Labor Board Member Cleared on Ethics Question

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By Chris Opfer and Robert Iafolla

Embattled National Labor Relations Board Member William Emanuel (R) has been cleared to participate in drafting a closely watched new “joint employer” regulation over concerns about his former law firm’s ties to the issue, the board’s chairman told Bloomberg Law Nov. 9.

The agency’s ethics officer concluded that Emanuel doesn’t have to sit out the board’s move to issue a new regulation on franchiser and staffing company liability, Chairman John Ring (R) said. The NLRB’s Inspector General determined last year that Emanuel should have recused himself from a case challenging the board’s approach to joint employment because his former law firm, Littler Mendelson, represents a staffing company in a separate but related case.

“The recusal standard for rulemaking is very different than for cases,” Ring told Bloomberg Law. Though members are required to sit out cases involving their former clients and law firms for two years after joining the board—and perhaps some cases raising the appearance of a conflict—they generally don’t have to recuse themselves from drafting regulations that apply broadly across the country, he said.

The clearance of Emanuel marks a step forward in the board’s efforts to resolve ethics questions that have dogged it since shortly after President Donald Trump was inaugurated. Those questions stem largely from Emanuel’s—and to a lesser extent Ring’s—work at huge management-side labor law firms before joining the board.

The NLRB in September issued a proposed rule to tackle one of the most controversial labor policy questions in recent years: When is one business a “joint employer” of another’s workers and therefore required to collectively bargain with those workers and responsible for any unfair labor practices against them. That issue has been at the center of legal disputes involving McDonald’s and Microsoft.

Critics, including some high-profile Democrats in Congress, have accused the board of using the rulemaking process to evade ethics questions. Shortly after Republicans took control, the board overturned the Obama administration’s broad approach to joint employment, but later had to scrap the decision because of Emanuel conflict concerns.

Waiting for Decision on McDonald’s Case

Ring said NLRB ethics officer Lori Ketcham is still reviewing whether he and Emanuel should sit out the McDonald’s case that alleges the fast food giant is responsible for labor violations by franchisee restaurant owners.

Littler and Morgan Lewis, where Ring worked before joining the board, advised McDonald’s and its franchisees about how to respond to Fight for $15 advocacy campaigns. Fight for $15 is representing a group for franchisee workers who say they were punished for participating in those campaigns.

“When a case like that comes in, it will be screened by the ethics officer and she will provide board members a written decision,” Ring said. He said “blackletter” recusal cases involving former clients and law firms likely will be resolved based on Ketcham’s recommendation, but added that cases involving the appearance of a conflict are a “harder call.”

“She’ll say ‘here are the factors’ and the member will decide” whether to sit out a particular case, Ring said. He added that federal courts have the power to consider challenges to those recusal decisions.

An NLRB administrative law judge in July threw out a proposed settlement between the agency and McDonald’s in the unfair labor practice case. The company has asked the board to overturn that decision.

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