Daily Labor Report®

Punching In: Spotlight on Conflicts, Job Services, Big Business

Jan. 6, 2020, 11:01 AM

Monday morning musings for workplace watchers

NLRB Ethics Food Fight | The Chamber Chief Speaks | Is That What You Call Privatizing?

Chris Opfer: The Trump administration’s top ethics officer, and his predecessor, have some questions for the National Labor Relations Board about updates to the board’s process for reviewing potential conflicts of interest among members.

Emory Rounds, the director of the Office of Government Ethics, told NLRB Chairman John Ring (R) in a Dec. 19 letter that he’s “very concerned” that certain portions of a recent 70-page NLRB “ethics recusal” report may be misconstrued. In particular, he asked Ring to make clear that OGE will not be refereeing any disagreements between board members and the agency’s designated ethics officer over whether a member should sit out a particular case because of conflicts of interest.

“I understand that your staff have informally acknowledged that these provisions are not intended to be construed as stating that there is a right to review or appeal recusal disagreements to OGE; therefore, all that remains is to clarify the text of the report itself,” Rounds said in the letter. He pointed to five different sections of the report that appear to indicate that OGE will investigate and weigh in on recusal disputes.

The letter highlights lingering uncertainty about the “unusual circumstances” in which a member and the NLRB ethics officer aren’t on the same page about whether the member should sit out a case involving a former employer or client, or which poses some other potential conflict. The report indicates that the ethics officers’ decision is “binding” but “not self-enforcing,” meaning a member has the right to still participate in the case and tell the ethics officer to go pound sand.

That’s not exactly sitting well with former OGE chief Walter Shaub, who in a recent tweet storm accused Ring of weakening the agency’s ethics checks. Ring promptly responded to the former Obama administration official’s jabs.

Meanwhile, management lawyer and business lobbyist Roger King says NLRB Member Bill Emanuel (R) deserves an apology. Emanuel has been followed by a cloud of controversy since NLRB Inspector General Dave Berry and Designated Agency Ethics Officer Lori Ketcham said he should have recused himself from the high profile Hy-Brand cases because of the implications for a former client.

“The Inspector General and DAEO owe Emanuel and the board, as an institution, an apology for the manner in which the Hy-Brand cases were handled,” King writes in a Bloomberg Law Insight piece.

Jaclyn Diaz: Congress returns from the holidays this week: the Senate later today, followed by the House on Tuesday.

The Senate Finance Committee is expected to vote Tuesday on legislation approving the U.S.-Mexico-Canada Agreement. That would send the deal to the Senate floor, where it’s likely to be approved.

The Chamber of Commerce will have its annual “State of American Business” event on Thursday. Last year, Chamber President Thomas Donohue said the face of the business community would focus largely on workforce and immigration, trade, and infrastructure in efforts on Capitol Hill and state legislatures. I’m predicting some déjà vu this time around.

Workforce and Immigration: Between California’s new worker classification law and similar attempts to implement worker and union-friendly legislation at the state and federal level, the Chamber will have a full plate for the next 12 months. It already successfully sued to block (for now) a new California law limiting mandatory arbitration in employment contracts.

Immigration policy also remains at the top of the Chamber’s list. The U.S. Supreme Court likely will rule in June on whether the Trump administration legally ended the Deferred Action for Childhood Arrivals program, which provides deportation protections and work permits to young, undocumented immigrants who came to the U.S. as children. The Chamber supports the program and has long pushed for updates to federal laws to give DACA recipients permanent protections from deportation.

The justices’ reaction to oral arguments in November indicate that the court will back the administration’s position. That would mean an estimated 30,000 DACA recipients could lose their jobs every month. I’ll be keeping my ears open for any mention of the implications that decision could have on the business community and what the Chamber might do next.

Trade: The Chamber has long supported the USMCA, but what, if anything, might Donohue say about the new labor protections piece of the agreement?

It’s likely Donohue will take the opportunity to hammer tariffs. The Chamber has long said these trade war weapons harm American businesses. The U.S. has recently expanded plans to implement new tariffs on food (including a whole lot of cheese), tools, and clothing from the European Union.

Ben Penn: Some of you returning to normalcy from an extended holiday break probably missed a final rule the Labor Department put out on Friday. And others might have simply ignored it because it appears at first glance to be a fairly vanilla tweak to staffing requirements for DOL-financed job training centers.

It’s worth another look.

The regulation gives states the freedom to spend federal dollars for career support programs on private companies, removing a requirement that job-seeker services be provided strictly by civil servants. When the agency proposed the rule in June, Democrats, state workforce agencies, and public sector unions blitzed DOL with comment letters voicing opposition to the privatization of employment services established by the Wagner-Peyser Act, which include support for unemployment benefits recipients. The administration disagreed that outsourcing the staffing to the private sector would be problematic and also wrote in the final rule that it would be inaccurate to even refer to this as “privatization.”

History suggests the matter is far from settled.

Add this rule to the list of doomed George W. Bush-era labor initiatives that the Trump DOL is trying to revive. A 2006 regulatory effort to give states a similar form of staffing flexibility was never finalized because Congress thwarted the rule through the appropriations process, allowing the Obama administration to eventually withdraw it. That budget rider was enacted back when Democrats controlled both chambers.

The presently divided Congress means this iteration of the regulation has been successfully completed and is set to take effect in 30 days. That still leaves a pathway to halt the rule through the judicial branch.

Public unions like the American Federation of State, County and Municipal Employees will be contemplating a legal challenge to block the rule if and when it sees a state decide to take the DOL up on its new liberty to outsource an employment service to a private provider that was previously performed by state employees.

“It’s not clear that any or all states would move quickly to privatization, but we’re not naïve and we know that some governors are going to want to do that. And the reason is there’s vast amounts of cronyism within the employment and training field,” Steve Kreisberg, special assistant to AFSCME’s president, told me. “And there’s a funding stream that some of the private providers will want to get their hands on.”

AFSCME would consider filing a lawsuit “at the appropriate time, if we have members adversely affected,” Kreisberg said. “I’m not saying we will, but I’m certainly not taking it off the table.”

This isn’t the potential rulemaking lawsuit that’s been chiefly on the radar of most labor observers. But when it issues a rule that could cost the public sector union members who currently perform the career services their jobs, the Trump administration has to be preparing for a battle.

We’re punching out. Daily Labor Report subscribers can check in during the week for updates. In the meantime, feel free to reach out to us.

See you back here next Monday.

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To contact the reporters on this story: Chris Opfer in New York at copfer@bloomberglaw.com; Ben Penn in Washington at bpenn@bloomberglaw.com; Jaclyn Diaz in Washington at jdiaz@bloomberglaw.com

To contact the editor responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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