Three Questions Raised by the Labor Secretary’s Resignation

Alex Acosta’s resignation from the Labor Secretary post signaled a quick blow to a key member of President Trump’s cabinet.  It is too early to determine how this change will affect the DOL as far as policy and personnel.  However, this blog provides insights on some key questions.

What does this mean for Labor Department policies and initiatives?  Several key initiatives are on tap for DOL.  Efforts to raise the overtime threshold, key apprenticeship initiatives and efforts to revamp the various visa program requirements have been at the top of DOL’s agenda.  It is often believed that the head of the agency spurs these initiatives.  In reality, many of these initiatives flow from White House policy officials. In the first term of most administrations, the White House remains laser-focused on reelection. Tight control over policy initiatives ensures that nothing embarrasses the President.  Nonetheless, this administration has expressed some frustration with Acosta’s measured approach to business-friendly rollbacks of Obama-era policies.  It is conceivable that Acosta’s resignation will lead to more aggressive policy positions going forward.  On balance, though, we do not expect Acosta’s departure to change the overall landscape of the DOL.

What does this mean for DOL senior officials?  Patrick Pizzella will move into the Acting Labor Secretary role. While this will be a new position for him, he has deep experience in the Labor Department after serving extensive time under Elaine Chao during the George W. Bush administration.  As a seasoned inside-the-beltway player, Pizzella is not expected to make significant policy changes.  However, his experience and lobbying ties place him in the position to more quickly navigate the regulatory and administrative hurdles. The fate of other senior officials remains to be seen. The administration endured numerous difficulties to get senior officials confirmed by the Senate.  As such, Pizzella will likely continue to retain his existing team.

When will there be a new Labor Secretary?  Trump has made it clear that he is not anxious to fill out his team with permanent staff.  Based on this, it is likely that Pizzella will remain in the acting role for a significant time. Indeed, it will not be surprising if he remains in the role through the 2020 election to avoid any confirmation fights in the Senate.  One wild card would be if Trump tapped highly respected EEOC Commissioner Victoria Lipnic for the Labor Secretary role. She is a former Wage and Hour Administrator and has been easily confirmed by the Senate in the past.

We will continue to monitor these developments. In the meantime, employers should take a wait and see attitude regarding the Labor Department and not immediately expect big changes.