Punching In: Judge Not

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By Chris Opfer and Ben Penn

Monday morning musings for workplace watchers

Watching Worker Centers | Ketcham if You Can | NLRB Classification Clash

Ben Penn: The recent confirmation of a hard-charging, pro-business, Puzder-aligned deputy labor secretary has some management types pining for a shakeup at the top.

On Friday, I wrote how Pat Pizzella’s arrival to the Labor Department’s No. 2 slot is ushering in potentially unrealistic hopes for rapid policy change. But the management bar’s desires actually go further than initially reported.

A trio of management-side attorneys tell Bloomberg’s Josh Eidelson and me that members of their community are hankering for the White House to reassign Labor Secretary Alex Acosta to the federal judiciary, allowing the less-cautious Pizzella to take the Labor Department throne, at least temporarily.

To be clear, there is no evidence that this gossip has ever left these lawyers’ table at the Capital Grille and made its way over to the West Wing. But I bounced this notion off of Acosta’s camp just in case.

“The Department does not comment on ridiculous speculation to which there is no truth,” a DOL spokesman replied.

Now, the agency’s press shop would have good reason to squash this talk even if it had merit. But maybe there is some ridicule behind the idea of the White House sending Acosta from the Frances Perkins Building over to the bench.

We hit the one-year mark Saturday on Acosta’s tenure as labor secretary. He hasn’t accomplished as much regulatory dismantling as some would like, but consider what else the measured Acosta hasn’t done.

There haven’t been any private jets, rentals at lobbyists homes, office dinette set purchases, public remarks to undermine the president, or pick-your-favorite-Jeff Sessions-distraction. Secretary Acosta hasn’t even taken a nip of vodka or cheered for DC hero Alex Ovechkin at a Caps game, let alone been connected to Bob Mueller’s Russia probe.

Even when Acosta did encounter a snafu—the tip pooling data deletion that would have barely registered on the EPA controversy Richter scale—the secretary responded by hammering out a legislative deal with Democrats to muffle the outrage.

There are surely some people in Trump World who don’t see eye-to-eye with Acosta and wish he’d move in a more aggressive, business-friendly fashion. But why would this administration risk losing a Cabinet member who is governing in the least Trumpian of manners: out of the national spotlight?

If you think I’m ascribing more logical thought to this White House than it deserves, you might be onto something. But then again, Trump seemingly endorsed this entire line of reasoning when introducing his labor secretary at an event in Florida earlier this month.

“Not all of my choices were good, but they were great ones,” Trump told the crowd in reference to Acosta and Steve Mnuchin.

None of this disqualifies Acosta’s interest and candidacy for a judgeship. He’s only 49 years old. Point being, I’m just not convinced Pizzella’s arrival is relevant to that discussion.

Chris Opfer: Bloomberg Law’s Hassan Kanu last week got his hands on an interesting pair of memos from Lori Ketcham, the National Labor Relations Board’s designated agency ethics official. Ketcham has sided with NLRB Inspector General Dave Berry in finding that Member Bill Emanuel (R) violated an ethics pledge by participating in one big joint employer case closely tied to another big joint employer case in which Emanuel’s former firm—Littler Mendelson—represents a client.

Ketcham’s take is likely to further muddy the situation. It leaves unclear how the board will sort out the Browning-Ferris Industries and Hy-Brand IndustrialContractors cases and what vehicle the Republican members might use to eventually undo the broad joint employment standard set by the Obama board in BFI. But the memos also offer some insight into how Ketcham views the limits of the White House executive order on conflicts of interest and a related ethics pledge.

Folks on both sides of the debate generally seem to agree that the pledge requires NLRB members and other presidential appointees to sit out for two years cases involving a former client that the appointee personally represented or the appointee’s former firm. Some, in the fallout from the Emanuel affair, say that it also bars appointees from participating in any cases involving a former firm’s client, even if the appointee never did work for the client and the firm is not involved in the case before the appointee. That’s the thinking behind a pending request for the board to scrap a closely watched decision in a case involving Boeing in which the board overturned precedent on workplaces rules and employee handbooks.

Ketcham appears to have a narrower interpretation of the recusal requirements for board members. She said the executive order banned Emanuel’s “participation in a ‘particular matter involving specific parties’ in which his former employer or his own former clients are a party or the representative of a party.” In other words, Ketcham seems to be saying that Emanuel can participate in cases involving Littler clients if the firm is not working on the case and Emanuel didn’t perform legal work for the client while he was at Littler. That would clear the way for Emanuel to participate in the Boeing case: Although Littler has represented the company, it’s not working on that particualr case and Emanuel didn’t do any work for the aerospace giant before joining the board.

On the other hand, no one expressly asked Ketcham to address the Boeing question. Ketcham said in one of the memos that Office of Government Ethics officials told her the executive order “leaves room for interpretation by an individual agency.”

“Thus, the policies that underlie the provision may come into play when the totality of the circumstances demonstrate participation in a matter involving a representation by a former employer, even if this representation is not readily apparent,” Ketcham said.

Stay tuned.

BP: A House subcommittee hearing last week on the need to modernize labor law turned into a forum for Republicans to advocate for new priorities at the DOL Office of Labor-Management Standards.

We heard the longstanding calls from the panel’s leadership, including Reps. Virginia Foxx (R-N.C.) and Tim Walberg (R-Mich), to bolster OLMS enforcement and scrutinize whether worker centers are behaving as unions.

The message was delivered with particular flair from an emerging new face in this space, freshman Congressman Francis Rooney (R-Fla.).

“So how are they not a union? They walk and quack, but they’re not a duck,?” Rooney said in reference to the boycotting and picketing of one successful worker center, the Coalition of Immokolee Workers.

I’ll be reporting this morning that Secretary Acosta isn’t willing to issue any broad legal interpretation that targets the amorphous category of worker centers. But the department does appear close to naming a new OLMS director, which is considered a crucial first step for the administration to take any action on this issue.

The DOL has conducted previous audits of worker centers and always found they did not meet the definition of “labor organization.” This meant groups like ROC United and OUR Walmart could continue operating without filing the same onerous financial reports as traditional unions.

A new OLMS director would be in a position to consider altering this approach on a case-by-case basis.

We’ve been telling you how longtime GOP labor lawyer Arthur Rosenfeld isin—and then maybe out—of the running for the job. Apologies for causing your head to spin, but Rosenfeld, a former NLRB general counsel, is now back in the mix.

A source familiar with the matter told me that as of very recently, Rosenfeld was still in contention for OLMS director or for a spot on the DOL Administrative Review Board—the latter being Rosenfeld’s personal preference.

Regardless of who’s the pick and when exactly we get an answer, there’s a story to be told here on how a non-Senate-confirmed but inherently controversial role has taken this long to get filled.

CO: As a federal appeals court mulls a controversial Seattle law that would allow Uber and Lyft drivers to unionize, the NLRB has the opportunity to decide whether an employer violates federal labor law by wrongly classifying a worker as an independent contractor rather than an employee. Workers treated as employees have the right to organize, but independent contractors are generally believed not to be covered by federal collective bargaining and other labor protections.

The question before the board: Did a medical courier service commit an unfair labor practice by wrongly classifying drivers as independent contractors? Which is to say: is misclassification itself a violation of labor law? Former NLRB General Counsel Richard Griffin told me during a Bloomberg Law panel earlier this year that it makes sense to make misclassification an unfair labor practice.

“That’s because what you’re doing is you’re robbing them of the status of an employee entitled to exercise Section 7 rights,” Griffin said. Section 7 of the National Labor Relations Act gives workers the right to organize and engage in related concerted activity.

The outcome could have big implications for businesses and workers in a wide range of industries, not just the gig employers that get a lot of attention when it comes to classification questions. Lawrence Dube and Hassan Kanu will have the story this week.

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.comand bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer and @BenjaminPenn.

Bloomberg Law’s labor news team is hitting the conference circuit this week. I’m headed out to the desert with Genevieve Douglas for Littler’s Executive Employer conference. I can feel the dry air parching me already, if anyone out that way wants to pony up for a cold one at the nearest watering hole. News Director Karen Ertel—also commonly referred to as “our boss"—is speaking on a panel at Dixon Hughes Goodman’s annual government contracting conference on Thursday. If you’re planning to attend, please also plan on putting in a good word for us. Porter Wells is covering the Institute for Workplace Equality’s annual shindig, where she’ll be waiting to hear what DOL senior adviser Craig Leen has to say about reported plans to soften federal contractor audits.

See you back here next Monday.

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