Julie Su Is A Partisan Union Activist Whose Policies Will Hurt Independent Contractors And Small Businesses

Su Presided Over California’s Disastrous Administration Of Unemployment Benefits During The Pandemic, As Over $30 Billion Was Stolen By Scammers, In Part Enabled By Decisions She Made

SEN. CASSIDY: “[W]e should ask questions about how Ms. Su presided over a mismanaged California unemployment insurance program during the pandemic, and why California paid $31 billion in fraudulent claims while she chose to suspend the eligibility determination process. Some of these payments went to inmates and known domestic and international criminals. To put into context, DOL’s requested budget is $15 billion dollars and employs more than 17,000 people. This means that Ms. Su lost more than double the annual budget of the agency she will be responsible for managing in Washington D.C. This calls into question her qualifications as a manager.” (Sen. Cassidy, Remarks, 3/27/2023)

Julie Su ‘Oversaw The State’s Troubled Employment Development Department,’ Which Disbursed Over $30 Billion In Payments To Fraudsters During The Pandemic: ‘Organized Crime Rings And Prison Inmates Filed Thousands Of Fraudulent Claims For Benefits That EDD Readily Paid’

“President Biden on Tuesday nominated Julie Su to be his next Labor secretary … Before joining Biden’s Labor Department, Su served seven years as secretary of California’s Labor and Workforce Development Agency. In that role, she oversaw the state’s troubled Employment Development Department, which is responsible for doling out unemployment benefits but struggled to manage a backlog of claims and to combat widespread fraud during the pandemic. The office received at least 26.4 million claims and paid out $180 billion in benefits from the beginning of the shutdown through last spring, and about $30 billion of those payments went to scammers, according to state officials.” (“Julie Su, Who Oversaw California Unemployment Agency Amid Fraud Wave, Nominated U.S. Labor Secretary,” Los Angeles Times, 2/28/2023)

• “The California EDD’s ‘improper payment’ rate during the first six months of the pandemic was 36.6%, according to a U.S. Labor Department audit report from September. It is unclear what share of that was fraud or payments made in the incorrect amount. Some scammers posed as prison inmates, or, in one instance, as Sen. Dianne Feinstein, to receive COVID relief money.” (“Julie Su, Who Oversaw California Unemployment Agency Amid Fraud Wave, Nominated U.S. Labor Secretary,” Los Angeles Times, 2/28/2023)

• “Organized crime rings and prison inmates filed thousands of fraudulent claims for benefits that EDD readily paid. One reason: EDD had cancelled a contract with a firm that flagged suspicious claims, then rehired the contractor only after the rampant fraud became apparent.” (Dan Walters, “California’s Unemployment Insurance Mess Laid Bare,” Calmatters, 1/27/2021)

Su Herself Admitted That California Distributed Over $30 Billion To Fraudsters And Scammers: ‘Criminals Took Advantage Of The Situation’

“California Labor Secretary Julie Su’s admission that her department spent up to $31 billion on fraudulent claims for jobless benefits has collided with White House plans to tap her for a key labor post, creating a potential liability for her promotion to the federal stage.” (“California Unemployment Fraud Woes Complicate Su’s DOL Hopes,” Bloomberg Law, 1/26/2021)

• FORMER CALIFORNIA LABOR SECRETARY JULIE SU: “There is no sugarcoating the reality… California has not had sufficient security measures in place to prevent this level of fraud, and criminals took advantage of the situation.” (“California Officials Say Unemployment Fraud Now Totals More Than $11 Billion,” Los Angeles Times, 1/25/2021)

California’s State Auditor ‘Issued A Damning Report On The EDD’s Failings,’ With One Part ‘Directed At Su,’ Pointing To Her Decision To Stop Checking Eligibility For UI Benefits

“State Auditor Elaine Howle issued a damning report on the EDD’s failings, while pointing out that they had been evident for many years…. One passage of Howle’s letter was directed at Su. ‘In spring of 2020,’ it said, ‘the secretary of the Labor and Workforce Development Agency directed EDD to pay certain claimants UI benefits without making key eligibility determinations and to temporarily stop collecting biweekly eligibility certifications. Although both directives were designed to provide Californians with benefit payments as quickly as possible, the U.S. Department of Labor has not waived these requirements and, consequently, EDD now faces a very large impending workload of eligibility certifications that threatens its ability to operate effectively.’” (Dan Walters, “California’s Unemployment Insurance Mess Laid Bare,” CalMatters, 1/27/2021)

CALIFORNIA STATE AUDITOR ELAINE HOWLE: “EDD did not take substantive action to bolster its fraud detection efforts for its UI program until months into the pandemic, resulting in payments [as of January 2021] of about $10.4 billion for claims that it has since determined may be fraudulent because it cannot verify the claimants’ identities. Specifically, EDD waited about four months to automate a key anti-fraud measure, took incomplete action against claims filed from suspicious addresses, and removed a key safeguard against improper payments without fully understanding the significance of the safeguard.” (California State Auditor, “Significant Weaknesses in EDD’s Approach to Fraud Prevention Have Led to Billions of Dollars in Improper Benefit Payments,” Report Number: 2020-628.2, 1/28/2021)

CALIFORNIA STATE AUDITOR REPORT: “As claims began to surge in March 2020, EDD halted most of its work determining whether claimants were eligible for UI benefits…. [T]he Department of Labor determined that this decision likely compromised the integrity of California's UI program. In September 2020, the Department of Labor learned about EDD's decision to suspend many eligibility determinations. On December 4, 2020, the Department of Labor notified EDD that it believed those actions conflicted with a core tenet of the UI program, namely not paying benefits to ineligible claimants. It noted that without conducting eligibility determinations, EDD could not be certain that individuals are eligible for benefits and instructed EDD to immediately resume all eligibility determinations.” (California State Auditor, “EDD's Poor Planning and Ineffective Management Left It Unprepared to Assist Californians Unemployed by COVID?19 Shutdowns,” Report Number: 2020-128/628.1, 1/26/2021)

Su Is A Supporter Of California’s Notorious AB5 Legislation, A Union-Backed Measure Designed To Force Companies To Treat Independent Contractors As Employees, Which Has Led To Labor Chaos In The Golden State, And Which Su Sees As A Template For The Entire Country

SEN. CASSIDY: “In California, Ms. Su was a top architect of AB 5—a controversial law that removed the flexibility of individuals to work as independent contractors…. Independent contractors are shielded from forced or coerced unionization that would strip that flexibility away. This of course has made eliminating this classification a top priority for large labor unions who benefit from more workers being forced to pay mandatory union dues…. [E]ven in California, AB 5 is extremely unpopular. 58 percent of California voters supported a measure to exempt rideshare drivers from AB 5. The law is so flawed the governor and state legislature had to pass multiple laws to exempt over 100 occupations. In fact, the statutory exemptions are longer than the text of AB 5 itself.” (Sen. Cassidy, Remarks, 3/27/2023)

THE WALL STREET JOURNAL EDITORIAL BOARD: “As labor secretary in California, [Julie Su] drove implementation of the state’s AB5 law, which reclassified independent contractors as employees. The law was aimed at Uber drivers and other gig workers, but it ended up smacking workers seeking flexible hours in multiple industries—comedy performers, personal fitness trainers, midwives, transcriptionists, hairdressers, music-lesson providers. After the law passed, Ms. Su promised statewide investigations and audits to enforce compliance. The ensuing labor and economic harm caused the state to exempt numerous professions from the law, while voters in 2020 overwhelming passed an initiative exempting many gig workers from the statute. Ms. Su’s Labor department is nonetheless taking AB5 national with a proposed regulation that replicates California’s mess by reclassifying millions of contractors as employees.” (Editorial, “A Big Labor Partisan Named Julie Su,” The Wall Street Journal, 4/18/2023)

California Democrats Imposed AB5 At The Behest Of ‘A Powerful Coalition Of Labor Unions’

“California lawmakers rewrote the rules of employment across a wide swath of industries …  Assembly Bill 5, which curbs businesses’ use of independent contractors, gained final approval in the state Senate and the Assembly and was sent to Gov. Gavin Newsom … AB 5 codifies and expands on a 2018 California Supreme Court decision that adopted a strict, three-part standard for determining whether workers should be treated as employees, modeled on a Massachusetts test.” (“Sweeping Bill Rewriting California Employment Law Sent To Gov. Newsom,” Los Angeles Times, 9/11/2019)

• “Gov. Gavin Newsom signed a controversial bill [in September 2019], known as AB 5, after months of uproar from businesses and gig companies like Uber and Lyft. The bill will require businesses to hire workers as employees, not independent contractors, with some exceptions.” (“California Just Passed A Landmark Law To Regulate Uber And Lyft, Vox, 9/18/2019)

• “The bill passed the Assembly 56 to 15 and the Senate 29 to 11 along largely partisan lines, with most Democrats voting in favor and most Republicans opposed.” (“Sweeping Bill Rewriting California Employment Law Sent To Gov. Newsom,” Los Angeles Times, 9/11/2019)

“AB 5 was pushed by a powerful coalition of labor unions, many of which have suffered stagnating membership as companies classify large chunks of their workforces as independent contractors. Under federal law, only employees can join unions and collectively bargain for wages and benefits.” (“Sweeping Bill Rewriting California Employment Law Sent To Gov. Newsom,” Los Angeles Times, 9/11/2019)

“AB 5 captured the industries targeted by labor: gig workers; big-rig, Amazon and other truck drivers; and low-wage services ranging from janitors to home health aides.” (“Who’s In, Who’s Out Of AB 5?,” CalMatters, 9/11/2019)

“Pushing AB 5 through the legislature is perhaps one of the most significant labor wins in decades … If any state can start to reverse the trend of shrinking labor unions, it’s California.” (Vox, 9/11/2019)

• THE ORANGE COUNTY REGISTER EDITORIAL BOARD: “AB5 was backed by big labor as a path to unionizing the gig-economy workforce. Only employees may join a union; independent contractors cannot be organized to bargain collectively.” (Editorial, “Assembly Bill 5 And The Right To Work,” The Orange County Register, 1/20/2020)

“[L]abor is celebrating a banner year in Sacramento: New restrictions on California charter schools at the behest of the teachers unions. A bill to allow unionization for child care workers. And … the signing of AB 5, a nationally watched measure converting 1 million California freelancers into employees while granting them a suite of protections along with the right to join unions.” (“Labor Had A Banner Year In California — Now Will Workers Unionize?,” Calmatters, 9/19/2019)

• “After the U.S. Supreme Court’s dues-gutting decision in the case of Janus v. AFSCME, labor went into political overdrive … in California, pushing a series of bills through the Legislature …” (“Labor Had A Banner Year In California — Now Will Workers Unionize?,” Calmatters, 9/19/2019)

The California Assemblywoman Who Sponsored AB5 Was Previously A Union Executive And Later Resigned From The Assembly To Become The Leader Of The California Labor Federation, A Branch Of The AFL-CIO

“From the beginning, the bill’s author, Assemblywoman Lorena Gonzalez, a labor organizer and a Democrat from San Diego, made clear her goal was to … expand the right to collective bargaining …” (“Who’s In, Who’s Out Of AB 5?,” CalMatters, 9/11/2019)

“Assemblywoman Lorena Gonzalez (D-San Diego) announced her resignation from the Assembly on Monday to become the next leader of the California Labor Federation, one of the largest and most influential union groups in California, later this year. …[H]er background as a community activist and organizer… culminated with her becoming the CEO and Secretary-Treasurer of the San Diego and Imperial Counties Labor Council, AFL-CIO in 2008. … However, by far her largest and most controversial legislation was AB 5, the 2019 law that drastically altered the contractor worker landscape in the state by having most contractor employees be reclassified as employees. While the aim was to have more workers provided labor protections and more benefits such as health coverage, the law instead hurt many independent contractors, caused many companies to hire fewer people because of the increased costs, and proved to be so inconsistent that the law has been consistently been altered – even before coming into law in 2020.” (“California Assemblywoman Lorena Gonzalez Resigns For Labor Union Post,” California Globe, 1/3/2022)

Julie Su Was Known As A Proponent Of AB5 And Considered It ‘A Model For The Country’

“Prior to joining the Biden administration, Su was the secretary for the California Labor and Workforce Development Agency and the state’s labor commissioner. Su has gained critics over her time in leadership in California as well as her support for A.B. 5, a California law that aims to reclassify certain gig workers as regular employees.” (“Key Senate Democrats Remain Non-Committal On Biden’s Labor Secretary Pick Ahead Of Confirmation Hearing,” CNN, 4/19/2023)

“During her tenure in California, Su was a proponent of AB5, a law that made it more difficult for employers in the state to classify workers as independent contractors.” (“New Leader at the Labor Department: What Employers Need to Know About Julie Su,” Fisher Phillips, 4/09/2023)

THEN-SECRETARY OF THE CALIFORNIA LABOR AND WORKFORCE DEVELOPMENT AGENCY JULIE SU: “AB 5 is meant to address that kind of misclassification … [W]hen we talk about creating a voice for workers, that it’s really a voice premised on union — like a genuine right to a union on the job. If we can accomplish something, it will set a model for the country.” (“CA’s Labor Chief Wants The Jobs Of The Future — And She Wants Them To Cut Inequality,” Calmatters, 10/16/2019)

But AB5 Has Proven So Overbearing, Disruptive And Unworkable, 58% Of Californians Voted To Rein The Law In And State Lawmakers Have Repeatedly Granted Exceptions To It For Well-Connected Groups

THE ORANGE COUNTY REGISTER EDITORIAL BOARD: “The political power of unions in Sacramento distorted the legislative process for AB5, resulting in a law that has seemingly random exemptions for some groups and industries, while others are left out in the cold.” (Editorial, “Assembly Bill 5 And The Right To Work,” The Orange County Register, 1/20/2020)

“While [AB5] was unambiguously aimed at ride share and food delivery companies that treat drivers as independent contractors, it was broadly written and was passed with little discussion.  Confusingly, it contained a mishmash of last-minute exemptions from the ‘ABC’ test that, from a distance, seemed to be based on little more than which industry groups were able to get legislators’ ears in the hours before the statute was passed. The original exemptions to AB5 extended to doctors, dentists, insurance agents, lawyers, accounts, real estate agents, and hairstylists, among others…. [E]ight months after AB5 went into effect, more industries and occupations have been exempted from AB5. On September 4, 2020, Governor Gavin Newsom signed AB 2257, which immediately exempts the following professions from the ambit of AB5: Fine artists, Freelance writers., Still photographers, Photojournalists, Freelance editors, Newspaper cartoonists, Translators, Copy Editors, Producers, Cartographers, Musicians with single-engagement live performances, Musicians involved in sound recordings or musical compositions, Insurance inspectors, Real estate appraisers, Manufactured housing salespersons, Youth sports coaches, Landscape architects, Professional foresters.” (Michael S. Kun, “California Adds More Exemptions to Controversial Independent Contractor Statute,” The National Law Review, 9/08/2020)

“California voters … overwhelmingly approv[ed] Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors…. The Associated Press projected early Wednesday that Prop. 22 had carried 58 percent of the vote…. In voting [for Prop. 22,] Californians rejected the principles outlined in a 2018 State Supreme Court ruling and enshrined in a 2019 state law that said workers who performed tasks within a company’s regular business — and were controlled by the company and did not operate their own firms — must be treated as employees.” (“Uber and Lyft Drivers in California Will Remain Contractors,” The New York Times, 11/04/2020)

Yet California’s Truckers Remain In The Crosshairs, Showing How Damaging The Law Has Been

“Independent truckers snarled traffic on freeways in the Los Angeles, Long Beach and San Pedro areas [last year] to protest AB5, a bill passed and signed into law years before that they argue is going to kill trucker jobs amid skyrocketing inflation and the supply chain issue…. Representatives also signed an open letter to Gov. Gavin Newsom Friday, urging him to stop AB5, and prevent it from crippling the already chaotic supply chain.” (“What is AB5? The Bill Behind LA's Trucker Protest,” NBC Los Angeles, 7/15/2022)

• “Truckers have operated as independent contractors for decades in California. Because AB5 changes how they would be classified, truckers are worried they will have to take on added costs, like buying their own insurance. Independent truckers who own or lease their own trucks and don’t work for larger companies worry they will be forced to spend tens of thousands of dollars on insurance premiums.” (“What is AB5? The Bill Behind LA's Trucker Protest,” NBC Los Angeles, 7/15/2022)

As Biden’s Secretary Of Labor, Julie Su Would Be Tasked With Implementing New Regulations Designed To Take AB5 Nationwide

SEN. CASSIDY: “Ms. Su has taken her support for this anti-worker, pro-union policy to the Department of Labor. During her tenure as Deputy Secretary of Labor, essentially the agency’s ‘Chief Operating Officer,’ the Biden Administration pushed to eliminate independent contracting via federal executive rulemaking. There was no hope of ever getting an AB 5-like law through Congress, so they pursued their goals through regulation. If finalized, the new regulation would strip 21 million individuals of their ability to classify themselves as independent contractors and enjoy the flexibility it provides.” (Sen. Cassidy, Remarks, 3/27/2023)

• “This regulation would undermine the business model of services like Uber, Lyft, and Door Dash that provide valuable services and give drivers the ability and freedom to set their own hours and even hop between states and between companies based upon where they wish to be and which company provides them with the best opportunities.” (Sen. Cassidy, Remarks, 3/27/2023)

• “By the way, truckers will be severely impacted. Many truckers are independent owner-operators, and many own their own trucks. This regulation could devastate the freedom of these truckers, and it could potentially impact the supply-chain in the process as trucking moves more than 72 percent of goods in the United States every year.” (Sen. Cassidy, Remarks, 3/27/2023)

• “We don’t need the application of law from one of the most liberal states in the nation on a national level. A law rejected in California is not a policy that we should be pursuing on a federal level. We need to support the rights of workers and their ability to choose what's best for them, not put them in a straitjacket serving other people's goals.” (Sen. Cassidy, Remarks, 3/27/2023)

The New Rule Is ‘The Latest Pro-Labor Turn From The Biden Administration’

“The Labor Department on [October 11^th] announced a new rule that makes it more likely that gig workers get classified as employees — the latest pro-labor turn from the Biden administration.” (Axios, 10/11/2022)

“The Biden administration is proposing a rule that could result in more ‘gig’ workers being considered full-time employees, a potentially major shift in the nation's labor laws that could disrupt ride-sharing, delivery, construction and other companies that employ independent contractors.” (“Biden Administration Proposes New Rule That Could Upend ‘Gig’ Work,” CBS News, 10/11/2022)

“The rule could bolster labor advocates seeking to challenge worker classification in courts, or state lawmakers seeking to pass stricter laws for designating workers as contractors, said Patricia Campos-Medina, executive director of the Worker Institute at Cornell University’s School of Industrial and Labor Relations.” (“Labor Proposal Could Upend Rules For Gig Workers, Companies,” The Associated Press, 10/11/2022)

The Author Of AB5 From The California State Assembly Is Even Praising The New Biden Administration Rule

“Lorena Gonzalez Fletcher, a former leader on workers’ issues in the California Assembly who is now head of the state’s labor federation, said in an interview that the action demonstrated the Biden administration’s strong pro-worker stance but that the effect of the new rule would come down to how aggressively the administration enforced it.” (“Biden Proposal Could Lead to Employee Status for Gig Workers,” The New York Times, 10/11/2022)

Julie Su Is An Unabashed Pro-Union Activist, Not A Fair Leader For A Department That Must Balance Interests Of Workers And Employers

DEPUTY SECRETARY OF LABOR JULIE SU: “Mr. President, when you said you wanted to be the most pro-worker, pro-union President in history and restore decency and build the middle class, I said, ‘Sign me up for that.’ I want to help do that.” (Deputy Sec. Su, Remarks, 3/01/2023)

In 2005, Su Wrote That Corporations ‘Promote And Perpetuate Economic Injustice… The Real Problem, And The Larger Challenge, Is The Growing Ability Of Corporations To Use, Abuse, And Exploit Poor People Anywhere In The World’

SU: “The very definition of a corporation as an entity that is created to permit maximum income and designed to insulate the individuals who will profit from liability for the acts of that entity, seems to promote and perpetuate economic injustice. … But executive salaries are only a small part of the problem.  The real problem, and the larger challenge, is the growing ability of corporations to use, abuse, and exploit poor people anywhere in the world, and do this through subcontracting for labor.” (Julie Su, “The Progressive Crtitique of the Current Socia-legal Landscape Corporations and Economic Justice Corporations and Economic Justice,” Seattle Journal for Social Justice, 11/2005)

Attempting To Justify An Expanded Joint Employer Test, In 2005, Su Compared A Retailer’s Relationship With Its Subcontractor To ‘Separate But Equal’

SU: “We need something more than the joint employer test that currently exists. We need a test that reflects the reality of a global marketplace for cheap labor and, more specifically, that understands how control over labor will not be proven by a multi-factored test about the relationship between one company and its subcontractors. Rather, a new test should be developed that requires an analysis of the industry dynamics and economics as a whole. Just as it is often too narrow to evaluate desegregation cases without the context and history of ‘separate but equal,’ or discrimination cases without attention to systemic racial and gender inequality, an examination of one retailer’s relationship with its subcontractors devoid of an understanding of how the industry as a whole is designed to exert downward pressure on prices and working conditions misses some of the most profound ways in which corporations are responsible for sweatshops.” (Julie Su, “The Progressive Crtitique of the Current Socia-legal Landscape Corporations and Economic Justice Corporations and Economic Justice,” Seattle Journal for Social Justice, 11/2005)

Some Of The Largest, Most Politically Powerful Unions Are Working To Support Su’s Nomination

“Large labor unions including the AFL-CIO and the Service Employees International Union (SEIU) are crafting plans to defend Su, union officials said.” (“Battle Over Biden Labor Nominee Julie Su Heats Up,” Reuters, 4/10/2023)

“The AFL-CIO, the nation’s largest labor federation, is leading a new campaign in support of Su, Director of Public Affairs Ray Zaccaro confirmed to CNN. The campaign, led by AFL-CIO President Liz Shuler, will include a six-figure digital ad buy targeting Arizona and other states, as well as Washington, DC. The federation is also committing resources and mobilizing the 60 affiliate unions nationally as part of the effort.” (“Key Senate Democrats Remain Non-Committal On Biden’s Labor Secretary Pick Ahead Of Confirmation Hearing,” CNN, 4/19/2023)

‘The Country Needs A Labor Secretary Who Is A Credible Arbiter, Not A Union Partisan’

THE WALL STREET JOURNAL EDITORIAL BOARD: “President Biden’s legislative agenda has little chance in the current Congress, but that means he’ll try to govern even more through regulation. It also means his regulatory and Cabinet nominees deserve extra scrutiny, and an example is Julie Su, his choice to run the Department of Labor. Currently the deputy secretary, Ms. Su has a record of putting union interests above those of individual workers or flexible business models that workers like but unions oppose… In the top job she’d be in a position to intervene on behalf of unions in looming labor negotiations that could have a major economic impact. Maritime employers and longshoremen are sparring over a new contract, while UPS and the Teamsters began negotiating a new contract this week. The country needs a Labor secretary who is a credible arbiter, not a union partisan.” (Editorial, “A Big Labor Partisan Named Julie Su,” The Wall Street Journal, 4/18/2023)

Employers, Franchisees, Small Businesses, And Contractors From All Across The American Economy Expressed Concerns Over Su’s Nomination Because Her ‘Track Record As California’s Secretary Of Labor Raises Legitimate Questions About Her Ability To Lead The U.S. Department Of Labor’

32 BUSINESS ORGANIZATIONS: “The 32 undersigned organizations write to express our concerns with Secretary of Labor nominee, Julie Su. Ms. Su’s track record as California’s Secretary of Labor raises legitimate questions about her ability to lead the U.S. Department of Labor (‘DOL’), particularly at a time when our country faces supply chain challenges, inflation, and workforce shortages. Moreover, upcoming labor negotiations at the West Coast Ports and elsewhere could, without adequate leadership, effectively shut down our nation’s economy. We urge the Committee to examine Ms. Su’s record and request that she fully detail her plans to address our nation’s challenges in a manner that advances our collective goals of reducing inflation, ensuring stable supply chains, and supporting economic opportunities for employers and employees alike. Confirming a labor secretary with a track record of putting roadblocks in the way of solving the current workforce shortage would negatively affect every American, every business (particularly small businesses), and the economy.” (32 Business Organizations, Letter to Senators Sanders and Cassidy, 3/30/2023)

• “The groups listed below are further concerned that when Ms. Su led the California Labor and Workforce Development Agency, she spearheaded initiatives that jeopardized millions of independent contractor relationships. The independent contractor business model has created prosperity for millions of workers and entrepreneurs. In her capacity as the state’s chief labor officer, Ms. Su was integral in the formation and implementation of A.B. 5, which codified language that effectively banned such arrangements in California. The law left millions unsure as to whether they could continue to work as self-employed individuals or would have to seek jobs elsewhere. Controversy and chaos ensued, resulting in a patchwork of legislative solutions with over 200 industries and occupations seeking and securing exemptions from the law. Even with the exemptions, the law proved so unpopular that voters of California overwhelmingly rejected it by passing Proposition 22 in 2020.” (32 Business Organizations, Letter to Senators Sanders and Cassidy, 3/30/2023)

• “Su has also supported California’s Fast Food Accountability and Standards Recovery Act (or FAST Act), which gives a board of unelected individuals complete autonomy over the fast food industry, including the power to set wages, establish employment conditions, and create new regulations. This law was opposed by the state’s own Department of Finance, which stated enforcement would increase government costs and could lead to a fragmented regulatory and legal environment for employers and raise long-term costs across industries.’ Fortunately for small businesses and entrepreneurs in the state, implementation was put on hold until the 2024 election after hundreds of thousands of Californians signed petitions disapproving of the law and demanding it be put on the ballot as a referendum.” (32 Business Organizations, Letter to Senators Sanders and Cassidy, 3/30/2023)

• The 32 Business Organization Signatories: Air Conditioning Contractors of America, American Hotel & Lodging Association, American Trucking Associations, Americans for Tax Reform, Associated Builders and Contractors, Association Of Bi-State Motor Carriers, Center for the Defense of Free Enterprise, Coalition of Franchisee Associations, Consumer Technology Association, Franchise Business Services, Heating, Air-conditioning, & Refrigeration Distributors International, Independent Bakers Association, Independent Electrical Contractors, Institute for the American Worker, International Franchise Association, International Warehouse Logistics Association (IWLA), IPSE (Independent Professionals and Self-Employed) Association, Leading Builders of America, National Armored Car Association, National Association of Home Builders, National Association of Wholesaler-Distributors, National Council of Chain Restaurants, National Federation of Independent Business, National Franchisee Association, National Grocers Association, National Ready Mixed Concrete Association, National Restaurant Association, National Retail Federation, Open Competition Center, Small Business & Entrepreneurship Council, Workforce Fairness Institute, Workplace Policy Institute

MIKE LAYMAN, Senior Vice President of the International Franchise Association: “Ms. Su has made no secret of her disdain for the laws enacted by Congress that, as Deputy Secretary of Labor, she is bound to enforce as written. In 2014, Ms. Su stated that regulators ‘can’t fine people into compliance’ but instead should look at ‘entire industry structures’ in a desire to dramatically overhaul workplace protections well beyond what Congress has enacted. Enforcing the law—not creating the law—is precisely the job of the U.S. Secretary of Labor. We are concerned that Ms. Su, as Secretary, would target certain sectors of the economy based, not on the law and the facts on the ground, but on her personal, ideological views of how the American economy should function.” (Mike Layman, Letter to Senators Sanders and Cassidy, 3/15/2023)

JADE WEST, Chief Government Relations Officer for the National Association of Wholesaler-Distributors: “During her tenure in California, Ms. Su oversaw what some have called the most fraud-plagued unemployment program in the country which, according to her own admission, paid out at least $31 billion in fraudulent claims. Furthermore, Ms. Su was one of the architects of California’s Assembly Bill 5 (AB5), a law that attempted to make it nearly impossible for a worker to be classified as an independent contractor by imposing an ‘ABC test.’ AB5 may be one of the most flawed business legislative initiatives in recent memory. The legislation has been so difficult to implement due to its flaws that the California state legislature and the Governor were forced to enact multiple new laws to exempt over 100 occupations, and was so unpopular that 59% of California voters voted via a ballot measure to roll back other provisions in the law.” (Jade West, Letter to Senate HELP Committee, 3/14/2023)

• WEST: “In 2021, while Ms. Su still served the people of California, the Mercatus Center at George Mason University found that California had the highest regulatory burden in the nation and ranked first in the nation for highest occupational licensure burden. Even with high hourly wages and generous benefits, wholesaler-distributors are still struggling to fill many roles. A Department of Labor led by Ms. Su would likely increase unnecessary and burdensome regulations that could significantly raise employer costs.” (Jade West, Letter to Senate HELP Committee, 3/14/2023)

Truckers Are Especially Concerned: ‘Make No Mistake, If Ms. Su Were To Advance The Same Policies That She Championed In California, It Would Force Hundreds Of Thousands Of Truckers To Change Their Business Model And Put Their Livelihood In Jeopardy’

CHRIS SPEAR, President & CEO of the American Trucking Associations: “We are concerned by Ms. Su’s public position on key issues, most notably her leading opposition to the right of drivers to operate as independent contractors—a cornerstone of trucking… California’s AB5, which Ms. Su helped pass and implement as Secretary of the California Labor and Workforce Development Agency, essentially outlaws their business model. AB5 is designed to strip independent drivers of their choice and right to operate as contractors for motor carriers, in essence forcing them to become company employee drivers. It is wreaking havoc on thousands of self-employed, small-business owners by forcing them into legal limbo and placing administrative, compliance, legal and other unsustainable costs on the industry. As a result, families are leaving California to preserve their businesses, incomes, way of life, and choice to earn on their own terms as part of the American dream.” (Chris Spear, Letter to Senators Sanders and Cassidy, 3/15/2023)

TODD SPENCER, President & CEO of the Owner-Operated Independent Drivers Association: “Make no mistake, if Ms. Su were to advance the same policies that she championed in California, it would force hundreds of thousands of truckers to change their business model and put their livelihood in jeopardy. We are especially concerned with her nomination at a time when the Department of Labor is working on an updated worker classification rule. There is the potential for this rule to make some improvements to worker classification at the federal level, but if Ms. Su is confirmed to lead the Department, we fear that we will see a repeat of what’s happened in California.” (Todd Spencer, Letter to Senators Sanders and Cassidy, 3/03/2023)