Welcome to Labor of Law. What a week of breaking news and big cases. William Emanuel's conflict pushed the NLRB to return to the Obama-era joint-employment standard. What's next on that front? And: momentum's building on LGBT workplace protections.

I'm Erin Mulvaney in Washington, D.C., covering labor and employment from the Swamp to Silicon Valley. Follow this weekly newsletter for the latest analysis and happenings. If you have a story idea, feedback or just want to say hi, I'm at [email protected] and on Twitter @erinmulvaney.

The Republican NLRB's Move to Overturn Joint Employer Blew Up. Now What?

The National Labor Relations Board has a legal jumble to sort out now that the agency scrapped its decision from December that overturned Browning-Ferris—the 2015 ruling that puts companies on the hook for contractors and franchisees. And just like that, we're back to the Obama-era precedent that management-side lawyers fought against for years.

Blame William Emanuel's conflict for the mess. The former Littler Mendelson shareholder's vote in Hy-Brand should not have happened, according to the agency's inspector general. NLRB Chair Marvin Kaplan, with Democratic members Lauren McFerran and Mark Gaston Pearce, voted together to vacate the Hy-Brand ruling, returning the board to the Obama-era standard.

What does this mean and what's next?

Here's a Seyfarth Shaw blog post on guidance for the business community: “Companies in or contemplating such relationships should account for this new development. While it is widely expected that the Trump NLRB will eventually overrule Browning-Ferris, when that may occur is uncertain.”

Emanuel's conflict doesn't quickly disappear, meaning the board will be split 2-2 on whether to return to a more business-friendly standard on joint-employment. Alexander Batoff of Obermayer Rebmann Maxwell & Hippel looks at a scenario how the board does try to scrap the Obama standard. “The caveat is that there is no telling how long this will take,” he writes.

Ballard Spahr's Steven Suflas tells me what's on his mind right now: “It was somewhat surprising because the inspector general's report raises all kinds of questions in my mind. I worry this could have unintended consequences. I worry the effect will be you can't get qualified practitioners on the board.”

Suflas tells me: “I don't think there is anybody who knows how to advise their clients on the NLRB. No one could trust that anything filed today would get through the process before a political change.”

It's possible the Browning-Ferris case will be revived in the D.C. Circuit—the case was pending there when the NLRB voted in Hy-Brand to overturn Browning-Ferris. The appeals court hadn't issued a ruling—and, at the request of the NLRB, returned the dispute to the board.

Emanuel's conflict and the Hy-Brand vote could also touch other cases at the NLRB.

Reuters reports the union-backed group Fight for $15 has asked NLRB general counsel Peter Robb to suspend the settlement talks with McDonald's Corp. in a major joint-employment case claiming the company is liable for alleged labor violations by its franchisees.

Altshuler Berzon's Michael Rubin on the pro-labor side has this take about what's next after Hy-Brand:

“This decision is a good sign for the future because it shows how much the board members care about the board as an institution. All of the concern about ethical violations and failure to recuse was casting a bad light on the the board as a whole.”

Rubin says the board should wait to have an appropriate case and be fully briefed before taking up joint employer again. But he acknowledges any party-line voting could mean the issue will “not be resolved for quite awhile.”

Meanwhile…

➤➤ Morgan, Lewis & Bockius partner John Ring will face the Senate HELP committee on Thursday morning, where he is expected to get questions about how he will work to avoid any ethical conflicts. We'll have more on the hearing—check back at NLJ.com. If you're watching—ping me your thoughts: [email protected].

Ring is replacing former NLRB chair Philip Miscimarra, who returned to Morgan Lewis. Ring's financial disclosure identified 49 clients, including Google, Inc., Amazon and Marriott International.

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What Companies Should Know After 'Zarda'

The Second Circuit's ruling this week that sexual orientation should be protected under Title VII embraced the EEOC's view, and went against the position of the U.S. Justice Department. The appeals court—overseeing New York, Connecticut and Vermont—aligned with the Seventh Circuit, and it deepened the split with the Eleventh Circuit.

Here's a roundup of some of the takeaways about Zarda v. Altitude Express:

➤➤ Brian Gershengorn and Michael Marra of Fisher Phillips say the decision will “serve as a reminder to employers in these three states to fully respect the rights granted by their powerful state and local laws, especially now that employees have another tool in their toolbox in the form of a potential Title VII claim.”

And more: “You should take heed and prepare for this possible trend to extend workplace protection rights for LGBT workers based on sexual orientation. This includes a review of workplace policies and practices, managerial training materials, employee anti-discrimination and anti-harassment training sessions, interview and hiring protocols, benefits offerings, and any other practice which may otherwise unfairly target workers because of their sexual orientation.”

➤➤ Littler Mendelson's Emily Haigh and Mark Phillis predict companies might see more claims in the NY, Connecticut and Vermont. “Employers outside of these states should remember that the EEOC continues to take the view that Title VII prohibits discrimination based on sexual orientation and should anticipate that the EEOC and/or private litigants are likely to continue to pursue these claims even in jurisdictions where the courts have rejected these claims.”

➤➤ Ballard Spahr's Louis Chodoff, Kelly Kindig and Noah Goodman point to uncertainty in the courts: “Although federal law is still in flux on this issue, employers should remember that many states and municipalities have amended their fair employment practices laws to expressly prohibit employment discrimination on the basis of sexual orientation and gender identity or expression.”

➤➤ My colleague Cogan Schneier caught the reaction of Attorney General Jeff Sessions: “We believe we're on the right principle there. And I guess maybe the judges woke up that morning, read the New York Times or something, and decided their previous ruling was wrong.”

➤➤ Reuters columnist Alison Frankel spotlights the Justice Department's participation in Zarda—and how the Second Circuit “demolishes” the government's argument. Frankel writes: “The 2nd Circuit majority in Zarda said the government is pushing the wrong comparison: The correct test doesn't compare gay men to lesbians but rather considers disparate treatment between lesbian employees and heterosexual male employees; or gay men to heterosexual women.”

Who Got The Work

Google 'Bro Culture' Led to Violence, Harassment: Lawsuit
The San Francisco labor and employment firm Hoyer & Hicks is suing Google Inc. on behalf of a former female engineer named Loretta Lee. “Google's bro-culture contributed to (Lee's) suffering frequent sexual harassment and gender discrimination, for which Google failed to take corrective action,” according to the complaint in Santa Clara Circuit Court. [Mercury News]

XPO Unit Faces Suit in California Over Allegedly Misclassifying Drivers
Bush Gottlieb partner Julie Gutman Dickinson, a lawyer for the drivers, said XPO Logistics “continues to misclassify workers and flout California labor laws, leading to the class-action lawsuit that we filed today.” XPO said it would defend its independent contractor business model. [Wall Street Journal]

➤➤ Docket watch: The U.S. Supreme Court on Monday granted two new labor and employment case. My colleague Tony Mauro reports:

New Prime Inc. v. Oliveira: A broad interpretation of the Federal Arbitration Act that exempts “seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce” is the issue in this case brought by a Massachusetts trucking company. Gibson, Dunn & Crutcher partner Theodore Boutrous Jr. represents the company. Jennifer Bennett of Public Justice represents Dominic Oliveira.

Mount Lemmon Fire District v. Guido: The court will referee a dispute among circuit courts over the scope of the Age Discrimination in Employment Act. At issue is whether the law covers all state political subdivisions of the states or applies only to those subdivision with more than 20 employees, as is the case with private companies. E. Joshua Rosenkranz of Orrick, Herrington and Sutcliffe represents the Mt. Lemmon, Arizona fire district. Don Awerkamp of Arizona's Awerkamp & Bonilla represents John Guido.

Around the Water Cooler

After a Second Google Suit, Time to Re-Examine Policies for Internal Forums
“The more you offer forums like this the more [employees] are tempted to speak their minds about anything and not realize until it's too late that it may have some consequences,” says Robin Shea, a partner at Constangy, Brooks, Smith & Prophete. “I'm really not in favor of message boards at all, but if they are going to exist there ought to be some pretty clear cut rules about what types of communication are off limits.” [The Recorder]

Navigating #MeToo: Advice for Corporate Board Members and Executives
“If your organization has not yet experienced a #MeToo type claim, now is not the time to be complacent or self-congratulatory,” write Jones Day partners Alison Marshall in Washington and Deborah Sudbury in Atlanta. [Corporate Counsel]

Non-Disparagement Agreements: Worth It?
“Non-disparagement agreements are a tempting remedy. Clients want them. They are paying to put a matter behind them. But these agreements may be perceived as an effort to unfairly muzzle employees, so they must be written with care, and in the proper context.” writes Philip Berkowitz, a Littler Mendelson shareholder and co-chair of the firm's U.S. international employment law and financial services practices. [New York Law Journal]

Where Will the Law of Unintended Consequences Take Us?
The new tax law limits deductibility of harassment settlements, but there could be unwanted results, according to Sullivan & Cromwell partner Julia Jordan and associate Christina Anderson. “The provision may ultimately result in fewer settlements, or lower settlement amounts, for plaintiffs. It also may incentivize employee creativity in asserting claims—for example, by not asserting harassment but instead asserting other claims that could continue to be settled confidentially without adverse tax consequences. It thus may actually result in fewer sex harassment claims being brought.” [New York Law Journal]

S.F. Boutique in Spotlight as Silicon Valley's Workplace Problems Persist
Despite the #MeToo movement and some high-profile cases against tech companies, David Lowe, managing partner of San Francisco-based employment law firm Rudy, Exelrod, Zieff & Lowe, says the issues the firm regularly faces have persisted throughout the years. “We still have a long way to go,” he says.
[The Recorder]

Behind a Key Anti-Labor Case, a Web of Conservative Donors
This investigative piece from the NYT's Noam Scheiber and Kenneth Vogel looks at the influence game supporting the challengers in the union-fee case that was argued Monday at the Supreme Court. [New York Times]

How the Supreme Court Could Reshape Employment Law
“While Janus will affect one set of unions, Epic Systems may harm millions of Americans who work for wages, whether they belong to unions or not,” Garrett Epps of the University of Baltimore School of Law argues. [Atlantic]

Thanks for reading! That's all for this week. Feedback and story ideas always welcome: [email protected]