Coalition Letter to Senate HELP Committee in Opposition to David Weil, DOL Wage and Hour Nominee

By SBE Council at 13 July, 2021, 5:50 pm

The Honorable Patty Murray                  The Honorable Richard Burr

Chair                                                       Ranking Member

Committee on Health, Education,          Committee on Health, Education,

Labor, and Pensions                                Labor, and Pensions

U.S. Senate                                              U.S. Senate

Washington, D.C.  20510                        Washington, D.C.  20510

Re:    Nomination of David Weil to Be Administrator of the Wage and Hour Division

Dear Chair Murray and Ranking Member Burr:

The undersigned are writing to express our serious concerns with the nomination of David Weil
to be Administrator of the Wage and Hour Division (WHD) at the U.S. Department of Labor
(DOL). Dr. Weil previously served as WHD Administrator from 2014 to 2017. Based on his
previous service at DOL, and his track record of bias against employers, particularly the smallest
employers in America, we are concerned that Dr. Weil would implement policies at the DOL
that are unbalanced and would harm workers and small businesses, in particular women and
minority-owned businesses that employ millions of Americans. For these reasons, we urge the
Committee to reject Dr. Weil’s nomination.

We respectfully submit our concerns with Dr. Weil’s agenda, including:

Open Bias Against Small Businesses. Dr. Weil has an extensive track record of hostility towards
specific business models, industries, and companies that employ millions of Americans in every
state. In his 2014 book “The Fissured Workplace,” as well as numerous academic writings, and
public forums in coordination with labor unions, Dr. Weil has expanded on his ideology and
belief that the DOL should take an aggressive and activist approach to enforcement, particularly
against lead enterprises that do business with smaller firms. During his time in the Obama
Administration, this worldview resulted in several harmful actions that are outlined in this letter.
Dr. Weil’s ideology is a cause for great concern for small employers, who are often the
contractors and franchisees against whom Weil has telegraphed his intended enforcement.

Unlawful 2016 Overtime Rule. During his tenure as Administrator, Dr. Weil was the architect of
DOL’s revised white collar overtime rule, which would have more than doubled the minimum
salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week
($47,476 annually), an unprecedented expansion of Fair Labor Standards Act (FLSA)’s overtime
coverage. In a successful legal challenge to the rule, the U.S. District Court for the Eastern
District of Texas characterized the increased overtime threshold as a “drastic” change that would
extend FLSA mandates to 4.2 million employees from the exemption even though they
performed exempt job duties. The court ultimately concluded that DOL unlawfully and
impermissibly exceeded its rule-making authority by promulgating these regulations and
enjoined them on a nationwide basis. The Obama overtime rule would have been a massive
burden on employers, and we are concerned that Dr. Weil will pursue an aggressive revision to
overtime rules that will harm small businesses as our economy works to recover from the
COVID-19 pandemic.

Restrictive Independent Contractor Status. In 2015, Dr. Weil issued an Administrator’s
Interpretation (AI) under the FLSA, in which DOL adopted an unreasonably strict standard for
“independent contractor” classification, rejecting decades of case law emphasizing “control”
over an individual’s work, and focusing instead on “economic dependency” in a manner that
would effectively eliminate the use of independent contractors across a range of business models.
Indeed, the standard adopted in this AI was premised on Weil’s well-publicized view that most
workers should be classified as statutory employees under the FLSA, and would have eliminated
the preferred model of work for countless individuals who choose to work as independent
contractors to control their own schedule, work flow, income, and independence. Notably, this
move to dramatically limit the ability of workers to operate as independent contractors almost
exactly squares with the abolition of independent contracting sought by organized labor in
H.R.842/S.420, the Protecting the Right to Organize Act or “PRO Act,” which would adopt a
draconian “ABC test” for determining independent contractor status, and as a practical matter,
destroy the business model and disrupt the livelihoods of millions of Americans.

Unprecedented Expansion of Joint Employment. In 2016, Dr. Weil issued another AI which
dramatically expanded joint-and-several liability for “joint employers” under the FLSA. This
change broadened the definition of “joint employer” to include employers who exercised only
indirect control of the employees, for example, in a staffing arrangement where the so-called
joint employer did not control work rules, hours, or wages of the staffing company’s workers.
Particularly significant and onerous, the AI would have made national franchisors “joint
employers” of their franchisees’ employees, even where franchisor has little to no direct control
over terms and conditions of these workers’ employment. Again, the theories of joint
employment Dr. Weil has espoused mirror the disastrous PRO Act, which would seek to impose
liability on a wide range of employers for unfair labor practices in which they played no role.

Between 2016-2018, Mr. Weil’s unilateral broader standard of joint employment cost franchise
businesses an additional $33.3 billion per year in operational and legal costs, resulted in 376,000
lost job opportunities, and led to a 93% increase in lawsuits. (1) Had it not been withdrawn by the
previous Administration, this AI would have sacrificed more jobs and increased frivolous
litigation. Given Dr. Weil’s open hostility to certain small businesses, we are concerned he will
again seek a harmful joint employer standard that will reduce job and entrepreneurial
opportunities for many Americans.

The undersigned organizations believe that Dr. Weil will, if confirmed again, once more use the
power of the DOL beyond Congressional intent to enact policies that will harm workers and
small businesses during the economic recovery. We believe that a thorough and fair review of
Dr. Weil’s record will illustrate that he is unfit to lead the WHD in the impartial manner that is
critical to both enforce federal law and encourage economic growth during the post-pandemic
recovery.

Thus, we urge Committee members to reject Dr. Weil’s nomination. Thank you for considering
these views.

Sincerely,

Associated Builders and Contractors
Coalition of Franchisee Associations
Franchise Business Services
Job Creators Network
Independent Electrical Contractors
International Franchise Association
International Warehouse Logistics Association
National Association of Home Builders
National Association of Wholesalers-Distributors
National Franchisee Association
National Restaurant Association
Small Business and Entrepreneurship Council
TechNet
Truck Renting and Leasing Association

_________________________

1 Jointemployerfacts.com

CC: Members of the U.S. Senate Committee on Health, Education, Labor, and Pensions

U.S. Senate Majority Leader Charles Schumer
U.S. Senate Republican Leader Mitch McConnell