PUNCHING IN: New Faces at Labor Department, Fresh Overtime Uncertainty


Monday morning musings for workplace watchers 

By Chris Opfer and Ben Penn


DOL Staffs Up | Opining on Opinion Letters | RIP Overtime Rule

Chris Opfer: Congress is back tomorrow with a full plate and an unclear path forward, muddled by squabbling between President Donald Trump and the GOP leadership at the Capitol. At the top of most lists is some sort of appropriations legislation to keep Uncle Sam’s lights on before the current funding measure runs dry at the end of this month. 

We’ve seen this movie before: Congress passes a short-term funding patch or two to buy more time for a big legislative package that keeps most appropriations levels roughly in place. But will Trump be willing to sign? He’s called for deep spending cuts – including a 20 percent dip in the Labor Department’s allotment – almost across the board.

Senate appropriators are scheduled to take up their version of a Labor-HHS funding bill on Wednesday. We still don’t know what’s in it, but it’s safe to assume the measure will be lighter on the policy riders than the version floating through the House. 

Will our nation’s leaders take us up to the brink of another shutdown? If the government does run out of cash, should the Labor Department start charging folks to play squash in the basement of the Frances Perkins building? Give us a shout: copfer@bna.com and bpenn@bna.com, or on Twitter: @ChrisOpfer and @BenjaminPenn.

Ben Penn: The first Labor Day of the Trump era is upon us, meaning the annual ritual of think pieces and studies on the crisis facing workers will be a little different this year. Sen. Elizabeth Warren’s office released a special holiday report this morning, “Not Working for Workers: How President Trump has betrayed America’s workers and undermined the middle class.” 

Read Warren’s report here. Teaser: She’s not over Andy Puzder.

Warren devotes a section of her report to the Department of Labor nominees that she finds objectionable. But her office didn’t have a chance to include on this list the three subcabinet DOL nominees the White House just announced in a classic pre-holiday Friday night news dump.  

Well, let’s review the troika, who will all be subject to Senate confirmation, right here: 

  • Cheryl Stanton, Wage and Hour Division administrator: As we first reported in June, back when the South Carolina workforce agency director was said to be the eventual pick, Stanton is familiar to the management bar from her two stints at employment law megafirm Ogletree Deakins. She’s never worked at DOL, but liaised with the department as an attorney for the George W. Bush White House.

  • Katherine McGuire, assistant secretary for congressional and intergovernmental affairs: McGuire is currently the chief of staff for Rep. Randy Hultgren (R-Ill.) and has held a handful of other Capitol Hill jobs since the 1990s, including as a Senate labor committee staffer and software industry lobbyist.

  • David Zatezalo, assistant secretary for mine safety and health: His background as an executive for coal company Rhino Resources – including when the business was cited by MSHA for safety violations – could make his confirmation the process the most contentious of the three. 

For those who have bemoaned the lack of political personnel at DOL this year – particularly employer groups who are eager to unwind more Obama administration rules and enforcement procedures – these announcements were encouraging. But the White House’s intent to nominate them does not necessarily indicate other key personnel selections, such as for solicitor and Employee Benefits Security Administration, are imminent. It also doesn’t guarantee swift Senate action on their confirmations, as deputy labor secretary nominee Patrick Pizzella can attest to. 

Stanton, if confirmed, may not arrive for at least a few more months to the WHD that still doesn’t have any political staff. Considering the heavy load of controversial decisions pending before the division already, this is a bit confounding. 

At WHD, the solicitor and secretary’s offices have been lending a hand on the knotty legal matters, but they’ve been stretched thin. The solicitor’s office did grow by at least one in recent weeks. DOL hired Dave Dorey from O’Melveny & Myers to be counselor to the solicitor. The big question remains – who will be his permanent boss? 

CO: Unless you spent last week on a Griswoldian family vacation trekking across the country in a station wagon, you know that Judge Mazzant hammered a couple more nails in the coffin for the Obama overtime rule. Mazzant followed up on an earlier decision temporarily blocking the rule that would have made some 4 million workers newly OT eligible. He said the DOL overshot its authority by doubling the salary threshold (to about $47,000) under which workers are automatically eligible for overtime pay.

Several sources on both sides of the debate told me they expect the Labor Department to withdraw its appeal of Mazzant’s earlier decision as a result of the new ruling. The DOL had asked the Fifth Circuit to affirm its right to use salary levels at least in part to determine overtime eligibility. Mazzant’s latest decision – he seemed to say DOL can take salary into account, but wasn’t entirely clear on the limits – may be good enough. The department is already taking another look at overtime. A guy I know in Vegas says the over/under on where DOL tries to set a new salary threshold should be somewhere around $34k.

Not everyone is sure the Trump administration drops the appeal. Sharon Block, who ran the DOL’s policy shop in the Obama administration, told me the new decision still limits the department’s regulatory authority in a way the White House might not like.

“If they’re being truthful that they want to promulgate a new rule, I guess they have to figure out a rationale for a salary threshold that aligns with his reasoning,” Block said, referring to Mazzant.

It’s been four days since the decision, and we still haven’t heard a peep from the Labor Department about the ruling.

BP: If Stanton is confirmed as WHD chief, she will be responsible for reviewing a stack of opinion letter requests that have been accumulating ever since Acosta reinstated the process for employers and workers to seek fact-specific clarity on particular legal scenarios. 

Some wage-and-hour attorneys would advise clients it’s not wise to submit opinion letter questions until after at least one WHD political shows up. Well, not everyone is on board with that thinking. There exists a small, but notable list of companies and a few employees, who formally requested a letter over the past two months.  

Thanks to a Freedom of Information Act request, I’ve acquired an 87-page PDF of all the applications for opinion letters that the agency has received thus far.  Daily Labor Report subscribers can learn more – and check out a link to the documents – later this week. 

CO: The House Education and the Workforce Committee on Tuesday is holding a hearing on the sharing economy. Perhaps the biggest labor issue facing gig workers and their employers is that Uber and Lyft drivers, Instacart grocery shoppers and others who earn their cash in the sharing space are largely treated as independent contractors instead of employees. 

Bloomberg Law’s Jon Steingart pointed out that a federal court in San Francisco will be considering that very issue later the same day. Trial begins in a lawsuit by a GrubHub delivery courier who says the company wrongly classified him as an independent contractor.

Also this week, Bloomberg Law’s Jacquie Lee is reporting on the state and city government efforts to step in with new pay data demands on businesses, in the aftermath of the last week’s Trump administration decision to suspend the Obama Equal Employment Opportunity Commission’s wage reporting plan. 

That’s all for now. Daily Labor Report subscribers can check in with us during the week for more updates. We will be watching for a possible White House announcement about what the Trump administration plans to do with the deferred action for childhood arrivals program. See you back here next Monday morning. Happy Labor Day.

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