HR Management & Compliance

Is the NLRB Sinking in Place?

If it wasn’t for broader, more serious organizational and ethical breaches swirling around a variety of Trump appointees and agencies, the disarray at the National Labor Relations Board (NLRB) might attract some attention. The situation at the NLRB is an all-but-perfect example of a “Washington dilemma,” made up of equal parts of political posturing, self-interest, and a serious ethical quandary. It’s also a situation that has profound ramifications for employers and employees.

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The NLRB was designed by Congress to reflect the policies and positions of the president. In that sense, it represents one of the most straightforward ways in which a new president can see his policies effected. Its direct impact on employment practices has made the Board one of the most politicized agencies in our government. In this highly politicized moment in a highly divided government, the tugs and pulls on the NLRB are at the point of dismembering the institution.

It all started quietly enough. Two new Republican members were appointed to fill vacancies at the NLRB, creating a Republican majority on the Board. As is often the case under a Republican administration, the new members are experienced attorneys who have devoted much of their careers to representing employers and employer associations. In every respect, the new members are “management” counterparts to the “labor” representatives appointed by Democratic presidents, whose careers have been devoted to representing unions and other employee organizations.

One of the new NLRB members is William Emanuel, a partner in a large law firm that represents management. His appointment coincided with the hearing of a new case, Hy-Brand Industrial Contractors, Ltd., in which the Board overturned Browning-Ferris Industries of California, Inc., a highly controversial 2015 decision. In Browning-Ferris, the NLRB held that a business that exerts indirect control over another business’s workers can be considered their “joint employer” in union election cases and unfair labor practice proceedings. That ruling created confusion about the bargaining obligations and business relationships of employers everywhere, especially among franchisers and franchisees, and contractors and subcontractors.

In addition to reinstating the decades-old standard for determining who is considered “in charge” of a workforce, Hy-Brand created jurisdictional turmoil in the courts. The Board’s Browning-Ferris decision had been appealed and argued. Was that appeal still pending, or was the case moot? And while those legal matters were spinning, the ethical shoe dropped. Under pressure from union advocates and some members of Congress, the NLRB’s inspector general (IG) issued a report (itself controversial) in which it found that Emanuel should have recused himself from the Hy-Brand case because his law firm represented one of the affected parties. With Emanuel absent, the Board then ruled to rescind the Hy-Brand decision.

The wisdom and propriety of that rescission has been questioned ever since. The appeals court hearing Browning-Ferris has all but thrown up its hands and told the NLRB to settle the issue before it will deal with the appeal. The NLRB’s General Counsel has challenged the legal sufficiency of the rescission. Hy-Brand recently filed a motion alleging the Board violated its own procedures when it vacated the decision. More important, Hy-Brand challenged the IG’s authority to interpret the Trump administration’s ethics rules and alleged its report was legally insufficient in every respect. Perhaps most significant, the criteria for recusal have been thrown into chaos.

Since the NLRB’s inception, Board members have been selected from jobs in which they represented management or labor. Emmanuel insists that he had no role in his firm’s representation of Hy-Brand and notes that his role in a firm of more than 1,000 lawyers was limited to a tiny percentage of matters. But the simple fact that he was a partner in that “management” law firm was the basis for his recusal. If that’s the case, it’s hard to know if there’s a bright line anywhere. Indeed, the newest Republican Board member, John Ring, has already been challenged by union representatives because he, too, was a partner in a large management law firm that represents employers.

If “issue recusal” is now the standard at the NLRB, it’s just as likely that Democratic members will be banned from participation in certain cases, too. After all, they’ve represented unions, and even worked for unions, before coming to the Board. Indeed, if the “Emanuel standard” is the new ethical criterion for recusal, it may not be possible to have a functioning NLRB.

In these turbulent times, when ethical issues have been politicized and “weaponized,” it’s difficult to see how NLRB members can withdraw to the prior “specific matter” recusal standard. Only the necessity of having an NLRB that can perform its statutory functions may force a resolution.

Burton J. Fishman is an attorney with Fortney & Scott, LLC, in Washington, D.C. You can reach him at bfishman@fortneyscott.com.