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Federal Agency Asks DOL to Halt Transfer of Oracle Litigator (1)

Sept. 22, 2020, 12:32 PM; Updated: Sept. 22, 2020, 7:57 PM

An independent federal agency has asked the Labor Department to temporarily halt reassignment of its chief West Coast litigator, who alleged in a whistleblower complaint that Secretary Eugene Scalia retaliated against her for opposing what she described as his attempt to intervene in a high-profile pay-bias case against Oracle Corp., according to a top House appropriator.

The U.S. Office of Special Counsel requested a 90-day stay of Janet Herold’s involuntary transfer to allow it to complete its investigation of her accusations against the labor secretary, Rep. Rosa DeLauro (D-Conn.), who chairs a House appropriations subcommittee with jurisdiction over DOL, said in a letter to Scalia on Monday.

Alexis Ronickher, an attorney for Herold, confirmed the agency’s request, saying it shows “there is sufficient evidence of retaliation and discrimination in violation of the Whistleblower Protection Act.”

Herold is an Obama-era career appointee who serves as the department’s Regional Solicitor for San Francisco and head of branch offices in Los Angeles and Seattle. She has been a leading force behind DOL’s efforts to bring employment discrimination lawsuits against several Silicon Valley tech companies, including the pending litigation against Oracle.

DOL leadership notified Herold in July that she was being transferred to a position at the department’s Occupational Safety and Health Administration, Bloomberg Law reported in August. Herold then filed a whistleblower complaint with OSC, alleging that Scalia was reassigning her as retribution for speaking up internally about the Oracle case, which she filed in the waning days of the Obama administration.

Herold had sent a memo to department leadership, after she was first notified of the reassignment in July, complaining that she believed Scalia was intervening in the suit against Oracle by attempting to reach a lesser settlement.

‘Reasonable Grounds’ Standard

OSC policy is to request a delay of an adverse action against a federal employee when its initial review of an accusation supports a belief that an agency has in fact violated federal workforce employment law. The independent office, which is charged with enforcing the Whistleblower Protection Act by safeguarding federal employees from reprisal, issues such requests after it determines there are “reasonable grounds” to believe the agency has committed a “prohibited personnel practice,” according to the OSC website.

Scalia, through a spokesman, previously denied communicating directly with Oracle attorneys about the case, but said it’s appropriate for him to take interest in such major litigation. A DOL spokesman also previously said that “at no time has the Department engaged in retaliation” against Herold.

DeLauro pointed out the agency’s protocol for requesting a delay, arguing that “it is critical” that OSC complete its investigation before Herold’s reassignment from the Office of the Solicitor becomes effective on Oct. 27. Herold would face termination if she declines the new job, unless DOL were to grant the stay.

“OSC’s investigation into Ms. Herold’s involuntary reassignment is critical to protecting SOL’s work on behalf of vulnerable and harmed workers, as well as ensuring the effective administration of the Department, as a whole,” DeLauro wrote.

DOL spokesman Robert Bozzuto declined to comment about OSC’s request. A DOL spokesman told Bloomberg Law earlier this month that Herold was being transferred for “legitimate reasons that are in the best interest of the Department.”

“OSC cannot comment on or even confirm that we have specific open [prohibited personnel practice] investigations,” OSC spokesman Zachary Kurz said by email Tuesday.

Ronickher, Herold’s lawyer, called on Scalia to grant OSC’s request.

“We strongly urge the Secretary to agree to the request and allow a fulsome, independent investigation of the reassignment, particularly because the three highest DOL officials—the Secretary, the Deputy Secretary, and the Solicitor—are all involved in Ms. Herold’s reassignment,” Ronickher, of Katz, Marshall & Banks LLP, said in a statement to Bloomberg Law. “To do otherwise would show that DOL’s top officials believe they should be able to operate with impunity,” she added.

Scalia on Aug. 28 officially signed off on Herold’s reassignment to run OSHA’s Chicago office, which strips her of litigation authority and places her in an agency where she has little direct experience.

Spending Request Cited

DeLauro’s letter said the reassignment conflicts with a spending request the Labor Department recently submitted to Congress, because it would deprive the Office of the Solicitor of a veteran litigator when DOL wants funding in Fiscal 2021 to hire 28 full-time equivalent positions for the office.

DeLauro noted that OSC made the request of DOL because its normal approach to handling such a situation has been blocked.

Under typical circumstances, the agency would seek an enforceable stay from the U.S. Merit Systems Protection Board. But that body has no members and has lacked a quorum for the entirety of the Trump presidency, making it unable to take action. The only option for OSC is to ask DOL to voluntarily pause its action against Herold.

“It will not go unnoticed if the Department exploits this dysfunctional environment to operate with impunity,” DeLauro said.

The DOL’s lawsuit against Oracle alleges the company underpaid female and minority employees, and owes them $400 million.

Previous DOL statements said Scalia “has never had any communications with Oracle or its attorneys concerning the Department’s litigation against the company, or any settlement discussions.” A DOL spokesman also called it “absurd” to suggest that DOL leadership exhibited favoritism toward Oracle.

(Updated with OSC response in 12th paragraph.)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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