What to expect from the next DOL secretary

Although his confirmation process may involve a long and grueling battle, Eugene Scalia–son of the late U.S. Supreme Court Justice Antonin Scalia–is likely to succeed Alexander Acosta as the next secretary of the Department of Labor.

“Eugene Scalia is a very experienced practitioner,” says Michael J. Lotito, co-chair of the Workplace Policy Institute at Littler law firm. “He understands the practical implications of what happens when rules and regulations come out and especially with the inconsistencies of DOL enforcement.”

Scalia formerly served as the DOL’s top lawyer for one year under the Bush administration. As a law partner at Gibson, Dunn and Crutcher, he spent most of his career successfully defending corporate clients like Walmart, UPS and SeaWorld, challenging federal labor and financial regulations.

Lotito says the real question is not if, but when, Scalia will be confirmed, considering that the confirmation process for Mark Esper–the country’s new defense secretary–took nearly seven months.

Despite Scalia’s reputation as a corporate pit bull, Lotito believes HR professionals should applaud President Trump’s pick because he is likely to “create more uniformity within the DOL among its various regions.”

As an example, he points to the proposed joint-employment rule, regarding DOL regulations that haven’t been revised since 1958. It clarifies the responsibilities of employers and joint employers to employees in joint-employer arrangements, such as companies that hire a temporary staffing agency to fill specific job roles.

“There are four to five different circuit courts that have taken different positions under the Fair Labor Standards Act as to what the proper interpretation of what joint employment is,” Lotito says, adding that Scalia will create balanced DOL decisions. “How are companies supposed to know what they’re supposed to do when different courts tell them different things? You need certainty in order to provide compliance guidance. That’s what Scalia is going to do.”

Honest Verdict or Bad Rap

Still, not everyone believes Scalia is the right person for DOL’s top job.

The Economic Policy Institute, an economic-research organization, calls Scalia the “go-to lawyer for corporations wanting to avoid worker and consumer protections.”

The EPI refers to several cases, one in which Scalia opposed rules that would have required UPS and other employers “to pay for protective equipment needed to keep employees safe on the job.” He also challenged the DOL’s fiduciary rule that “safeguarded employee retirement security by requiring investment advisers are acting in the best interest of workers and do not have a conflict of interest.”

But the EPI and even some media outlets are giving Scalia a “bad rap” because of his realistic approach to business, according to Maria Rodriguez, a partner who runs the employment group at McDermott Will & Emery law firm.

“You get people in these roles who sit in ivory towers,” she says. “They have to understand business, employer challenges with complying with certain laws and have a more realistic approach than prior heads of the DOL when it comes to enforcement of laws, compliance with laws and practicality of some laws.”

Under the Obama administration, for instance, Thomas Edward Perez, who headed the DOL from 2013 to 2017, never worked in corporate America nor defended large employers. While in his position, he shattered records, pushing out more than 195 DOL rules and regulations.

Rodriguez says HR professionals must decide about Scalia for themselves by considering both sides of his professional story. Meanwhile, there’s no need to get excited one way or the other, she says.

“All of this is wait and see,” she says. “If Trump isn’t elected, there won’t be enough time for Scalia to implement anything because it has to go through a comment period before becoming a final regulation.”

Regardless of who occupies the job, the labor secretary must enforce DOL’s rules as written, not stretching their meaning beyond their initial intent for a political agenda, says Chuck Baldwin, managing director at global law firm Ogletree Deakin.

“The problem is when the government has less knowledge or relies on faulty logic or science and says, ‘We know better,’ ” he says. “The government can take a general, ambiguous, catch-all phrase and try to use that to leverage employers, requiring them to do things that aren’t really helpful.”

HR professionals need clear rule-making and clarity of expectations of what is and isn’t allowed. If Scalia is confirmed, Baldwin believes he will write opinion letters to help them more clearly understand what’s expected under DOL laws.

Besides, he adds, nothing is stopping legislators from changing laws, as opposed to “doing an end-around,” expecting the DOL to take a more aggressive enforcement stance because of who’s in the White House.

“This is a good appointment for HR professionals,” Baldwin says. “It’s a good appointment for employers. You’ll all find that it’s easier to do your job as HR professionals with someone like Eugene Scalia running the DOL.”

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Carol Patton
Carol Patton is a contributing editor for HRE who also writes HR articles and columns for business and education magazines. She can be reached at [email protected]