The election of President-elect Donald Trump to serve a second term could carry significant implications for independent schools. As we move toward Inauguration Day, it would be wise for independent schools to stay attuned to the issues of potential impact, both at the federal and state level.
School Choice and Vouchers
Vouchers, whereby parents can receive public funds to offset the cost of privacy school tuition, are expected to be a focus in Trump's second term. In Trump's first term, Education Secretary Betsy DeVos strongly advocated for school choice, and Trump has promised vouchers in his upcoming term. In addition, at least 10 states and the District of Columbia have already implemented voucher programs.
While these programs help families afford independent schools and ease the strain on school financial aid budgets, it is important to be careful about the contours of any such program. Federal and state money often comes with additional obligations, including to comply with non-discrimination laws. Schools thinking about accepting student vouchers should first confer with counsel to weigh the potential benefits against the burdens of legal compliance.
Joint Employment
During the Biden administration, the National Labor Relations Board (NLRB) proposed a new joint employment analysis that would make it easier for schools to be held legally liable for the actions of contractor employees. While litigation has blocked the implementation of the new joint employer test, it is anticipated that the Trump administration will abandon any defense of the new test and revert to a test promulgated in 2020 that makes it more difficult for a potential plaintiff to assert joint employment.
Diversity, Equity, and Inclusion Efforts
Trump has historically viewed DEI efforts unfavorably and it is expected that the administration will resume its work in this area. For example, in 2020, he issued an executive order titled "Ending Employee Trainings that Use Divisive Propaganda to Undermine the Principle of Fair and Equal Treatment for All." President Joe Biden soon rescinded it, but we can expect similar executive orders from the second Trump administration.
Conservative groups, such as America First Legal, have requested that the U.S. Equal Employment Opportunity Commission (EEOC) investigate DEI practices in employment that it alleges are unlawful. These activists are likely to find a more sympathetic ear in the Trump administration. It is also likely that the Trump administration will revisit longstanding EEOC guidance that allows voluntary affirmative action plans to consider race in hiring to remedy past discrimination.
In addition, the U.S. Supreme Court will decide a case by June 2025 on whether to lower the bar for bringing reverse discrimination lawsuits. The Court will not hear oral argument until 2025, so the Trump administration will have an opportunity to weigh in on the case.
Given the changing environment, independent schools that engage in DEI efforts should consult with legal counsel to minimize risk while still promoting the school's mission.
Overtime
The Department of Labor in the Biden administration sought to increase the minimum pay threshold for employees to be considered exempt from overtime laws. A federal judge blocked that rule in November 2024. The Trump administration has not taken a position on the rule and has instead promised to eliminate federal income tax on overtime wages. Independent schools can find guidance on compliance with current overtime laws in Venable's recent publication on the topic.
Non-Compete Agreements
The Federal Trade Commission (FTC) during the Biden administration sought to ban almost all non-compete agreements for employees. In August 2024, a Texas federal court prohibited the rule from taking effect, and the FTC has appealed the decision to the Fifth Circuit. Similarly, the FTC has appealed a challenge to the non-compete ban in Florida to the Eleventh Circuit. Both appeals remain pending.
However, with the announcement that Trump plans to appoint Andrew Ferguson as the new Chair of the FTC, we can expect that the FTC will abandon these appeals. Ferguson currently serves as one of five FTC Commissioners and, when the non-compete ban was first passed, strongly opposed the rule as unconstitutional and exceeding the FTC's authority. Despite this, Ferguson has expressed general support for the FTC's focus on protecting competition in labor markets and the FTC's use of individual enforcement actions to address overbroad non-compete agreements that constitute an unlawful restraint on labor.
Absent the FTC's non-compete ban, independent schools that utilize non-compete agreements and other restrictive covenants, such as student and employee non-solicitation agreements and confidentiality agreements, should ensure that they comply with applicable state law requirements. For example, most states impose requirements that such agreements are narrowly tailored to protect the school's legitimate business interests and are reasonable in geographic and temporal scope.
