Hy-Brand: Labor Board Members Crossed Line in Joint Employer Case

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By Chris Opfer and Ben Penn

Lawyers for Hy-Brand Industrial Contractors will ask the National Labor Relations Board as early as March 9 to reconsider a recent decision on joint employer liability, sources briefed on the situation told Bloomberg Law.

They intend to argue that NLRB Chairman Marvin Kaplan (R) and members Mark Gaston Pearce (D) and Lauren McFerran (D) wrongly shut member William Emanuel (R) out from the decision-making process before the three members moved to scrap the board’s previous ruling in an unfair labor practice case against the company, according to sources.

The lawyers will also allege Pearce told attorneys at an American Bar Association event in Puerto Rico a day before the decision was made public that a development was coming. They say Pearce made those comments before Emanuel learned of the ruling.

The Hy-Brand lawyers intend to argue that Kaplan, Pearce, and McFerran violated the Government in the Sunshine Act, which generally requires agencies to make certain meetings and deliberative processes open to the public.

Hy-Brand’s imminent motion to re-examine the decision marks the latest chapter in a tumultuous period at the NLRB, stemming in part from ethics concerns related to Emanuel’s ties to his former law firm, Littler Mendelson. Those concerns have also left uncertain how the board intends to approach the hot-button joint employer liability issue.

Michael Avakian, the lead attorney for Hy-Brand, declined to comment for this story. An NLRB spokesperson didn’t immediately respond to Bloomberg Law’s request for comment.

All Eyes on Two Cases

Kaplan, Pearce, and McFerran last month voted 3-0 to overturn a previous decision in the Hy-Brand case, following an NLRB inspector general report finding that Emanuel shouldn’t have participated in the earlier decision. Inspector General David Berry said the earlier decision was rushed through in the waning days of former Chairman Philip Miscimarra’s (R) term in a way that tied it too closely to the separate Browning-Ferris case, which Emanuel agreed to sit out because of his law firm’s participation in the litigation.

The Obama-era NLRB in Browning-Ferris shifted to an “indirect control” test that makes it easier to tag multiple companies as joint employers of the same workers for collective bargaining requirements and unfair labor practice charges. That move, which drew sharp criticism from GOP lawmakers and the business community, was widely expected to be overturned once Republicans regained control of the board late last year.

In Hy-Brand, the Republican majority-board—Miscimarra, Kaplan, and Emanuel—originally overturned Browning-Ferris and reverted to a “direct control” test for joint employment. By later vacating the Hy-Brand decision, however, the board left Browning-Ferris as controlling law, at least for the time being.

The five-member NLRB is currently locked in a 2-2 partisan split. Management attorney John Ring would give Republicans control of the board if the Senate confirms his nomination for an NLRB seat.

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