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Federal Agency Asks DOL to Punt Top Lawyer’s Transfer to Biden

Nov. 24, 2020, 8:49 PM

An independent federal agency investigating whether Labor Secretary Eugene Scalia illegally retaliated against a top attorney, shifting her to a new job against her will, has asked the U.S. Labor Department to delay that transfer, setting up a Trump administration decision on whether to give President-elect Joe Biden a chance to reverse it.

The U.S. Office of Special Counsel requested that Scalia give Janet Herold, the DOL’s western region solicitor, an extra 60 days beyond an existing Nov. 26 deadline to accept her involuntary reassignment to a non-legal post in Chicago, a spokeswoman for Herold told Bloomberg Law.

If the department declines the request, Herold would need to tell DOL leadership by the deadline that she will take the new job running the Occupational Safety and Health Administration’s Midwest office. If she fails to respond or opposes the move, she’ll be terminated.

A 60-day extension would give Herold until Jan. 25. That would be five days into Biden’s administration—in effect, giving the new president an opportunity to handle the matter differently. A DOL media representative declined to comment.

DOL has yet to inform Herold’s lawyer, Katz, Marsall and Banks partner Alexis Ronickher, whether it will agree to a 60-day extension or to a shorter period, Herold’s spokeswoman said.

Herold, an Obama-era career appointee who wields significant control over department litigation and enforcement in the Pacific region, alleged in a whistleblower complaint that Scalia retaliated against her for opposing what she described as his attempt to intervene in a high-profile pay-bias case against Oracle Corp. She also accused Scalia of ordering her transfer due to her aggressive wage-hour litigation tactics, including on the hot-button issue of independent contractor classification.

Herold has been a leading force behind DOL’s efforts to bring employment discrimination lawsuits against several Silicon Valley tech companies. That included the litigation against Oracle, in which the department sought $400 million to compensate women and minority employees. The department lost the case in a September ruling.

Test for Scalia

Scalia’s response to the independent Office of Special Counsel will demonstrate his level of commitment to his year-long push to re-balance enforcement protocols in employers’ favor. During her time as DOL’s top West Coast litigator, Herold has earned a reputation among businesses as a tough enforcer aligned with the Obama-era’s more worker-friendly approach.

Biden’s labor policy platform and transition hires suggest he is aiming to revive many of former President Barack Obama’s workplace policies, such as pursuing joint-employer enforcement actions against corporations and their franchisees and contractors. Removing Herold from her post would frustrate that agenda.

Media representatives for the Biden transition didn’t immediately respond to a request for comment on whether a new White House would opt to keep Herold in her post.

This is the second time OSC has requested a stay in Herold’s whistleblower case. In September, the independent agency sought a 90-day extension. DOL leadership agreed instead to postpone the deadline by 30 days.

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 an agency has committed a “prohibited personnel practice,” according to the special counsel’s website.

Under typical circumstances, the office 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 administration, making it unable to take action. The only option for OSC is to ask DOL to voluntarily pause its action against Herold.

A spokesman for the OSC didn’t immediately respond to a request for comment. The office has a policy of not commenting on open cases.

A DOL spokesman previously said that no illegal retaliation took place, and that Herold was being transferred for “legitimate reasons that are in the best interest of the Department.”

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; Andrew Harris at aharris@bloomberglaw.com

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