Daily Labor Report®

Boeing Case Tested by Labor Board Conflicts Questions

March 14, 2018, 1:40 PM

The National Labor Relations Board already has hit the reset button on one high-profile case in response to conflict-of-interest concerns for member William Emanuel (R). The board is also being asked to scrap another decision with far-reaching impact that was issued the same day.

Emanuel shouldn’t have participated in a December decision involving Boeing because his former law firm represents the aerospace company in other legal matters, a local painters union told the NLRB earlier this year. The board has yet to weigh in on the union’s request to rescind a decision in favor of Boeing, approving the company’s “no photo” rule in work areas.

“There is at least the appearance of a conflict when the case involves a company that is a client that your firm is making money off of,” David Rosenfeld, a lawyer for the International Union of Painters and Allied Trades, told Bloomberg Law. “These are two very important cases and I can’t believe that somebody from those clients didn’t consult him.”

The board in December loosened controversial restrictions on facially neutral workplace policies, ruling that Boeing was permitted under federal labor law to ban workers from using devices to take photos at certain job sites. That ruling—overturning the NLRB’s 2004 decision in Lutheran Heritage Village-Livonia—was hailed by the business community as a commonsense approach that lets employers craft reasonable workplace rules without impinging on workers’ rights to collective activity.

The NLRB on the same day also moved to limit the situations in which one business can be considered a joint employer of another business’s workers, a decision that was similarly cheered by franchise and other industry advocates. But the board later withdrew that ruling after NLRB Inspector General David Berry said Emanuel should have sat out the case because it was too closely tied to another case in which his former law firm, Littler Mendelson, was involved.

Emanuel’s supporters have slammed Berry for expanding recusal requirements related to former clients to include general legal issues that may impact those clients. “All of this is predicated on an internal investigation that comes with a lot of questions,” former NLRB member John Raudabaugh (R) told Bloomberg Law.

An NLRB spokeswoman and Littler spokeswoman Jen Klein declined to comment. Representatives for Boeing didn’t immediately respond to Bloomberg Law’s request for comment.

Rosenfeld unsuccessfully asked the board to force Littler to make its entire client list public, in a filing on behalf of a group called the Committee to Protect the Religious Right to Organize. He’s also asking the NLRB to allow the painters union to intervene in the Boeing case. The union says the decision directly impacted a separate dispute they’re involved in with Caesars Entertainment Corp. over confidentiality requirements and a “no camera” rule for workers at a Las Vegas casino.

Reconsidering Work Rules

Emanuel pledged before joining the board to recuse himself for two years from any cases involving Littler Mendelson or his “own former clients.” He also gave Senate lawmakers a list of clients that he personally represented, as well as those that Littler represented in NLRB-related cases in the two years before Emanuel was appointed.

An executive order requires political appointees to recuse themselves from certain matters involving former clients. It doesn’t cover matters involving a former employer’s clients for whom the appointee didn’t personally provide services.

But Rosenfeld said Littler’s work for Boeing creates at least the appearance of a conflict and raises questions about whether Emanuel did any work for the company before joining the board, especially given the inspector general report. He also said the firm represented Caesars Entertainment Corp., which is involved in a case raising many of the issues decided by the board in the Boeing litigation.

A Democrat-majority NLRB in 2015 ordered Caesars to drop policies banning workers at the Rio Las Vegas Hotel & Casino from disclosing salary and organizational information and prohibiting them from taking photos on the property without permission. The board used a framework created in the Lutheran Heritage decision, finding that a workplace rule that appears neutral violates federal labor law if it could be “reasonably construed” by a worker to infringe on his or her rights to engage in “concerted activity.”

A new, Republican-controlled board junked Lutheran Heritage when it sided with Boeing on the company’s “no camera” policy last year. The board said it would instead focus on how much a workplace rule may impact employees’ rights and whether an employer has a legitimate justification for the rule.

NLRB member Mark Gaston Pearce in a dissenting opinion called the Boeing decision a “how-to manual for employers intent on stifling protected concerted activity before it begins.”

“Overly protective of employer interests and under protective of employee rights, the majority’s standard gives employers the green light to maintain rules that chill employees in the exercise of rights guaranteed by the National Labor Relations Act,” Pearce said.

Clients or Issues?

The painters union listed 21 cases in which Littler has represented Boeing in the last four years, along with seven cases in which the firm has worked for Caesars. That includes defending both companies in sexual harassment and discrimination cases and representing them in litigation involving an employee benefits plan. None of the cases appear to include the NLRB.

Littler has also represented Uber in an NLRB case in which a driver challenged the ride-share company’s confidentiality requirements, as first reported by ProPublica. That could reignite some “issue preclusion” calls from Democrats on Capitol Hill. Sen. Elizabeth Warren (D-Mass.) and other lawmakers have already said Emanuel should recuse himself from any case involving the joint employer issue because it would impact Littler clients in other cases involving the same legal question.

That kind of broad-based exclusion from cases—whether it’s on the joint employment issue or workplace rules—would be new territory for the labor board. “I don’t know any labor lawyer in the country that hasn’t been involved in some of these issues,” Roger King, labor counsel for the management-focused HR Policy Association, told Bloomberg Law

But that doesn’t mean questions about board members’ potential conflicts are going away any time soon. John Ring, an attorney for Morgan Lewis who has been nominated to fill the all-important fifth seat on the NLRB, recently disclosed that his firm represents Boeing in three labor disputes.

“That’s the playbook coming from the Democrats,” King said. “They’re doing everything they can to delay decisions in these cases.”

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com

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