Reprinted with permission from ABA Business Law Section
United States elections, especially over the past decade, have become increasingly tense events. The heightened political tensions, spilling over into such events like the January 6th Capitol Attack, impact not only the fabric of our nation, but businesses operating in the country. The political temperature in the United States is high and is proving to be a challenge for businesses to navigate.
It is important for business lawyers to consider how the possible change of control of one or both houses of Congress will affect their personal and professional lives. Business lawyers will have to adjust their expectations and “asks” accordingly depending upon their clients’ and/or company’s interests, which may or may not be in vogue under a new regime. Building or reestablishing relationships with those newly in power will be key.
If the midterm elections promise one thing, it is some significant change in the makeup of Congress. Currently, the Democrats have a razor-thin majority in Congress. The Senate has a 50-50 split, with Vice President Kamala Harris providing Democrats with the tie-breaking vote. For the 2022 election, all 435 House seats and 35 of the 100 Senate seats are on the ballot. In the Senate, 21 of the 35 seats up for election this year are currently held by Republicans. There are seven total retirements, six of which are Republicans. In the House, 50 of the voting members in the chamber are retiring: 31 Democrats and 19 Republicans. Additionally, the 2022 election will be the first after the 2020 redistricting cycle. There has been significant litigation regarding state redistricting efforts, with more than 70 cases having been filed challenging congressional and legislative maps.
The uncertainty caused by the midterm elections—be it from the change in political party in control to the potential for violence in the leadup to and aftermath of the election—places stress on both individuals and companies. Internal company policies that may be in vogue with the current party in power may fall out of favor in Washington by 2023. Business lawyers will need to wrestle with the pressures of Washington and the expectations of company employees. For example, we have seen dozens of companies offer to pay for the travel expenses of employees, their spouses, and their partners to receive reproductive healthcare access if they live in states that have tightly restricted such access in the wake of Dobbs v. Jackson Women’s Health Organization. These policies have largely been embraced by employees and will likely be considered a major selling point to companies looking to attract and retain talent. On the other hand, these polices may cause companies to face scrutiny if even one chamber of Congress switches hands. In addition, if the chambers switch hands, business lawyers will need to establish and/or reestablish relationships with the officials and staff in power.
Even in the highly polarized political atmosphere that we currently live in, there will be areas for potential bipartisan compromise. We have seen recent bipartisan success with the bipartisan infrastructure bill and the gun safety bill. Further, there are certain things that Congress must pass in order to keep the government functional, including governmental funding and the debt ceiling. We may see bipartisan compromise surrounding immigration policies; the CHIPS Act of 2022 to strengthen semiconductor manufacturing, design, and research and improve national security; and certain privacy reforms. With the growing pressure on the U.S. labor market, Congress is being pushed by companies to expand immigration access. Business lawyers need to be prepared to potentially see changes in those areas and weigh in with concerns appropriately.
Beyond legislative activity, there is a high chance that if one or both of the chambers change hands, we will see an increase in Congressional investigational activities. Currently, we are seeing specific industries facing increased scrutiny, including big tech, oil and gas, healthcare and prescription drug manufacturers, and firearm manufacturers. If the House of Representatives switches hands, we may see investigations into which companies received funding from the American Rescue Plan Act of 2021. We may see clean energy companies come under an investigative magnifying glass. Further, despite the Supreme Court’s decision in West Virginia v. Environmental Protection Agency, we may see administrative agencies increase enforcement action and regulatory activity.
Overall, the American political atmosphere is rapidly changing. By the time this program is presented, some of the information contained herein will have already changed. It is imperative that a business lawyer working in this area stay abreast of each development so that they are properly advising their clients. The goal of this program is to provide the business lawyer with background and tips for how to keep current in this evolving world.
This article was co-authored by Jason Abel, Charles F. Bass, and Ryan Guthrie.The 2022 Midterm Congressional Elections and Their Impact on Business Lawyers - BLT - September 8, 2022