All posts by cueinc

Alexander Acosta stepping down as Labor secretary

  • July 12, 2019

POLITICO is reporting that

Labor Secretary Alexander Acosta is stepping down from his post, just two days after he held a news conference to defend a plea deal that he brokered for wealthy sex offender Jeffrey Epstein while serving as a U.S. attorney in Florida more than a decade ago.

Acosta, a 50-year-old Harvard-educated lawyer, came newly under fire for the lenient 2008 plea deal after Epstein was re-arrested July 6 in New York City and charged with sex trafficking. Under the earlier plea agreement, Epstein served only 13 months of an 18-month term and was permitted daily furloughs to go to the office. Epstein also was required to register as a sex offender and to pay restitution to his underage victims.

Things began to unravel for Acosta in November, when the Miami Herald published a lengthy reexamination of the case, and accelerated in February, when a district court judge ruled that the 2008 plea deal violated the Crime Victims Rights Act because Acosta never revealed the terms of the deal to Epstein’s victims before it was finalized. Also in February, the Justice Department opened an investigation into whether Acosta’s prosecution team committed professional misconduct in its handling the Epstein case.

Key details of Acosta’s plea agreement with Epstein were known to senators at the time Acosta was confirmed as labor secretary, though initially, these seemed minor compared to domestic abuse allegations against Trump’s first pick for labor secretary, Andy Puzder. Acosta defended his actions at a congressional hearing this past April, saying he entered the case only after a state grand jury recommended that only one charge be filed against Epstein — a course of action that would have resulted in no jail time for Epstein, no restitution to victims, and no registration as a sex offender.

“At the end of the day Mr. Epstein went to jail,” Acosta said. “Mr. Epstein was incarcerated, he registered as a sex offender, the world was put on notice that he was a sex offender, and the victims received restitution.”

Acosta has suggested that he and his attorneys were worn down by Epstein’s all-star legal team, which included Alan Dershowitz and Kenneth Starr, the special prosecutor who investigated the Monica Lewinsky scandal in the 1990s. Among other tactics, the Epstein lawyers investigated the prosecutors looking for “personal peccadillos,” Acosta wrote in 2011 to journalist Conchita Sarnoff, whose 2016 book “TrafficKing” chronicled the Epstein prosecution. Acosta called these efforts “a year-long assault on the prosecution and the prosecutors.”

Acosta has also said that the full extent of Epstein’s alleged abuse wasn’t known at the time he struck the plea deal.

“Had these additional statements and evidence been known,” he wrote in a letter Sarnoff, “the outcome may have been different.”

Epstein aside, Acosta’s relationships in the White House wore thin in recent months. Known for his careful demeanor, Acosta was privately accused by White House officials of slow-walking deregulatory efforts, such as business-friendly policies on overtime pay and shielding franchised companies from legal liabilities.

It took two years for DOL to issue a regulation outlining a program for privately led apprenticeships, a delay that irked the president’s daughter, Ivanka Trump. A former DOL official told POLITICO in June that she was “fed up” with Acosta.

Mick Mulvaney, Trump’s acting chief of staff, curtailed Acosta’s rule-making authority shortly after taking office in January, requiring three White House aides to sit in on all the agency’s regulatory meetings. Then in May, the White House took the unusual step of ordering Acosta to fire his chief of staff, Nick Geale, after an internal review concluded that Geale’s interactions with employees — including frequent profanity-laced tirades — were damaging morale inside the agency.

Even as White House aides abandoned Acosta, the president himself remained content for a while longer, in large part because of the favorable monthly employment statistics typically reported by DOL. Acosta went out of his way to praise the strength of the economy on social media, often mentioning the president by name.

“I feel very badly, actually, for Secretary Acosta,” Trump said July 9. “I’ve known him as somebody that works so hard and does such a good job. I feel very badly about that whole situation.”

SunTrust to cut off financing for private prisons

  • July 8, 2019

SunTrust said today it plans to stop providing financing to companies that manage private prisons and immigration holding facilities, becoming the latest large lender to distance itself from the industry amid a backlash against Trump administration immigration policies.

The bank said it made the decision “after extensive consideration of the views of our stakeholders on this deeply complex issue.”

JPMorgan Chase, Bank of America and Wells Fargo have also committed to cutting ties with private prisons following activist pressure. Among the advocates urging the banks to act is Rep. Alexandria Ocasio-Cortez (D-N.Y.), who has used her Financial Services Committee post and a huge social media following to put a spotlight on the issue. She recently called immigration detention facilities at the border “concentration camps.”

SunTrust has been working to satisfy community groups watching its proposed merger with BB&T. Financing of private prisons came up at public hearings on the merger.

Private prison companies GEO Group and CoreCivic, which have been SunTrust clients, blasted the announcement. The companies said they haven’t managed facilities that house unaccompanied minors.

GEO Group said “misleading political activism has been allowed to impact a decade-long banking relationship.” CoreCivic said SunTrust has a contractual obligation to continue working with the company through the expiration of a mutual agreement in 2023.

“Despite claims of a thorough review process, these banks have kowtowed to a small group of activists rather than engaging in a constructive dialogue about the facts,” CoreCivic said.

Rats, Cats and “Secondary” Activity under the NLRA

  • July 3, 2019

The National Labor Relations Act (“NLRA”) protects employers from becoming embroiled in labor disputes which are not their own. These innocent employers are referred to as secondary or neutral employers while the employers in a labor dispute are referred to as primary employers. To add pressure on primary employers, unions often pressure neutral employers and employees. This is particularly common in the construction industry where primary and neutral employers and their employees work in close proximity.

Unions have eye-catching ways of drawing attention to their labor disputes. Here is just one of them:

The NLRB recently issued advice to its regional offices on how to handle unfair labor practice claims in situations where a union uses big banners and inflatable rats and cats – like the one above – to pressure neutral employees not to report for work.

Summit Design + Build was the general contractor for a project in Chicago. It subcontracted the project’s electrical work to Edge Electric. Edge and IBEW Local 134 (Union) became entangled in a primary labor dispute over Edge’s failure to pay area standards pay and benefits.

Over three days in August 2018, the Union put up a large yellow banner that read LABOR DISPUTE: SHAME SHAME.” Just below that the banner read “SUMMIT DESIGN AND BUILD.” The Union also set up an inflatable fat cat clutching a construction worker by the throat. The cat was about 12-15 feet high. The Union positioned the banner and the cat about 15 feet from the project’s entrance.

Summit told the Union that Edge would not be working on site at least one of those three days. Union representatives distributed handbills that indicated the Union’s labor dispute was with Summit. Two subcontractors refused to work on the job site because of the union’s activities. The Union admitted that its activity was aimed at Summit even though it had no primary labor dispute with Summit.

The NLRB advice memo concluded that the Union’s activity constituted an unfair labor practice and that a complaint should issue against the Union. Its activities – summed up here:

 “The Union agents’ holding of a large, misleading banner—the functional equivalent of a picket sign—and the posting of a large, hostile-looking cat strangling a worker at the entrance to the site, were each tantamount to picketing because each created a symbolic, confrontational barrier to anyone seeking to enter or work at the construction site.”

violated the NLRA’s prohibitions against encouraging neutral employees to withhold their labor and against coercing secondary employers (Summit) from doing business with any other business (Edge). 

Finding that the Union’s activities were the functional equivalents of picket signs and picketing was key because picketing is viewed – under Board law and labor history – as more confrontational and coercive. Picketing is more regulated than other types of union activity, like hand-billing. Picketing encompasses more than marching back and forth while carrying with signs in the minds of the authors of the memo.

Also, the false claim on the banner that the labor dispute was with Summit also rendered the Union’s activity less deserving of legal protection under the Act and the First Amendment. 

Finally, the advice memo urged the NLRB to reconsider and reverse three specific decisions issued in 2011 that narrowed the definition of “picketing” and thereby gave unions leeway to engage in secondary activity like what occurred Chicago. The memo spelled out the reasons why those three decisions were wrongly decided in light of prior legal precedent.

The memo itself is not a change in NLRB precedent.  It only represents the current view of the NLRB’s General Counsel in similar pending and future cases.  In fact, an NLRB Administrative Law Judge recently refused to find that a union engaged in unlawful activity using an inflatable rat and loud bullhorns against a neutral employer. 

The memo, however, may serve as a road map for the Trump NLRB to address future secondary activity cases. As a guide, the memo points to a better place for employers: a place where the rights of secondary employers not to be drawn into others’ labor disputes and the rights of unions to pressure primary employers have been recalibrated to be more fairly balanced.

Tim Murphy is a partner with Skoler, Abbott & Presser, P.C. in Springfield, Massachusetts.  The contents of this article are for information purposes only and should not be construed as legal advice.

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