Re: Nomination of Patricia Smith, Solicitor of Labor-Designee
Background and Chronology
On April 20, 2009, Patricia Smith, currently Commissioner of the New York State Labor Department was nominated by President Obama to be the Solicitor of Labor at the U.S. Department of Labor (DOL). The Solicitor is the chief legal officer at DOL, third-ranking official in the Department, general counsel to Secretary, manages one of the largest legal offices in the federal government (more than 400 attorneys), responsible for ensuring that all stakeholders, including small businesses, are given fair treatment under department’s jurisdiction, and plays a key role in nearly every department policy, regulation and enforcement action.
In conducting due diligence, we learned of a program Ms. Smith launched, called Wage and Hour Watch in New York. In the program, community organizations and unions are trained by the State Labor Department in wage and hour laws, issued state identification cards, sent to leaflet area businesses – and go into businesses to investigate and report suspected violations directly to the State Labor Department.
On May 7, 2009, Ms. Smith testified at a confirmation hearing before the Health, Education, Labor and Pensions Committee. During the hearing Ms. Smith is asked about several aspects of the Wage and Hour Watch program by Senator Burr.
On May 13, 2009, Ms. Smith responded to Questions for the Record (QFRs) from Senators Enzi, Isakson, & Coburn. In her responses, she declined to provide documents about New York Wage and Hour Watch Program, requesting that the Committee seek them from New York.
On June 4, 2009, Senator Enzi requested documents from the State of New York under its Freedom of Information Law (FOIL) related to the Wage and Hour Watch Program, which were ultimately delivered the first week of July.
On July 28, 2009, Ms. Smith responded to a second round of QFRs from Senator Enzi regarding Wage and Hour Watch. She does not change prior testimony regarding program.
On August 25, 2009, Senator Enzi officially requested the White House withdraw Ms. Smith’s nomination.
On September 9, 2009, Ms. Smith responded to QFRs from Chairman Kennedy.
On September 10, 2009, Senator Isakson asked President Obama to withdraw Ms. Smith’s nomination.
- Factual Inconsistencies in Ms. Smith’s Testimony to the Committee Regarding Expansion of the Wage and Hour Watch Pilot Program
Ms. Smith testified in five separate instances, both written and orally, that the NY Wage and Hour Watch Program was a “pilot program” only to be used in/around New York City, and that there were no plans to expand it, even to upstate New York. Ms. Smith’s responses:
- [Hearing May 7] No, we have not had any discussions of that. I have not had any discussions with the Department of Labor in New York about whether we would extend it across New York State. Again, it is a pilot program which we just did in January. We specifically limited it to a small number of groups, and we limited it to a small geographic area. We limited it to basically New York City, Long Island, the lower Hudson Valley so that we could assess what the successes would be, what the problems would be.
- [Enzi QFR May 13 response] This initiative was designed as a local model in a limited geographic area in a state, for a particular issue under a particular statute. It was not designed for other laws or to be used on the federal level. Until the pilot is completed and evaluated, I would not advocate expanding it to other areas in New York, to other areas of the country, to the federal level or to other federal or state laws.
- [Kennedy QFR September 9 response] At the time of my confirmation hearing I had no discussions about a potential expansion of Wage and Hour Watch with anyone, other than generally indicating that if it were proved successful, my goal would be to expand it to other areas of New York State. At that time, I had not authorized my staff to proceed with a statewide expansion of the program, nor had I discussed them with any steps that were preliminary to a possible expansion. My first substantive discussion about the steps needed to be taken to evaluate any potential expansion of Wage and Hour Watch occurred in late May 2009 with my Executive Deputy Commissioner.
The FOIL documents show that both before and after her confirmation hearing, she and her team promoted expanding the program, and her subordinates, including her deputy who had worked with her for 5 years as well as the Wage and Hour nominee, Lorelei Boylan, were recruiting new members. Attached are emails before and after her testimony and QFRs, as well as an application received in June from the NYS Laborers Organizing Fund that was not rejected. Virtually every relevant document, including press statements, internal and external emails and her own speeches, discusses expanding the program upstate and statewide or even nationwide – and many reference a June deadline to register with NY. There do not appear to be any documents in the approximately 3,000 pages provided that support Ms. Smith’s statements regarding having no plans for expansion.
- Other Concerns with Smith Nomination
- External Involvement of Unions and Community Organizers
In response to questions about how the program was developed, Ms. Smith stated that it was developed internally on two occasions:
- [May 7 Hearing] This was an internally crafted group. It was only after we sat down and crafted it ourselves that we reached out to groups to see if they would be interested.
- [Enzi QFR May 13 response] My staff had done considerable work researching Neighborhood Watch and developing the concept of this initiative and felt it was time to present the Department’s ideas for what is now known as Wage and Hour Watch, to gauge the possible interest of these two groups with whom we had worked and to get feedback.
However, emails show that two of the pilot groups, the Retail Warehouse and Department Store Union (RWDSU) along with Make the Road New York, a public interest entity financed in part by unions, were heavily involved in developing all aspects of the program. Attached is one example of email where these outside groups provided support for and pushed the State to implement this program. Ms. Smith did not even discuss the program with the targeted small business community or its representatives until March. This was after five trade associations representing small and medium business sent a letter to her and requested a meeting over a month after the program was launched.
- Union Organizing.
Ms. Smith stated that the State had ensured the union organizers involved in the program would not use Wage and Hour Watch for organizing:
- [Enzi QFR May 13 response] In order to avoid the possibility you raise, we instructed them not to use their status as Wage and Hour Watch groups as a union organizing tool. In order to implement this instruction, in the required training sessions, participants are taught to introduce themselves using their name and their group, not by Wage and Hour Watch or the Department of Labor.
Notably, however, the agreement entered by New York with the unions and special interest groups specifically allows them to make use of information gathered for community organizing, which Ms. Smith also admitted in response to a QFR. Unions planned to use the program for organizing, including outside the pilot area of the program. Attached is the work plan of United Food and Commercial Workers Local 1500 stating they plan to use Wage and Hour Watch in “all of our Organizing Campaigns,” including those outside their designated Wage and Hour Watch area. UFCW Local 1500 also published plans to target non-union workplaces as part of the program in its newsletter. Other facts of interest:
- The Coordinator of Retail Organizing Projects for RWDSU, Jeff Eichler, is prominently involved in developing the program from the private sector.
- RWDSU’s lead union organizers participated in and conducted the program training.
- Signatories for the pilot program agreements for the two unions are union organizers as appear to be all those attending the program training and receiving state identification cards according to the sign-in sheet.
- The Co-Chairman of the Wage and Hour Watch program is the president of the RWDSU.
- A number of applicants to join the program are entities whose sole purpose is union organizing – e.g., the New York State Laborers Organizing Fund and the organizer for a Plumber’s Local.
- The Wage and Hour nominee in an email suggested altering program participation requirements specifically to ensure up-state trade unions could be eligible to join Wage and Hour Watch.
The documents also show no instance where Ms. Smith or anyone else informed the unions that they could NOT use this program to organize.
C. Wage and Hour Watch Goal is Enforcement
- [May 7 Hearing] So the substance of Wage Watch's purpose is to engage groups to help us with education. So we have a pilot program which we have just begun. We have six groups which were picked on the basis of our prior experience with them, so I knew they were reliable and sensible groups. We developed training. We developed an agreement, and they have agreed to do educational events both for workers and employers.
Her subordinates, including Wage and Hour Administrator nominee Lorelei Boylan, and the union organizers and public interest groups involved in setting it up, described it from the beginning as an "Enforcers” Program. Participants were described as “community enforcers” and some of the training materials included that reference as well. Ms. Smith received email to that effect. Attached is one example.
- Action Taken by HELP Committee Ranking Member Mike Enzi
Senator Enzi’s letter of August 25th announced his opposition to the nomination and requested that she be withdrawn by the President (copy attached). Senator Enzi will oppose Patricia Smith’s nomination at the mark-up before the HELP Committee, and place a hold on her nomination should it reach the floor. His opposition to Ms. Smith is based on factually incomplete and inconsistent testimony before the Committee and concerns about her treatment of small business generally.
Nomination of PATRICIA SMITH to be Solicitor of Labor Accuracy and Integrity of Senate Testimony
Democratic staff has informed Republican staff that Senator Reid may soon file for cloture on Patricia Smith’s nomination to be Solicitor of the Department of Labor.
Ms. Smith misled the Health, Education, Labor and Pensions (HELP) Committee in her May 2009 testimony concerning a program she created in New York - “Wage and Hour Watch” - that credentials union organizers and community activists to act as State enforcement surrogates. Ms Smith was given the opportunity to correct her testimony in questions for the record but she continued to provide misleading and factually inaccurate responses. These responses contradicted official documents and e- mails received from the State of New York pursuant to a FOIA request. Three months after her testimony she responded to questions from Democratic Members claiming that she “misspoke”.
Ms. Smith was reported out of committee on October 6, 2009, on a straight party-line vote of 13-10.
Patricia Smith’s Testimony:
• Expansion: Ms. Smith denied that she had plans to expand the Wage and Hour Watch program. However, documents obtained from the State of New York contain more than 50 specific references to program expansion. E-mails sent immediately before and after her hearing show that expansion efforts were well under way.
• Enforcement: Ms. Smith stated the program was designed to be an educational effort. However, documents and her own speeches show it was designed as an enforcement program from the beginning and she even set up a hotline for union organizers and community activists. ID cards were distributed so that these groups could enter businesses to question employees.
• Program Creation: Ms. Smith stated that the program was created internally, by her staff, in her State Labor Department. However, the program was actually promoted and designed by a head union organizer and a community activist organization.
• Targeting Small Business: The program targets small- and medium-sized businesses. Ms. Smith did not consult with the business community while creating the program. It was only after small business representatives raised concerns about potential abuse that she met with them. This happened more than a month after the program was launched and too late to make changes.
• Labor Organizing: Ms. Smith stated the program would not be used for union organizing. Documents obtained from the State Labor Department and a union newsletter show plans specifically to use the program for union organizing throughout New York.
Solicitor of Labor: The Solicitor of Labor is a key position playing a role in nearly every policy, regulatory, and enforcement decision at the U.S. Department of Labor. Attached is a letter to Chairman Harkin from all Republican Members of the HELP Committee opposing this nomination. Also attached please find a letter from Senator Enzi to President Obama requesting that the nomination be withdrawn.