NLRB Tosses ExxonMobil Decision Where Trump Member Had Stock (1)

The federal labor board threw out a two-year-old decision in which William Emanuel, a former Republican member, allegedly had a financial conflict of interest unknown to federal watchdogs at the time.

The National Labor Relations Board on Friday vacated the decision in in ExxonMobil Research & Engineering Co., citing Emanuel’s stock holdings in Exxon Mobil Corp. at the same time he decided the case. Although the matter had been reviewed by the NLRB inspector general and the US Department of Justice, the “product of his unlawful participation” had been left in place, the board’s Democratic majority wrote.

“Vacatur eliminates any possibility that a decision tainted by bias based on a financial conflict of interest will have legal effect,” the majority wrote. “It adds a further, appropriate disincentive to violate the statute. Most important, it demonstrates to the public that the agency is determined to protect the integrity of its decision-making process.”

While on the board, Emanuel held more than $50,000 in sector-based mutual funds that traded ExxonMobil stock—enough to put him in conflict with an ethics agreement he signed upon joining the board in 2017. He didn’t disclose the investment as required despite repeated warnings from ethics officers, according to emails and other documents.

The inspector general later concluded that Emanuel broke the law by failing to monitor his investments. Federal prosecutors declined to press charges.

It’s doubtful that Emanuel successfully drove up the price of his ExxonMobil stock, which may have influenced the Justice Department’s decision not to prosecute, experts said. A Bloomberg Law investigation earlier this year found that the price of ExxonMobil rose about 2% on Sept. 28, 2020—the day of the decision—but the gains to Emanuel’s energy-sector mutual fund were wiped out the following day.

Republican Member John Ring dissented in Friday’s decision, saying there’s no evidence that Emanuel was aware of the conflict or was influenced by his investments.

“Because Member Emanuel’s error was harmless, the Board’s 2020 decision in this case should not be vacated,” Ring wrote.

The NLRB is reviewing four other cases where Emanuel may have had conflicts. The former member has denied wrongdoing, saying in a 2021 statement he was never influenced by money and never had “any knowing conflict of interest.”

NLRB Chair Lauren McFerran and Member Gwynne A. Wilcox joined Friday’s decision.

The case is Exxon Mobil Research & Engineering Co., N.L.R.B., Case 22–CA–218903, 8/19/22.