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: Senate’s rejection of Biden Labor Department nominee seen as a win for gig companies, loss for PRO Act

Three Democratic senators rejected President Joe Biden’s pick to head the Wage and Hour Division at the U.S. Labor Department, which experts said was a victory for Uber Technologies Inc. and other gig companies and likely kills the near-term chances of a pro-labor bill that has been stalled in Congress.

Sens. Mark Kelly and Kyrsten Sinema, both of Arizona, and Joe Manchin, of West Virginia, on Wednesday night voted with Senate Republicans against moving forward on the nomination of David Weil, who headed the Wage and Hour Division under President Barack Obama.

Weil is a well-known economist who has been critical of gig companies such as Uber
UBER,
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and Lyft Inc.
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He wrote a book called “The Fissured Workplace,” in which he examined how large corporations that have embraced contracting and indirect relationships with workers whose labor they depend on have eroded labor protections, driven wages down and contributed to growing inequality.

The rejection of Weil’s nomination likely means the Protecting the Right to Organize Act, known as the PRO Act — which the U.S. House of Representatives passed last year and would make it harder for gig companies to classify their workers as independent contractors, among other things — will not have enough votes in the Senate this session. Sinema and Manchin’s ties to business interests are widely seen as obstacles to Biden’s agenda, and though Kelly has said he supports the goals of the PRO Act, he has expressed “concerns” that may have been shaped by his ties to franchise and gig companies.

“It’s a shot across the bow for the PRO Act, which had little chance in any event,” said William Gould, professor emeritus at Stanford Law School and a former chairman of the National Labor Relations Board.

See: PRO Act called ‘most important labor legislation in several generations’

Tom White, an analyst for D.A. Davidson, said the rejection of Weil’s nomination could mean the next head of the Wage and Hour Division will have a more “moderate stance” on worker classification.

That’s “at least a modest incremental positive for the large gig companies going forward,” he said.

Veena Dubal, a professor at UC Hastings College of the Law who studies the gig economy, called Weil a “pre-eminent economist and leader in the world of wage and hour law,” and said the denial of his nomination “makes no sense, except that particular industrial interests don’t want those laws enforced.”

See: From treatment of gig workers to tip transparency, the app-based economy could see key changes in 2022

Both Gould and Dubal said the gig economy’s worker-classification issue will likely continue to be fought in the courts and at the state level. They said the Labor Department still plays an important role, though Biden will now have to find another nominee.

“The laws exist and it’s the duty of whoever is in that position to enforce them,” Dubal said.

The Labor Department did not return a request for comment before publication Thursday.

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