DOL plants flag in ESG, crypto investments debate

DECIDING INVESTMENT DECISIONS: Two of the most discussed financial trends in recent years have been the mainstreaming of cryptocurrency and so-called environmental, social and governance metrics — sparking political tug-of-wars in Washington.

Under the Trump administration, the Labor Department sought to deter investors from factoring-in ESG considerations as part of company-sponsored 401(k) offerings and other products it regulates under ERISA. But President Joe Biden’s appointees have reversed the course and issued a final rule last week ensuring that savers can opt into investment vehicles that have ESG-related components.

That move has created a contrast with the Biden DOL’s frostiness toward allowing savers to put retirement money into digital assets after Fidelity and several others announced plans this year to do so.

“ESG is a wonderful example of how everyday Americans can be hurt by a DOL that plays the role of armchair advisor,” David Ramirez, CEO of ForUsAll, a company that builds crypto investment products and has sued DOL over its March crypto memo. “The core asset class hasn’t changed but the political winds have.”

There are limitations to any direct comparisons — ESG is an investment strategy, whereas cryptocurrency is its own type of asset — but both have been subject to debate over whether they are fit for retirement portfolios and how the government should treat them.

Labor Secretary Marty Walsh in May pointed to crypto’s volatility and the risk of “making investments in an industry that’s uncertain” as a major reservation — a position seemingly validated by the rash of high-profile crypto meltdowns of late.

For its part DOL says there’s no difference in how it approaches these various investments and that it is consistent in ensuring that fiduciaries act and invest retirement funds prudently.

“We actually don’t see them as being divergent at all,” Lisa Gomez, the head of DOL’s Employee Benefits Security Administration, told Shift. “With the cryptocurrency guidance that was put out, there was nothing in there that said that you can’t invest in cryptocurrency. … We pointed out some particular concerns that fiduciaries should take into consideration with respect to those types of investments.”

Nevertheless Republicans are unlikely to buy DOL’s argument that it is not favoring certain types of investments over others, especially as it relates to ESG — which some conservatives deride as a distraction from business’ core financial priorities.

“The Department shouldn’t be deciding what is or is not a prudent investment,” Rep. Virginia Foxx, the top Republican on the House Education and Labor Committee, said in a statement.

GOOD MORNING. It’s Monday, Nov. 28. Welcome back to Weekly Shift, your go-to tipsheet on employment and related immigration news. Your host is back after completing the Troy Turkey Trot without incident, which is more than these two can say. Send feedback, tips, and exclusives to [email protected] and [email protected]. Follow us on Twitter at @eleanor_mueller and @nickniedz.

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INERTIA STIFLING PREGNANT WORKERS BILL: Legislation that would give pregnant workers more job protections has all the ingredients for success in a narrowly divided Congress with one crucial exception: a plan to pass it before Democrats’ time is up.

Senate leadership has thus far declined to bring the Pregnant Workers Fairness Act — which has already passed the House — to the floor, imperiling the legislation, infuriating its supporters, and illustrating just how much Democrats must juggle in their waning hours of controlling the House, Senate and White House.

The risk: Advocates warn that if Congress doesn’t enact the bill by the end of the year, opposition from a few key House Republicans over a lack of religious exemptions means the legislation will likely never get passed. The GOP is slated to take over the House in January, at which point enactment would be near impossible.

Eleanor has more (for Pros) here.

WATCHING THE WATCHMEN: The Mine Safety and Health Administration is beset by management and staffing issues that threaten to impede its core mission overseeing the nation’s miners, Bloomberg Law reports.

The agency is down to less than 1,700 staffers as of September, and MSHA has lost roughly 30 percent of its headcount since 2013.

Additionally there appears to be trouble within the agency’s administrative office in Arlington, Virginia.

“At least five discrimination complaints have been lodged against leadership at that office, according to copies of Equal Employment Opportunity Commission filings reviewed by Bloomberg Law.”

WHAT’S MARTY UP TO: Labor Secretary Marty Walsh recently penned an op-ed for The Seattle Times decrying the amount of time it takes for newly unionized workplaces to reach a first contract with management.

“There is no reason the process needs to take so long, and it’s in the best interests of all parties to reach a deal,” Walsh wrote.

He said that labor laws need to be strengthened to address protracted standoffs and called for the passage of the PRO Act (which will not happen anytime soon.)

Side note: The placing of this op-ed appears pointed, as Walsh specifically refers to the wave of unionization happening at companies like Starbucks and Amazon, both of which are based in Seattle and have been accused of dragging their feet at the bargaining table.

More agency news: “The White House girds for combat,” from our Christopher Cadelago.

BIDEN INVOLVED IN RAIL TALKS: President Joe Biden said Thursday that his administration remains involved in negotiations between freight railroad operators and labor unions as the prospect of a massive strike looms, Reuters reports.

“‘My team has been in touch with all the parties, and in (a) room with the parties and I have not directly engaged yet because they’re still talking,’” Biden told reporters in Massachusetts.

Circle your calendars: Dec. 9 marks the end of the current “cooling-off period,” during which no work stoppage is allowed, for the unions that have rejected their tentative agreements.

More workplace news: “Rivian Employees Say Rapid Production Led to Injuries, Safety Oversights in Illinois Plant,” from Bloomberg.

RUNOFF WRANGLING: The Georgia AFL-CIO has been mobilizing a mass member-to-member outreach effort to drive turnout for Sen. Raphael Warnock (D-Ga.) in his Dec. 6 runoff against Republican Herschel Walker.

The organization says it has roughly 200 people trying to reach out to some 200,000 union members and their voting-age family members. The state AFL-CIO is reprising a playbook that was ultimately successful in Warnock’s previous runoff victory against ex-Sen. Kelly Loeffler.

Other labor groups are also all in on Warnock. Unite Here is deploying its battleground-tested campaign strategies to Georgia that include door knocking (and some union recruitment along the way).

A HAIRY DILEMMA: D.C. firefighters are suing the city over its facial hair policy, arguing it infringes on their religious freedom and is hampering their careers.

“The reassignments to logistical positions resulted in the firefighters losing opportunities to earn overtime and holiday pay, which was less total pay than they would have received had they remained on field duty, the plaintiffs asserted,” The Washington Post reports.

Previous iterations of the policy were also subject to legal challenges, which resulted in a 2007 permanent injunction against the city.

More state news: “[California] state employment officials side with union’s unfair labor complaints against UC,” from the San Francisco Chronicle.

LIFE AFTER TITLE 42: In less than a month the Trump-era health policy used to expel migrants will come to an end, and the Biden administration will have to find other ways to address the situation along the border, our Myah Ward reports.

Experts in the immigration field say they’re expecting a stressful and chaotic transition when a court-ordered deadline to end the Trump directive is hit, one that could drive a new rush to the border and intensify GOP criticism.

More immigration news:  “Backers of Farmworker Visa Overhaul Make Year-End Push for Immigrant Labor Deal,” from The Wall Street Journal.

— “It’s not just Joe Biden. Plenty of Americans are now working into their 80s,” from Business Insider.

— “These Young Workers Are ‘Romanticizing’ the Return to Office,” from The New York Times.

— “Warehouse Packing Help Wanted, Excellent Penmanship Required,” from The Wall Street Journal.

THAT’S ALL FOR WEEKLY SHIFT!