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Old Foes Await in Scalia’s Return to Labor, 16 Years After Split

Aug. 21, 2019, 10:10 AM

Eugene Scalia had to fall in line or take a stand.

His boss, Labor Secretary Elaine Chao, had directed him to intercede in a lawsuit on the side of a union leader who was the George W. Bush White House’s closest, if only, friend in organized labor. Scalia vehemently disagreed, advocating to reverse the stance adopted by both Chao and her predecessors in Bill Clinton’s administration.

Already marginalized in an acting role with a Democratic-controlled Senate unwilling to confirm him as solicitor, Scalia was seeing Chao take the advice of her union liaison over his, even though he was chief legal officer. After his counsel was vetoed, Scalia resigned, saying only that it was an “appropriate time” to leave.

Nearly 17 years later, Scalia is the White House pick for labor secretary. If confirmed, the longtime corporate attorney would have to work alongside now-Transportation Secretary Chao in President Donald Trump’s Cabinet.

The labor leader he refused to support in court, Douglas McCarron, is still president of the United Brotherhood of Carpenters, one of the few unions that has tried to bond with the Trump administration on issues including job training, infrastructure, and trade. McCarron, who met with a newly inaugurated Trump at the White House in 2017, leads some 500,000 blue-collar workers whose support may be critical to the president’s chances of reelection.

And that former Chao union adviser, Andrew Siff, now runs a lobbying firm representing the Carpenters. He leveraged his friendship with Trump’s first labor secretary, Alexander Acosta, to give construction unions influence in Acosta’s policy decisions. Before stepping down in July, Acosta backed McCarron in persuading the White House to preserve building trades’ apprenticeship programs, preventing the politically powerful construction union federation from going to war with Trump.

“Given his conduct as solicitor, I would not be surprised to see a Secretary Scalia being less interested in union concerns than Secretary Acosta was,” said Michael Hayes, who ran the DOL office that enforces union oversight under President Barack Obama. “And what happens if and when he becomes secretary on these issues may also reveal what path the Trump administration plans to take for reelection.”

The story of Scalia’s resignation hasn’t been previously reported, although it was floated at that time in a Wall Street Journal editorial that didn’t name a source. This account is based on interviews with six officials from the Trump and Bush administrations, who all spoke on condition of anonymity.

Trump announced his intention to nominate Scalia, son of the late Supreme Court Justice Antonin Scalia, in a July 18 tweet.

“Eugene Scalia is the President’s pick to lead the Department of Labor because of his deep expertise and ability to defend the American worker,” White House spokesman Judd Deere said in a statement. “Upon confirmation, Mr. Scalia will join Secretary Chao, who he admires and respects, and honorably serve the American people and President Trump.”

Scalia declined to comment. Attempts to contact Chao through Transportation Department representatives weren’t successful.

McCarron on Apprenticeship Task Force

Acosta’s resignation, following backlash over a decade-old lenient plea deal he brokered for accused sex trafficker Jeffrey Epstein when he was U.S. Attorney in Miami, came after Trump’s acting Chief of Staff Mick Mulvaney became so fed up with the DOL’s pace of deregulation that he seized ultimate authority over rules from the labor secretary.

On the issue most essential to McCarron and the Carpenters, though, the Labor Department has thus far been able to prevail. That matter, a White House initiative to expand apprenticeship programs, may be the largest source of White House-union tension that Scalia will have to navigate.

McCarron sat on a White House task force that helped Acosta frame an “industry-recognized apprenticeship program” regulation that exempted the construction industry, as McCarron wanted.

But a final rule, which would fall on the next secretary, could change gears and include builders, which the Carpenters and other trade unions say would undermine their model and give employers an avenue to hire cheaper, nonunion apprentices.

“We don’t have any comments on this story,” Kyle Makarios, political director of the UBC, said in an email. “We don’t have insight into the DOL internal drama in 2003, and since he hasn’t been nominated yet, it’s premature to take any position on Mr. Scalia.”

To be sure, the Carpenters’ old legal case is now resolved. McCarron’s side won. The matter was an internal union dispute rather than one against an employer that would pit labor supporters against union critics. Further, the UBC is no longer affiliated with construction union organization North America’s Building Trades Union, which has had a heavier political footprint under Trump than the UBC.

But on apprenticeship policy, the UBC and NABTU largely speak with one voice.

Union Democracy Lawsuit

The lawsuit that led to Scalia’s departure was filed in 2000 by Carpenters’ dissident members alleging that McCarron’s restructuring of the union, which was designed to consolidate its diffuse governance and boost organizing, deprived the rank-and-file of their federally protected right to directly elect regional officers. The department sided with McCarron in the Clinton White House, and Chao ultimately chose to do the same after months of internal deliberations.

Two weeks after Scalia’s exit, DOL attorneys advanced the agency’s reasoning for not suing McCarron’s hierachy. They argued that the union’s regional councils operated as “intermediate bodies,” under the Labor-Management Reporting and Disclosure Act. Unlike local unions, intermediate bodies are exempt from the DOL-enforced requirement that members directly elect officers.

Far from Scalia’s opposition to that stance being anti-union, an attorney for the UBC dissident members who met with Scalia in 2002 said the then-solicitor was receptive to his side. Alan Hyde filed an amicus brief opposing McCarron in the case.

“The fix was in because Doug McCarron was one of the few union leaders to have friendly relations with the Bush administration,” said Hyde, a Rutgers University labor law professor.

Friendly disagreements among Chao’s senior leaders were common and part of a healthy debate process, said Chris Spear, the DOL’s policy chief at the time. Scalia also was frustrated near the end of his tenure as solicitor by not getting a confirmation vote, said Spear, who doesn’t remember the Carpenters’ matter. Other former senior Bush administration officials saw his exit as motivated at least in part by a desire to disassociate himself from the Carpenters’ defense.

John DeCarlo, who was the UBC general counsel during the litigation and remains its outside counsel at his Los Angeles law firm DeCarlo & Shanley, declined to elaborate when asked if McCarron would be concerned that Scalia once wanted no part in defending him.

“Well, he was proved wrong, wasn’t he?” DeCarlo said.

The Labor Department still considers McCarron’s regional council system to be legal.

Scalia Mentor: ‘He’ll Resign’

Scalia’s longtime mentor William Kilberg recalls a conversation with Scalia, shortly after the resignation announcement. They discussed Scalia’s return to work for the firm Gibson Dunn, where he’s built a practice representing corporations or trade associations in employment cases against workers and labor regulations.

Kilberg asked his protege if the rumors of the Carpenters dispute were true. He didn’t get an answer.

“I think that’s typical of Gene. He would act on principle, but he wouldn’t necessarily go public and say, ‘Look at me; I’m the principled one here,’” said Kilberg, himself a former DOL solicitor in the Nixon administration.

“I think that’s essentially the way he’ll behave as secretary,” added Kilberg, who has known Scalia since he was 10. “If something happens in the administration that he thinks is key and he can’t perform as secretary, in certain circumstances, he’ll resign. But there won’t be a press conference.”

Acosta v. Scalia

Siff, Chao’s counselor and union liaison, eventually became her chief of staff. When he left government in 2005, Siff signed up the Carpenters as one of his first lobbying clients. His firm still lobbies and consults for the UBC, according to public filings.

Dating back to his time as Acosta’s unofficial adviser during his 2017 Senate confirmation process, their relationship sparked grumbling in the management bar and business community that Acosta would give more weight to organized labor’s priorities than a typical GOP labor secretary. That discontent amplified after Acosta became labor secretary and took positions that weren’t aggressively pro-business.

Acosta and his chief of staff, Nicholas Geale, relied on Siff as an informal adviser and liaison to the building trade unions, including on the apprenticeship debate, current and former DOL officials said.

Siff declined to comment.

As for Chao, Scalia would have to sit with her at Cabinet meetings and work with her on joint Labor-Transportation projects, particularly an infrastructure deal that likely would require close collaboration. But Kilberg and other sources said Scalia and Chao are now friendly.

After all, Scalia recently received public praise from the best supporter he could ask for in ensuring swift confirmation: Chao’s husband, Senate Majority Leader Mitch McConnell.

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

To contact the editor responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com

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