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Eugene Scalia, Trump's pick to head the Labor Department, scares worker advocates to death

Labor Secretary Alex Acosta resigns
  • Workers' rights groups and Senate Democrats are objecting to the nomination of Eugene Scalia to head the Labor Department, pointing to his career as a lawyer defending big business.
  • Scalia led the charge against a proposed rule that would have required 401(k) plan managers to act in the best interests of their investors.
  • He also worked to weaken parts of the Dodd-Frank financial overhaul bill and Clinton-era rules designed to prevent repetitive stress injuries at work.

President Donald Trump's move this week to tap attorney Eugene Scalia to head the U.S. Department of Labor is causing worker advocates to sound the alarm. Scalia, whose father is late Supreme Court Justice Antonin Scalia, is a career corporate lawyer most of whose professional life has focused on representing big companies in their fights with consumers, employees or government regulators.

The National Employment Law Project noted that Scalia "has spent his entire career fighting for big businesses and against working people," while the left-leaning Economic Policy Institute called Mr. Trump's choice "another fox-guarding-the-hen house selection that defines the Trump cabinet." And prominent Senate Democrats have stated their opposition to Scalia's nomination.

Coming from a White House avowedly in favor of eliminating a host of government regulations, Scalia's nomination is no great surprise. But what does that actually mean for U.S. workers?

Legal winners and losers

"Labor secretaries have a lot of power when it comes to enforcement," said Susan Schurman, a distinguished professor in the Rutgers School of Management and Labor Relations. "The labor secretary has tremendous influence on how the law is enforced, whether the law is enforced, which laws are favored and which laws aren't," she said.

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Take overtime work. Currently, an employer can avoid paying an employee one-and-a-half times their hourly pay by classifying that worker as a manager, unless that worker earns under $23,660 annually. For the last five years, the Labor Department has been working to raise the pay level at which workers draw overtime rates, with the exact pay thresholds changing depending on the administration. (President Obama's labor department aimed for a level of $47,700; the current proposed rule puts it at $35,300.)

"Glorified internships"

One area worker advocates are concerned about is apprenticeships. Mr. Trump made these programs a cornerstone of his economic policy when he was inaugurated, but two and a half years later, the program has barely gotten off the ground. "Not a single apprenticeship program has been created under the program, nor a single person trained," Politico reported.

One way to speed that up that the government has proposed is by creating more industry-sponsored apprenticeships and curtailing the need for Labor Department approval. Currently, the government certifies the training programs to make sure they meet standards of pay, training and minimal benefits.

"These have been the hallmark of post-secondary education for people who are not interested in getting or can't get a bachelor's degree," Schurman said. Without certification, "I predict that the apprenticeship would simply become just another form of glorified internship."

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Tip pools and safety rules  

Scalia's biography on the website of law firm Gibson, Dunn & Crutcher, where he is a partner, offers hints of what laws might fall out of favor if he were confirmed. For example, he has represented Walmart and other large employers in opposing a law requiring the businesses to spend a certain portion of their payroll on health care, and in another case against corporate whistleblowers who say they were fired. 

After an orca at SeaWorld killed its trainer in 2010, meanwhile, Scalia defended the amusement park against new federal safety rules, arguing that "the company has no more responsibility to protect its trainers than the NFL has a duty to combat on-the-field injuries," according to Mother Jones. Scalia also represented casino Wynn Las Vegas in a case that found that a business can force employees to share their tips with a pool of workers that the employer chooses.

In the 1990s, Scalia led the opposition to federal regulation that aimed to ensure better physical working conditions for employees. The so-called ergonomics rule required employers to warn their workers about repetitive stress injuries and to fix workplace conditions that led to frequent injuries. Scalia argued that the rule was based on "junk science" and "quackery," writing in an op-ed that it would "force companies to give more rest periods, slow the pace of work and then hire more workers."

Dollars and cents

Several news reports have noted Scalia's zeal as a litigator, including a Bloomberg profile that appeared halfway through the Obama presidency. "Suing the Government? Call Scalia!" stated the piece, which detailed his role in blunting the Dodd-Frank financial reform law that followed the housing bust. 

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"He was at the center of the industry effort to undo Dodd-Frank in the back rooms, and in terms of intimidating regulators and overturning important parts of it, he had a lot of success," recalled Marcus Stanley, policy director of Americans for Financial Reform, a group that supports the law.

"Most of the rules that were costing industry a lot of money, he was the lead on trying to overturn them," Stanley added.

Scalia also led the charge to roll back the so-called fiduciary standard. That rule, which originated at the Labor Department, would have required managers of a 401(k) to act in the best interests of their clients, instead of steering them into higher-fee funds that are more profitable for the fund managers.

With the fiduciary rule now repealed, middle-class investors are left with little guidance on their 401(k)s except "buyer beware." With many other rules potentially on their way out, the new advice could be: Beware of the boss.

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