United States: DOL Labor Secretary Nominee Thomas Perez Addresses Senate Committee

If confirmed as the next Labor Secretary, Thomas Perez said during a Senate Committee hearing his top priorities for the Department include reauthorizing the Workforce Investment Act (WIA), ensuring safe and equal opportunity workplaces, establishing pension security, and providing even-handed enforcement of wage and hour laws. Last month President Obama named Perez – who currently serves as Assistant Attorney General of the Department of Justice's Civil Rights Division – as his choice to fill the position left vacant by Hilda Solis's departure in January.

Most of the more pointed questions lobbed at Perez concerned the DOJ's involvement in an alleged quid pro quo agreement with the City of St. Paul, Minnesota. As discussed more fully in a Congressional Joint Staff Report released on April 15, the purported quid pro quo agreement involved a lawsuit, Magner v. Gallagher, in which the City had challenged the use of statistics as evidence of race discrimination under the Fair Housing Act (FHA). The DOJ was reportedly concerned that the Supreme Court could strike down this practice and find that disparate impact claims are not cognizable under the FHA, so it allegedly encouraged the City to withdraw its lawsuit. In exchange, according to the report, the DOJ would decline to intervene in an unrelated False Claims Act (FCA) lawsuit, United States ex rel. Newell v. City of Saint Paul. The FCA case was brought by a private whistleblower charging that St. Paul violated the FCA by falsely certifying that it was using federal funds to create jobs for low income workers of all races, when the programs were allegedly focusing only on minority employment.

Ranking Member Sen. Lamar Alexander (R-TN) pointed out that one of the responsibilities of the DOL is to respond to whistleblower complaints. The Occupational Safety and Health Administration is charged with enforcing 22 separate whistleblower statutes. Said Alexander, "That's why allegations made in the report issued this week about Mr. Perez's interference with the decision not to intervene in a whistleblower case is of concern."

Committee Chairman Tom Harkin (D-IA), however, defended Perez's actions in this matter. Both he and Perez emphasized that it was the City that raised the idea of linking the two cases, not the DOJ. In addition, Perez explained that he consulted with a FCA expert and senior attorney at the DOJ, who ultimately determined that the FCA case was a weak candidate for DOJ intervention. Under questioning from Sen. Sheldon Whitehouse (D-RI), Perez explained that the expert "had an immediate and visceral reaction that [Newell] was not a winning case," which was the primary reason the DOJ declined to intervene. Sen. Harkin stated that "lawyers make these choices all the time," and the "evidence clearly shows" Perez acted ethically and appropriately. Perez further explained the DOJ explicitly decided against intervening and dismissing the matter so the plaintiff could have his day in court.

Under further questioning by Sen. Alexander, Perez admitted the Magner case was "a poor vehicle for raising" the disparate impact theory, which Perez supports.

Several Senators spoke in favor of Perez's candidacy. Sen. Harkin said when Perez served as Secretary of Maryland's Department of Labor, Licensing and Regulation, he was known as a consensus builder. Harkin read an excerpt of a letter written in Perez's support by the Maryland Chamber of Commerce, which stated that "Mr. Perez proved himself to be a pragmatic public official," and the Chamber "found him to be fair and collaborative." Sen. Ben Cardin (D-MD) echoed this sentiment, claiming that while at the helm of Maryland's labor department, Perez "received highest praise from both the business community and labor community."

Both Sens. Johnny Isakson (R-GA) and Lisa Murkowski (R- AK) asked Perez how he would handle the proposed – and later rescinded – fiduciary rule that would have broadly defined who constitutes a "fiduciary" for the purposes of rendering investment advice under the Employee Retirement Income Security Act (ERISA). Perez responded that if confirmed, he would "listen and learn" about all of the concerns regarding this rule, and accept any and all feedback.

Perez said job training programs at the DOL would also be a priority. He emphasized the need to engage the business community to determine which jobs are in demand, stating that "we can't train and pray."

Sen. Murkowski also asked Perez whether he would be committed to the H-2B visa program, regulations which have faced both judicial and administrative delay. Perez said he respects the bipartisan concerns over the H-2B wage rule and would work with her on the issue.

The Senate Committee on Health, Education, Labor and Pensions is scheduled to meet for an executive session next Thursday to consider Perez's nomination. Stay tuned.

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