Appointee Violated Trump Ethics Pledge, Second Official Says

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By Hassan A. Kanu

A labor board ethics official agrees with the agency inspector general that member William Emanuel (R) violated the Trump administration’s conflict-of-interest rule, according to two memos obtained by Bloomberg Law.

“We agree with the IG’s determination that, under the totality of the circumstances, Member Emanuel violated the Ethics Pledge,” Lori Ketcham, the labor board’s designated agency ethics official, and a deputy wrote in a Feb. 21 memo to the board. The memo had previously not been made public

Ketcham said Emanuel shouldn’t have participated in a lightning rod case that impacted a separate legal dispute in which his former law firm was involved. NLRB Inspector General David Berry reached the same conclusion last month, saying that the board’s decision in the Hy-Brand Industrial Contractors case was so closely tied to the Browning-Ferris Industries case that they were the “same particular matter” for conflict-of-interest purposes.

The cases center on the closely watched labor law question of when one company can be considered a “joint employer” of another company’s workers for unionization purposes. Littler Mendelson, Emanuel’s former firm, represents a staffing company in the Browning-Ferris case.

Browning-Ferris is appealing an Obama-era board decision in which the NLRB made it easier to find joint employer liability and said the company was required to bargain with recycling plant workers provided by a staffing company named Leadpoint. A Republican-majority board used the Hy-Brand case to revert to a more business-friendly joint employer test last year but quickly scrapped that decision after Berry said Emanuel shouldn’t have been involved.

Management-side attorneys and the business community have been pushing to change the Browning-Ferris joint employment test, arguing that it creates confusion as to who has liability between companies and staffing businesses, corporate parents and franchisees, and in other similar business relationships. Unions and worker advocates maintain that businesses in those sorts of relationships often exert significant control over contractors or workers at a franchise location and should therefore share responsibility for violating labor laws.

Ketcham’s conclusion bolsters the inspector general’s findings. The board already withdrew the initial Hy-Brand decision because of the conflict, and the Browning-Ferris case—which is in a federal court—has been paused until the board members decide how to resolve it. That means that the Obama-era decision remains the law of the land, at least for now.

Democrats Want Hearing

Officials in the designated agency ethics official role coordinate with the federal Office of Government Ethics. They’re generally responsible for reviewing actions that may create or appear to be a conflict of interest and advising appointees, agency heads and others on how to deal with the situation.

The board sent Ketcham’s memo, which is heavily redacted, to congressional labor panels. Ketcham reiterated her conclusion in another memo sent March 27 to a high-powered white-collar defense attorney that Emanuel hired to deal with the controversy.

The attorney, Dwight Bostwick, has said Ketcham told Emanuel that he didn’t have a conflict when he came to her for advice before she’d written either of the two memos. Ketcham noted in the letter to Congress that Emanuel didn’t act in bad faith by participating in the Hy-Brand case but said his involvement raised at the least an appearance of a conflict of interest.

Rep. Bobby Scott (D-Va.), ranking member of the House Education and the Workforce Committee, told Bloomberg Law April 26 that Ketcham’s formal and final opinion holds more weight than any statement she may have made to Emanuel because it must have been based on either the same or more information than she had when she communicated directly with Emanuel.

Democrats on a House Education and the Workforce subcommittee repeated their calls for a hearing to resolve the issue during a meeting April 26. The subcommittee’s chairman, Rep. Tim Walberg (R-Mich.), said he’d consider it.

—Josh Eidelson (Bloomberg News) contributed to this report

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