A New Nominee for Labor Secretary & Implications for delay of the Fiduciary Rule
After four previously delayed dates for his hearing, Andrew Puzder withdrew himself from consideration as the next Labor Secretary on Wednesday this week, the day before his scheduled hearing.
Amid mounting controversy over his personal and professional past, it was widely reported that Puzder had lost key support from up to 12 republican senators. Revelations regarding his hiring of an undocumented immigrant housekeeper and not paying taxes associated with her employ combined with other controversial factors (not the least of which involved an old accusation of domestic abuse- which were later recanted) became too much to bear for the Senate Republican majority.
Moving quickly, President Trump named R. Alexander Acosta as his new nominee for Labor Secretary at a rather spirited press conference on Thursday this week.
As the first Latino nominated to President Trump’s cabinet, Acosta is a very different pick than Andrew Puzder. Acosta is a lawyer with decades of experience as a public servant and is anticipated to not be the outsider and disrupter that Puzder presumably would have been.
A Graduate of Harvard Law School, Acosta began his career as a clerk for conservative Judge Samuel Alito on the Court of Appeals for the Third Circuit. In 2002, Acosta was appointed by President George W. Bush to the National Labor Relations Board and shortly thereafter as an Assistant Attorney General in the Justice Department’s Civil Rights Division. Acosta has also served as a judge on the U.S. Court of Appeals for the Third Circuit and as a U.S. Attorney for the Southern District of Florida. Having resigned from his U.S. Attorney post in 2009, Acosta is currently the dean of Florida International University College of Law.
Many familiar with Mr. Acosta’s work have described him as a staunchly conservative lawyer and a careful and cautious public servant. Despite his conservative reputation, Acosta’s legal record has been more balanced at times.
Acosta has been a defender of religious freedom of expression, criticizing France for its ban on headscarves, kippahs, crosses and any other religious clothing or jewelry. In his role as the Assistant AG in the Justice Department’s Civil Rights Division Acosta defended the rights of Muslim Americans, once asking the justice department to intervene on behalf of a Muslim teen who had been told to remove her headscarf at school.
As the U.S. attorney for the Southern District of Florida, Acosta prosecuted defendants such as Republican lobbyist Jack Abramoff and the global financial firm UBS, resulting in the Swiss bank paying more than $750 million in fines for a tax-avoidance scheme.
Still, Acosta’s background is not without some controversy, including a plea deal involving soliciting prostitution and soliciting a minor for prostitution that he cut with wealthy financier Jeffrey Epstein- who was a member at Trump’s Palm Beach club, Mar-a-Lago.
A more conventional pick than most of Trump’s cabinet nominees, Acosta has a decades-long public service career, serving in three presidentially appointed and Senate-confirmed positions. Having already gone through multiple vettings by the U.S. Senate, it is unlikely that there are any surprises in his background that could threaten his nomination.
Based on the recent missteps related to Andrew Puzder’s withdrawal and Michael Flynn’s resignation as National Security Adviser, it is widely expected that the GOP will be relieved to consider a more traditional candidate and be willing to look past any controversies that Acosta may present to confirm him quickly.
No hearing dates for Acosta have been set as of this writing, but it has been speculated that he may be confirmed by the Senate by late March.
What does this all mean with respect to the possible delay of the Fiduciary Rule before the April 10th applicability date?
Even Fiduciary Rule advocates are suggesting that the delay in confirming the new Secretary of Labor should not affect the current DOL proposal to delay under review by the Office of Management and Budget. As quoted in an InvestmentNews article, Duane Thompson, senior policy analyst at Fi360, stated "I don't think it affects the timing on the current process at all… They're going to move rapidly on it because the industry needs to know."
It is expected that the DOL staff will likely be able to push ahead with the review requested by the recent Presidential Memorandum even though Mr. Acosta is not in place as Secretary.
Some have speculated that the OMB’s review of the DOL’s recent request to delay the Rule may be concluded as early as next week. If approved by the OMB, the new proposal would published in the Federal Register immediately thereafter, which kicks off the formal process that could officially produce a delay of the Rule, followed by changes or recension. Please see my recent post “Timing is Everything” for additional details on the steps involved in this process.
We hope that these summary updates are helpful. We will continue to provide updates when relevant as this issue progresses.
Contact Steve Saltzman with questions or comments at email@example.com.