Punching In: Su’s Acting Status Likely Feature of DOL Rule Suits

Tuesday morning musings for workplace watchers.

Su Nomination Round Two|State Legislatures Set Sights on Unions

Robert Iafolla: The Labor Department finalized its regulation for employment classification under federal wage-and-hour law last week, just a day after Julie Su was renominated by the White House to be labor secretary, continuing her role as acting head of the agency.

With more DOL rules in the offing and persistent political opposition standing in the way of Su’s confirmation, the department’s regulatory actions are likely to draw more lawsuits attacking her acting status as agency chief.

“I imagine the challenge will continue to get raised—for political points,” Anne Joseph O’Connell, an administrative law scholar at Stanford University, said via email. “It does look a bit weird to have an acting Secretary of Labor, who cannot get enough votes in the Senate to be confirmed.”

But Su’s service as an acting secretary stands on strong legal and constitutional grounds, according to O’Connell, who has written extensively on leadership in the federal bureaucracy. O’Connell’s 2020 article examining the use of acting department heads from the Reagan administration through the Trump administration won the American Bar Association’s Scholarship Award in Administrative Law, marking the third time she earned that honor.

The Associated Builders and Contractors raised Su’s acting status in its lawsuit attempting to block the Labor Department’s rule to boost wages for workers on federal construction projects. The regulation is invalid, the group argued, because it was issued under the authority of an official acting without the Senate’s constitutionally required advice and consent.

An initial industry bid to quash to the employment classification rule didn’t raise Su’s status, but those challengers didn’t file a fresh lawsuit. Instead, they’re trying to revive their previous litigation that blocked the department’s 2022 effort to revise worker classification standards.

Regardless, congressional Republicans have questioned whether the Federal Vacancies Reform Act’s time limits should apply to Su.

The Government Accountability Office tackled the FVRA issue in a decision by its general counsel in September. Su can stay in her role because of the line of succession set out in the original law establishing the department, according to the GAO.

“I think the GAO’s decision is clearly correct—it said that Julie Su was properly serving under the DOL succession provision, not the Federal Vacancies Reform Act of 1998,” O’Connell said. “The latter has time limits; the former does not. In short, Su is not violating the FVRA.”

While the GAO addressed a statutory question, the construction industry lawsuit raises a constitutional claim arguing that Su’s service violates the Constitution’s Appointments Clause.

“Su is also not violating the Appointments Clause,” O’Connell said. “She was confirmed as Deputy Secretary—Congress enacted a statute saying that the Deputy Secretary could serve as an acting Secretary.”

The fact that the Senate hasn’t confirmed Su to lead the DOL doesn’t change that analysis, because it also hasn’t rejected her, she added.

The bottom line is that federal laws and the Constitution permit Su to continue in her acting role, but not indefinitely—once her second nomination is returned, her service must end, O’Connell said.

READ MORE:

• Su’s Acting Role Called Unconstitutional in New Legal Threats
• Biden’s Prevailing Wage Rule Hit With Lawsuit Targeting Julie Su
• Julie Su’s Status as Acting Labor Secretary Is Legal, GAO Says

Julie Su, acting US secretary of labor, speaks during an event at a White House event announcing a highly anticipated DOL rule that would broaden the kinds of retirement advice subject to strict fiduciary standards under federal benefits laws.

Photographer: Al Drago/Bloomberg

Chris Marr: State legislatures will continue to dabble in unionization policy in 2024, including a Georgia proposal aimed at discouraging union growth that coincides with autoworker organizing efforts.

Georgia Gov. Brian Kemp (R) is calling for requiring businesses that receive economic development incentives to favor secret-ballot elections when workers attempt to unionize, rather than voluntarily recognize a union based on the lower bar of signed cards of support, sometimes called “card check.”

The proposal mirrors a Tennessee law enacted last year, requiring companies to demand union organizers win secret-ballot elections and limiting their disclosure of employee contact information to unions if they’ve received state incentives. The American Legislative Exchange Council also released model legislation in 2023 in the same vein.

On the other side of the political spectrum, Democratic-majority state legislatures in Connecticut, Maine, Minnesota, and New York passed laws last year favored by union organizers that ban what they call “captive audience” meetings. These laws prevent employers from requiring workers to attend meetings where managers opine on—and typically oppose—joining or forming a union. Similar bills are pending this year in Alaska, California, Massachusetts, Vermont, and Washington state.

Also last year, Michigan lawmakers made the rare move of repealing the state’s decade-old “right to work” law, meaning that effective next month unionized workplaces can once again require all covered employees to join the union or pay dues.

The moves are state lawmakers’ limited attempts to tip the scales for or against unions, skirting around the National Labor Relations Act’s preemption of most state regulation on private-sector collective bargaining. The state efforts coincide with renewed union recruitment, particularly aimed at automakers following the United Auto Workers’ contract wins last year.

Tennessee’s Republican-majority legislature passed the 2023 law as a backlash against Ford Motor Co.'s neutrality agreement with UAW for the electric truck and battery factory Ford is building near Memphis with the aid of $900 million in state incentives. The legislature ultimately decided to exempt the factory from the new law, since the incentives were already promised in 2021.

Kemp didn’t specifically mention autoworkers when announcing his proposal Jan. 10, but he had harsh words for the organizers of last year’s wide-ranging labor strikes.

“The people orchestrating these actions are partisan activists who want nothing more than to see the free market brought to a screeching halt,” Kemp told a crowd of Georgia Chamber of Commerce members and state legislators.

Georgia has committed at least $1.8 billion in incentives to a Hyundai Motor Co. plant near Savannah, and electric vehicle startup Rivian Automotive Inc. also is building a factory in the state. A group of Democratic US senators wrote to the heads of non-union automakers earlier this month—including Hyundai, Rivian, Tesla Inc., Honda Motor Co., and Toyota Motor Corp.—urging them not to block union organizing efforts, which are protected by federal law.

Pegging union resistance to economic development incentives is a new twist on an older idea, partly designed to lessen the risk of federal preemption. In 2010, voters approved ballot measures in Arizona, South Carolina, South Dakota, and Utah that declared workers have a right to a secret-ballot election for union drives in their workplace. Virginia passed a similar law through its legislature in 2013.

The Arizona measure survived an initial lawsuit alleging it was preempted by federal law in 2012, when a judge found the challenge was speculative and premature because no one had attempted to enforce the measure.

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