DOL Official Represented Steel Co. in Court While on Job (1)

March 1, 2019, 11:16 AMUpdated: March 1, 2019, 5:12 PM

A Labor Department official continued to represent a business in a private lawsuit against a worker union after joining the Trump administration, raising concerns about whether he used the power of his office for leverage, Bloomberg Law has learned.

Assistant Deputy Secretary Michael Avakian was suspended without pay for two weeks last year for “bad judgment,” a Labor Department spokeswoman told Bloomberg Law. The former management attorney worked on a lawsuit against an Ironworkers local in Indiana for three months after taking the job at the DOL, court records show.

“After a review, Department career ethics officials determined that Michael did not use any government resources for his personal involvement in the case,” the spokeswoman said. “Further, career ethics officials concluded that Michael had not knowingly violated a criminal statute or particular ethics rule.”

The incident likely will feed worker advocate concerns that DOL officials are a little too cozy with the business community. Avakian worked on the private case against a union that the Labor Department is tasked with regulating. The DOL’s inspector general and the Justice Department were investigating related criminal charges against local Ironworkers representatives at the same time Avakian was going after them in court.

Avakian is a longtime labor litigator who worked for Atlanta-based law firm Wimberly & Lawson and represented the Center on National Labor Policy, a conservative advocacy group that focuses on “union and government abuses,” before being tapped for the Labor Department job. He also represented an Iowa industrial contractor in a controversial case challenging the National Labor Relations Board’s test for determining shared “joint employer” liability for businesses in collective bargaining and unfair labor practice cases.

He filed two motions on behalf of D5 Iron Works, Inc. and participated in a pair of conference calls with the judge in the case after joining the department in April 2018. The company alleges in the lawsuit that union leaders used physical violence to secure a collective bargaining agreement at a construction site. Federal prosecutors charged a pair of union officials with labor extortion less than two weeks after Avakian withdrew from the case.

DOL ethics officers instructed Avakian when he joined the department to “wind down” his involvement in the Ironworkers and other cases, according to the spokeswoman. They became aware that Avakian was still working on the case on July 31 and instructed him to remove himself from the litigation the next day. Avakian filed a motion to withdraw from the case Aug. 2.

The spokeswoman didn’t say when ethics officials decided to suspend Avakian, who also agreed not to accept compensation for work on the case done after he joined the Labor Department. Avakian didn’t immediately respond for Bloomberg Law’s request for comment.

Construction Site Assault

Avakian and other lawyers for D5 Iron Works in 2016 alleged that union representative Thomas Williamson and others attacked company employees on a construction site after failing to get them to agree to sign a collective bargaining agreement. One employee suffered a broken jaw in the assault, according to court filings.

Lawyers for the company and injured employees are asking for more than $1 million in damages.

Avakian in July 2018 filed two briefs on behalf of D5 Iron Works opposing the union’s summary judgment motions. He also participated in a pair of telephone conferences, which took place on weekday mornings when he otherwise would be on the clock at the DOL.

Robert Hanlon, Avakian’s co-counsel on the case, said he wasn’t aware of whether Avakian got clearance from the department to continue working on the case. He pointed out that Avakian’s role at the department focuses on policy rather than litigation. Hanlon also said he didn’t know that Avakian had been suspended without pay because of his participation in the case.

Grant Piechocinski, an attorney representing the Ironworkers, declined to comment on whether he and other defense attorneys were aware of Avakian playing double duty. He also declined to comment on Avakian’s general role in the case.

Avakian was involved in other cases still ongoing when he joined the Labor Department. He withdrew himself from three of those cases without further participating in the litigation, according to Bloomberg Law’s review of court and NLRB filings.

Some Pro Bono OK

It’s not unheard of for attorneys working for the federal government to also be involved in private sector litigation at the same time, but there are strict guidelines for doing so.

Those cases have to be pro bono, the department must approve of it, and there must be no potential conflict with the person’s daily work, according to Greg Jacob, a former DOL solicitor and now partner at O’Melveny & Myers. Jacob said he worked on pro bono cases in family courts throughout his time in the public sector.

“Rules are there for good reason: to ensure there is no conflict and to make sure an employee is not spending taxpayer money on their private work,” he said.

The Avakian incident is a sign of a possible gap in the onboarding process at the department, Patricia Smith, labor solicitor during the Obama administration, told Bloomberg Law. Smith now works as senior counsel with the National Employment Law Project, a worker advocacy group. Incoming DOL staffers typically are required to sign a pledge to divest from law firms, litigation, and stocks, and given a strict timeline to complete that process, she said.

Avakian and DOL ethics officials appear to have had different ideas about “winding down” his participation in the D5 Ironworks case meant.

“The incident highlighted the importance of providing specific advice on appropriate time frames for winding down matters,” the DOL spokeswoman told Bloomberg Law.

(Updated to include information on criminal investigation of union representatives.)

To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editors responsible for this story: Cathleen O'Connor Schoultz at cschoultz@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com

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