The Republican-lead U.S. Senate voted Thursday to approve President Trump’s nomination of Eugene Scalia, son of the late Supreme Court Justice Antonin Scalia and a former Department of Labor (DOL) Solicitor General, to the role of Labor Secretary.
Having served in the high-ranking DOL position under the Bush Administration, experts suggest, Eugene Scalia will likely hit the ground running as a Labor Secretary with a markedly conservative agenda.
Speaking with PLANADVISER in August following Scalia’s nomination, Brian Netter, a partner in the Washington office of Mayer Brown’s litigation and dispute resolution practice, said Scalia is known for having worked in the trenches of a large number of labor issues for many years.
“He would, therefore, bring to the post a significant level of personal understanding of how to enact President Trump’s deregulatory agenda,” Netter said, adding that, if confirmed, he thought Scalia could potentially have a big influence on the retirement planning marketplace.
“All of the President’s cabinet secretaries have substantial authority to promulgate regulations and then to interpret and enforce them,” Netter explained. “This means they can individually have a big impact on regulated entities. The DOL Secretary, in particular, has control over a large swath of players in the U.S. economy. The decisions made by the Secretary are often felt by workers and business owners quite directly.”
When Scalia was nominated, Jamie Hopkins, director of retirement research at Carson Group, told PLANADVISER the now-confirmed Labor Secretary has engaged in a very successful litigation practice since his first gig at DOL.
“He has been extremely pro-business, anti-labor and anti-consumer protection,” Hopkins reflected. “The reality is he has fought hard against consumer protections and fiduciary standards.”
According to Hopkins and Netter, the DOL’s position on promulgating new regulations to address advisory industry conflict of interests is likely to remain murky for some time to come. They further suggested that, given Scalia’s recent litigation experience representing clients opposed to the establishment of stricter conflict of interest standards, he would likely be called on by some parties to recuse himself from working on fiduciary issues under the Employee Retirement Income Security Act (ERISA). For his part, Hopkins thinks the DOL under Eugene Scalia could be more active in this area than some other observers expect.
Also notable is the fact that, effective October 1, the DOL’s Employee Benefits Security Administration (EBSA) will have three deputy assistant secretaries who report directly to EBSA Head Preston Rutledge, who in turn will now report to Secretary Scalia. After that date, oversight responsibilities will be allocated differently among the deputy assistant secretaries. Traditionally, the two EBSA assistant secretaries were split between a political appointee and a member of the career staff. The new deputy assistant secretary for regional offices will be filled by a career staffer, according to a Labor Department spokesman.