Department of Labor dismisses allegations that secretary abused his power in pay discrimination case

The Department of Labor dismissed allegations from a federal litigator on Friday that Secretary Eugene Scalia abused his power by interfering in a pay discrimination case against a company linked to the White House. 

Deputy Assistant Secretary Joe Wheeler countered the allegations in a Friday letter to Rep. Rosa DeLauro (D-Conn.), who last month requested Scalia recuse himself from the case involving tech company Oracle amid the accusations. 

“With regard to the request in your November 12 letter that the Secretary recuse himself from the Oracle case: he has not done so, because there is no reason to do so,” Wheeler wrote.

Wheeler objected to Regional Solicitor Janet Herold’s claims from an August complaint to the Office of Special Counsel that Scalia got involved in Oracle’s case to back a settlement that she thought was too low. 

The department’s probe into Oracle revolves around whether the firm owes between $300 million and $800 million in back pay for women, African American and Asian workers who say they were paid less than white and male colleagues.

“In brief, Ms. Herold’s retaliation allegations rest on erroneous speculation regarding matters she is not in a position to know,” Wheeler wrote. “She is based in California, not Washington D.C., has never met with or spoken to the Secretary about the Oracle case, and has no knowledge of whom he has spoken to or how he spends his time.”

The deputy assistant secretary called Herold “mistaken” that Scalia participated in settlement discussions with the tech company, saying, “It is my understanding that this never occurred, and the Secretary has not spoken with Oracle or any of its attorneys or representatives.”

Wheeler said Herold’s claims of “improper political considerations and interference are without any supporting fact,” noting that Scalia never discussed the case with the White House.

His letter mentioned that Herold’s recommendations for settlement were “as high as between $150 million and $300 million,” much higher than $14 million — the highest settlement in the history of the Office of Federal Contract Compliance Programs.

He said Herold’s memos and recommendations within the case “fell short of the objectivity and accuracy needed.”

He also noted that Oracle “disagreed with and rejected the settlement offer the Secretary supported” late last year as Herold continued to oversee the case litigation. Wheeler challenged the claim that Herold was a whistleblower, saying that she raised the allegations after her reassignment to Chicago in July.

Oracle declined to comment to The Hill. 

Herold submitted her complaint in August after reportedly learning that Scalia wanted to settle for $40 million before the case’s December trial, which she opposed, The New York Times reported. 

The regional solicitor alleged through one of her lawyers, Debra Katz, that Scalia became involved in the Oracle case shortly after being confirmed in an “improper” way. Another of her lawyers, Alexis Ronickher, told the Times the secretary was trying to reassign Herold to Chicago after she objected to his involvement in the case.

Ronickher told The Hill in a statement that Herold “risked her career to protest against the Trump Administration’s efforts to give Oracle, a very public political ally, a sweetheart deal.”

“For eight years, Ms. Herold has fought on behalf of American workers as the Regional Solicitor for the Western Region, always earning accolades for her work,” Ronickher said in her statement. “Once she blew the whistle against Secretary Scalia’s corruption and cronyism, she suffered the same fate of so many other civil servants under the Trump Administration.”

“Ultimately, despite Ms. Herold’s efforts, Oracle was successful in using its political influence to avoid a full adjudication of the case when the Department of Labor agreed this week to not appeal its landmark discrimination case, effectively abandoning the thousands of affected workers,” she added. 

Ronickher also said that a senior person on President-elect Joe Biden’s transition team told Herold that a senior official in the Department of Labor informed them that officials planned to fire her before Jan. 20. 

“‘This all’ has been driven by Secretary Scalia himself to make sure that Ms. Herold was not there when the Biden Administration arrived,” she said.

DeLauro called on Scalia last month to recuse himself from the Oracle case amid the allegations, saying that Herold’s reassignment “may be retaliatory, particularly because your office has yet to provide a satisfactory explanation for her transfer.”

“The American people need to have confidence that its law enforcement officials are making decisions based on the rule of law — not to advance the interests of a politically connected few,” she said. “Your recusal, along with that of the Deputy Secretary and the Solicitor of Labor, will ensure that there is no question as to the integrity of the Department’s handling of this important enforcement action.”

Updated at 7:51 p.m.