President Donald Trump announced Alexander Acosta, the dean of Florida International University College of Law, as his new pick to head the Department of Labor on Thursday.
Despite backing from top industry trade groups, Puzder withdrew his nomination Wednesday after it became clear he didn’t have enough GOP support in the Senate.
Republicans began breaking away in the wake of news that Puzder employed an undocumented housekeeper (unknowingly, he says) and that his ex-wife went on Oprah in disguise years ago to accuse him of abusing her. Puzder denied the accusations, and his ex-wife recanted as part of a child custody deal. Unions that celebrated Puzder’s downfall credited his treatment and underpayment of employees as the deciding factors.
Acosta clerked for Supreme Court Justice Samuel Alito, served as a George W. Bush nominee on the National Labor Relations Board, was assistant attorney general at the Justice Department until 2005 and then became U.S. attorney in southern Florida until 2009. As U.S. attorney, Acosta focused on health care fraud and white collar crime, handling a case against Swiss Bank UBS, accused of helping Americans avoid taxes, that resulted in UBS paying $780 billion in fines. He is also chairman of U.S. Century Bank.
Acosta isn’t a huge political donor, having given less than $10,000 to Republican politicians, parties and committees since 1989; the largest amount went to former Trump rival Sen. Ted Cruz ($4,050, though he did not contribute to his presidential campaign).
The war room without a war
Puzder’s supporters had known he faced a bumpy ride, so a band of them — including the powerful National Restaurant Association — had set up a war room to counter the accusations expected during his hearing, which had been scheduled to take place today.
At this point it seems unlikely that Acosta will draw the same level of oppositon that Puzder did, so all-out efforts by the NRA and others may be less needed; the group seemed pleased that Trump had moved quickly to name a replacement. “We look forward to learning more about Alexander Acosta and his position on the issues important to the restaurant industry,” said Cicely Simpson, executive vice president of the National Restaurant Association, according to The Washington Examiner.
The almost century-old restaurant trade group is one of the organizations that most frequently mentions labor, antitrust and workplace issues on its lobbying reports, according to OpenSecrets.org data. (Organizations are not required to divvy up how much they spend on each issue, but rather report lump sums; instead, the frequency with which an issue is mentioned is a rough way to quantify groups’ priorities.)
The NRA (restaurant, not rifle, association), recently picked up the pace on K Street, posting record spending in the last two years at $4.3 million in 2015 and $3.9 million in 2016; it mentioned labor issues on 13 reports in 2016. One of the two bills the group mentioned most frequently was the Forty Hours is Full Time Act (which changes how to calculate the number of full-time employees a company has with respect to the health care employer mandate).
The NRA also posted on its website some other labor-related changes it wants to see in the health care law, arguing that the Affordable Care Act has “been a tremendous challenge for restaurateurs.” Modifications it’s looking at, besides defining a full work week as 40 hours instead of 30, include simplifying reporting mandates and increasing the number of employees that puts a company in the “large business” category, which triggers more requirements.
As Congress considers a tax overhaul, the NRA is asking lawmakers to keep the Work Opportunity Tax Credit, a federal tax break for employers that hire veterans, food stamp recipients and people in certain other groups.
Last Tuesday, the trade group, along with about 50 other signers including the International Franchise Association (of which Puzder was on the board of directors) and the lobbying giant U.S. Chamber of Commerce, sent a letter to a House committee pushing to reverse a ruling from the National Labor Relations Board. The 2015 decision changed the definition of a joint employer, making it easier to find corporations liable for labor infractions of their franchisees.
Unions weigh in
While labor unions adamantly opposed Puzder, they see Acosta as a step up.
“Unlike Andy Puzder, Alexander Acosta’s nomination deserves serious consideration,” said AFL-CIO president Richard Trumka in a statement. “In one day, we’ve gone from a fast-food CEO who routinely violates labor law to a public servant with experience enforcing it. We will of course review Mr. Acosta’s record as thoroughly as we did the previous nominee’s.”
Unions contributed a record high this past election cycle at $195 million, up from $141 million in both 2012 and 2014. About 86 percent of their contributions to candidates and parties favored Democrats. Hillary Clinton received the most campaign cash with $580,000, followed by Sen. Tammy Duckworth (D-Ill.) with $392,000, former Rep. Ann Kirkpatrick (D-Ariz.) with $346,000 and Sen. Catherine Cortez Masto (D-Nev.) with $339,000.
However, the bulk of union spending, or $135 million, went to outside spending groups, which is about a 66 percent increase from 2014. The pro-Clinton Priorities USA Action got $28 million, $22 million went to For Our Future (a super PAC formed by several unions and megadonor Tom Steyer’s NextGen Climate), and $20 million to Senate Majority PAC (a super PAC offshoot of the main fundraising arm for Democratic Senate candidates).
Labor unions spent $46.5 million lobbying in 2016, a high in the past couple of years but still not as much as 2011’s $50.7 million. The bulk of that spending comes from public sector unions ($13.3 million) such as the National Education Association and American Federation of State/County/Municipal Employees (AFSCME), and transportation unions ($12.6 million) such as the Teamsters Union and United Transportation Union.
The National Education Association mentioned the Equal Treatment of Public Servants Act most often, which would change who is eligible for certain Social Security benefits, while AFSCME lobbied on the Federal Employees Paid Parental Leave Act, which would provide federal employees six weeks of paid parental leave. (We may see some progress on this one, as first daughter Ivanka Trump has shown interest in expanding family leave.) The Teamsters Union supported the Keep Our Pension Promises Act, which would protect certain workers from cuts to their retirement benefits.
Louisville-based YUM! Brands (which includes your fast-food favorites, KFC, Pizza Hut and Taco Bell) also weighed in on the NLRB decision regarding parent companies and their franchisees. In addition, it lobbied the yearly-introduced Healthy Families Act, which would require workers at certain companies to earn seven paid sick days a year. Yum! Brands did not reply to a request for comment by the time of publication, so it is unclear what position they took. In general, restaurants don’t favor paying you for sick time: According to the Bureau of Labor Statistics, 76 percent of restaurant workers don’t receive paid sick leave, compared to 39 percent of all workers. The fast-food hub spent $1.6 million lobbying last year, about the same as in 2015 and significantly higher than other recent years.
The joint employer standard appeared on the reports of the majority of organizations that lobbied most frequently on labor issues. It’s also included on the lobbying disclosure of the American Hotel & Lodging Association, the hotel owner industry trade group, which mentioned labor issues 16 times last year. The trade group spent $2.4 million lobbying, its highest outlays ever, and also reported “concerns with the Department of Labor proposal to change the federal overtime pay requirements.” Changes to expand the pool of employees that must be paid overtime were supposed to take effect Dec. 1, 2016, but a Texas federal court blocked implementation and now the injunction is on appeal.
Home Depot also broke its lobbying records, spending $1.7 million trying to influence the government last year. Its labor concerns included the Paycheck Fairness Act, which addresses the gender pay gap, and “micro unions,” smaller bargaining units that the NLRB began allowing in 2011 and the U.S. Chamber has criticized. The NLRB’s action created a way for unions to win collective bargaining rights that they might not have been able to achieve in the past, which some companies, like Volkswagen, complained has fractured their workforces.
Senior researcher Douglas Weber and Alex Baumgart contributed to this post.