Wage-Hour Nominee Defended Domino’s, FedEx in Pay Lawsuits

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By Ben Penn

President Donald Trump’s nominee to head federal wage enforcement boasts an elite legal pedigree with high-ranking government service. But her career hasn’t included much work with the minimum wage and overtime laws she would be policing.

When the White House announced Sept. 1 its intent to nominate Cheryl Stanton as administrator of the Labor Department’s Wage and Hour Division, a press release highlighted her position since 2013 as executive director of the South Carolina Department of Employment and Workforce, an agency focused on unemployment benefits and job training. However, employer compensation policies are outside the purview of her South Carolina department. That’s because the state doesn’t have its own wage-and-hour laws on the books.

It’s Stanton’s earlier work in the private sector, for prominent labor and employment management firm Ogletree Deakins, that may offer a better glimpse into how she’d handle the vital responsibilities as WHD administrator if she’s confirmed by the Senate. She worked for 10 years as a management litigator, defending Domino’s, Barnes & Noble, FedEx, and other employers accused of shorting their employees’ paychecks.

In two roughly five-year stints (2002-2006 and 2008-2013) at the New Jersey and New York offices of Ogletree Deakins, Stanton routinely represented business clients facing alleged violations of workplace laws, according to a review of Bloomberg Law court filings. Stanton more often litigated discrimination cases, but her name does appear as defense counsel on a few notable Fair Labor Standards Act class actions.

WHD administrators from prior Republican administrations frequently arrived from the management bar and adopted a more conciliatory relationship with businesses than seen from divisions under Democratic control.

Stanton’s legal positions when representing employers in FLSA cases don’t necessarily reflect how she would preside over the division as it embarks on a review of Obama-era strategies and rules that the business community criticized for being burdensome and punitive. Still, her relevant casework could loom large, as the next WHD administrator faces important policy decisions such as determining which workplaces to target for investigations and oversees a new rulemaking that determines which employees will be eligible for overtime.

Stanton’s Clients

Bloomberg BNA identified dozens of cases litigated by Stanton during her time as an Ogletree Deakins shareholder. While most of the lawsuits didn’t pertain to statutes enforced by the WHD, here are a few examples of Stanton’s legal work that are germane to her potential new job:

  •  When delivery drivers sued Domino’s Pizza in 2009, alleging failure to pay the minimum wage, the franchiser retained Stanton to defend it from the class action. The case, which involved federal and New York state labor law, lingered for five years, amid attempts by Domino’s to dismiss the class certification and was eventually settled in 2014, after Stanton withdrew in 2013 as Domino’s attorney.
  •  She was lead attorney in 2005 for FedEx Ground when a class of New Jersey drivers claimed they were misclassified as independent contractors and illegally denied the overtime premium for hours above 40 in a week. The case was eventually transferred to a different district in 2006, at which point Ogletree replaced Stanton with a new counsel. It was resolved this year, when a judge approved a package of settlements totaling more than $220 million for drivers in 19 states. The next WHD administrator will decide whether to continue prioritizing independent contractor misclassification when investigators audit work sites.
  •  The bookstore chain Barnes & Noble relied on Stanton’s defense in 2013 when salaried assistant managers filed a class action alleging they were misclassified as exempt from time-and-a-half overtime pay. The parties eventually reached an out-of-court settlement for strictly the three plaintiffs after Stanton had already left the case to work for the South Carolina DEW.
  •  International quality assurance company Intertek retained Stanton in response to a 2007 class action complaint alleging that inspectors were denied the time-and-a-half overtime premium because of an improper application of the fluctuating workweek method. This litigation, which was settled in 2010 for a class of 437 workers, involved an FLSA technicality that permits employers meeting certain requirements to pay only half-time, rather than time-and-a-half, for hours in excess of 40 in a week.

Confirmation Controversy?

“Cheryl’s work in labor policy and as a practitioner makes her especially qualified to effectively manage the Wage and Hour Division,” a White House spokesman told Bloomberg BNA via email. “We look forward to her confirmation and appreciate her willingness to serve her fellow citizens.”

The Senate hasn’t scheduled a committee hearing on her nomination.

Kim Ebert, who worked with Stanton when he was Ogletree’s managing shareholder, recalled her as being “very hard working, very smart,” and a “strong litigator.”

Stanton’s background defending employers wouldn’t inhibit her ability to uphold the WHD’s mission to protect employee wages, Ebert said.

“I think she’d be very balanced to her approach in the job and does not come to the job with any unacceptable ideological bent,” Ebert, who remains a shareholder in Ogletree’s Indianapolis office, told Bloomberg BNA. “I think she’ll be very true to the spirit of the laws that she’d be asked to enforce.”

Patricia Smith, who was solicitor of labor in the Obama Labor Department, said it’s Stanton’s personal, not professional, dealings that should raise more concerns about her nomination.

“I think what is unusual is a proposed wage-hour administrator who has at least been accused of violating the laws of which she would be enforcing,” Smith, now senior counsel at the National Employment Law Project, told Bloomberg BNA. “I honestly don’t know enough about what she was like as a management lawyer to comment about that, but I do know that it’s pretty basic that you’ve got to pay your employees, which apparently she didn’t do until she was sued.”

The Center for Investigative Reporting uncovered that Stanton was named in a 2016 state civil lawsuit alleging she never paid a housecleaning service for four cleaning visits. The cleaning company withdrew the complaint after Stanton paid in full, according to court documents.

Contacted through a South Carolina DEW spokesman, Stanton did not immediately respond to a request for comment on the lawsuit.

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; Chris Opfer at copfer@bna.com

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

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