President Names DOL Nominee With Deeper Labor Ties

Whoever takes on the role of DOL Secretary will be tasked with overseeing the Trump administration’s response to the forthcoming fiduciary rule reforms. 

Days after the surprise withdrawal of Andrew Puzder as President Trump’s Labor Secretary nominee, the White House is now confirming their new pick for the job, former member of the National Labor Relations Board R. Alexander Acosta.

Acosta is currently Dean of Florida International University Law School, and the Trump administration is highlighting his “long and distinguished career in public service.” Compared with the previous pick, the initial response to the nomination of Acosta has been far more positive, both on the left and the right of the political spectrum.

Background information shared by the White House notes that Acosta has served in three Senate-confirmed positions, including as a member of the National Labor Relations Board. He was the first Hispanic man or women to hold the rank of Assistant Attorney General and went on to serve as the United States Attorney for the Southern District of Florida. Since 2013, Acosta has also served as Chairman of U.S. Century Bank, the largest domestically owned Hispanic community bank in Florida. Media outlets have widely noted that Acosta, if confirmed, would be the first and only Hispanic member of the president’s cabinet.

President Trump actually began the first solo press conference of his term by naming Acosta as his new nominee. He quickly moved on to other subjects, but the president observed the following of Acosta, as recounted in the official White House transcript of the presser: “He has a law degree from Harvard Law School, was a great student.  Former clerk for Justice Samuel Alito.  And he has had a tremendous career.  He’s a member, and has been a member, of the National Labor Relations Board, and has been through Senate confirmation three times, confirmed—did very, very well.  And so Alex, I’ve wished him the best.  We just spoke.  And he’s going to be—I think he’ll be a tremendous Secretary of Labor.”

Interesting to note, the retirement industry is apparently being a little more cautious this time around about sharing in speculations as to who will finally fill the DOL Secretary role—and when. This is only natural, as so far the effort to fill the leadership role at the agency tasked with enforcing the Employee Retirement Income Security Act (ERISA) has been a rocky effort, with multiple last-minute delays in scheduled confirmation hearings and the outright failure of the first nominee to get through a Senate controlled by Republican allies.

NEXT: Very different response from Puzder 

When the Puzder nomination was first announced, PLANADVISER received a plethora of responses from retirement plan providers, advisory firms and investment managers—all of those closely watching to see whether the DOL will in fact delay or terminate the fiduciary rule before the first deadlines in April. Some praised Puzder’s business experience running a major U.S. fast food franchise, while others questioned whether he would be a good Labor Secretary given accusations of unfair treatment of workers and failures to uphold basic labor standards at his restaurants.

So far the same providers have been more quiet about Acosta’s nomination, undoubtedly left a little uncertain by the first nominee’s shortfall. The most vocal supporters of the nomination at this point have actually been Hispanic and Latino advocacy groups, relieved to see President Trump make a move to improve the diversity of his cabinet.

The effort of checking Acosta’s background has only begun, but at first blush he seems like a pick with a more traditional background suited for the role. And unlike with Puzder, there have yet to emerge any particular points of personal or professional controversy around the nominee in the trade or national media.

It stands to reason that Acosta must be open to rolling back the fiduciary rule if President Trump picked him for the role, but he also has the National Labor Relations Board background to consider. That is the independent government agency with responsibility for enforcing U.S. labor law in relation to collective bargaining and unfair labor practices. It would be a natural extension of such work to take on a role leading DOL, the Trump administration argues.

Sharing some preliminary analysis with PLANADVISER, Nancy Ross, partner and head of ERISA litigation practice at Mayer Brown LLP in Chicago, says that “if confirmed, Acosta's agenda as Secretary of Labor will be primarily driven by his boss.”

“That said, he has a reputation of being a champion of diversity which we may see influence his decisions as Secretary,” she observes. “With respect to benefits, much will also depend on who he selects as his Deputy Secretary of EBSA.  He is less of a known commodity that Puzder, who we knew held strong views against government intermeddling in business.  Given Acosta's years in government, and his familiarity with the courts, he will likely feel more comfortable taking stances on significant benefits issues, and continue the DOL's robust amicus program from the last administration.”