Trade Group Urges Biden Not to Crack Down on Independent Contractors amid Julie Su Confirmation Fight

Kristin Sharp, CEO of Flex, a trade association, sent a letter Monday to President Joe Biden urging him to delay finalizing a Department of Labor rule that would hurt the rideshare and delivery industry until after it has a permanent secretary in charge.

After former secretary Marty Walsh resigned in March, the Department has been led by Julie Su, the deputy secretary. The Biden administration nominated her to fill Walsh’s seat but she has not yet corralled the necessary votes for confirmation in the months since.

With Senator Joe Manchin (D., W.Va.) joining all Republicans in opposing Su’s nomination and two other caucus moderates undecided, the administration has simply resolved to leave Su in charge indefinitely, relying on a statute that appears to conflict with the Vacancies Act. Normally, an acting secretary can only serve for 210 days.

According to the trade group, which represents companies including DoorDash, Grubhub, Lyft, and Uber, “any action taken to finalize the proposed worker classification regulation under Ms. Su’s current leadership as Acting Secretary would circumvent the Senate’s constitutional role of providing advice and consent on nominees.”

Republicans have already warned the Biden administration it is setting itself up for a legal challenge with its dubious legal maneuvering. “It is my view that this use of the Succession Act violates the constitutional provision of advice and consent and would potentially open any DOL action under Julie Su’s leadership to legal challenges,” wrote Senator Bill Cassidy (R., La.) in a letter to Biden.

Flex’s letter offers further warning of the problems that may ensue if the administration perseveres with its current plan.

The trade association also explained when Su was California’s secretary of labor she took actions to undermine independent entrepreneurs, who prefer by wide margins to keep that status and “make their own decisions about whether, when, and where to work.”

“The lack of support in the Senate for Ms. Su’s nomination stems in large part from her refusal to articulate plans for finalizing the proposed worker classification regulation in a manner that protects independent work and avoids the economic turmoil California experienced under her leadership,” added the group.

Cassidy, who is ranking member of the Senate Health, Education, Labor and Pensions Committee, said in April that in her California role, Su enforced 85 “controversial laws that dismantled the gig economy.”

Su’s decision to reclassify contractors as de-facto employees entitled to overtime pay, among other things, undermines a worker’s freedom of contract, some observers have argued.

According to the trade association, the Department of Labor and Su are now threatening to disrupt the gig economy nationwide.

“Flex remains concerned that Ms. Su’s leadership could lead to upheaval that is national in scope,” the group concluded.