Trump Aide’s Clash With Labor Secretary Slows Policy Actions

From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...

By Ben Penn

The sharp contrast between a Trump policy assistant and Labor Secretary Alexander Acosta has led to executive branch friction and slowed workplace policy moves, sources tell Bloomberg Law.

Even as Acosta has united with Ivanka Trump on job training and apprenticeship efforts, he has clashed with White House labor adviser James Sherk on matters ranging from personnel appointments to regulatory policy. The common theme: the labor secretary avoids actions that would be perceived as overtly hostile to workers or could land him on the losing end of a lawsuit, whereas Sherk is viewed as a hardliner, pro-management voice who favors aggressive deregulation and government downsizing.

“The secretary is much more cautious. He is also very much motivated by what he sees as being politically popular on the Hill,” Paul Winfree, Sherk’s former superior at the White House Domestic Policy Council, told Bloomberg Law. “There were several things in the regulatory space that we tried to push him on last year that he pushed back on us on just purely out of, `Well I don’t want to tackle that political challenge right now.’”

Winfree, who left the White House to return to the Heritage Foundation at the start of this year, wouldn’t detail the rulemaking suggestions Acosta rejected. Sherk worked closely with Winfree at Heritage, a conservative think tank, throughout most of the decade before they both joined the administration.

The tension comes amid the department’s delayed progress on regulations, including a more moderate version of an Obama-era rule expand workers’ access to overtime pay, and an anticipated effort to take a closer look at union and worker center finances. White House policy assistants are bound to disagree with a Cabinet secretary in any administration, but Acosta’s policy victories over Sherk illustrate a Trump Labor Department that has adhered to agency norms more than expected when the president first took office.

“The White House Domestic Policy Council and Department of Labor continue to work hand in glove on President Trump’s agenda of strengthening the American workforce, creating jobs, and ensuring a more transparent and efficient Federal government,” Lindsay Walters, a White House deputy press secretary, said in a statement.

“There is no tension between DOL and the senior White House staff because we are closely aligned on priorities,” a source close to Acosta told Bloomberg Law. Asked if Sherk is meant to be excluded from the senior staff category, the source responded, “yes.”

The accounts in this article are based on interviews with more than two dozen people who have communicated with DOL officials and Sherk. A former senior Trump administration official also confirmed the friction between the pair. Most of the sources spoke on condition of anonymity to divulge private conversations. Although some sources depicted Sherk’s frustration with Acosta, others downplayed the notion that the Acosta-Sherk dynamic is dramatic or unusual.

A DOL official told Bloomberg Law that Sherk is one of the “low-level staffers” at the White House whose “temper tantrums” distract from the president’s agenda. The official said Acosta maintains a strong relationship with Sherk’s superior at the DPC, Andrew Bremberg, and that the DOL has been delivering on the top-level White House priorities: scaling up apprenticeship programs and issuing a rule to expand small business health benefits.

Although a multitude of higher-ranking White House officials coordinate labor policy with DOL, Sherk is the only White House staffer with a portfolio designated to labor. The White House didn’t make Sherk available for an interview.

Style Contrast

Acosta has held three Senate-confirmed legal posts during which he earned a reputation as a detail-oriented lawyer who kept his mind open to the views of unions and Democrats. Several unions endorsed his nomination for labor secretary. His deliberate approach has fueled rampant speculation in business and Republican circles that Acosta is trying to improve his chances for a federal judgeship.

Opposite the labor secretary resides Sherk, the president’s special assistant on labor and employment policy. Sherk favors abolishing the federal minimum wage and contributed to a report calling for the elimination of the DOL’s Women’s Bureau, the Bureau of International Labor Affairs, and the Office of Federal Contract Compliance Programs. A past decade of prolific research and Capitol Hill testimony—mostly opposing Obama-era labor policies—entrenched him as a firm ally of the business community. On the few exceptions when employer groups wouldn’t see eye-to-eye with him, three lobbyists told Bloomberg Law, it was because Sherk veered more conservative than the mainstream business view.

The duo represent wholly disparate governing styles that are emblematic of a paradoxical, amorphous Trump workplace agenda. Employers and workers are still left guessing as to which side the administration will be on when it comes to certain policy issues.

“Sherk seems very much aligned with a deregulatory, anti-institutionalist, anti-union take on labor. The opposite of that within the Republican pantheon is Alex Acosta,” Seth Harris, a deputy and acting labor secretary under President Barack Obama, told Bloomberg Law. “Acosta understands how government works, he has no interest in blowing up the structures and processes of government, did not enter government with either a clear conservative or reactionary labor agenda, and has been extraordinarily cautious both to make sure he is giving the White House what it wants and also to avoid making negative headlines.”

Personnel Dispute

The rift became apparent when Sherk opposed Acosta’s choice of a veteran conservative lawyer to run a critical DOL subagency. The Office of Labor-Management Standards has been empowered under past GOP administrations to conduct detailed audits of union finances that the labor movement has perceived as harassment.

Acosta preferred Arthur Rosenfeld for the OLMS directorship. Rosenfeld, Acosta’s former colleague at the National Labor Relations Board, has a laid-back reputation and lacked the aggressive, anti-union pedigree that the National Right to Work Foundation would’ve preferred. Sherk—advancing the views of the NRTW, with whom he had worked to push state laws banning forced unionization—attempted to block Rosenfeld’s hiring, according to a source with knowledge of the deliberations.

Acosta eventually won that battle when Rosenfeld assumed the post in July, but the decision came more than seven months after he was first picked for a job that doesn’t require Senate confirmation. Business groups and GOP lawmakers had urged the department to fill the spot and reorient the office. They expect the OLMS to increase scrutiny on how union members’ dues are spent and to probe whether worker organizing nonprofits are evading the disclosure obligations required of labor organizations.

The DOL official acknowledged Sherk played a role in the administration’s Rosenfeld discussions but wouldn’t describe how the dispute was settled. The National Right to Work Foundation declined to comment for this article.

Friend of Business

Sherk spent the first few days of the Trump administration as a temporary DOL political appointee, before Winfree hired him to join the Domestic Policy Council. He quickly leveraged his Heritage relationships to become a reliable liaison for business lobbyists to raise concerns or pitch policy proposals.

When word leaked that Sherk had become the president’s point person on labor and employment, the business community reaction was, “Good news,” recalled Randy Johnson, who at the time was the U.S. Chamber of Commerce’s vice president on labor policy. With Sherk, Johnson knew he was getting “a smart young conservative who wants to get things done.”

Several business representatives echoed this sentiment. Sherk, in his role as Heritage Foundation labor economist, had helped legitimize the policy basis for employer lobbyists’ past decade of causes. That includes thwarting legislation to make it easier for workers to unionize and thwarting Obama DOL regulations designed to lift wages.

But after failing to see many of his ideas gain traction at the DOL, Sherk has been focusing on more attainable policy wins that don’t involve the department. He’s advanced efforts to downsize the civil service workforce and unwind union-favored labor relations board rulings, the former senior administration official said. The shift has left Acosta free to forge bonds with other White House advisers on more politically-neutral subjects, including Ivanka Trump’s workforce development initiative.

The White House rolled out three executive orders in May that will make it easier to fire federal workers, require the government to review its collective bargaining agreements for cost savings, and limit federal employees from spending more than 25 percent of their work hours on union representation issues. Over at the NLRB, another key focal point for Sherk, there have been staff buyouts, talks of reorganization plans, and other steps to curtail the agency’s footprint.

To the labor movement that was initially fearful of Sherk’s presence inside the White House, the resistance to his ideals at the DOL is a positive development.

“This was somebody who had spent an entire career both fighting congressional efforts and efforts by unions to help workers come together to negotiate for higher wages and better conditions,” Bill Samuel, government affairs director of the union umbrella organization AFL-CIO, told Bloomberg Law. “I would assume there’s been some internal struggle over those views, so fortunately, no one seems to be listening to him right now.”

Sherk’s more limited involvement at the Labor Department can also be explained by several factors unrelated to differences with Acosta. DOL offices that investigate and regulate workers’ wages and safety have remained without a Senate-confirmed leader and Ivanka Trump’s Office of Economic Innovation has taken a keen interest in many of the areas that overlap with the secretary’s White House-generated priorities. DPC Director Bremberg hails from a health-care background, leading coordination with the Labor Department that’s been chiefly focused on expanding access to small employer group health plans.

Puzder-Acosta Switch

More than a year has now passed since the withdrawal of the president’s first labor secretary nominee, fast-food executive Andy Puzder. Like Sherk, Puzder had been preparing for what would’ve been an initial foray into government service following a career decrying government’s interference in business growth.

It was Puzder who was the labor secretary pick more likely to swiftly unwind rules and free businesses from the targeted, data-driven enforcement tactics that drove them nuts in the prior White House.

Sherk’s presence at the White House today could serve as a painful reminder for some of his business comrades of what might have been.

Meanwhile, Acosta’s even-keeled approach has helped him maintain a low profile and avoid sustained controversies.

To Harris, the former acting labor secretary, the change of directions at the top signals Sherk’s ideology may never catch on at the DOL, at least as long as Acosta is there.

“The dichotomy between Sherk and Acosta tells us that President Trump abandoned plans for a radically reactionary labor agenda after his nomination of Andrew Puzder for Secretary of Labor went down in flames,” Harris said.

Request Labor & Employment on Bloomberg Law