NLRB Republican Pressured About Alleged Conflict of Interest

Challenge by the Teamsters called ‘hypocritical’ by some, given union attorney’s record on the board

Allen Smith, J.D. By Allen Smith, J.D. January 25, 2018
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National Labor Relations Board (NLRB) members who were once corporate lawyers shouldn't participate in cases involving former clients, and Republican member William Emanuel recently violated this ethics rule in a landmark decision redefining "joint employer," the Teamsters claimed in a Jan. 4 motion to the U.S. Circuit Court of Appeals for the District of Columbia.

This assertion also could be made at some point against John Ring, a Republican nominee to the board, according to labor relations attorneys. Ring's Jan. 12 nomination to serve on the board is pending before the Senate. Like Emanuel, Ring has worked for a corporate law firm—Littler in Emanuel's case; Morgan Lewis in Ring's.

The GOP briefly controlled the five-member board at the end of last year under former Chairman Philip Miscimarra's leadership, with fellow newly appointed Republican NLRB members Emanuel and now-Chairman Marvin Kaplan. These three issued a Dec. 14, 2017, decision changing the definition of "joint employer"—an opinion with a dissent from Democrat board members Mark Gaston Pearce and Lauren McFerran. Miscimarra's term ended Dec. 16, 2017. Emanuel should not have been allowed to cast a deciding vote in this case because he should have excused himself due to a conflict of interest arising from his firm's representation of one of the parties involved in the litigation, the Teamsters asserted.

The decision, Hy-Brand Industrial Contractors Ltd., overruled the board's 2015 Browning-Ferris Industries opinion, which had defined "joint employer" in a way that made it easier for companies to be held liable for National Labor Relations Act (NLRA) violations committed by contractors or franchisees. In Hy-Brand, the board threw out Browning-Ferris' holding that indirect control by one organization of another is enough to be considered a joint employer. The NLRB instead required that there be direct control by one entity of another for the two to be treated as one.

D.C. Circuit's Action Questioned

Following Hy-Brand, the D.C. Circuit sent the Browning-Ferris case, which had been appealed to it, back to the NLRB on Dec. 22, 2017, for consideration under the new Hy-Brand test.

[SHRM members-only HR Q&A: What is the function of the NLRA?]

In its motion to the appeals court, the Teamsters said the D.C. Circuit should not have sent Browning-Ferris back to the NLRB in light of Emanuel's alleged conflict of interest and should withdraw this action.

Executive Order 13770 prohibits executive branch employees for two years from the date of appointment from participating in any matter involving parties that are substantially related to the worker's former employer.

In addition, the executive branch's Standards of Ethical Conduct for Employees require government employees to avoid any activity creating the appearance that they are violating the law or ethical standards. An employee should not participate in any matter when a reasonable person would question his or her impartiality. A sensible person would conclude that Emanuel's objectivity was compromised in Hy-Brand, the Teamsters stated, even though his old firm did not represent anyone in that case—just in Browning-Ferris.

Linda Dreeben, the NLRB's deputy associate general counsel, disagreed with the Teamsters in a Jan. 16 response. The union should bring its objections to the board and not the appeals court, she wrote, so that the board has an opportunity to respond. She added that the union's objection was already before the board in a motion for reconsideration of Hy-Brand filed Jan. 11.

Teamsters' Objection Called 'Hypocritical'

The Teamsters' motion, co-written by former Democrat NLRB member Craig Becker, is "hypocritical," said Peter List, CEO of Kulture, a national labor-employment consultancy based in the Charleston, S.C., area. When Becker was on the board, he routinely ruled on matters involving the Service Employees International Union (SEIU), where he had formerly been general counsel.

David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis, said Becker's refusal to excuse himself from cases involving the SEIU set a precedent for Emanuel being involved in the Hy-Brand case.

Argument May Resurface

The argument that NLRB members should excuse themselves from decision-making in cases involving companies they once represented is likely to resurface, however.

"The recusal argument absolutely may resurface with John Ring," Pryzbylski said.

Could Republican NLRB members face an instance where two of them have to excuse themselves from participating in a case, giving the two Democrats on the board a majority in that decision?

"I view this circumstance as unlikely," he said. "Most conflicts requiring recusal stem from prior representation of a party. Ring and Emanuel practiced at different law firms, so there likely was not much, if any, overlap between their clients."

 

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