no declared or blatant attempt to do so, simply by parsing and discovering disproportionate benefits accrued for protected groups, like women and minorities. Practices that are considered outright discrimination that are codified in federal civil rights legislation will continue to remain illegal under the current regime.

Among these is a prohibition of discrimination against people because of their national origin. Both DOL and the EEOC also have jointly announced that they will add to this category situations in which employers have been found to have actively discriminated against U.S. citizens. The agencies state that this kind of discrimination covers employers preferring foreign workers, including workers with a particular visa status—like H-1B visa holders—over American workers.

Employees need to watch out, employment attorneys advise. “The DOL-EEOC partnership may result in multi-agency actions on the same issue (for example, an EEOC investigation of a charge of discrimination proceeding alongside a DOL investigation addressing H‑1B misuse),” warn attorneys Sarahanne Vaughan and Anne Yuengert of the Bradley Arant Boult Cummings law firm.