The Trump administration's National Labor Relations Board is mired in a dispute over whether board member and former Littler Mendelson shareholder William Emanuel had a conflict of interest when he voted last year to undo an Obama-era rule that broadly defined “joint employment” relationships among businesses.

Emanuel's vote securing the reversal of the board's “joint employment” liability standard was a big win for companies, and it immediately drew criticism from labor advocates who said he should not have participated in the case. Littler Mendelson in a similar case represented different clients.

The arguments over ethics, unfolding at the agency and in a federal appeals court case in Washington, could signal a flash point at the board, as union leaders scrutinize the activity of the former management-side attorneys who will form a Republican majority. Any recusals could cause deadlocks, slowing—or outright stopping—new efforts to undo the legacy of the Obama-era board.

The criticism of Emanuel could soon follow John Ring, the Morgan, Lewis & Bockius management-side partner nominated in January for a vacancy on the panel. Ring's nomination is pending in the U.S. Senate but no confirmation hearing has been set. Ring, like Emanuel, has represented major U.S. companies in labor disputes, and his firm has one of the largest labor-employment teams in the country.

“Part of the problem is that the board's rules are not that elaborate,” said Wilma Liebman, a former Obama-era Democratic chairwoman of the NLRB, about when it is appropriate for an NLRB member to recuse. Liebman said Emanuel's vote to undo the joint-employment standard “looked bad” in part because the board's vote, a major reversal, came so suddenly after he and another Republican, Marvin Kaplan, arrived at the agency. “The whole thing looked like a rush to judgment,” Liebman said.

During his confirmation process, Emanuel identified dozens of cases and clients in which he would recuse himself. “I am committed to performing my official duties in an impartial manner, and have and will continue to adhere to the ethical standards set forth for political appointees, federal officials, attorneys, and adjudicators,” Emanuel told the Senate in November.

ProPublica reported Thursday that Emanuel was facing an inspector general investigation into whether he violated ethics rules in his vote in December to erase the Obama-era joint-employment rule. The publication cited two congressional officials as knowing about the inquiry.

A representative for the NLRB declined to comment Thursday.

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Pending joint-employment cases

Two cases are at the heart of the ethics dispute: Hy-Brand Industrial Contractors and Browning-Ferris Industries. The NLRB last year, in a flurry of decisions, used the Hy-Brand case to reverse the Obama-era joint-employment standard that was set out in Browning-Ferris.

In the Hy-Brand matter, Emanuel, Kaplan and then-member Philip Miscimarra cast the three votes needed to overturn the Obama-era Browning-Ferris decision. Emanuel had not earlier represented any clients in the Hy-Brand case, but his firm was involved in Browning-Ferris.

The Obama board in Browning-Ferris expanded the definition of who is considered an employer in joint-employment relationships, putting companies on the hook for franchises.

At the time the board voted in Hy-Brand, the Browning-Ferris decision was under review at the U.S. Court of Appeals for the D.C. Circuit. The D.C. Circuit, at the request of the NLRB, asked the court to send Browning-Ferris back to the agency for further consideration.

The International Brotherhood of Teamsters Local 350, represented by former NLRB board member and current general counsel to the AFL-CIO, pushed back and asked the court to reconsider that decision. Becker argued Emanuel “was barred from participating in such a decision by the governing rules of ethics.”

In the Hy-Brand case, the workers, represented by James Faul of Hartnett Gladney Hetterman, contend Emanuel should not have participated in the vote in December.

“Littler is counsel to one of the two respondent employers before the board in Browning-Ferris. Member Emanuel is thus unquestionably barred from participating in Browning-Ferris,” Faul argued in requesting the board to reconsider its decision.

Lawyers for the NLRB haven't taken a position on the request the board reconsider the Hy-Brand decision. But Michael Avakian of Wimberly, Lawson & Avakian, a lawyer for the company, has defended Emanuel's involvement.

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Spotlight on former NLRB members

Avakian pointed to a similar controversy concerning the votes of then-NLRB member Becker, who served on the board from 2010 to 2012. Anti-union groups criticized Becker, who worked for the national SEIU and AFL-CIO before joining the board, for weighing in on cases that involved local chapters of the union groups.

Avakian told The National Law Journal that Emanuel should not be responsible for every matter Littler Mendelson has undertaken. He said Becker made a similar argument in cases before the board involving local chapters of the SEIU and the AFL-CIO. Becker declined to comment.

“We have distinct parties here,” Avakian said of the Hy-Brand and Browning-Ferris cases. “The unions are hoping to create a deadlock. It seems like this will happen with every case he'll be confronted with and deny all sorts of parties the chance to have their cases heard by him. It's just going way too far.”

In one case in 2010, Becker, declining to recuse, said: “The law requires analysis from 'the perspective of a reasonable person with knowledge of relevant facts.' Such a reasonable person appearing before the board will distinguish between the roles I played as an advocate and a scholar in the past and the position I hold now as a member of the NLRB.”

Avakian said Becker's determination to recuse himself was based on his work for a particular client, such as the SEIU, not “the imposition of a blanket recusal whenever a national union he indirectly represented was involved.”

Becker did recuse in at least a couple dozen cases during his time on the board, including Dana Corp., where the AFL-CIO had filed a joint brief as amicus. In another case, Mezonas Bakery, he recused because one of this former colleagues at the union represented a party. In both cases, Becker's recusal resulted in a 2-2 split.

Wilma Liebman

Liebman recalled one effort where she was asked to recuse and refused. It was a case involving a union where she worked in the 1980s. She said her participation was not unethical: She had not worked for the union in a long period of time and she did not handle cases.

“I think it's an open issue,” Liebman said. “I don't know if there is anything that will give you the answer to whether Emanuel has to recuse himself or whether there was an actual conflict.”

Guidelines at the NLRB essentially say a board member should not participate in a case where the member participated while in the private sector, said Marshall Babson, a Seyfarth Shaw counsel in New York and former NLRB member. He said Emanuel acted within his authority to vote in the Hy-Brand case.

“Virtually every labor lawyer in the country or union lawyer has a joint employer issue,” Babson said. “Nothing would ever be decided. Recusal is something that should arise when you have personally represented a party or your prior law firm is representing. The notion that you can't participate because you've represented a client in the past that has had a joint employer issue is not substantial.”

Frank Rox Jr., a former NLRB trial attorney who's now at Atlanta's Lehr Middlebrooks Vreeland & Thompson, called the labor board a “political creature” whose composition matches the party in power. “Obama stacked the board with Democrats. Trump stacked the board with Republicans. It's self-policing and it's a nebulous area,” he said. “If there is no public pressure, he won't step aside.”

Emanuel “wasn't put on the board to recuse himself right and left,” Rox said. “Littler Mendelson is on a lot of hot topics. Because of the political nature of the board, if you recuse yourself for every reason you should, you wouldn't ever see anything new.”

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