President Donald Trump’s acting chief of staff, Mick Mulvaney, has taken control of the Department of Labor’s rulemaking process, according to news reports. What effect this may have on the DOL’s proposed relaunch of its fiduciary rule is currently unclear.
The Trump administration had apparently been frustrated with the pace of deregulation at the agency under Labor Secretary Alexander Acosta, current and former department officials and other people who communicate with the administration tell Bloomberg Law.
Mulvaney, who joined the White House in January, has set up a “formalized system” whereby all disputes between Acosta’s staff and White House assistants are elevated to Mulvaney for a final say, people with direct knowledge of the process tell the news service. Acosta and his team have been overturned so often that they no longer appeal Mulvaney’s decisions, current and former DOL officials tell Bloomberg Law.
“Acosta wasn’t really interested in getting those rules done until Mick Mulvaney started taking over, and then everything started moving at the department because Mulvaney doesn’t mess around,” a former Trump administration official tells the news service, referring to deregulatory actions across DOL. “When Mulvaney took over, they started scrambling to try to make up for lost time.”
The Labor Department “declines to comment on internal administration processes,” an agency spokesperson tells Bloomberg Law in a statement.
Acosta’s position had also recently been weakened when a federal judge ruled he and others had violated the law by negotiating a controversial plea deal for hedge fund billionaire and accused sex-trafficker Jeffrey Epstein, according to the news service.
So far, Mulvaney’s seizing control has resulted in an acceleration of rules on job training, overtime pay, joint employment liability for franchises, workplace safety and overtime pay, Bloomberg Law writes.
But the impact of Mulvaney’s intervention on the DOL’s proposed reincarnation of its fiduciary rule is unclear. The original Obama-era rule, which purported to force retirement account advisors to put clients’ interests first, was killed in the courts last year, following a directive from Trump for the agency to reassess the rule.
At a May 1 hearing of the House of Representatives House Education and Labor Committee, Acosta said the DOL was collaborating with the SEC and would issue a new rule to replace the Obama-era regulation, as reported.
Asked about the agency's timeline, Acosta said it would depend on the SEC’s progress. The SEC is working on a package of regulations on broker-dealer and investment advisor conduct known as Regulation Best Interest. On May 23, the SEC announced it will vote on the proposed overhaul on June 5.
Around May 22, however, the DOL posted its spring regulatory agenda, saying it plans to reintroduce its fiduciary rule some time in December.