Nominated to serve as Secretary of Labor, Eugene Scalia addressed numerous questions Sept. 19 about his past record representing various employer interests, as well as whether he would recuse himself in the forthcoming revamp of the DOL’s conflict of interest rule.
Scalia's comments came during a three-hour hearing before the Senate Health, Education, Labor and Pensions (HELP) Committee. The hearing focused largely on questions concerning how Scalia would address worker protections and rights, particularly given his past work.
“If there’s one consistent pattern in Mr. Scalia’s long career, it’s hostility to the very workers he would be charged with protecting, and the very laws he would be charged with enforcing if he were confirmed,” Sen. Patty Murray (WA), the ranking Democrat on the committee, said in her opening statement.
Scalia responded that the views of his clients don’t necessarily reflect his personal views, but that attorney-client relationship is part of defending their rights in court. He further emphasized that he would seek to strike the right balance in upholding the mission of the DOL and would vigorously enforce the laws within the DOL’s jurisdiction.
Fiduciary Rule
Under questioning by Murray about the DOL’s fiduciary rulemaking and whether he would recuse himself if confirmed, Scalia noted that federal ethics rules would govern what he can work on and that he would seek guidance from the designated ethics officials within the DOL. Scalia served as counsel for the U.S. Chamber of Commerce appellants in litigation that was ultimately successful in challenging the DOL’s attempt at rewriting the fiduciary rule.
Pressing further, Murray asked whether Scalia believes that families that are seeking professional investment advice about their retirement savings deserve advice that’s in their best interest, noting that the nominee has been an “outspoken critic” of the DOL’s earlier fiduciary rulemaking and fought to get it overturned.
“I do think they should be able to seek that advice and I think that should be available and they should be informed of the nature of the advice they are receiving and if there are conflicts,” Scalia explained. “Thankfully the Securities and Exchange Commission has now stepped in and itself has adopted a best interest standard for broker-dealers who are ordinarily regulated directly by the SEC rather than the Department of Labor,” he further stated.
Scalia added that having previously worked at the DOL as solicitor general, he is “very mindful of the role the department has in protecting pensions and worker retirements.”
Pressing further, Murray asked whether he intends to “cede DOL authority to the SEC” if confirmed, noting that Scalia had previously suggested that the DOL should allow the SEC to oversee the fiduciary rule. “If confirmed I would not cede responsibility to the SEC. I engaged in some vigorous actions as solicitor to help protect the right of retirees to their pensions,” Scalia stated in defending his record, including addressing Enron’s pension plans. “I will say that the Labor Department’s mission is focused on employment retirement savings and one of the concerns that was raised by the fiduciary rule is that they were actually treading on the SEC’s jurisdiction,” he explained. Scalia further emphasized that the importance of ensuring the proper balance between the different regulatory authorities and that he would work with the SEC, if necessary, to strike that balance.
Multiemployer Plan Issues
Under questioning by Sen. Tina Smith (D-MN), Scalia agreed that action is needed to address multiemployer pension funding problems but would not necessarily commit to a specific remedy. “I do agree with you that something does need to be done, and I think there’s bipartisan recognition of that and, if I’m fortunate enough to be confirmed, that’s something I would want to work on because I think everyone recognizes the need negotiate out some legislative solution,” Scalia stated.
But when pressed further about whether he would support the Butch Lewis Act approved recently by the House and its creation of a Treasury agency to issue bond-backed loans to faltering plans, Scalia would not commit to supporting that bill, but indicated that he was interested in looking at different approaches to address the issue, including ways to address the solvency of the PBGC.
Sen. Tim Scott (R-SC) told Scalia that he believes more attention is needed on the gig economy and that he would like to see a hearing addressing its impact on employment and benefits.
The Senate HELP Committee plans to vote Sept. 24 on Scalia’s nomination. Barring unforeseen circumstances, he will probably be confirmed by the committee and subsequently by the full Senate. He would succeed Alexander Acosta, who resigned in the wake of controversy regarding a plea deal Acosta negotiated more than a decade ago with the disgraced financier Jeffrey Epstein.
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