Law Firm Wants New NLRB Member Out of Class Action Cases

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By Hassan A. Kanu and Lawrence E. Dubé

New labor board member William Emanuel (R) should stay out of all pending cases related to the legality of class action waivers for workers because of his long history of litigating the issue as a management-side lawyer, a New York law firm argued in a recent motion to the board.

Emanuel has “extensively and aggressively” opposed NLRB rulings that class action waivers violate workers’ rights under federal labor law, according to Outten & Golden LLP attorneys. He should therefore be “recused from all pending cases raising” the issue, they said.

The legality of class action waivers is a question that is critically important to businesses, including many of Emanuel’s former clients. The U.S. Supreme Court earlier this week took up a challenge to a board ruling that the waivers infringe on workers’ right to collective activity.

Typical recusal motions are based on a board member or even a federal judge’s financial or other ties to a party , rather than a position on particular legal question. The firm’s basic argument is that Emanuel has prejudged the issue, and his previous statements and advocacy on behalf of clients is proof he can’t be impartial on the matter.

“This is a rare circumstance where you have a series of cases involving a discrete, ‘yes or no’ binary issue where the manner in which one case is resolved necessarily decides the outcome of the others,” Michael Rubin, an employee-side partner at Altshuler Berzon LLP, told Bloomberg BNA Oct. 3. “At least two or three cases establish a principle here in terms of judicial recusal. If you have to be recused from deciding case Y, you can’t choose instead to rule in case X, where the outcome of X necessarily decides Y.”

“Reasonable minds can differ as to the import of the ethics rules here,” Peter Finch, a former NLRB staff attorney and partner at Davis Wright Tremaine LLP, told Bloomberg BNA Oct. 3.

“No one’s said issue recusal is a real thing, so the only way to get an answer is to put it before the board or the courts—the board would probably be shirking their duties if they don’t get an answer to this,” he said.

The White House referred Bloomberg BNA to the NLRB, which didn’t immediately respond to Bloomberg BNA’s request for comment. Officials at the Office of Government Ethics also didn’t immediately respond to Bloomberg BNA’s request for comment.

Potentially Far-Reaching Impact

Outten & Golden attorneys are representing employees in an unfair labor practice case against Raymours Furniture Co., a New York retailer. They argued that it would create the appearance of impropriety if Emanuel votes or participates in any board case involving the hotly contested issue of class and collective action waivers.

Sen. Elizabeth Warren (D-Mass.) made a similar argument during Emanuel’s Senate confirmation hearing.

The waivers are vital for employers, who have adopted arbitration procedures to sidestep costly class actions. Worker advocates say forcing employees to arbitrate grievances against employers one at a time makes it harder and more expensive to pursue claims against large corporations.

Emanuel in his representation of employers and organizations at Littler Mendelson P.C. had argued the board’s position on the legal issue—that the waivers are impermissible—is erroneous.

The new member, who was sworn in Sept. 26, has said he will not participate in NLRB cases in which he or Littler Mendelson served as counsel. But Outten & Golden’s motion claims Emanuel “cannot adequately fulfill his duty as an impartial decision maker” in any case involving the divisive legal issue.

Answers Remain Unclear

The recusal request seems “unreasonably broad,” Finch said.

“I don’t see a good basis to say there’s such a thing as ‘issue preclusion’ in the ethics rules of the firm’s arguments,” he said. “We have board members who get to where they are because they have long and extensive experience participating in cases under the NLRA, and there’s a difference between advocating for a client and having a personal viewpoint.”

But Rubin said the focus on “issue preclusion” misses the mark.

“The major thrust was that if Emanuel participates in any discussion” of the waiver cases, “that will have a direct and immediate impact on the result of the pending Supreme Court cases, and future cases, including those where he was counsel or his firm is counsel,” Rubin said.

“If he were to do anything that influences the Supreme Court decision so that his former clients or his firm’s clients win their cases, that’s indistinguishable from him ruling in those cases himself, although he would be clearly recused in those,” Rubin said.

In any case, the firm isn’t making a trivial argument.

“This is not a specious motion,” Finch said. The firm has solid grounds for its argument because the ethics rules are also aimed at preventing the “appearance” of impartiality, he said, and the public’s perception of the agency’s credibility could be damaged if Emanuel rules in those cases.

To contact the reporters on this story: Hassan A. Kanu in Washington at hkanu@bna.com; Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Chris Opfer at copfer@bna.com

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