ESOP Companies, Professional Service Providers Strongly Support Keith Sonderling for U.S. Secretary of Labor

WASHINGTON--(BUSINESS WIRE)--Following today's confirmation hearing before the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), The ESOP Association announced its strong support for Keith Sonderling's nomination as U.S. Secretary of Labor and urged the Senate to swiftly confirm him to lead the Department of Labor.

"Through his leadership and his actions, Acting Secretary Keith Sonderling has earned the trust of ESOP companies, plan fiduciaries, and the millions of employee owners whose retirement security depends on a fair and effective Department of Labor," said James Bonham, President and CEO of The ESOP Association. "He has demonstrated a commitment to balanced enforcement, regulatory clarity, and policies that will strengthen retirement security and grow broad-based employee ownership in America. Keith Sonderling is exceptionally qualified to serve as Secretary of Labor, and we urge the Senate to confirm him without delay."

Since becoming Deputy Secretary of Labor, Sonderling has advanced a regulatory and enforcement approach that has been welcomed by ESOP companies, plan fiduciaries, and employee owners. Working with Assistant Secretary Daniel Aronowitz and the Employee Benefits Security Administration (EBSA), he has driven a shift at the Department toward a more balanced and predictable approach to ESOP oversight.

In January, Sonderling announced that EBSA was changing its enforcement priorities, which included removing ESOPs “to ensure an even-handed, responsive approach to investigations to produce the best results for American workers, retirees, and their families.” He said that the new enforcement priorities will make investigations “more efficient, responsive, and prioritize serious misconduct rather than minor foot faults.”

The ESOP Association also supports Sonderling's emphasis on providing clear regulatory guidance, particularly regarding the "adequate consideration" standard for ESOP transactions. For too long, plan fiduciaries have been forced to navigate an inconsistent patchwork of court decisions, settlements, withdrawn regulations, and informal agency interpretations rather than clear federal rules. That uncertainty has increased litigation, discouraged ESOP formation, and limited opportunities for more American workers to become employee owners.

Sonderling has also called for ending "regulation by litigation" and reducing meritless ERISA lawsuits that drive up costs for plan sponsors. This approach, combined with balanced enforcement and clear regulatory guidance, will create a stronger environment for new ESOP formation and the growth of employee ownership.

"Employee ownership strengthens retirement security, increases productivity, and builds real wealth for working Americans," Bonham said. "We look forward to working with Secretary Sonderling and the Department of Labor to remove barriers to ESOP formation while maintaining strong protections for employee owners. Together, we can help more American workers share in the success of the companies they help build."

Click here to read The ESOP Association’s statement of support to the Senate HELP Committee.