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Punching In: Walsh, DOL Secretary Nominee, Gets Ethics Sign-Off

Jan. 25, 2021, 10:07 AM

Monday morning musings for workplace watchers

Walsh’s Paperwork | Leen Trashes Trump Order | OIRA Changes

Ben Penn: President Joe Biden‘s labor secretary nominee, Marty Walsh, cleared an important hurdle in readying for a Senate confirmation hearing by getting final sign-off of his ethics and financial paperwork.

The U.S. Office of Government and Ethics over the weekend published Walsh’s letter pledging to avoid conflicts of interest if confirmed to Biden’s Cabinet, along with a report documenting his income and investments. The disclosures don’t appear to reveal any details that would risk complicating the Senate’s consideration of the two-term Democratic Boston mayor and former construction union leader.

His sole source of income (exceeding $201) over the past year was his $199,000 mayor’s salary, and his stock portfolio is modest. Absent are the lavish speaking fees or millions in corporate investments that raised eyebrows in disclosures from Treasury nominee Janet Yellen and Energy pick Jennifer Granholm, respectively.

The one area to watch is whether Walsh will recuse himself from all U.S. Department of Labor interactions with the Laborers’ International Union of North America, in line with commitments outlined in his OGE-approved ethics pledge. His rise through organized labor began as a dues-paying member of Laborers’ Local 223 in the Dorchester neighborhood of Boston.

Walsh’s financial report said he’ll continue to participate in the Massachusetts Laborers defined benefit plan, which makes the 53-year-old eligible for $1,700 a month when he turns 60. His ethics letter makes no specific mention of plans to wall himself off from potential DOL investigations into LIUNA’s finances or to avoid taking meetings with the union, which at nearly 600,000 members is a force within the building trades.

The letter includes boilerplate commitments that Walsh will consult with a DOL ethics attorney in the event he needs to resolve any actual or potential conflicts. Walsh also attests that he won’t participate “personally and substantially in any particular matter in which I know I have a financial interest.”

Now that these documents are public and can be submitted to the Senate Health, Education, Labor and Pensions Committee, Walsh’s nomination is likely to advance to a hearing, perhaps in mid-to-late February.

Republicans will try to score political points by bringing up his coziness with organized labor, but his financial disclosure is the latest reminder that, barring an unforeseen development, Walsh’s confirmation is shaping up to be a matter of when, not if.

Paige Smith: The Trump-era executive order that made many federal contractors pause planned diversity trainings—sparking backlash among civil rights advocates and some businesses—was “unnecessary,” the former agency leader who implemented it told Bloomberg Law.

Executive Order 13950, which former President Donald Trump signed in September, ordered federal contractors to halt trainings that include race or sex “stereotyping or scapegoating.” It disrupted hundreds of planned diversity and inclusion events.

The order was quickly challenged in court, and frozen by a federal judge in December before it Biden rescinded it last week.

“I sought to apply that executive order in a way that was consistent with OFCCP’s historic mission,” Craig Leen said in an interview last week. Leen formerly led the Office of Federal Contract Compliance Programs, which the Trump administration had tasked with carrying out the order. “EO 13950 came from the White House.”

The agency enforces federal anti-discrimination laws and affirmative action obligations among federal contractors. Leen said he focused on the part of the order that banned workplace race and sex stereotyping.

“I felt it was unnecessary because EO 11246 already sufficiently addressed race and sex stereotyping in employment and training, and had done so for decades,” said Leen, referring to the central anti-discrimination order the OFCCP enforces. He applauded Biden’s rescission of the order.

“The recent executive order revoking EO 13950 is a positive step in my view, and I know it is welcomed in the stakeholder community as well,” Leen said.

Ben Penn: Biden made two bold moves last week that had unions rejoicing: The Inauguration Day termination of former NLRB general counsel Peter Robb and the widely expected executive order directing the Labor Department to consider issuing an emergency rule by March 15 to protect workers from Covid-19 infection.

But it was a low-key personnel appointment at the White House regulatory affairs office on Wednesday that may wind up having more far-reaching implications for Biden’s workplace agenda over his first 100 days.

Without fanfare, Sharon Block reported to duty Jan. 20 as the political leader at the Office of Information and Regulatory Affairs. Block is a known commodity in labor circles, having served in several senior roles at the Obama administration’s DOL and National Labor Relations Board.

Her new job is housed within the White House Office of Management and Budget. Biden last week also appointed Sam Bagenstos—a labor law professor and accomplished civil rights attorney—to serve as OMB general counsel, an OMB spokesman confirmed. They’re joined by OIRA’s new senior counselor Sabeel Rahman, who’s stepped down as president of the progressive think tank Demos, the spokesman added.

The trio bring liberal and union credentials to the regulatory office, along with a lengthy paper trail espousing the importance of empowering the labor movement to achieve an equitable economy. Block, for instance, spent much of the Trump administration spearheading a Harvard University project focused on how to reimagine labor law to give workers a leg up.

Biden has yet to nominate an OIRA administrator, a post requiring Senate confirmation. That means, for the time being, Block, Rahman, and Bagenstos will have significant pull in ensuring execution of Biden’s regulatory actions—both to undo Trump rulemakings and advance urgent Democratic priorities to provide more proactive Covid-19 relief.

OIRA developed a reputation among unions and environmentalists during the Obama years as a place where aggressive regulations lingered for years, unable to withstand staffers’ scrutiny of legal and scientific ramifications and economic impact. Liberals also blamed corporate lobbyists for persuading OIRA officials about dangerous costs to the economy from regulatory actions.

In the months leading up to Inauguration Day, multiple advocates who had hoped Biden would embrace pro-worker regulations said there was tension inside the Democratic Party about what type of candidate was best suited to helm OIRA in the next administration.

Concerns mounted in the worker-rights community that Biden would tap an OIRA institutionalist or regulatory academic type, who would be more inclined to preserve the tradition of cost-benefit analysis that critics said undervalued the merits of regulation to improve workers’ wellbeing.

Block’s recent writings indicate she’s among those critics. And her familiarity with DOL could help the department’s new leadership team as it works to replace Trump rules on independent contractor status and joint employment, hustles to finish an OSHA Covid-19 standard, and issues new rules affecting federal contractor workplace protections.

Read More: Top NLRB Lawyer’s Firing Muddies Future Labor Enforcement

We’re punching out. Daily Labor Report subscribers, please check in for updates during the week, and feel free to reach out to us.

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com