Acting Secretary of Labor Su Under Pressure as DOL Prepares Fiduciary Proposal

Julie Su

Senator Bill Cassidy, R-Louisiana, the ranking member of the Senate Health, Education, Labor and Pensions Committee, introduced legislation Wednesday that would require Julie Su, the acting secretary of the Department of Labor, to step down as acting secretary.

The Advice and Consent Act would restrict an official from serving in an acting capacity for more than 210 days after their initial nomination. Su has currently been acting secretary for 176 days, nominated in March following Marty Walsh’s February resignation. The bill would take effect immediately if passed and would require Su to obtain Senate confirmation or step down. Su was confirmed by the Senate as deputy Secretary of Labor, but amid controversies over her tenure as secretary of the California Labor and Workforce Development Agency, her confirmation has not been put to a full vote.

Brad Campbell, a partner in the Faegre Drinker law firm and a former head of the Employee Benefits Security Administration, says, “Very clearly, what the White House seems to be doing is a violation of historical norms, but what is less clear is what law it is a violation of” in allowing Su to continue without obtaining Senate confirmation.

Campbell explains that the Federal Vacancies Reform Act of 1988 states that an acting officer can serve in that capacity for 210 days, but it is not clear if it applies to cabinet officials. Additionally, some argue that the 210-day stint does not start until a nomination is rejected or withdrawn, which has not yet happened.

He adds that the laws governing the DOL state that an acting secretary can serve in place of the secretary if the secretary is unavailable but make no mention of how long they may serve. There are “competing views as to which laws trump what,” Campbell says.

Cassidy’s legislation comes as industry watchers anticipate the DOL will send a new fiduciary rule to the Office of Management and Budget for review this week or next. Cassidy’s legislation could be anticipating a proposal itself—and a Republican challenge—by putting Su’s tenuous position in the spotlight.

The new rule is likely to be controversial with the retirement and financial advice industries, in particular, and is therefore likely to be challenged in court. Campbell says that “any [action] that the department takes, someone can raise the objection that [Su] isn’t the valid secretary. It’s unclear how courts would proceed with that. But if you’re going to challenge the rule, you would make every plausible challenge.”

Campbell adds that “there’s no question [the DOL] slowed the regulatory process” as a means of smoothing Su’s confirmation process that has since stalled. Now the administration of President Joe Biden seems to be content to keep Su in an acting role, and that “opens the way for the DOL to start moving contentious regulations again.”