ESOPs like what they're hearing in Trump 2.0

Politico

16-06-2025

QUICK FIX
TAKING STOCK: Proponents of expanding a corporate set-up that allows workers to accrue ownership stakes in companies are bullish on the Trump administration clearing regulatory hurdles they believe have hindered their growth for years.
Labor Secretary Lori Chavez-DeRemer gave a speech in Washington last month praising the 'transformative power' of Employee Stock Ownership Plans and vowed to ensure that the department would do more to foster 'rather than discourage them.'
'I understand how poor regulation and misguided agency agendas can directly impact business success, so it's my mission to support you, not regulate you into oblivion,' she said.
ESOP advocates have long distrusted DOL's Employee Benefits Security Administration, which regulates these programs as well as other retirement offerings. They contend that in their zeal to protect workers from being ripped off and saddled with overpriced shares, the agency makes it overly cumbersome to set up an ESOP and makes investment advisers fearful of litigation.
'Fiduciaries are taking so many prophylactic steps that they're literally withering ESOPs on the vine,' said James Bonham, president of the ESOP Association, the group that held the event where Chavez-DeRemer spoke. '[There are] millions American workers who will never have the opportunity to have an ESOP benefit because of EBSA.'
President Donald Trump's EBSA nominee, Daniel Aronowitz, vowed during his confirmation hearing earlier this month to 'end the war on ESOPs' and said that DOL for years has been 'nitpicking the professional judgement' of experts tasked with fairly valuing companies — an integral step of the process.
The industry wants the Trump administration to end an enforcement project at EBSA involving ESOPs that has been in place since 2005.
'There's nothing special about it anymore, other than it allows them to go after ESOPs,' Bonham said.
They are also hopeful that the administration will propose an overhauled 'adequate consideration rule' after taking issue with the version proposed at the tail end of President Joe Biden's tenure as required by the SECURE 2.0 Act.
Industry members are also calling on EBSA to stop using 'common-interest agreements,' in which the agency shares certain information with outside attorneys. Congressional Republicans have blasted the agreements as a way to circumvent discovery rules and allow private plaintiffs access to information they couldn't otherwise access.
The Biden administration took steps to mend fences with ESOP advocates and foster worker-owned businesses, including by establishing an Employee Ownership Initiative within EBSA.
'I totally understand the concerns from the community that EBSA has historically been overly aggressive and discouraged people from pursuing ESOPs,' said Lisa Gomez, who led the office under Biden.
'We were making strides toward improving the relationship,' that's now being overlooked, she added.
Gomez also warned that swinging too far in the other direction risks harming the reputation of ESOPs and making companies that offer them less desirable, if workers start to associate them with false promises.
'Some workers have heard bad stories, and are afraid of going to those companies,' she said.
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AROUND THE AGENCIES
MONEY BACK: The Department of Labor said Friday that it has completed recovering billions of unspent Covid-era funding to states.
DOL pulled back $1.4 billion in March and was pursuing the remaining approximately $3 billion, which had been allocated for emergency unemployment insurance programs set up early in the pandemic response.
'The pandemic is long behind us – it's the federal government's responsibility to return unusable COVID-era funding to the American people and ensure these dollars are being utilized effectively,' Chavez-DeRemer said in a statement.
More agency news: 'Employee groups challenge 'favorite EO' question as agencies begin rollout,' from the Government Executive.
Efficiency alert: 'The Elon Musk DOGE legacy that just won't die,' from Axios.
LEGAL BATTLES
A PYRRHIC VICTORY? A federal judge on Friday ordered the reinstatement of three Democratic members of the Consumer Product Safety Commission ousted by Trump.
Judge Matthew Maddox, a Biden appointee in the district of Maryland, ruled that the White House's attempt to remove the commissioners in May was illegal, as they were only allowed to be fired 'for neglect of duty or malfeasance in office,' — which the Trump administration never alleged. Instead, Trump has claimed nearly unlimited power to hire and fire executive branch officials as he deems fit and that for-cause protections violate the Constitution's separation-of-powers.
But the win for Alexander Hoehn-Saric, Mary T. Boyle and Richard Trumka Jr. may be short-lived.
The Supreme Court has already overruled similar reinstatements from Democrats fired from the National Labor Relations Board and the Merit System Protections Board ordered by lower-court judges.
And the high court signaled a desire to revisit a nearly century-old precedent that has underpinned the authority of so-called independent executive agencies like the NLRB, MSPB — and CPSC.
A CPSC case-study: 'They're Chic, They're Quiet, and They Might Be Filled With Mold,' from The New York Times.
On The Hill
PRESSING ON: Dozens of House Democrats on Friday urged the Equal Employment Opportunity Commission to rescind the Trump administration's move to sharply deprioritize claims of workplace discrimination based on an individual's gender identity.
'Discrimination against transgender and nonbinary people is a serious and ongoing issue,' the lawmakers wrote to Acting Chair Andrea Lucas. 'Yet, under your leadership, the EEOC has abdicated this responsibility under the law when it comes to transgender and nonbinary workers.'
Lucas has embraced the Trump administration's policy that recognizes male and female as the sole, immutable genders and has instructed agency staff to backburner gender-identity cases while prioritizing ones involving corporate diversity efforts.
An EEOC spokesperson confirmed receiving the letter but did not provide additional comment.
Related: 'Ditched by Trump's EEOC, job applicant advances bias lawsuit against Sheetz,' from HR Dive.
More Hill news: 'Bill Cassidy Blew It,' from The Atlantic.
Unions
FOR THE RECORD: Add former Labor Secretary Marty Walsh to the list of Biden administration officials who say they thought it was inadvisable for him to run for a second term.
'If the president had asked me, I would have suggested to him that he doesn't have to run again,' Walsh said on Teamsters' General President Sean O'Brien's podcast released last week. (The media project is not affiliated with the union.)
Walsh added later on in the conversation that he sees merit in having more generational turnover in the Democratic Party, without directly mentioning Biden.
'I'm not saying throw out the old people, but if you've been there for 30 years, it's time to step aside and let somebody come in,' he said.
Still, Walsh defended the former president against accusations that his mental acuity was slipping and chastised those who he described as attempting to launder their own reputations by dishing anonymously about Biden.
'It infuriates me when I see that,' he said.
Walsh, now the head of the NHL Players Association, said he had personally seen how both Biden and Vice President Kamala Harris were better when they were in unscripted environments. He added that he thinks it was a strategic mistake during the presidential race to not allow them to go off-the-cuff more frequently.
Speaking of 46: Biden is scheduled to give a talk about leadership and the future of work in San Diego on July 2 at the Society for Human Resource Management's annual conference. Media outlets this spring reported that Biden was finding a cool market for lucrative speaking engagements in his post-presidency.
IMMIGRATION
A GROWING CONCERN: The Trump administration is reportedly paring back immigration enforcement in the farming and hospitality sectors following concerns from agricultural interests about cutting into their labor supply.
The New York Times, Associated Press and Wall Street Journal each reported that Immigration and Customs Enforcement issued revised guidance to agency staff to place a 'hold on all work site enforcement investigations/operations on agriculture (including aquaculture and meat packing plants), restaurants and operating hotels.'
That shift does not extend to individuals caught up in criminal investigations. But is a notable relaxation in the Trump administration's all-out push to beef up immigration arrests, detentions and deportations.
The change-of-tune has also been rather sudden. White House border czar Tom Homan was championing worksite raids to Semafor on Wednesday, and the Washington Post reported Friday that things had not immediately changed after Trump's social media posts on the topic Thursday — citing administration officials and Homan as well.
Republicans are left in a bind of their own making, conceding that some immigrants are, to refashion the 2008 phrase, too important to deport — at least for the time being.
WHAT WE'RE READING
— 'These Robots Do Windows,' from The New York Times.
— 'Judge approves $69M class action settlement in UnitedHealth 401(k) litigation,' from the Minneapolis Star-Tribune.
— 'Millions of Working People Could Lose Medicaid Under Proposed Work Requirements,' from the Robert Wood Johnson Foundation.
THAT'S YOUR SHIFT!