Acosta: Who Needs Government Protections In the Era of Yelp?

AcostaYesterday’s House Appropriations hearing on the Labor Department’s FY 2019 budget was a fairly low key — mostly boring — rendition of how well Alex Acosta thinks things are going in Trump’s Department of Labor. I had intended to “live tweet” the hearing, but the Committee’s website was having “technical difficulties.” Rebecca Rainey of Inside OSHA, was present at the hearing, however, and thanks to the miracle of Twitter, live-tweeted the highlights, which I then retweeted with commentary (for those on my Twitter feed.)

For those not on Twitter, I have summarized some of the highlights of the hearing below, or if you don’t trust me, you can watch the entire hearing here. (It begins at minute 16.)

No One Knew How Incredibly Complicated Regulatory Analysis Was

The main fireworks, as expected, were over the Department’s failure to publish an economic analysis in the proposal for the tip-sharing rule.  You may recall that last month BNA reporter Ben Penn discovered that DOL’s Wage and Hour Division hid an economic analysis from the public that was intended to back up their reversal of an Obama era regulation that would have allowed restaurant workers to keep their tips.   Under pressure from the restaurant industry, Acosta’s proposal would have allowed management to split servers tips with back-of-the-house workers who don’t earn tips. And according to worker advocates, the new rule “would permit management to essentially skim gratuities by participating in the pools themselves.”

Acosta, anticipating the attack, noted in his opening statement that criticism of the Department’s process was essentially fake news: “It’s unfortunate that basic facts have been mis-portrayed,” Acosta offered. Claiming that no one is looking to take tips, Acosta lamented that in these turbulent times, “unfortunately overstatement sometimes triumphs over a desire to solve a problem.”

Ranking member Rosa DeLauro (D-CT) was having none of it, asking (in vain) for Acosta to provide short answers to several questions — the first asking “Why didn’t the rule explicitly prohibit employers from pocketing their employees‘ earned tip wages?”

Instead of providing short answers, Acosta basically filibustered (eg. talked a lot), claiming that he would never eat at an establishment that pocketed tips. Acosta attempted to give a long explanation of the process the Department followed and the obstacles they faced, beginning every single sentence with an increasingly exasperated “Ranking Member DeLauro…”

Ranking Member DeLauro finally shot back “I know my name,” but was not too successful in getting the responses she wanted.  Acosta basically explained that it was too difficult to estimate how much money employees would lose. BNA reported however that the Department actually had conducted an analysis which showed significant losses for tipped workers, and employees were ordered not to include the analysis in the proposed rule.  Acosta also told DeLauro that he had no intention of withdrawing the analysis-challenged proposal. (You can watch the exchange yourself from minute 42 to 49.)

Acosta was rescued by soft ball pitcher Congressman John Moolenaar (R-MI) who asked Acosta to tell the committee about all the wonderful things the Department was doing for veterans.

The Era of Yelp

But Acosta wasn’t out of the woods yet.  At minute 1:10:30, Rep. Katherine Clark (D-MA) took up the battle again asking Acosta about his statement that he wouldn’t frequent an establishment where management took tips from workers. “How would you know?” she asked.

Acosta responded that “in the era  of Yelp and the internet, I um, I think it would get out very quickly. And I don’t think many restaurants would do this because they’d lose their workers and they’d lose their customers.”

He then pre-empted the Supreme Court which will decide between two conflicting lower court decisions — one that says DOL has authority to prohibit establishments from keeping tips and one that doesn’t.  Despite the fact that the Supreme Court has not yet decided, Acosta stated that he “personally” found persuasive the court decision that says he is not allowed to prohibit employers form keeping tips and ordered regulation writers to act accordingly.  So who needs the Supreme Court when the Secretary of Labor can decide which lower court decision he likes best?

Acosta assured Clark that the final rule will have a quantitative analysis. Too late for people to have a chance to comment, but I guess it’s the thought that counts.  And he said he’d strongly support a law prohibiting establishments from keeping tips. So, as many have commented, maybe it would be prudent to hold off on finalizing the regulation until the law is passed.

Now I have a couple of things to say about Acosta’s Yelp comment.

  1. Really?
    “Happy anniversary Honey.  Where should we celebrate this year?”
    “Thanks Sweetchomps, let’s head for Looney’s. I love it there. But first we need to check Yelp to make sure they don’t steal their employees’ tips.”
    “Good point Buttercup, but if they steal tips, they probably don’t even have any employees because they would have all quit and found better employers elsewhere.”
    “That’s true Babycakes. Maybe we should just defrost something from the freezer.”
  2. Interestingly, a similar argument has been made in support of OSHA’s electronic recordkeeping rule which would require employers to send their injury and illness numbers into OSHA where it would be posted on the internet so that workers and consumers can decide whether to work for, or patronize employers who are endangering their workers. Republicans have come up with all sorts of reasons why “shaming” employers like this would be impractical,  inaccurate and immoral. But I guess as long as Yelp does the same thing for tipping, it’s OK.
  3. And anyway, who needs regulatory protections — or any government enforcement — when you have Yelp? Unsafe products, businesses who pollute the air or water, steal wages and tips from workers, employers who injure, kill or sexually harass their employees, banks that cheat customers or destroy the nation’s economy…. The list is endless and the solution is simple: Just check Yelp and then choose not to patronize those establishments. Problem solved.

Workplace Safety

The only OSHA question came from Congressman Mark Pocan (D-WI) who, noting that the number of OSHA inspectors has declined by 4 percent since Trump took office, asked about OSHA staffing issues (which we covered here, here and here.)  Acosta assured Pocan that hiring of inspectors was under way, although no mention was made of other OSHA staff, such as administrative staff and mid-level managers who ensure that the enforcement process proceeds as quickly as possible (and that workers are protected as quickly as possible.)

What Now?

Next on the appropriations agenda will be a Senate hearing. Following that, we may or may not see a final bill from each House of Congress.  There will also be hearings from other committee that will decide NIOSH’s budget, as well as the fate of the Chemical Safety Board which the Trump administration has again slated for elimination.

Although the fiscal year ends September 30, no one expects there to be a final budget by that date. Not only has Congress failed to meet that deadline in recent memory, but the fact that this is an election year decreases those non-existent chances even further.

Alex Acosta Budget OSHA Wage and Hour Division

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