Punching In: Help Wanted at the Labor Department

Monday morning musings for workplace watchers

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Jaclyn Diaz: It appears someone at the Labor Department had a New Year’s resolution to make changes. A week into 2019, three personnel changes have been announced. Most recently, the DOL announced it was losing Acting Assistant Secretary of Labor for the Veterans’ Employment and Training Service Matthew Miller. He’s heading out to take over the chief of staff position for Rep. Ben Cline (R-Va.).

In a story today, I took a look at how subagencies being headless might affect the department’s policy work.

Over the course of the next three months, much of that important policy work is supposed to come out of the Wage and Hour Division. That includes revising overtime eligibility under federal wage-and-hour law and providing clarity about shared employer liability for minimum wage and overtime violations in franchise and staffing arrangements.

As we now know, former Acting Administrator for WHD Bryan Jarrett is packing up and moving back West. So, the important question now is: Who takes over?

Some sources I spoke to say Keith Sonderling is the most likely pick for the acting gig given that he’s the next WHD political appointee in line. Patricia Davidson, a career staffer, is currently serving as the deputy administrator. Sonderling is already a known figure. He was the public face of the department during the overtime forums the DOL hosted this summer and has worked closely with Jarrett.

Sonderling already has a fan club, too, made up of some in the management and business community. They’d like to see him keep the chief seat warm as the wait continues for Cheryl Stanton, who’s likely to get a renomination for wage and hour administrator.

I’m taking bets on other potential candidates if you’ve got a thought. In the meantime, Hassan Kanu sat down with Robert Iafolla to talk about some big legal news for the National Labor Relations Board in this week’s Punching In podcast.

Chris Opfer: Going into the office these days for DOL Administrative Review Board Member Leonard Howie must be a little like me wandering the Crystal City underground now that Amazon is moving in. There are signs that some strange life form once occupied the space (RIP expensive puppet store that no one ever went into) and that a new one is eventually coming. But how long the in-between period will last is entirely unclear.

Howie has been the board’s only member since August. The empty seats mean the ARB, which hasn’t issued a ruling since July, doesn’t currently have enough members to do much of anything.

“For people who are affirmatively wanting some action from the board, that’s got to be frustrating,” Stephen Fink, an employment lawyer with Thompson & Knight in Dallas, recently told me.

The board primarily hears appeals of decisions by Labor Department administrative law judges and the Wage and Hour Division. That includes the ongoing spat between Google and the DOL’s federal contractor employee pay police.

Although Republicans and business lobbyists blame many of the department’s other vacancies on political holdups in the confirmation process, it’s Labor Secretary Alexander Acosta who owns the near-empty ARB. The secretary doesn’t need Senate approval to place new members on the board.

Interested in joining the board? The DOL is accepting applications for leadership and member roles.

JD: The DOL’s recent policy change on compensation for tipped workers didn’t work out so well for Buffalo Wild Wings in a recent wage settlement case.

Back in November, the DOL reissued a 2009 opinion letter. It reiterated that waiters who rely on tips for wages but also have non-tip-producing incidental duties don’t have to get full minimum wage for the side tasks—if they don’t make up 20 percent of the job.

Some attorneys I spoke to at the time noted that since administrations have flipped back and forth on this “80/20" rule, a court might be less likely to give the latest interpretation deference.

In this case, Cope v. Let’s Eat Out, Inc., Buffalo Wild Wings pointed to the reissued letter retroactively as defense. Judge Stephen R. Bough wasn’t having it.

The restaurant chain failed to show that its tipped employees couldn’t bring a collective claim for improper use of the tip credit because of the opinion letter, he said in his order. The letter isn’t entitled to deference because “the DOL does not offer reasoning or evidence of any thorough consideration for reversing course,” the court said in its decision.

CO: Before we punch out, here’s a quick update on the fallout from the Miami Herald story on Acosta’s role in the Jeffrey Epstein case.

The Herald in November detailed the deal Acosta negotiated as a prosecutor to let off the hedge fund manager accused of sexually abusing scores of teenage girls with what some call a slap on the wrist. Shortly after the story was published, Epstein settled a Florida lawsuit that could have put a new spotlight on the salacious allegations against him by allowing some of his victims to testify for the first time.

But a separate, federal lawsuit against the Justice Department is still ongoing. Lawyers for some of Epstein’s alleged victims say the department—namely, Acosta as U.S. attorney for the Southern District of Florida at the time—violated federal law by keeping the victims in the dark while the plea deal was being negotiated. It stands to reason that those lawyers will want to eventually get Acosta to sit down for a deposition or take the witness stand.

“I can’t really speculate how things will unfold from here,” Paul Cassell, a lawyer for the alleged victims, told me. Cassell said he’s first waiting for the court to rule on a motion for summary judgment filed by the victims.

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 on any and all labor and employment news: copfer@bloomberglaw.com, and jdiaz@bloomberglaw.com or on Twitter: @ChrisOpfer and @JaclynmDiaz.

See you back here next Monday.

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