President Trump originally chose Andrew Puzder, the CEO of CKE Holdings, the parent company of Carl’s Jr. and Hardee’s, as his nominee for Secretary of Labor. However, on February 15, 2017, one day prior to his much-delayed confirmation hearing, Mr. Puzder withdrew his name from consideration amidst reports that he would not receive the required Senate votes necessary for confirmation. Mr. Puzder’s nomination was knocked off track by allegations that he failed to pay workers overtime pay, hired an undocumented worker in his home, condoned sexual harassment, and opposed legislative efforts to address those problems. The next day, President Trump officially tapped former U.S. Attorney Alex Acosta for the position.
If confirmed as Labor Secretary, Mr. Acosta will oversee the federal apparatus that investigates violations of minimum wage, overtime and workplace safety laws and regulations. Mr. Acosta would also be the first Hispanic member of President Trump’s cabinet.
Mr. Acosta has a strong public service background. After graduating from Harvard Law School, he clerked for Judge (now Supreme Court Justice) Samuel Alito on the Third Circuit Court of Appeals. He has also served as a member of the National Labor Relations Board, head of the U.S. Department of Justice’s Civil Rights Division (both of which he was appointed to by President George W. Bush), and U.S. Attorney for the Southern District of Florida. Most recently, Mr. Acosta served as
Dean of the Florida International University School of Law. Should he be confirmed, Mr. Acosta’s public and private experiences (he also practiced law at Kirkland & Ellis) allow him to bring to his new role numerous perspectives on business and the regulatory landscape under his purview.
At this stage, Mr. Acosta’s views on various pressing issues at the Department of Labor — such as consideration of a higher minimum wage or the proposed new overtime regulations that currently are on hold — are largely unknown.
Nonetheless, while Andrew Puzder was harshly criticized for his anti-regulatory positions (he was a vocal critic of the Obama Labor Department’s overtime regulations and efforts to increase the federal minimum wage) and numerous other controversies relating to his personal life, Alex Acosta has so far avoided such controversy. Indeed, he has received support from both Industry Labor.
The immediate reaction to the announcement of Mr. Acosta’s nomination was in stark contrast to how many viewed Mr. Puzder. Notably, AFL-CIO President Richard Trumka responded to the news of Acosta’s nomination by stating:
“Working people changed the game on this nomination. Unlike Andy Puzder, Alexander Acosta’s nomination deserves serious consideration. In one day, we’ve gone from a fast-food CEO who routinely violates labor law to a public servant with experience enforcing it.”
This reaction by labor unions to Acosta’s nomination may be partly attributable to the belief that he is more of a “mainstream” nominee and more predictable than Puzder, which may provide at least some comfort to employers. At the same time, most pundits believe that Acosta has the unique ability to take both employer and employee points of view into account when making decisions, which makes him particularly qualified for this position.
Moreover, Acosta has already been vetted by the Senate multiple times for the positions he held in the Bush Administration. For those reasons, as well as Acosta’s combination of academic and practical legal experience, it is expected that his confirmation process will be successful and move quickly.
Ultimately, it is likely that, as would have been the case under Puzder, employers may benefit from Acosta’s authority to reallocate agency resources away from agency enforcement actions for labor law violations. Under Obama, the Wage and Hour Division and OSHA were very active in enforcing labor laws and regulations, investigating industries and workplaces with a history of violations, and bringing and publicizing significant enforcement actions. One can assume that, based on the overriding themes of the first month of the Trump Administration, Mr. Acosta will have a mandate to slow down enforcement, conduct fewer investigations, and reduce the Department of Labor’s regulatory impact on businesses. Acosta’s confirmation process, and then his first few months as Labor Secretary (assuming he is confirmed) will provide us with the necessary information to assess how employers will be affected by this new leader at the DOL.