Su’s Labor Department Sued Because of Su

And so it begins.

It what promises to be the first of many, a lawsuit has been filed against Acting Secretary of Labor Julie Su and her department stating that a new wage regulation is invalid, at least in part, because Su cannot make such regulations because she has never been confirmed by the United States Senate.

The suit, brought by the Associated Builders and Contractors (ABC) group, is about both Su’s status and the new regulations her department has proffered regarding the Davis-Bacon Act, commonly referred to as the prevailing wage law.

Under the Davis-Bacon Act, any infrastructure project that receives federal dollars must pay employees what is called a prevailing wage to construction workers.  Typically the wage is in fact higher (in some cases far higher) than what workers would be paid for work on a private project.

The state of California has similar regulations governing state and local projects; both sets of regulations tend to push project costs higher and also tend to box out smaller contractors from bidding for the work because of the intricacies of determining the proper wage, byzantine workplace codes, and the mountains of paperwork required to be in compliance with the laws.

Side note: As a Lake Elsinore city council member, we worked – through our redevelopment agency –  with a new hotel to help cover the cost of street widening, sewage expansion, and such.  That improved infrastructure was needed for the hotel itself but would also allow other builders in the area in the future to proceed more smoothly.  Eventually, the hotel passed on the offer because the addition of public funding would have driven up the cost of building the actual hotel by a half-million dollars because they would have then been required to pay “prevailing wage” on the entire project.  But I digress.

Su’s Labor Department has decided that the way the wage is determined should revert back to the way it was done in the 1970s (before a major Reagan era change) and to expand the number and type of businesses and employees to be covered by the rule.  These changes are significant to the point of being essentially entirely new regulations, not mere tweaks, and therefore cannot be enacted by a department that may actually not have a leader who is legally entitled to do so, the lawsuit states.

For example, one of the rules involves pre-fabrication.  If a project uses something custom made off-site, the new rule states that the company that made it must now also comply with Davis-Bacon even though it works on multiple other projects for other customers – including private customers – as well.

The new regulations are an attempt to “rig the system” in favor of union contractors, said ABC vice president of regulatory, state, and labor affairs Ben Brubeck.  

Brubeck noted President Joe Biden has specifically and publicly stated that his new infrastructure spending should be done by union contractors.

But it is the Su-relevant parts of the lawsuit that could have even more widespread ramifications that even the Biden administration may have not foreseen.

Su was nominated to be the new Secretary of Labor in late February when her predecessor Marty Walsh left the job to take over the NHL players union; she has been serving as “acting” secretary ever since.

Su failed to secure the necessary support for a vote on her nomination in the Senate to even be scheduled.  Moderate Democrats like Sen. Joe Manchin (D-WV) and others balked at Su’s incompetence – she was in charge of the unemployment agency when it lost up to $40 billion to fraud – and her hard left, pro-Big Union politics (she helped write and zealously enforced California’s anti-freelancer AB 5 law and many are suspicious she will try to take that idea national) stance.

Despite that failure, Biden has kept her in the role, ignoring the fact that all cabinet members must be approved by the Senate under the “advice and consent” clause of the constitution.  The administration argued that a special Labor Department law allows Su to remain secretary and the Government Accountability Office agreed, hence Su being in the job now.

However, the GAO opinion is just that – an opinion – and the ABC lawsuit will put that to the test.

The suit states that:

“Because Su has not received the consent of the Senate, she has not been confirmed as the Secretary of Labor. She cannot continue to exercise the powers of that office indefinitely. She cannot continue to direct the Department’s functions, including its regulatory functions. She has no constitutional authority to continue leading the Department. And because she lacks constitutional authority, she cannot license, direct, or approve binding rules on the Department’s behalf…The (new Davis -Bacon) Rule was issued under Su’s purported authority. Because she has no such authority, the Rule is invalid.”

The suit, filed in an east Texas federal court, seeks “injunctive relief” from the new regulation.  That means that a judge could grant an injunction that would bar Su – and the Labor Department – from instituting any new regulations until the matter of the propriety of her position is settled in a court of law.

“That would have a ripple effect through all of the new regulations,” Brubeck said.

In other words, Biden’s own possible illegal definitely pigheaded absolutely very-pro Big Labor adamantine stance of keeping Su in the job could end up crippling – at least temporarily – his entire labor agenda.