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Tensions Await Julie Su in Shaping Role as Labor’s Deputy (1)

July 13, 2021, 7:28 PM; Updated: July 13, 2021, 8:57 PM

Julie Su’s confirmation as deputy labor secretary gives the Biden administration an experienced employment law regulator known for prioritizing vulnerable workers, but raises questions about how much influence she’ll have in setting the president’s workplace policy agenda.

The Senate voted 50-47 Tuesday to approve Su as second-in-command at the U.S. Labor Department, ending months of delay from Republican resistance to her California credentials.

Far more challenging political pressures await as Su transitions from California labor secretary to deputy at the federal level.

The foremost question is how she’ll gel with Labor Secretary Marty Walsh, who only six months ago was competing against Su for the department’s top post. Key to their dynamic as leaders could be how much latitude Walsh gives Su to carve out her portfolio in a position that traditionally functions as the agency’s bureaucratic operator but has the potential to delve into policy.

Progressives in the labor and employment realm have lofty aspirations for Su, considered a forceful and innovative enforcer of workers’ rights; they’d like her to assume an outsized role in framing actions to protect marginalized workers and promote racial and gender equity.

At the same time, business lobbyists who’ve been pleased with Walsh’s pragmatic style fear Su could take the department in a more liberal direction; they’ve repeatedly criticized her over the billions of dollars in fraudulent jobless benefits payments California paid out last year.

Sen. Richard Burr, the top Republican on the Senate labor panel, laid down a marker at her March 16 confirmation hearing, arguing that her job should be managerial. He cited concerns about California’s pro-labor reputation and suggested she’d serve as a “shadow secretary.”

Former Boston mayor and construction union leader Walsh likely will be the ultimate decider on Su’s involvement in policy, though the White House can have its say. The two have contrasting resumes, yet share a feature that may complicate their division of labor: Both are newcomers to Washington.

The conventional wisdom would have been to pair a Cabinet secretary like Walsh with a deputy steeped in Beltway politics or with past DOL experience. But administration backers have come around to the Walsh-Su tandem.

“Walsh is a politician, and apparently has a very good relationship with Biden and the White House; and Julie Su, from what I know about her, is much more a policy-type person,” said Jordan Barab, who was deputy head of the DOL’s Occupational Safety and Health Administration for much of the Obama administration.

“That could be a complement as well,” Barab added, “where you’ve got the deputy secretary really focusing in on a lot of the policy issues and the nuances of the policy issues, and the secretary—with the back-slapping relationships—would have the ability to actually work with the White House and Congress to get things implemented.”

A DOL spokesman, in a prepared statement, said: “The U.S. Department of Labor is excited to welcome Deputy Secretary of Labor Julie Su to the team. As Deputy Secretary, Su will serve as the de-facto Chief Operating Officer for the department, and will oversee efforts to rebuild and empower the Labor Department workforce, manage the department’s budget, and execute the priorities of the Secretary of Labor.”

Media representatives for Su didn’t respond to a request for comment.

U.S. Labor Secretary Marty Walsh speaks during a news conference at a construction site in Washington, D.C., on May 19.
Photographer: Al Drago/Bloomberg

‘Specialized Hand’

Walsh continues to adjust to his first federal job and the rigors of Cabinet service, as the White House dispatches him across the U.S. to sell President Joe Biden’s infrastructure plan. That leaves Su in position to oversee day-to-day operations of a sprawling department that’s instrumental to the president’s economic agenda.

She enters at a moment when the department is pivoting from pandemic response to charting a strategic vision for the administration’s future, and faces crucial decisions on spending stimulus dollars to upgrade the nation’s unemployment insurance system, working within the fiscal 2022 budget, hiring to offset mass attrition, and executing on the administration’s regulatory agenda.

Su has spent the past decade in California, the world’s fifth-largest economy, administering many workplace programs that parallel DOL’s mission, such as wage-hour, civil rights, and immigration policies.

“She does have this very strong reputation for enforcing labor laws in California in ways that are meant to get at the really systemic harms being done to the most marginalized workers,” said Vasu Reddy, senior policy counsel at the National Partnership for Women & Families.

The department needs a “point person” to review Trump-era rules, enforcement priorities, and other “nitty-gritty details,” Reddy said, adding, “It’s too much for one person, especially in a public-facing role like the secretary of labor has. It just needs a specialized hand.”

Clash With Walsh?

Walsh’s most divisive policy move as secretary so far was stalling a workplace safety regulation meant to protect employees from Covid-19 and then limiting it to the health-care sector. That demonstrated to the business community that he understands their desire for the department to take a measured approach, several industry leaders have said.

While Su’s opinion on that decision isn’t known, the California agency she led issued a broad virus workplace safety standard last year that was bashed by the state’s employer community, which argued it was vague and unworkable.

Burr voiced a common concern among management when he questioned Su at her confirmation hearing: “I also hope you can demonstrate that you aren’t aiming to drag Mayor Walsh away from what I think is a sensible agenda he committed to pursuing,” Burr said. He pressed her to support the concept that the deputy secretary should be the department’s chief operating officer, and she agreed.

Business groups will now monitor her moves closely, remembering past hands-on DOL deputies such as Seth Harris and Patrick Pizzella.

“To the extent she is going to take the same approach at the Labor Department here in D.C. that she took in California, we’re definitely going to have a robust conversation around a lot of issues,” said Ed Egee, vice president of government relations and workforce development at the National Retail Federation, which sued over California’s Covid-19 standard. “We’ve had a good conversation and good working relationship with Marty Walsh and his staff to this point.”

Ann O’Leary, who worked with Su in California as chief of staff to Gov. Gavin Newsom (D), rejected the idea that Su and Walsh could clash. Su’s history of defending workers in the service, agricultural, and garment industries “can be an amazing complement” to Walsh, whose career began in the building trades, said O’Leary, a former White House aide for Bill Clinton.

O’Leary and labor leaders who’ve collaborated with Su insist that saddling her with strictly operational tasks would waste her talents. She envisions Su serving in “probably less the COO-management role, more the really setting-the-agenda-getting-it-done role.”

“But, of course,” O’Leary added, “that’s up to Secretary Walsh and how they run the department; that’s just, I think, her best strength.”

(Updated with additional reporting throughout. )

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; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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