Addressing the multiemployer pension funding crisis and striking the right balance with the Securities and Exchange Commission on fiduciary duty regulations would be top of mind for Eugene Scalia if confirmed as secretary of Labor.
In testimony Thursday before the Senate Health, Education, Labor and Pensions Committee, Mr. Scalia, a partner at Gibson Dunn & Crutcher and son of late Supreme Court Justice Antonin Scalia, took questions for the better part of three hours. Though most of the hearing focused on issues like wages and worker safety, Mr. Scalia did field a handful of retirement-related inquires.
Sen. Patty Murray, D-Wash., the committee's ranking member, who in her opening statement referred to Mr. Scalia as an "elite corporate lawyer," asked the nominee if he would recuse himself from the Labor Department's forthcoming fiduciary rule proposal.
Mr. Scalia was part of a Gibson Dunn team representing the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and other associations in successful challenges to the fiduciary rule, including during oral arguments before the 5th U.S. Circuit Court of Appeals in New Orleans.
The Labor Department is expected to issue a new fiduciary rule later this year while the SEC adopted a best-interest standard in June that aims to compel brokers to put clients' financial interests ahead of their own and requires them to mitigate financial conflicts.
"With the case of the fiduciary rule I would seek guidance from the designated agency ethics official at the Department of Labor regarding what my ability to participate would be," Mr. Scalia said Thursday.
He added that he would not cede the issue to the SEC. "The DOL is focused on employment retirement savings and one of the concerns that was raised by the fiduciary rule was that they were treading on the SEC's jurisdiction," Mr. Scalia said. "So I think part of what's necessary in a government is making sure that there's the proper balance between the regulatory authorities and I would want to, if I'm confirmed, work with the SEC if necessary to strike that balance correctly."
Following a line of questioning from Sen. Tina Smith, D-Minn., on the multiemployer pension crisis, Mr. Scalia said it needs to be a priority "both for the workers that are affected and also for the solvency" of the Pension Benefit Guaranty Corp.
"I think there's been a confluence of factors that has led to the problems and I'm not steeped enough to know exactly what they are but I do agree with you that something does need to be done and I think there's bipartisan recognition of that," Mr. Scalia said.
Broadly, Republicans on the committee were more receptive to Mr. Scalia's nomination than Democrats.
"I believe Mr. Scalia has the skills to help continue to grow our economy and help workers gain the skills they need to succeed in today's workplace," said Sen. Lamar Alexander, R-Tenn., and chairman of the committee, in his opening remarks. "Mr. Scalia has broad experience in labor and employment law in both the public and private sectors."
Mr. Scalia’s extensive Labor Department experience includes serving as solicitor — the legal officer responsible for all department litigation and legal advice on rulemaking and administrative law — during President George W. Bush's administration. He also served as a special assistant to the attorney general.
The Republican-led committee will vote Tuesday on Mr. Scalia's nomination.
Following the resignation of Alexander Acosta in July, Patrick Pizzella, the deputy secretary, has served as acting secretary. He will remain in that role until Mr. Scalia is confirmed by the Senate.
