Obama Transition Director Guiding DOL Handoff

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

Nov. 2 — The man who guided President Barack Obama’s 2008 transition is being tasked with ensuring that the Labor Department doesn’t fumble the handoff to the next administration.

Chris Lu, the deputy labor secretary since 2014, has been overseeing the DOL’s transition preparations, he told Bloomberg BNA Nov. 1. Lu was executive director of the Obama-Biden transition project in 2008.

No matter who wins the election next week, Lu said the transition planning is all about cataloging the DOL’s work in progress to prepare the next team to set its own agenda.

“Our job is basically to give the incoming folks the best picture of what the department does right now, as well as some of the ongoing projects, some of the opportunities, some of the challenges,” Lu said. “And they will take that information and make their own decisions about what the priorities should be.”

Lu: Regulatory Carryover Not a Problem

The next DOL leadership will need to determine how to implement a handful of controversial regulations finalized by the agency this year, including a rule to expand overtime access to some 4 million workers. Lu said the timing of several rules’ effective dates shortly after the election won’t create a transition challenge.

“We simply note, ‘here are regulations that are either proposed, here are ones that are final, here’s the status of litigation,” he said. “We are obviously hopeful that they defend our regulations and we are hopeful that they finalize the ones that we proposed, but that’s their decision.”

When the 2016 president-elect’s DOL agency review team considers how to carry out the agency’s landmark overtime rule, which takes effect Dec. 1, they’ll be pulled in opposing directions at stakeholder meetings. Worker advocates have said they’ll be reminding the new DOL to protect the overtime rule from pending litigation and legislation, while employer groups plan to ask for some sort of reprieve (see related story).

Lu said he appreciated the outgoing 2008 administration’s objectivity and will be following suit as he prepares the next DOL crew for action on overtime and other regulations.

“We feel passionately enough about our regulations that we certainly hope they will defend them in court but that’s their prerogative,” he said.

Wants Labor Secretary Confirmed ‘Very Quickly.’

One factor that would facilitate a smooth changeover falls outside of Lu’s control: confirmation of the next labor secretary.

Lu wouldn’t speculate on where DOL will fall in the list of Cabinet appointments, but his experience on transitions leads him to believe the sooner the better.

“There’s a large slate of Cabinet picks that are confirmed literally right after inauguration,” Lu said. “I don’t know how we will fall in the queue, but I am certainly hopeful that a new secretary of labor is nominated and confirmed very quickly.”

Labor Secretary Thomas Perez will almost surely leave the agency after inauguration—perhaps working for a Hillary Clinton White House in another role. And while the DOL emptied out most of its big-ticket regulatory objectives in this administration, there are still important responsibilities for the next top official to assume—whether it’s a friendly or a hostile takeover.

Recent administrations have named most Cabinet nominees by November and December, allowing the new Congress to begin holding confirmation hearings in the first week of January. Any Cabinet selections that have cleared committee can begin receiving Senate confirmation votes on inauguration day, Jan. 20.

The DOL may have to wait in line for a new leader, as higher-tier Cabinet spots, such as secretary of state and attorney general, are usually named and confirmed first.

Lu may even come up as a possible labor secretary appointee if Democrats capture the White House. But he wouldn’t entertain the notion of his next move.

“I’m here until noon of Jan. 20,” Lu said. “I will figure out next steps after that.”

What’s in the DOL Hopper?

The deputy labor secretary also wouldn’t show his hand on project specifics that will be turned over to a new DOL.

But one topic that will come up at transition that’s still very much a work in progress pertains to adapting the agency to the modern economy.

The DOL held a three-day “Future of Work Symposium” last December in which stakeholders met with department staff to discuss how the agency could tailor policies and enforcement to evolving workplace trends, such as the gig economy and other forms of contingent employment.

“As part of the meetings we’re having with the transition, the incoming folks, [we will be] making them aware that we actually did do a Future of Work Symposium, that we are gathering data, to help them understand that there’s a body of work that’s been done on this,” Lu said. “Which way they go with that or whether this becomes a priority, it’s up to them.”

Perez said at the symposium last year that many more discussions are necessary to determine the best course of action, one that balances technology-driven employment’s need for flexibility and innovation with the department’s mission to ensure that workers are protected.

In a related issue, the DOL’s Wage and Hour Division remains under pressure to clarify how the use of mobile technology affects when the workday starts and ends. The WHD has intended to issue a request for information on this topic, potentially leading to a regulation or guidance on when off-the-clock work on smartphones or laptops could be compensable.

That RFI has already been delayed over a year and is listed in the DOL’s regulatory agenda as in the “prerule stage.” Regardless of when it comes out and how the agency acts on the information it acquires, the issue has caused tremendous uncertainty for employers and employees alike and lacks consistency in the courts. It could be a big topic during the transition.

The Power of DOL

Lu has had a front-row seat at the DOL’s ascent to a more prominent executive branch role than seen in prior presidencies, even Democratic. The department has done this by boosting worker and retiree protections in a host of ways, to the delight of the labor movement and the dismay of some employer groups.

In addition to acting on overtime, the agency issued rules this year that expand disclosure requirements for employers that use advisers to help fight unionization drives; cut workers’ exposure to airborne crystalline silica; and raised the standards governing those who provide investment advice to retirement savers.

Lu jumped from the 2008 transition team to a spot as Obama’s Cabinet secretary from 2009-2013. In that role, he was the president’s primary liaison to all federal agencies.

Asked if the agency should continue to wield a similar level of authority under the next president, the deputy labor secretary partially deflected.

“I am proud of the [DOL’s] work, and the credit really goes to Secretary Perez for bringing to the forefront—of not only this administration but the broader national dialogue—the importance of workers, the importance of the programs that we administer here at the department,” Lu said. “I think a strong Department of Labor is not only good for workers, it’s good for employers and it’s good for the country.”

“What the relative power of this department is compared to where it’s been historically or where it will be, I’ll leave that to others to opine on,” he said.

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

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.