Labor Attorneys Plot Response to Trump, Puzder

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Ben Penn

Some employment attorneys woke up Nov. 9 fearing they’d soon be losing the Labor Department as a dependable ally in wage-and-hour enforcement. And they wasted no time planning a response strategy.

“As early as the day after the election, there were conference calls and meetings between workers’ advocates—including nonprofit lawyers and members of the private plaintiffs’ bar—to talk about the new reality and what needs to be done to make sure that the most vulnerable workers aren’t left behind,” Justin Swartz, a partner at Outten & Golden in New York, told Bloomberg BNA.

Under Republican control, the DOL’s Wage and Hour Division may change how it enforces overtime and minimum wage laws by focusing more on helping employers comply and less on investigating possible violations. Plaintiffs’ attorneys are waiting to see exactly how the WHD’s agenda might shift but say they may need to fill the void on smaller-dollar cases for low-wage and immigrant workers.

“If the incoming DOL is as business-friendly as some predict, I think most of the impact will be on lower-wage workers at smaller employers who might not be on the radar for private plaintiffs’ lawyers,” said Swartz, who was co-chair of the wage-and-hour practice group at the National Employment Lawyers Association from 2011 to 2016. “I think that it’s all of our responsibilities, just like it always has been, to remember that the most vulnerable workers need our help even if they don’t work for a large employer and even when a large recovery might not be possible.”

Management attorneys who say they’ve seen an increasingly active plaintiffs’ bar the last few decades don’t necessarily buy the premise that a new White House will alter the apolitical forces in the private wage-and-hour landscape. “I don’t personally think that the DOL is going to stop enforcing the law,” Eric Magnus, a principal at management firm Jackson Lewis P.C. in Atlanta, told Bloomberg BNA.

Divide and Conquer

President Barack Obama’s Wage and Hour Division and the plaintiffs’ bar operate independently, but in practice they sometimes took a divide-and-conquer approach when choosing which employers to target for minimum wage and overtime violations. Private attorneys have frequently referred single-employee or minimal back wages cases to the federal government, while the department has sometimes backed off investigations at large corporations where they knew plaintiffs’ attorneys were already pursuing class actions for FLSA claims.

The incoming agency’s exact agenda still isn’t clear, but some lawyers are already forecasting that President-elect Donald Trump’s choice of fast-food executive Andrew Puzder to run the DOL signals a strong likelihood of a WHD enforcement reversal.

The WHD in the Obama administration has focused on what outgoing Administrator David Weil dubs “fissured” industries. That includes businesses that heavily rely on franchise, independent contractor or other contingent employee arrangements.

Puzder, chief executive officer of the conglomerate CKE Restaurants Inc., isn’t expected to place the same emphasis on watching these types of businesses if confirmed as labor secretary. The public will learn more about Puzder’s enforcement vision at his confirmation hearing, which has been delayed until late January or February.

Leadership changes at the DOL and other agencies may mean that more labor and employment attorneys leave government practice to fight for workers in the private sector. David Lopez, the former Equal Employment Opportunity Commission general counsel, recently joined Outten & Golden as a partner in the firm’s Washington office.

“We’ve had lots of inquiries from people in various employment-related agencies,” Swartz said.

Busy Enough As Is

In some aspects, the private-public enforcement balance may not change under Trump and Puzder. WHD investigators and attorneys are career civil servants, many of whom are mission-driven regardless of who is in the White House. Private Fair Labor Standards Act litigation has already been booming in the past decade, partially from ambiguities in overtime exemption interpretations.

Still, the practice of referring less-profitable cases for the government to investigate may be coming to an end. That has the plaintiffs’ bar pondering how it can pick up the slack.

Douglas Werman, a partner at Werman Salas P.C. in Chicago, said that during the Obama administration, he has trusted that when he refers smaller-scale complaints to the DOL’s Chicago office, the agency will efficiently and rigorously pursue back-wage recovery for low-wage and immigrant workers.

“But if we stopped having that comfort level, then we’ll try and resolve those claims on our own,” Werman told Bloomberg BNA. “I think it’s too early to know for sure, but I think it’s very possible that the Department of Labor will just have fewer resources available.”

The problem for the plaintiffs’ bar is that small-dollar cases don’t keep the lights on. Firms may have to grapple with manpower issues to take on additional cases with minimal return on investment.

“We’re already very busy,” Joseph Sellers, a partner at Cohen Milstein Sellers & Toll PLLC in Washington, told Bloomberg BNA. Sellers said firms like his that intentionally select cases not typically brought by the government will become more in demand if the WHD puts investigations on the back burner.

“I hope we will have the ability to meet that demand,” Sellers said.

State, Local Action Possible

One solution may be to recruit lawyers who aren’t actively involved in employment issues to refocus their attention.

“I do think that we are seeing really tremendous energy around the country from attorneys who want to know what they can do in the face of an administration they find deeply threatening,” Emily Martin, general counsel and vice president of workplace justice at the National Women’s Law Center, told Bloomberg BNA. “I would expect to see stepped-up interest from attorneys who perhaps are not employment attorneys all the time.”

Magnus, of Jackson Lewis, cautioned that any surge in private cases will be met with new judicial appointments that are more favorable for employers. “They may bring more cases, but it doesn’t mean the results are going to be any better,” he said.

State and local government enforcers may also see an uptick in demand. That’s especially likely in Illinois, New York, California and other places with laws balanced more in workers’ favor.

“We’ve been talking a lot about state- and local-level advocacy, not just in the courts but at the agency level and in state legislatures,” Swartz said.

If predictions that the DOL backs off enforcement come true, “it will fall to states to enforce their own labor laws in expansive and protective ways,” he said.

No Replacing Government Enforcement

Catherine Ruckelshaus, general counsel of the worker advocacy group National Employment Law Project, has taken a lead role in plaintiffs’ bar wage-and-hour coordination.

She said DOL career officials have told her “it’s business as usual because the laws have been on the books for decades.” Therefore, plaintiffs’ attorneys and nonprofits will continue to send workers to the WHD, particularly to regional offices, as long as they see positive results.

Ruckelshaus told Bloomberg BNA she’s not optimistic that the WHD and the solicitor’s office will continue to pursue “wage theft” recovery for workers in fissured industries, however. And while the private bar “can and should” fill any new enforcement gaps, there are limitations, Ruckelshaus said.

“Only the Department of Labor can go in and enforce for an entire work site without waiting for individual claims to come in,” she said. “It doesn’t have to seek class certification; it doesn’t have to go through mandatory arbitration.”

That leaves Ruckelshaus and her allies forced to confront the post-election uncertainty with a touch of pessimism.

“Things that we were able to get in the last eight years, we’re probably not going to be able to get going forward,” she said. “But we’ll have to wait and see.”

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.