Punching In: Janus and the Emanuel NLRB Saga

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By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Janus Day | What the Emanuel Saga Means for Joint Employer Cases | Giggity

Ben Penn: The labor and employment world converges on the Supreme Court this morning when oral arguments begin at 10 a.m. in Janus v. AFSCME. This is a big one, folks. There’s no shortage of material to get you caught up, whether you’re interested in a preview of the nitty-gritty legal arguments, a look at how unions plan to survive a likely loss, or my rundown of why the business community is invested in the outcome.

Stay up-to-date throughout the day with Bloomberg Law’s Hassan Kanu. He’ll be at the courthouse to witness the National Right to Work Foundation—with support from Donald Trump’s solicitor general—square off against AFSCME and the state of Illinois. He’ll be listening particularly for what presumed deciding voter Justice Neil Gorsuch has to say about the question of whether public sector unions can force nonmembers covered by a collective bargaining agreement to pay “fair share” fees.

Not to undermine the significance of today’s proceeding, but to many observers on both sides of the aisle, the arguments themselves are a mere formality. It seems a forgone conclusion that unions are going to lose this case and along with it their long reliable revenue stream from nonmembers.

Organized labor groups held a national day of action Saturday in an effort to rally their supporters and draw attention to the threat posed by the Janus case. They’re back out in full force today.

Gabe Morgan, a vice president of SEIU 32BJ, told me union workers won’t be calling attention to the First Amendment debate on display at the high court; instead, they’ll be showcasing the value unions bring to communities. While this isn’t a get-out-the-vote rally, the fact that the Trump Justice Department is siding with NRTW helps unions connect Janus to their push to vote Republicans out office in November. Morgan didn’t say if today’s actions are directly designed to mobilize voters ahead of the midterms. But he did note that “it’s all connected.”

“Union steel workers in Indiana did not conceptualize that Donald Trump would strip their collective bargaining rights and take things that they’ve fought hard to get over a generation,” Morgan said. “I think that that backlash will come now.”

Still, it costs money for unions to have the same influence on elections that they’ve had in the past. Janus may offer them a persuasive rhetorical attack against Trump and the GOP in this election cycle. But the decision in this case is almost certainly going to make it tougher for that to message to reach as wide of an audience in 2020 and beyond.

Chris Opfer: NLRB nominee John Ring’s Senate confirmation hearing is currently scheduled for Thursday. Ring’s original dance with the Senate HELP Committee was delayed after ranking Democrat Patty Murray asked for more time to review a recent Inspector General report finding that board member Bill Emanuel improperly participated in a case involving the joint employer issue.

There’s no word yet of any additional delays. It’s safe to bet that Ring will get plenty of questions about how he might navigate any potential conflicts stemming from his work as a management lawyer representing businesses in labor matters. If all goes according to plan, the committee will vote on whether to approve Ring’s nomination next Wednesday. Meanwhile, there has been some talk that Democrats may push to package a vote on Ring’s nomination with a renomination for Mark Gaston Pearce. The former board chairman during the Obama administration is said to be interested in another go-around in his Democrat seat when his term ends in August.

Just how the Emanuel saga shakes out remains to be seen. To quote my favorite philosopher, “there’s a lot of ins, a lot of outs, a lot of what have yous.” The labor board, General Counsel Peter Robb, and lawmakers on the committees with jurisdiction over the NLRB appear to be waiting to hear from the board’s ethics officer before deciding what happens next. The big question: Will the fallout affect how the board considers joint employer liability? More on that in a minute.

BP: As we transition to March this week, some were hoping to lay their eyes on the Bureau of Labor Statistics’ revived contingent worker survey. March, or more generally, “spring,” were bandied about as possible publication dates for this highly anticipated measurement of the gig economy.

Labor Secretary Alex Acosta now says, “We’ll have those results maybe in May.” This is a critical survey, so if BLS needs more time to give the public the most comprehensive understanding of the growth in alternative work arrangements since Uber, Airbnb, and TaskRabbitt started transforming the workforce, then by all means, take those extra weeks. Accuracy becomes more essential when considering that these numbers are going to be used as a conversation starter on Capitol Hill.

The secretary, addressing a crowd at the U.S. Chamber of Commerce last week, made it clear that he’s excited to get a look at the data, which he’s confident will reveal a sizeable increase in the gig, or as he prefers to call it, entrepreneurial economy.

“I think over the next year to two years, we’re at the point where we’re going to see the BLS study come out, we’re going to see increased numbers in this entrepreneurial economy, and we owe it to those individuals to start looking at our laws and saying, ‘This is the future, how do we embrace it?” Acosta said.

For policymakers to actually update laws to protect more workers who lack traditional employment perks, Acosta will to need to make this pitch to a coalition that wasn’t present that day at the Chamber: Democrats. Bipartisanship may even be possible on this issue, especially if the BLS shows a substantial increase in the number of constituents working in the tech-driven sharing economy.

I recently caught up with the highest ranking Democrat on the House Education and the Workforce Committee, Rep. Bobby Scott. If the House majority flips this autumn, as some predict, Scott could be the panel’s chairman at this time next year. He’d then be in a key position to build bipartisan support behind the type of legislation Acosta might have in mind, such as bills to provide workers’ comp, unemployment insurance, retirement savings, and other benefits not normally afforded to independent contractors.

Scott said passing legislation to make these workplace protections available for gig workers is a priority. However, thus far he told me hasn’t had a single conversation with a Republican about it.

Acosta should be pleased to hear that Scott did say that the BLS contingent worker survey will facilitate progress. When the numbers come out, the ranking member from Virginia says he’ll assess the report, and then prepare to roll up his sleeves with the GOP at the table.

To the pessimists out there, Congress’ inability to pass legislation on this topic (or in general) in recent years gives you reason to think that maybe DOL should have a regulatory plan B in the pipeline.

CO: Here’s what we don’t know about the Emanuel situation: What, if any, impact it will have on the Browning-Ferris and Hy-Brand cases, not to mention others that include the question of whether affiliated businesses are joint employers for labor liability purposes. The Obama board in Browning-Ferris changed the test to make it easier to tag companies as joint employers. In Hy-Brand, a new, Republican majority board scrapped that test. Emanuel was one of the board members who decided Hy-Brand. An appeals court in D.C. then sent the Browning-Ferris case back to the NLRB without ruling on it, after being asked to do so by the NLRB.

But Inspector General David Berry said Emanuel should not have participated in Hy-Brand because his former law firm—Littler Mendelson—represented one of the businesses involved in the Browning-Ferris case. Browning-Ferris is once again pending before the board (after remand from the appeals court) where it is likely to stay for the near future, given that Emanuel is barred from participating in the case. If Emanuel couldn’t participate in Hy-Brand because a decision changing the joint employment standard would necessarily impact Browning-Ferris, then logic would seem to dictate that Emanuel can’t participate in any case that might change the joint employment standard. Assuming Ring is eventually confirmed, that would leave the board in a 2-2 split and powerless to change the current Browning-Ferris standard.

If that’s not confusing enough, it gets even trickier. Berry said he was particularly put off by some specifics of how Hy-Brand was decided. Former NLRB Chairman Phil Miscimarra “marshaled” the case through the deliberative process in a way that intertwined it with Browning-Ferris, according to Berry. He pointed to an email from Miscimarra to Emanuel and member Marvin Kaplan in which Miscimarra urged them to adopt his draft opinion in Hy-Brand with minimal or no tinkering and highlighted that the purpose of the decision was to undo Browning-Ferris. Berry said that the board majority – Miscimarra was joined by Emanuel and Kaplan, who were not on the board when Browning-Ferris was decided – appeared to simply adopt Miscimarra’s dissenting opinion in Browning-Ferris without much consideration of the facts and arguments in Hy-Brand, the case that was actually before them.

Berry’s findings seem to support the narrative from some worker advocates that Miscimarra & Co. grabbed whatever case they could find to undo a variety of Obama-era decisions in the small window after Republicans gained control of the board and before Miscimarra’s term ended last year. But it also appears to open the door for Emanuel to participate in new joint employer cases and help reset the board’s standard, if it’s done in a more thorough, deliberative way. That’s a particularly likely route, given that conservative and management types have come to Emanuel’s defense. They’ve noted that Berry didn’t join the chorus when Republicans unsuccessfully called for former member Craig Becker to recuse himself from cases concerning a legal issue he argued for the AFL-CIO as a union attorney before joining the board.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us: copfer@bloomberglaw.com and bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

See you back here next Monday.

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