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Rulli sponsors bill to stop the sharing of alleged confidential materials

U.S. Rep. Michael Rulli, a Salem Republican whose district includes all of Mahoning County, is sponsoring legislation seeking to stop the U.S. Department of Labor from sharing alleged confidential materials with law firms regarding pension benefits.

Rulli said his bill would “protect those who sponsor and maintain private retirement plans for the benefit of American workers.”

Rulli introduced the Balance the Scales Act that would require the department’s Employee Benefit Security Administration to submit an annual report to Congress on adverse interest agreements.

Republicans on the House Education and Workforce Committee, of which Rulli is a member, have been vocal since November on the EBSA using what is called common interest agreements with law firms that file class-action lawsuits.

It was disclosed in November that the law firm of Cohen Milstein Sellers and Toll which is suing Envision Management Holding Inc., a company targeted by a DOL audit, received information from the department.

Numerous workplace retirement plans have been the target of private-sector fiduciary breach litigation, costing companies millions of dollars in legal fees and settlements, according to BloombergLaw.com.

In addition to Cohen Milstein, Rulli said there are at least eight “other secret agreements that are currently in effect,” but the DOL refuses to disclose them.

“Secret agreements for the Department of Labor to share confidential information with class-action law firms undermine the public’s confidence in the Employee Benefits Security Administration as a regulator,” Rulli said.

He added: “The Department of Labor must never again share confidential information with private litigators behind closed doors. The Balance the Scales Act ensures transparency, safeguards due process, and reaffirms the principle that justice must be transparent, impartial and accountable.”

Rulli said federal rules of civil procedure dictate how plaintiffs’ attorneys access information. But during the four years of the presidency of Democrat Joe Biden, it “appears the DOL worked in concert with class-action law firms to circumvent those protections,” according to Rulli.

When an impasse was reached in the class-action lawsuit against Envision over whether it should be required to hand over an audit letter from the DOL, Cohen Milstein provided the document it had received from the federal agency, according to BloombergLaw.com.

The law firm has said that common interest agreements between the DOL and private-sector litigants “are common, legal and have been entered into by different administrations for decades.”

Rulli’s bill was referred to the Education and Workforce Committee.

In January, U.S. Rep. Tim Walberg, a Michigan Republican who is chairman of the Education and Workforce Committee, asked the DOL’s inspector general to investigate the EBSA for “serious abuses of authority following reports that it shared confidential information with a plaintiff’s attorney for use against employee benefits plan fiduciaries.”

In his letter, Walberg wrote: “As we saw in the first (Donald) Trump administration, career bureaucrats have sought to undermine the goals of the president and his cabinet secretaries. We know of cases where bureaucrats have leaked sensitive information or are working with plaintiffs’ attorneys to skew court cases against employers.”

Shortly after Lori Chavez-DeRemer was confirmed as secretary of labor, Walberg wrote another letter outlining a number of “ongoing oversight matters neglected by the” Biden administration, including this issue.

He added: “This is a blatant abuse of the law and our committee will hold ESBA accountable.”

In November, U.S. Rep. Virginia Foxx, a North Carolina Republican who then chaired the Education and Workforce Committee, requested the same investigation.

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