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What about the Executive Order Barring Contingency Fee Lawyers?

By | Briefly Legal, Human Resources, Labor Unions | One Comment

In the post below, “Department of Labor: Working the Phones for Contingency Lawyers,” we report on the recent Department of Labor alliance with the American Bar Association to farm out phone complaints from workers to contingency-fee lawyers who can sue businesses on the employees’ behalf.

This Department of Labor program flies in the face of the spirit, if not the letter, of an Executive Order that specifically bars federal agencies from hiring contingency fee lawyers.

Vice President Joe Biden announced the program at a White House event on Nov. 19, 2010, associated with a meeting of the White House Middle Class Task Force:

[The] Department of Labor (DOL) and the American Bar Association (ABA) are launching a new partnership to help workers resolve complaints received by DOL’s Wage and Hour Division, such as not getting paid the minimum wage or overtime, or being wrongfully denied family medical leave. DOL resolves more than 20,000 of these complaints every year, but because of limited resources, there are thousands more they are unable to pursue. Starting next month, people whose cases cannot be pursued will be provided with a newly created toll-free number that will connect them with an ABA-approved attorney referral service so they can find a qualified lawyer to help with their claims.

In his remarks, the vice president hailed the contingency-fee arrangement as a benefit to hard-pressed workers.

Most of it — and the average person will say, well, what do you mean by affordable? Most of all of this will be contingency — it’s on the back end. So they’re going to be in a position where the folks doesn’t have to — they don’t have to reach into pocket and come out of pocket money — out of pocket with the money to get the case started, which many are not in a position to be able to do.

The Obama Administration has let stand President George W. Bush’s May 16, 2007, Executive Order No. 13433, “Protecting American Taxpayers From Payment of Contingency Fees.” That order specifies:

(b) After the date of this order, no agency shall enter into a contingency fee agreement for legal or expert witness services addressed by section 1 of this order,  unless the Attorney General has determined that the  agency’s entry into the agreement is required by law.

The order was based on sound public policy grounds:

To help ensure the integrity and effective supervision of the legal and expert witness services provided to or on behalf of the United States, it is the policy of the United States that organizations or individuals that provide such services to or on behalf of the United States shall be compensated in amounts that are reasonable, not contingent upon the outcome of litigation or other proceedings, and established according to criteria set in advance of performance of the services, except when otherwise required by law.

The Department of Labor program violates those principles.