Revealed: The Corporations Mobilizing to Defeat Biden’s Labor Secretary Nominee

By Donald Shaw and David Moore, Sludge

Business associations and conservative political groups are mobilizing to sink President Biden’s nominee to be the next head of the Department of Labor. With Senate Democrats just barely having a majority, the groups are trying to get centrist senators who will be up for re-election in 2024 to vote against the nominee and force Biden to nominate someone who is more business-friendly. 

On February 28, Biden nominated Julie Su to be labor secretary, moving to fill the top spot after Marty Walsh stepped down to take a job as head of the National Hockey League. As the deputy at the department, Su has been the acting labor secretary since Walsh left, and next she will face Senate confirmation hearings on April 20.

The pick was applauded by labor unions, as well as immigrant and women’s groups, for Su’s record as a worker advocate. Su was California labor commissioner from 2011 through 2018, where she helped bring enforcement against businesses that stiffed workers on wages, and then served as secretary of the state’s Labor and Workforce Development Agency. In the mid-1990s, Su raised the cases of low-wage workers as a lawyer for a group of more than 70 Thai garment workers who were enslaved at a sweatshop in El Monte, near Los Angeles. 

Businesses and gig economy companies like Lyft and Uber are mobilizing to sink Su’s nomination in the Senate, where Democratic-aligned members hold a 51-49 majority, by targeting centrist senators who are up for re-election in 2024, including Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, and Jon Tester of Montana. Su’s nomination in July 2021 to be deputy secretary of labor was confirmed with a 50-47 party-line vote, with three Republicans not voting.

On March 30, 32 industry trade associations and conservative policy groups wrote a letter to Senate Committee on Health, Education and Labor Chairman Sen. Bernie Sanders (I-Vt.) and Ranking Member Sen. Bill Cassidy (R-La.) to express their concerns with Su’s nomination. The letter was critical of Su for her role in supporting California’s AB 5 law that ensures gig workers have access to basic labor protections and benefits that are often denied to independent contractors, as well as her support of a California law that established a council that implements minimum work standards for fast food restaurant employees. 

The letter was signed by the National Restaurant Association, National Association of Homebuilders, National Retail Federation, Americans for Tax Reform, and more lobbying groups. No trade groups representing gig economy companies signed the letter, but there is reason to suspect that companies such as Uber and DoorDash may have had some influence in it. One of the signers of the letter was the Workplace Policy Institute, which is the lobbying arm of San Francisco-based anti-union law firm Littler Mendelson. Several gig economy companies have employed Littler Mendelson, including Uber, DoorDash, and Grubhub. The firm, which says it “excel[s] in union avoidance and elections,” has represented Starbucks’ anti-union efforts, and represented McDonald’s in a case alleging retaliation against franchise workers participating in “Fight for $15” demonstrations.

Last March, Uber, Lyft, DoorDash and other gig economy companies formed a lobbying group called the Flex Association, which recently hired its first two federal lobbying firms. In January, it hired D.C.-based firm Ulman Public Policy & Federal Relations, which also lobbies for several of the obscure trade associations that signed the March 30 letter, including the National Armored Car Association, the American Hotel & Lodging Association, the National Retail Federation, and the Associated Builders and Contractors. It is therefore possible that Ulman Public Policy & Federal Relations may have played a role in coordinating the letter, perhaps as a service to its client the Flex Association. 

Many of the groups that signed the letter have PACs that have been making donations to the senators who will be key in determining Su’s confirmation vote. Sen. Manchin’s campaign and leadership PAC received $91,500 from the PACs of the letter signers in 2021-22, and Sen. Sinema’s campaign and PAC received $77,500 from them over that period. Sen. Mark Kelly, who has said he is undecided on the Su vote, received $26,500 from them. One of the groups that signed the letter, the International Franchise Association, pays Manchin’s former longtime chief of staff Patrick Hayes to lobby the Senate for them.

Recently, a new campaign called “Stand Against Su” has come into existence. The group is running anti-Su Facebook ads to people in states represented by senators who will be key votes on Su’s nomination, and it has purchased billboards and newspaper ads in those states. 

Stand Against Su is led by the group Freelancers Against AB 5 and The California Business and Industrial Alliance (CABIA) trade association. One of CABIA’s board members is Michael Saltsman, a vice president with Berman and Company and a managing director at the Employment Policies Institute think tank. The Employment Policy Institute has long worked with the restaurant industry and the National Restaurant Association to promote its interests. According to SourceWatch, a 1995 article in the National Journal said that the Employment Policies Institute was started “by a group of restaurant companies” and that at the time it got “95% of its budget from corporate sources — primarily restaurateurs and retailers.” Tax documents show that the Employment Policies Institute received donations from the National Restaurant Association as recently as 2017. The Employment Policies Institute’s president and executive director is notorious front group creator Richard Berman, who has been called “Dr. Evil” because of his work on behalf of unpopular industries like tobacco and herbicides. Berman does not disclose his funders, but in a 2011 CBS News segment, Dr. Michael Jacobson, the founder of health advocacy group the Center for Science in the Public Interest, alleged that “the food industry, the beverage industry, alcoholic beverage industry, the restaurant industry’s a major supporter” of Berman’s work. 

The Flex Association itself is also expressing its doubts about Su. In a March 20 letter to President Biden, the association’s CEO Kristin Sharp wrote that it hoped that during her Senate hearings, Su distinguishes her past work in California from what she plans to pursue if confirmed to lead the Department of Labor. The Flex Association’s members are Uber, Lyft, Grubhub, Shipt, Instacart, Doordash, and HopSkipDrive. 

People and PACs tied to the anti-Su effort have made donations to some of the senators being targeted by the anti-Su campaigners in recent years. Since 2018, Sinema has received donations from Lyft CEO Logan Green, Lyft President John Zimmer, National Restaurant Association President Sean Kennedy, and the PACs of the National Restaurant Association and Lyft. Manchin received donations from the National Restaurant Association’s PAC over that period. Sen. Mark Kelly since 2018 received donations from Grubhub founder Matt Maloney, Lyft CEO Logan Green, DoorDash VP of Communications Elizabeth Jarvis-Shean, and the National Restaurant Association PAC. 

Gig economy companies in the Flex Association retained more than 100 federal lobbyists last year, according to a Sludge review of Senate disclosures, the vast majority of whom weighed in on labor issues like the classification of independent contractors as employees. Many of the lobbyists—for example, Lyft lobbyists with the firm Akin Gump, or Uber lobbyists with the firm Brownstein Hyatt—previously worked as congressional staffers and traveled through the revolving door. Some of them made recent campaign contributions to key senators set to vote on Su’s nomination: for instance, DoorDash lobbyist Ed Pagano contributed to Mark Kelly and Tester’s campaigns, and Instacart lobbyist Steve Elmendorf gave to Sinema’s campaign in May of last year, before she announced her change in party affiliation.

The Department of Labor proposed a rule in October 2022, to be finalized this year, that will determine when a worker is deemed an independent contractor or an employee. The proposed rule was opposed last year in comments submitted by the Flex Association and the restaurant industry lobby, which urged its withdrawal. It would set the stage for major changes in how rideshare, delivery companies, and others are required to treat minimum wage, overtime, and other employee rights for workers. To exempt themselves from the similar California law in 2020, which was supported by Su, gig economy companies unleashed a wave of spending in support of the Proposition 22 ballot initiative that topped $200 million, outspending its opposition 10 times over.