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Challenges and Priorities for the New Secretary of Labor

Alex Acosta was confirmed by the Senate to be the next Secretary of Labor.  He now takes responsibility for several high-profile issues with critical implications for government contractors.

As we have previously written, the Labor Department was an exceptionally active regulator from 2013 through the end of the Obama Administration.  Although few of us expect that pace to continue, Secretary Acosta will have to balance two competing pressures.  On one hand, the President has already signed a law repealing one of the Labor Department’s most controversial regulations (the Fair Pay and Safe Workplaces rule) and directed agencies to review current regulations with a critical eye.  On the other hand, Acosta will be leading a department charged with enforcing the laws that protect or favor workers’ rights, which sometimes compete with the priorities of their employers. 

These potentially opposing viewpoints were on display during Acosta’s confirmation hearing where he was pressed repeatedly by Senators to discuss his views on various regulations.  Asked by Senator Roberts to give his “overall philosophy on regulation,” Acosta emphasized the need to eliminate regulations “that are not serving a useful purpose,” and the need to enable small businesses to thrive.

Some uncertainty remains with respect to two specific cases that government contractors are watching closely.  First, the regulations governing paid sick leave were not raised during Acosta’s confirmation hearing, and Acosta has not publicly opined on them.  They were issued late in President Obama’s second term, and therefore fell within the window of the Congressional Review Act (“CRA”), but the level of chatter about repealing those regulations has lately been quite low.

Second, the Department is currently litigating proposed changes to overtime pay rules.  A district court held last year that the Department acted without authorization by doubling the salary threshold for defining executive, administrative, professional, outside sales, and computer employees (so-called “white collar” employees) from approximately $24,000 to $47,000.  Acosta demurred when Senators asked for his opinion on the merits of the case.  He acknowledged, however, that the large increase was partially a result of the long delay in adjusting the salary threshold, which had not been changed since 2004.  Adjusting for cost of living rises, Acosta suggested, would result in a revised threshold closer to $33,000.  He declined to say whether the Labor Department might change its position in the litigation in the Fifth Circuit, where briefing is scheduled to be complete in at the end of June, or withdraw the rule and propose an alternative.

On a positive note, Acosta expressed support for the practice of publishing detailed “opinion letters” from the Administrator of the Wage and Hour Division.  This practice has been halted since 2009.  This type of guidance, although not binding on a court, could provide helpful clarity to employers with contracts covered by the Service Contract Act and the Davis-Bacon Act.

© 2019 Covington & Burling LLP

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About this Author

Jeff Bozman, Government contracts attorney, Covington Burling
Associate

Jeff Bozman draws on his past experience as a Marine Corps officer to advise companies who do business with the United States Government. Mr. Bozman’s practice includes procurement law and public policy, with an emphasis on national security issues. He has successfully represented clients in bid protests at both the GAO and the U.S. Court of Federal Claims.

Mr. Bozman helps companies secure approval from the Committee on Foreign Investment in the United States (“CFIUS”)...

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Susan B. Cassidy, Government Contracts Attorney, Covington Burling, Law Firm
Partner

Susan Cassidy advises clients on the complex rules and regulations imposed on government contractors, with a special emphasis on the defense and intelligence sectors. She combines a sophisticated knowledge of the FAR and DFARS with the practical insight gained from senior in-house positions at both dedicated defense and commercial item contractors.

Ms. Cassidy conducts internal investigations for clients on wide array of government contracts and national security compliance issues. She regularly advises on FAR mandatory disclosure obligations and represents clients with regard to these investigations before the agency, DOJ, and the relevant Suspension and Debarring Official. Ms. Cassidy spends considerable time advising on contractor cybersecurity requirements, including assessing contractual requirements and investigating and assisting clients with cyber breach incidents involving government information.

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Lindsey Burke Employment Law Attorney at Covington Burling Law Firm
Partner

Lindsay Burke co-chairs the firm’s employment practice group and regularly advises U.S., international, and multinational employers on employee management issues and international HR compliance. Her U.S. practice includes advice pertaining to harassment, discrimination, leave, whistleblower, wage and hour, trade secret, and non-competition issues arising under federal and state laws, and she frequently partners with white collar colleagues to conduct internal workplace culture assessments and audits in the wake of the #MeToo movement. Her international practice focuses...

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