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NLRB Chief Fights Early Legal Attacks on Joint Employer Proposal

Oct. 4, 2019, 9:39 PM

The National Labor Relations Board continued to push back against early legal challenges to proposed rules about the union rights of contract and franchise workers in a Oct. 4 letter to House Democrats.

NLRB Chairman John Ring (R) told the Democrat leaders of the House Education and Labor Committee that the board’s decision to outsource part of the public comment review process for a new “joint employer” rule does not create a conflict of interest. A pair of outside contractors helped with sorting and categorizing those comments, which is not an inherently governmental function that must be handled by board staff, Ring said.

“No such conflict exists,” Ring wrote in a letter to Reps. Bobby Scott (D-Va.) and Frederica Wilson (D-Fla.). Ring also noted that other agencies have used the same staffing company, Ardelle Associates Inc., to perform “document review work.”

Despite the board’s answers to congressional inquiries, the controversial “joint employer” proposal will likely continue to face political challenges throughout the rulemaking process, and even a court challenge seeking to strike down the eventual final rule.

Democrats and worker advocates have accused the Republican-controlled NLRB of pivoting to the regulatory process in order to avoid ethical rules that stymied an initial effort to change current “joint employer” policy via the agency’s usual policy-making mechanism—rulings in individual cases. The board’s proposed rule would reverse an Obama-era precedent that made it easier to find liability for workplace illegality against both a business and its subcontractors, or a franchisor and its franchisees. It comes as the board is still grappling with a case alleging that McDonald’s is a joint employer of workers at franchisee restaurants.

Ring and other board members have denied the accusations of impropriety. They argue that the current rule unfairly drags contractors that don’t have a role in setting employment terms into workplace disputes and union collective bargaining.

Staffers on the House Education and Labor Committee didn’t immediately respond to a request for comment.

Contracting Conflict Questions

Democratic leaders of the House labor committee most recently objected to the rulemaking by arguing that the board created a conflict of interest by hiring a private contractor to help review public input on the proposed rule. They added that language in the Ardelle contract about “summarizing” public comments suggests that it violates prohibitions against outsourcing “inherently governmental” functions.

“The Board engaged temporary support on a limited, short-term basis to perform the initial sorting of the public comments,” and Ardelle employees “did not create any summaries of the comments,” Ring said in the letter. “That language was included solely to provide the Agency maximum flexibility under the contract,” but “that flexibility was not exercised.”

The NLRB didn’t immediately respond to Bloomberg Law’s questions about the flexibility goal or job postings by Ardelle Associates seeking individuals with legal research experience to support NLRB work. The posting listed “issues and legal arguments made in comments” and “summarizing of the comments” as part of the project duties

Ring in the letter also reiterated the board’s position from an earlier back-and-forth that it will not hand over to Congress lists of the sorting categories for comments on the rules.

“The Board’s withholding of the list of categories provided to and used by the contractor to sort the comments is based on the fact that the categories are attorney work product and constitute an integral part of the Board’s deliberative process in connection with the joint-employer rulemaking,” Ring wrote. “Just as the Board would withhold from disclosure drafts of decisions, the Board is withholding the categories of comments.”

Ardelle was hired via the General Services Administration’s normal bid process, and in consideration of all conflict of interest issues, the Chairman added.

Lawmakers have also suggested that the NLRB violated a requirement under the Federal Acquisition Regulation to create a written determination that Ardelle is not performing inherently governmental work, saying the agency didn’t produce such a document when it asked.

Ring’s latest letter includes a document that appears to be an NLRB contracting officer’s March 8 determination that none of the tasks in the Ardelle contract are inherently governmental.

To contact the reporter on this story: Hassan A. Kanu in Washington at hkanu@bloomberglaw.com

To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com

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