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Labor Department’s Scalia Axes Top Oracle-Case Lawyer Herold (2)

Jan. 11, 2021, 3:46 PMUpdated: Jan. 12, 2021, 1:30 AM

U.S. Labor Secretary Eugene Scalia fired his agency’s West Coast legal chief, Janet Herold, effective Monday, removing the regional attorney who spearheaded a lawsuit against Oracle America Inc. as she continues to pursue a retaliation complaint.

Nine days before the White House switches hands, the Trump administration is expelling her from a position controlling litigation in an eight-state region that had developed a reputation for aggressively fighting for workers’ rights, including in wage-and-hour and pay discrimination cases.

The development is the latest chapter in a drawn-out tussle in which Herold has claimed Scalia inappropriately meddled to help Oracle, the Silicon Valley giant that’s been closely aligned with President Donald Trump. DOL leaders have accused Herold of lacking objectivity in handling the case.

Termination became Herold’s fate when she refused in December to accept an involuntary transfer to a non-legal post at a different Labor Department subagency, based in Chicago. It was confirmed Monday by her attorney, Alexis Ronickher.

“Ms. Herold will continue to pursue all legal options available to her for contesting the Secretary’s illegal action,” Ronickher, a partner at Katz, Marshall & Banks LLP in Washington, said in a statement. The discharge comes “despite the U.S. Office of Special Counsel’s ongoing investigation into the legality of that removal action and in spite of the OSC’s repeated request that the Secretary stay that removal during its investigation.”

Since August, the independent OSC has been probing Herold’s complaint that Scalia punished her for opposing his intervention in the highly-consequential Oracle litigation.

Herold had complained internally about what she viewed as Scalia’s efforts to meddle in the lawsuit by allegedly offering a lenient settlement. She’s also accused him of political retaliation related to her prosecution of wage-and-hour cases that stemmed from the Obama administration, including misclassification of employees as independent contractors.

“Ms. Herold is being removed from federal service for failing to accept a directed reassignment. This matter does not involve discrimination or retaliation of any kind, including for purported whistleblowing,” a DOL spokeswoman said in a statement. “The Department will not comment further on this personnel matter.”

‘A Fairy Tale’

In previous statements, the agency denied that Scalia had any improper involvement or engagement with Oracle and its attorneys.

Herold was a prime mover behind the Obama DOL’s push to aggressively pursue misclassification and “wage theft” litigation, and her continued push in that direction sparked a clash with Scalia, who as secretary has led a more conciliatory, business-friendly stance on enforcing wage-and-hour laws.

In a speech Monday, Scalia defended his more hands-on approach to the department’s litigation office as secretary, saying that his “guiding principle” has been the constitutional responsibility to ensure faithful enforcement of the law—which, he said, any department head derives from the president.

“I have regarded myself as accountable for the enforcement actions we bring, as I ultimately am for all actions of the Department,” Scalia said, in remarks that never identified Herold by name. “I know there’s a view which holds that enforcement activities—and therefore much of what the Department does in its regional offices—are not properly the business of the politically-appointed leadership in Washington.

“That is a fairy tale with no grounding in our constitutional system of government,” he continued. “The Framers designed our government to be politically accountable; an important element of that design is the President’s accountability to the American people for actions of the Executive Branch. The Framers never intended Executive Branch decisions to be made by officials perfectly sheltered from public opinion.”

Before Herold declined the transfer to head the Chicago office of DOL’s Occupational Safety and Health Administration, the OSC had asked Scalia to keep her at the West Coast Solicitor’s Office until at least late-January, to allow more time to investigate her claims. DOL declined that request.

Department leadership in December decided to not appeal the agency’s loss in the Oracle case. That lawsuit, brought in the final days of the Obama administration, sought $400 million from the tech giant for alleged systematic discrimination that paid female and minority employees less than their colleagues.

After that decision was announced, a department official wrote to a congressional Democrat, rejecting Herold’s allegation that Scalia meddled in the Oracle litigation, calling it “meritless.”

“Ms. Herold’s retaliation allegations rest on erroneous speculation regarding matters she is not in a position to know,” Deputy Assistant Secretary Joe Wheeler, DOL’s top congressional liaison, wrote at the time.

(Updated with passage from Scalia speech, starting in 10th paragraph.)

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

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