REMARKS BY SECRETARY EUGENE SCALIA - NOVEMBER 12, 2020 FEDERALIST SOCIETY 2020 NATIONAL LAWYERS CONVENTION
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REMARKS BY SECRETARY EUGENE SCALIA
2020 NATIONAL LAWYERS CONVENTION
FEDERALIST SOCIETY
NOVEMBER 12, 2020
As Prepared For DeliveryThank you for that introduction, Gene, and it’s an honor to address this
year’s National Lawyers’ Convention.
Every four years these Federalist Society meetings are even more lively than
usual, as we appraise a presidential term that’s ending and a recent election, and
speculate about what lies ahead for the Executive Branch, Congress, and the
courts.
In one big way things are very different this year—the Convention is virtual,
so sadly, you all are going to have to get by this year without attending the greatest
black-tie legal geek-fest on planet earth.
That said, the current presidential term is one of the most memorable, and
most consequential, in decades. More than most years, it gives Federalist Society
members a lot to talk about.
And a lot to celebrate, starting with the courts. President Trump has
appointed more than 50 federal appellate judges and nearly 160 district judges.
And it’s not just the quantity of these appointments that impresses, it’s the quality.
These are men and women with sterling qualifications and exceptional ability. Five
former law clerks for Justice Scalia, for example. Eleven for Justice Thomas.
(Evidently, the Thomas clerks have a harder time making it in the private sector.)
Altogether, more than 30 former Supreme Court clerks appointed to the bench.
President Trump has confounded his critics in a number of ways, and here’s one:
He filled the courts with the most impressive assembly of jurists appointed by any
president in our lifetimes. As much as the great Ronald Reagan transformed the
courts, even he did not consistently appoint judges of the caliber of President
Trump’s.
Credit for this goes partly to the Federalist Society, though not for the
reasons commonly supposed. This organization, meetings like this, and a few great
jurists—foremost among them, perhaps, my father—have for forty years led a
conversation about legal interpretation and the role of the courts that has brought a
convergence around a set of principles that now guide American jurisprudence.
President Trump can appoint great judges in part because of the consensus about
what a great judge is. That consensus, which only started to emerge—or re-
emerge—in the Reagan years, has shaped and will guide President Trump’s
appointees. It was forged in part in meetings like this.
1While I’m on the subject, I suppose I should say a word about one of the
President’s most recent appointments, Justice Amy Coney Barrett. The Scalia
family takes particular pride in the first former Scalia clerk to join the Court. I
believe she will be an exceptional justice, and an exceptional example to the
American people, in multiple ways. She joins two other impressive Supreme Court
appointments of the President. Though the proof will lie in the decisions they issue
over decades, and while we cannot be certain now, Justices Gorsuch, Kavanaugh,
and Barrett may together constitute one of the greatest impacts any president has
had on American law.
And of course, credit goes also to Majority Leader McConnell, who has
made confirming judges a priority throughout the Administration. We have been
fortunate to work with one of the most effective congressional leaders in American
history.
Leader McConnell is an unassuming man, and would be quick to point to the
extent that he’s just built on the work of those who came before him. So Harry
Reid, thank you for eliminating the judicial filibuster.
***
I’ve mentioned Ronald Reagan, in whose Administration I was privileged to
serve. Allow me to compare the Trump Administration to Reagan’s in another way
that’s important to many Federalist Society members: Restraining the
administrative state.
This Administration’s steps to reduce federal regulatory burdens have been
the most important since the cost-benefit analysis requirements of the Reagan
Administration—and they have been more comprehensive. The effort began with
an Executive Order just days after Inauguration which required agencies to remove
two regulations for every new one they added, and required agencies to set
regulatory budgets of no net cost increase. This Order was followed by two Orders
regarding use of guidance documents. One of those Orders required all guidance
documents to be posted online in a searchable database, and to be rescinded if
they’re no longer needed or valid. The Order also required all significant guidance
to go through notice-and-comment. Finally, this past spring the President issued an
Executive Order setting forth a “Regulatory Bill of Rights”—principles for
agencies to follow to help ensure regulated parties are treated fairly and receive
due process.
2At the Labor Department, we’ve sought to do our part to reduce unwarranted
burdens, increase regulatory clarity, and ensure fair process. Since the start of the
Administration, we estimate that our rules account for $15 billion in cost savings.
Over the past nearly four years, we’ve averaged nine deregulatory rules for every
regulatory rule we’ve adopted.
One simple example: A rule we adopted this year that lets retirement plan
providers send statements to plan participants electronically, unless the participant
affirmatively requests a paper copy. We estimate the rule will save $3 billion—and
a whole lot of trees.
We issued another rule this year to codify a clear and reasonable standard for
determining when a joint employment relationship exists; we hope the clarity it
brings will encourage legitimate business models—like franchising—that would
otherwise be deterred by the threat of costly litigation. A federal judge in New
York vacated key parts of the rule, and we have now appealed.
In the same vein, we’re currently working on a rule interpreting
“Independent Contractor” under the Fair Labor Standards Act, to clarify, simplify,
and harmonize principles federal courts have used for decades to determine who’s
an employee and who, instead, is in business for himself. We want to ensure that
employees receive the protections due to them under the FLSA—and we also want
to respect the desire many Americans have to be their own boss.
I view our rule in part as a counter-weight to AB 5, the California law that
radically re-defined independent contractor status in the State, and which has been
so disliked—including by workers—that the state Legislature felt compelled to
riddle it with amendments to allow dozens of exemptions for particular jobs. Last
week California voters delivered their own referendum on AB 5, approving a ballot
initiative backed by app-based transportation and delivery companies that exempts
them from AB 5, while requiring that they provide certain additional benefits.
That vote in California is a strong warning to progressives who believe that
Americans want radical changes in our employment laws.
***
I’d like to talk about something critically important that we’ve learned from
this Administration’s economic program. The economic and regulatory policies of
the Obama and Trump Administrations are a study in contrasts—one of this
3President’s principal aims was to cut the taxes and regulations of his predecessor.
The Administration has done so vigorously, and we have a growing body of
evidence of the relative impacts of Obama and Trump’s policies on American
workers. This includes data from my Department’s Bureau of Labor Statistics, and
from important retrospective reports issued in September by the Census Bureau
and the Federal Reserve. What I’ll relate from these reports should be at the center
of future debates about the benefit—for workers—of limited government.
The mainstream media would have you believe President Obama was a
president who lifted the working man and woman—the little guy. The data show
he failed. For nearly five full years under President Obama, the unemployment rate
was above 7 percent. By contrast, during the pandemic, we brought unemployment
back under 7 percent in half a year. The Obama presidency was a long, slow climb
out of the Great Recession—the weakest post-recession recovery since World War
II. And as that Administration ended, prognosticators expected the middling
economic performance to continue. In August 2016, the Congressional Budget
Office projected 1.9 million new jobs from January 2017 to the start of this year.
CBO projected we’d start this year at around five percent unemployment.
Something totally different happened. Instead of 1.9 million jobs, nearly 7
million were created in that three-year period. Unemployment wasn’t five percent
at the start of the year, it was 3.5, a 50-year low. We hadn’t been below four
percent unemployment since 2000, but in this Administration we logged two full
years at four percent or lower.
Meanwhile, wages grew at three percent or greater for more than a year-and-
a-half. The last time wage growth was above three percent was April 2009.
What changed after August 2016, when the CBO had projected lackluster
growth? The President changed. Policies changed. Talk to businesspeople: tax cuts
fueled investment and pay raises, and de-regulation fostered growth.
Among the principal beneficiaries of this economy were Americans who
historically have faced more challenges in the workplace. The unemployment rate,
and poverty rate, for African-Americans, Asian-Americans, and Hispanic-
Americans hit record lows last year. Wage gains in 2019 were greater for these
three groups than for Non-Hispanic whites. Unemployment for adult women hit a
nearly 70-year low earlier this year; nearly 70 percent of new nonfarm jobs in 2019
went to women.
4What about a top concern of progressives, “income inequality”? In the
Obama Administration—from 2010 to 2016—real net worth declined 2% for
families in the lowest quintile of income earners, while it rose 24% for families in
the top decile. But from 2016 to 2019, the Federal Reserve tells us, those results
flipped: The top decile of wage earners saw a modest decline in real net worth,
while the net worth of those lowest-earning families jumped 32%. A 32% increase
in three years! Women’s wages grew three times the rate of men’s in 2019.
In short, under Obama’s policies, the income gap grew. Under Trump, it
narrowed. For Americas’ workers, lower unemployment, higher wages, and greater
equity were the result of the Administration’s tax and regulatory policies. It’s a
lesson we should never forget.
That historic economy was sideswiped by the pandemic. But we’re already
in the midst of a strong recovery—more than 12 million jobs added since April,
and unemployment nearly 8 points lower than its April peak—lower, already, at
6.9%, than it was for five years under President Obama. This is a far faster rebound
than anyone was predicting in April. We still have work to do, and millions we
need to help return safely to work. But our economic rebound is a testament in part
to the firm economic footing we had as we confronted the virus.
Keep an eye on this, though: Through September, super-regulator states like
California, New York, and Illinois were having a much harder time bringing
unemployment down than the rest of the country. In September—the last month for
which we have state data—the unemployment rate in California was 11 percent; in
New York and Illinois, around 10 percent. The national average that month was
7.9%--and since California, New York, and Illinois are three of our five largest
States, they were weighing down that national average. The majority of States
were at 6.7% unemployment or lower in September. Nationally in September, we
had restored more than 50% of the jobs lost since March. But in California, just
38% of jobs had been restored, and less than 30% of manufacturing jobs.
We don’t yet know all the reasons for these discrepancies, or how lasting
they will be. But we know this: Coronavirus highlighted our federal system of
government, and the impact of state and local decisions. The virus also accelerated
some changes that otherwise might have occurred over a longer period of time.
Perhaps one is that businesses, as they re-open and re-invest, are concentrating
growth in States they find more hospitable.
5One last observation on the employment data from September and October:
Private sector job growth was strong, with about 900,000 jobs added back both
months. But a major drag on job growth was the education sector, where hundreds
of thousands of jobs were lost, accounting for seasonal adjustment. The American
people already know that teachers’ unions in districts across the country acted
against students’ interests, by making school re-opening more difficult than
warranted. In the post-coronavirus reckoning, it will be interesting to examine the
effect of that behavior on employment—employment for those in the education
system, and employment for those who count on their children being at school
during the workday.
***
The benefits for workers during this Administration were not incidental.
They were intended, with workers at the heart of a number of Administration
initiatives.
A prime example is the U.S.-Mexico-Canada Trade Agreement, USCMA.
The President has said that replacing NAFTA was a principal reason he ran for
president in 2016. There was broad consensus that NAFTA needed to be
renegotiated. President Trump got it done, with unprecedented support from
business as well as organized labor, and from the vast majority of both
Republicans and Democrats in Congress.
A key component of USMCA is labor protections that level the playing field
for American workers. The head of the U.N.’s International Labor Organization
has said that USMCA has the strongest labor provisions of any international trade
agreement ever. It promotes trade while protecting American workers from non-
U.S. companies getting an unfair advantage through exploitative working
conditions. Projections are that it will lead to up to 500,000 U.S. jobs or more in
the years ahead.
USMCA is part of an emphasis on U.S. manufacturing jobs that itself has
been a hallmark of the Trump presidency. Of the nearly seven million jobs added
before the pandemic, nearly half a million were in manufacturing. President
Obama didn’t think that could be done; he was resigned to a shrinking
manufacturing capacity. He mocked Trump’s goal of rebuilding manufacturing,
asking, “What magic wand do you have?” The magic of tax cuts and deregulation,
it turned out. Of hard bargaining for better trade deals. The magic of respecting
6blue collar manufacturing work and the vocational education and apprenticeships
that prepare people for those jobs.
One of the pleasures of my job as Labor Secretary has been visiting these
workplaces and meeting with workers and apprentices who are enjoying the
benefits of holding a good-paying manufacturing job in a vibrant economy.
Many of the Administration’s policies that supported workers were favored
by business. But some were opposed.
One area of difference is a rule we issued at the Department to correct some
of our foreign worker programs, including the H-1B program. These programs are
for companies to bring foreign workers to the U.S. to complement, not replace,
U.S. workers. But the program’s protections for American workers have atrophied,
and sometimes companies use these programs not to supplement their U.S.
workforce, but to displace it. To address that, the Department is raising the wages
required to be paid to these foreign workers, so the wages are on par with what
Americans make for the same work. By doing this, we’re reducing the incentive
for employers to hire foreign workers over American counterparts.
Foreign worker programs play an important role in our economy. And
immigration—legal immigration—formed this nation and lies at the core of our
national identity. But Congress did not intend foreign worker programs to serve as
a means to import less expensive foreign labor to displace U.S. workers. And I
found abuses in these programs that need to be fixed.
Now, some pundits like to depict Federalist Society members and their
beliefs as indistinguishable from the preferences of big business. The truth, as
Federalist Society members know, is that adherence to the Framers’ vision, the
Constitution, and the rule of law don’t mean obeisance to the U.S. Chamber of
Commerce. Look no further than the Federalist Society’s name: As a young
associate, I quickly understood that my corporate clients wanted simple, uniform
national rules. They may love our Constitution, but federalism? What a hassle! Or
to take another example, I’m with my father, in the BMW v. Gore case, that the
Fourteenth Amendment’s Due Process Clause is not “a secret repository of
substantive guarantees against [the] ‘unfairness’ . . . of an excessive civil
compensatory award, nor the unfairness of an ‘unreasonable’ punitive damage
award.”
7This past year at the Labor Department, we certainly saw matters where
fidelity to statutory commands, or to constitutional principles, furthered workers’
interests while creating some friction with sectors of the business community.
One involved so-called “ESG” investing—making investment decisions
based in part on environmental and social factors, or corporate governance.
Obviously these factors—at least the E and G—are sometimes material investment
considerations, in the case of a costly Superfund site, or a dysfunctional board of
directors, for instance.
But some activists—and some companies—promote ESG investing as a way
to advance policy goals, like addressing global warming and promoting gun
control. In a totally fortuitous coincidence, ESG factors often track left-of-center
political prescriptions. ESG proponents can spin some pretty elaborate theories
about the benefits that will spring from various investments or divestments, but I
don’t know that I’ve yet seen them propose a particular investment strategy
because, for example, it would strengthen religious faith, preserve two-parent
households, or reduce out-of-wedlock births, all of which correlate with better
educational outcomes and, accordingly, a more productive workforce. Although in
fairness, in an annual letter this year Blackrock CEO Larry Fink did side with the
Catholic Church; specifically, a 2019 pronouncement by the Vatican on—of all
things—carbon pricing. As a Catholic, I’m taking this as a very encouraging sign:
If successful liberal investors are looking to the Pope for pricing strategies, just
think how carefully liberals will listen to the Church on matters within what you
and I consider its core competencies.
Individuals can of course pursue whatever investment strategies they want
with their own money. But the Labor Department has oversight of private pension
plans managed by fiduciaries for the benefit of retirees. We recently finalized a
rule making clear that under ERISA, fiduciaries cannot use pension assets to
pursue policy goals; their decisions must be based exclusively on pecuniary
considerations intended to maximize investment returns.
While our rule received a lot of support, there was pushback from some
financial firms that offer and market ESG-themed investment funds. And some
ESG proponents argued for investing strategies that pursue nebulous supposed
social goods. One said that asset managers should see themselves as “universal
owners” dedicated to furthering broad policy goals rather than focusing on the
performance of individual investments. Another commenter said that “collective
investor action” was needed to “manage social and environmental systems.” And
8several Democratic Senators complained that our rule would “undermine a
powerful tool that leverages trillions of dollars a year to drive positive social
change.” That sort of proved our point: Retiree’s pensions aren’t there to be
“leveraged” to “drive” some people’s vision of “positive social change.”
In the words of another observer, the Director of the Center for Retirement
Research at Boston College, who was on President Clinton’s Council of Economic
Advisers: “Pension fund investing is not the place to solve the ills of the world.”
Rather, by law, our nation’s private pension plans further one incredibly important
social good—a financially secure retirement. And so our rule sides with retirees,
not with the ambitions that some elites may have for use of retirees’ funds.
Another area where the Administration had some disagreement with some
large corporations had to do with discrimination. In September, the President
signed an Executive Order barring federal agencies and contractors from giving
workplace training that the Order calls sex or race “stereotyping” or
“scapegoating.” This is workplace training that attributes particular traits or status
to someone because of his or her race or sex, as well as training programs that
assign blame or bias to someone just because, again, of that person’s race or sex.
The Order was motivated by training at some federal agencies, like one which
taught that “virtually all White people, regardless of how ‘woke’ they are,
contribute to racism.” Or, listen to this, from training at a federal laboratory:
Emphasizing “‘rationality over emotionality,’” it said, “was a characteristic of
‘white male[s].’” Do you know how furious that makes a half-Irish, half-Italian
Cabinet Secretary who’s perfectly capable of blowing his stack for no good
reason?
In conjunction with the President’s Executive Order, the Labor Department
invited employers and workers to voluntarily submit training materials that might
raise questions under the Order. We’ve learned that one health care company tells
workers that its training will “minimiz[e] the potential for harm your whiteness has
on others.” They make it sound like some kind of Kryptonite. An aerospace
company invites its workers to ask, “why is it so hard for white people to talk
about racism?” Maybe it’s hard because people running some training sessions are
demanding that white employees admit they’re racist. Here’s what one
construction company tells its workers: “The pressure to avoid [white privilege] is
great, for in facing it I must give up the myth of meritocracy. If these things are
true, this is not such a free country.” So, you thought you were walking into a class
about equality and non-discrimination; instead, your employer is telling you that
9you’re blinded by your race, there’s no real meritocracy in the U.S., and in fact
we’re not much of a free country.
From my time at the Labor Department, decades as an employment lawyer,
and simply being in the workplace, I know that discrimination persists. Training
about non-discrimination and equal opportunity is important, the Labor
Department encourages it, and in some instances we require it. There’s value, too,
in training that emphasizes the worth of people of diverse races and creeds. But
few things are clearer than that we do not end racism by promoting racial
stereotypes. Nor does racism end by teaching shame and envy based on race.
While principles of equal treatment and non-discrimination may be out of
favor in some sophisticated circles, we got a resounding affirmation in last week’s
elections from the American people. Earlier, I mentioned one strong message to
progressives in the election—California’s rejection of AB 5’s treatment of certain
app-based companies. A second message was delivered by California Proposition
16, which would have repealed the State’s 1996 referendum that requires non-
discrimination in State programs, and therefore bars certain forms of affirmative
action that give preferential treatment to one person over another because of their
races. Fifty-six percent of Californians voted against repeal. Their vote reflects the
abiding power of the elementary principle of non-discrimination.
***
The year since we last met has been tumultuous. But in that turbulence,
some bedrocks have been visible, even fortified. Scores of new judges have been
appointed—including a Justice—who pledge faith to a Constitution whose text and
original meaning define and delimit judges’ role in our democracy. We saw
further, powerful demonstration of the link between liberty and prosperity—an
affirmation, that establishing the conditions for a booming economy is the single
best thing the government can do for American workers. And in a year where our
nation’s Founders and founding ideals have been attacked and disparaged by mobs
and sophisticates, we’ve seen how the American people continue to cherish the
Framers’ vision of this great, exceptional country.
Thank you, and thank you for all the Federalist Society does to further the
Founders’ Constitution.
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