Labor Dept. Plans Memo to Rein In Field Offices

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By Ben Penn

The Labor Department’s new chief legal officer recently informed the business community that she is directing field offices to enforce and interpret the law in a way that’s consistent with Trump administration policy, three sources told Bloomberg Law.

DOL Solicitor Kate O’Scannlain in a closed-door U.S. Chamber of Commerce meeting on Friday told the crowd that she plans to soon send an enforcement and interpretation memo to field offices. O’Scannlain divulged the plan in response to an audience member complaint about inconsistent wage-and-hour and federal contracting enforcement across the country.

Her comments came during what was otherwise a restrained keynote on Friday, said the sources. All three sources attended the event and spoke on condition of anonymity to discuss a meeting that was closed to the press.

O’Scannlain’s words offer an overture to the management-side critics of the DOL’s cautious approach to governance under Labor Secretary Alexander Acosta. The field memo alone will likely have limited impact until more agency heads are installed to advance new investigative directives and regulations.

The labor solicitor has flown under the radar in four months as the DOL’s No. 3 overall official. O’Scannlain’s splash at the Chamber event suggests that her first foray into government service could be entering a more proactive phase.

“The department doesn’t have an announcement to make in this matter,” a DOL spokesman told Bloomberg Law. “Consistency in enforcement is important, and as it has under previous administration, the department communicates directly with its employees regarding enforcement matters.”

A separate DOL source said this would be O’Scannlain’s first formal directive to her subordinates working outside of Washington, D.C., since her arrival at the agency.

Chamber of Commerce representatives declined to comment.

Business Complaints

Some industry groups have griped that Acosta has let regional and district enforcement offices maintain investigative protocols from the Obama administration that employers felt were unnecessarily punitive, without taking enough steps toward compliance assistance.

Business representatives, joined recently by Sen. Marco Rubio (R-Fla.), have also alleged that certain field investigators are ignoring Acosta’s withdrawal of two Wage and Hour Division interpretative memos from the prior administration—one on joint employment liability for affiliated businesses and another on misclassifying employees as independent contractors.

The author of those memos, Obama WHD Administrator David Weil, argued that the pair of rescinded documents were merely clarifying established court decisions to inform businesses of their liability if they’re investigated for potential overtime and minimum wage violations. O’Scannlain’s Democratic predecessor as solicitor, Patricia Smith, has said repealing the interpretations shouldn’t affect how investigators apply the law.

But conservatives and business owners counter that those interpretations were secret regulations that empowered the agency to expand its investigative authority without undergoing notice and comment rulemaking.

The department hasn’t made many significant policy changes, aside from scrapping of the WHD guidance documents and a few separate initiatives designed to enhance compliance assistance. More affirmative policies are awaiting the Senate confirmation of Cheryl Stanton, President Donald Trump’s pick to run the WHD, and Scott Mugno, the choice to lead the Occupational Safety and Health Administration.

Progress at Contractor Agency

The solicitor, who hails from prominent management-side firm Kirkland & Ellis, disclosed her plans to send a memo, in response to a question that touched partly on inconsistencies in audits from the Office of Federal Contractor Compliance Programs.

The OFCCP, a Labor Department enforcement agency that monitors government contractors for workplace affirmative action and nondiscrimination compliance, recently adopted a more conciliatory tone toward employers. Acosta’s appointment of Ondray Harris as OFCCP director aided that transformation. The position doesn’t require the same lengthy Senate confirmation process that’s holding up the other enforcement agency nominees.

Still, Harris’ attempt to issue a more business-friendly new directive on how contractors are probed for pay discrimination is now delayed, amid internal deliberations, Bloomberg Law reported in April.

O’Scannlain’s appearance was her introduction of sorts to some of Washington’s influential labor lobbyists and management-side attorneys. As a labor and employment attorney working on mergers and acquisitions at Kirkland, she was largely unknown when Trump first tapped her for the solicitor post.

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