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Punching In: Acosta and Pizzella? Make Way for Gene Scalia

July 22, 2019, 10:02 AM

Monday morning musings for workplace watchers

Enter Pat (& Gene) |Dissecting Scalia | Life After the Fight for $15

Chris Opfer: That was fast. President Trump wasted no time picking Gene Scalia to take over as Labor Secretary. The president tweeted the announcement on the eve of Alex Acosta’s final day at the Frances Perkins Building.

Will we see the same kind of hustle in the Senate to get Scalia confirmed? If the past is prologue, Scalia probably doesn’t need to rush out to find new drapes for the secretary’s office.

The timing of Trump’s announcement—less than a week after Acosta said he’d step down—has some folks wondering whether the White House already had Scalia waiting in the wings. Even if that’s the case, he still has to go through various background checks and provide certain disclosures before he will be scheduled for a confirmation hearing. With Congress set to take a six-week summer break early next month, it’s safe to say Scalia won’t get a date with the Health, Education, Labor and Pensions Committee before Labor Day.

So what about Pat Pizzella, the newly minted Acting Labor Secretary? It’s still not clear why he was passed over for the gig, but any hard feelings are not likely to mean Pizzella plans to pack it in. Sources tell me Pizzella is expected to return to the Deputy Secretary role once Scalia is eventually sworn in.

In the meantime, Pizzella is already making some personnel moves. Tim Taylor, a former Holland & Knight lawyer who has been on loan from the DOL to work in White House Office of National Drug Control Policy, will serve as Pizzella’s chief of staff. Catherine Bartley, a special assistant to Pizzella, has been tapped for deputy chief of staff. Marine Corps attorney Joe Mazzara will slap on civilian stripes to serve as the department’s Acting Executive Secretary. Pizzella on Wednesday will also swear in John Pallasch to run ETA.

The shuffling means two key Acosta advisers are also on the move. Former chief of staff Molly Conway will work in the Employment and Training Administration in the remaining weeks before she leaves the department. Alison Kilmartin, who was in the mix to replace Conway as Acosta’s chief of staff, is taking a position in the DOL’s policy shop.

Pizzella’s first day on the job starts with a meeting with Inspector General Scott Dahl. The huddle is being described as a pro forma chat. Dahl was also the first DOL official that Pizzella met with when he came on board as deputy secretary last year. Still, the inspector general just so happens to be wrapping up a review of the department’s rulemaking process that stemmed from last year’s tip pool controversy.

As for Acosta, the outgoing labor secretary was spotted stalking the halls of the Francis Perkins building with his sleeves rolled up at 2pm on Friday afternoon. There’s no news yet on his next move.

Ben Penn: Barring any major surprises uncovered in his vetting process, Eugene Scalia will be confirmed by the Senate as your next labor secretary … is a sentence I didn’t envision writing. Nor did many of the plugged-in senior officials inside the Francis Perkins Building, some of whom tell Punching In they were blindsided when word started trickling out of the White House late Thursday.

But the shock of seeing Trump tap Scalia is now starting to wear off. The new reaction: this makes a ton of sense. For political reasons, the logic is apparent. Adding a Scalia to the Cabinet ahead of an election year is an instant way to reinforce Trump’s support among judicially-minded social conservatives.

If another Cabinet spot were to open, there are more Scalias around town. Gene, as he’s known by friends, isn’t even the only DC-based corporate labor lawyer named Scalia (see his brother, Greenberg Traurig’s John).

Scalia won’t be in for a picnic in the Senate. He’ll have to answer questions about his extensive litigation work for businesses, including lawsuits opposing the Obama Labor Department on behalf of corporate interests.

Something tells me he’ll be ready. Scalia was actually brought in on several occasions earlier in the Trump administration to prep other DOL nominees for their Senate hearings, a source with direct knowledge says. That includes an old Scalia family friend named Kate O’Scannlain, the current solicitor of labor. He’s also had a direct line to Acosta’s former Chief of Staff Nick Geale to discuss a range of issues impacting his clients.

When it’s his turn in the hotseat, I’d expect Scalia will be at ease.

That brings us to what a Scalia Labor Department would entail. Interestingly, his vast legal work on labor and employment matters pending before the department means he frequently may be forced to sit out significant DOL work altogether. The agency’s ethics lawyers are tough and not inclined to be bulldozed. Plus, Scalia’s reputation as a strong adherent to ethics shouldn’t be disregarded.

That means, on a wide range of issues, Pat Pizzella might step in for a recused Scalia as the de facto head honcho—whether that’s on a decision to fully rescind the fiduciary rule or on rulemaking to govern tip pooling arrangements. Keep digging in the dockets and I’m sure more potential recusals will pop up by the minute.

Even with all those potential conflicts of interest, Scalia didn’t leave his lucrative administrative and labor law practice at Gibson Dunn to assume a sidelined role. He may want to use whatever time he has to try to align workplace policy with what associates say is his deeply conservative ideology. Field offices should prepare for new directives that Secretary Acosta might have held back on.

I’d expect to see opinion letters galore.

And perhaps the most lasting impact of a Scalia Labor Department could be the one reason he’s feared most by Democrats: Scalia’s lethal combination as a top notch administrative and labor law lawyer controlling an agency in the throes of significant business-friendly wage regulations. Any Democratic White House in the future that wants to repeal rules finalized under Scalia would have a much easier time if they could knock them down in court first. A Secretary Scalia wouldn’t guarantee a judge will validate all the DOL’s actions. But it sure wouldn’t hurt.

Jaclyn Diaz: After six months of back and forth the House finally did it: Last week lawmakers passed a $15 federal minimum wage bill. Of course, the measure has no chance of getting through the Senate or signed by President Trump.

It’s not clear right now what, if any, kind of communication is happening between Republicans and Democrats on hiking the wage floor or whether their is any space for negotiations. Some Republicans, like HELP Committee Chairman Lamar Alexander (R-Tenn.), don’t think there should be a federal minimum wage.

I caught up with Rep. Pramila Jayapal (D-Wash.), co-leader of the Congressional Progressive Caucus, before the House voted on the Raise the Wage Act last week. She stressed the importance of getting President Donald Trump—who took a variety of positions on the minimum wage during his White House run—on board.

“We need to push the Senate to pass it,” she said of the difficulty to get the legislation pushed to the next step. “Really, the Senate doesn’t really exist as a body led by Mitch McConnell. It is completely driven by what Donald Trump says. But I think we really have to push Senators, Republican Senators, and we have to put pressure on Trump.”

This issue may be in limbo for now, but the House still has several issues on its legislative priority list and plans on hitting the ground running next week.

The Protecting the Right to Organize Act, a measure that would substantially broaden workers’ rights to strike and unionize, will get its second hearing in front of a Education and Labor Committee subcommittee this Thursday at 10:15 a.m.

Both business and union lobbyists have indicated to me that their job is a lot harder for this proposal than the minimum wage bill because labor policies on the Hill are often kicked to junior staffers with little experience on workplace issues. That requires a lot of education to get the support needed to move legislation.

The House is also gearing up for a vote on a bill meant to tackle the multi-employer pension crisis, according to House Majority Leader Steny Hoyer (D-Md.). The Treasury Department would make loans to underfunded multi-employer pension plans under the Butch Lewis Act. Plans that receive loans could also get financial assistance from the Pension Benefit Guaranty Corporation (PBGC). The PBGC covers partial benefits when a plan becomes insolvent. The measure wouldn’t address the PBGC’s own insolvency, which the corporation projects is almost certain to occur by the end of fiscal 2026.

CO: We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.com, bpenn@bloomberglaw.com, and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer, @BenjaminPenn, and @jaclynmdiaz.

See you back here next Monday.

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To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

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