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Labor Secretary Reassigns Lawyer Accusing Him of Retaliation (1)

Sept. 11, 2020, 8:41 PM; Updated: Sept. 11, 2020, 9:46 PM

Labor Secretary Eugene Scalia has approved the involuntary reassignment of his agency’s top West Coast attorney three weeks after she filed a whistleblower complaint accusing Scalia of retaliation, three sources with direct knowledge told Bloomberg Law.

Janet Herold, the Labor Department’s regional solicitor based in Los Angeles who’s accused Scalia of improperly meddling in a high-profile pay bias lawsuit against Oracle Corp., received the formal notice Aug. 28. This gives her 60 days to accept a post running the Chicago office of DOL’s workplace safety agency or face termination, said the sources, who were given anonymity to discuss sensitive internal deliberations.

DOL officials told Herold her services would be “better utilized” in the new position at the Occupational Safety and Health Administration, a role that’s been vacant since November 2019, said two of the sources.

Herold, the lead attorney in a contentious lawsuit with Oracle stemming from the final days of the Obama administration, filed a whistlebower complaint with the Office of Special Counsel on Aug. 7, according to an earlier statement from her attorneys Debra Katz and Alexis Ronickher. In her complaint, she alleges Scalia took steps to remove her from her post as punishment for raising objections to Scalia’s attempt to intervene in the case.

Three weeks after that whistleblower filing, Scalia has given the official sign-off on a reassignment that was first relayed to her in July.

Legitimate reasons

“Ms. Herold is being reassigned for legitimate reasons that are in the best interest of the Department,” a DOL spokesman said Friday in a prepared statement. “This matter does not involve retaliation of any kind, including for purported whistleblowing.”

The sources didn’t specify whether Herold would consider accepting the new job.

Heading to OSHA would remove her from litigation entirely. Although OSHA has taken on heightened importance to protect workers from Covid-19, Herold has limited experience with workplace safety law because the DOL western region largely defers to state agencies enforcing their own occupational safety laws.

The department spokesman didn’t address questions about why Herold was suited to work at OSHA instead, saying the agency “will not comment further on this personnel matter.”

No communication

In a previous response to the whistleblower complaint, a DOL spokesman said Aug. 13 that Scalia has never communicated with Oracle or its attorneys about the litigation.

“It is entirely proper for the Secretary of Labor and the Solicitor of Labor to take an interest in high-profile litigation like the Oracle case,” the spokesperson said in the August emailed statement. “Moreover, Ms. Herold, as the career regional solicitor, ultimately reports to the Solicitor, who in turn reports to the Secretary.”

The suggestion that DOL leadership exhibited favoritism toward Oracle is “absurd,” the spokesperson said at the time.

Two Democratic lawmakers have asked for an investigation into the reassignment from DOL’s Office of Inspector General.

In their letter to OIG, Sen. Patty Murray (D-Wash.) and Rep. Rosa DeLauro (D-Conn.) pointed out that Oracle co-founder Larry Ellison is an ally of President Donald Trump. He hosted a fundraiser for the president’s reelection campaign earlier this year. They also noted that Oracle CEO Safra Catz had a role on Trump’s transition team in 2016.

The transfer to OSHA also comes after Herold had written to DOL leaders to complain that Scalia was intervening to attempt to reach a low-ball settlement with Oracle in the case, sources briefed on the matter said. The lawsuit alleges the technology giant underpaid female and minority employees and owes them $400 million.

(Updated with response from DOL in the sixth and ninth paragraphs.)

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; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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