President Trump’s nomination of Eugene Scalia to lead the Labor Department would put one of the private-sector attorneys most responsible for frustrating the Obama administration’s labor policy agenda in charge of the current administration’s agenda.
The cases he worked on indicate that Scalia, son of the late Supreme Court Justice Antonin Scalia, is well-versed in the minutiae of labor law, federal regulations, and agency procedures.
“There is no finer legal mind in the field of labor and employment law,” said Gregory Jacob, a partner with the management-side firm O’Melveny. “Gene knows the subject, knows the Department, and will bring his trademark energy and charisma to implementing sensible reforms to regulations.”
“Throughout his career, Gene has proven himself to be a gifted attorney and a thoughtful and effective expert in labor and workforce policy,” said Retail Industries Leaders Association COO Brian Dodge. Scalia represented RILA in a 2007 case that challenged a Maryland law, Fair Share Health Care Fund Act, that required increased expenditures for employee health programs. The court ruled that the Maryland law, which was tailored to only affect Walmart, was preempted by the federal Employee Retirement Income Security Act.
Scalia, 55, has worked with the private sector management-side firm Gibson Dunn, where he has led its Labor and Employment Practice Group for the past 12 years. A spokesman for the firm declined to comment. Scalia previously served as solicitor for the Labor Department in 2002 during President George W. Bush’s administration.
He was a lead attorney in Boeing v. National Labor Relations Board, one of the most high-profile cases for the NLRB, the main federal labor law enforcement agency, in recent years. A 2011 NLRB complaint alleged that comments by a Boeing executive indicated that the company’s decision to open a new factory in South Carolina amounted to an unfair labor practice against the International Association of Machinists, the union that represented the company’s workers in Washington state. South Carolina is a right-to-work state, meaning that workers cannot be forced to join a union as a condition of employment, and as a consequence unions are much less powerful. Had the NLRB complaint stood, it would have made companies moving facilities to those states a potential legal minefield.
Scalia and other attorneys for Boeing challenged the case on the grounds that the NLRB’s acting counsel, Lafe Solomon, lacked the legal standing to pursue the complaint because he hadn’t been confirmed by the Senate. The case was eventually settled out of court in late 2011. However, Boeing’s challenge to Solomon’s standing proved prescient. In a separate 2017 case, the Supreme Court ruled that Solomon had been improperly serving as NLRB counsel and voided the complaints he had pursued at the time.
Trump’s nominee was also one of the attorneys retained by the Chamber of Commerce when it challenged the Labor Department’s 2017 “fiduciary rule,” which would have required all advisers managing tax-privileged retirement accounts to act in their clients’ best interests, a legal standard that Obama sought to crack down on conflicts of interest. Business groups challenged the rule, arguing it broadened the definition of fiduciary too far, clashed with existing regulations, and involved a regulatory change that only Congress could approve. A federal court agreed and vacated the rule last year.
Liberal groups argue the nomination of Scalia creates a fox-guarding-the-henhouse scenario. “The Department of Labor rule that would have simply required retirement advisers to work in the best interest of their clients — outlawing common practices such as financial advisers steering retirement savers toward investments that provide a good commission, but a lower rate of return,” said Heidi Shierholz, labor policy analyst for the Economic Policy Institute and a former chief economist for the Labor Department during the Obama administration.
Scalia was also part of the Chamber legal team that stopped a 1998 effort by the Occupational Safety and Health Administration during the Clinton administration. OSHA had implemented a policy, called “cooperative compliance,” that required workplaces with injury and illness rates above the norm for their industry to either voluntarily develop comprehensive safety programs with OSHA or face more frequent inspections. Business groups objected, arguing that the program was coercive. The Chamber’s challenge resulted in the program being quashed in federal court in 1999 because the administration had not undergone the proper rulemaking process.
