Punching In: Labor Board Eyes End of Ethics Saga

Monday morning musings for workplace watchers

Untangling the NLRB| Fluctuations, Part 2 | Musical Chairs at HELP

Chris Opfer: An ethics debate that has dogged the National Labor Relations Board during much of the Trump administration could soon be nearing resolution, at least from the Republican board majority’s point of view.

The NLRB plans in the next two weeks to release a long-awaited review of its process for determining when members need to sit out certain cases because of conflicts of interest, an agency official recently told me. The board will follow that move by deciding the closely watched McDonald’s case and publishing a final version of a new rule to revamp “joint employer” liability under federal labor law, two agenda items that have been wrapped up in ongoing ethics questions. The decision and the rule are likely to be out before Member Lauren McFerran’s term ends in December, the official said.

Board members on both sides of the political spectrum have long been faced with recusal questions, often stemming from their work as lawyers for unions or businesses before joining the NLRB.

Those questions hit a new crescendo in 2017, however, when the board decided to scrap a precedent-setting decision in a case involving Hy-Brand Industrial Contractors. The move came after the NRLB’s inspector general said Member Bill Emanuel (R) should have sat out the case. That’s because the board used the case to overturn an Obama era decision involving one of Emanuel’s former clients, which was still on appeal at the time.

The Hy-Brand snafu sparked a heated debate within the board and among the labor and employment community over the reach of a Trump ethics pledge requiring board members and other government officials to sit out certain matters involving previous employers and clients. It also prompted NLRB Chairman John Ring (R) to order a comprehensive review of the board’s ethics rules and recusal procedures.

The review should provide a blueprint for Ring and Emanuel to decide whether they need to sit out the McDonald’s case. Their former law firms advised the Golden Arches on the Fight for $15 demonstrations at the center of the case, but there is no indication that Ring or Emanuel were involved in those efforts.

The new recusal marching orders will also provide some guidance to Member Marvin Kaplan (R), who Senate Democrats say should be conflicted out of working on a new regulation to bar student worker organizing on college campuses. That rule would overturn the Obama board’s decision in a case involving Columbia University, where Kaplan’s wife is employed by the school’s trustees.

Meanwhile, Democrats in both chambers of Congress are likely to continue to slam the board’s new joint employer rule. They say that initiative was an end run around the ethics issues raised in the Hy-Brand case.

Ben Penn: The Labor Department’s latest regulatory move to give employers more payroll flexibility is expected to roll out this week. The proposed rule, which involves the fluctuating workweek method for paying workers’ overtime, won’t reach the same level of impact as the Wage and House Division’s other recent updates to compensation rules. But the effort has been more than a decade in the making and offers a conservative redemption tale of sorts.

The Fair Labor Standards Act’s fluctuating workweek method allows employers to pay certain workers whose hours vary widely each week at half their regular rates, instead of one-and-a-half times, for any hours worked over 40. The George W. Bush administration issued a proposal in 2008 stating that when applying the fluctuating workweek method, employers are to include bonus or premium payments in calculating employees’ regular rate of pay that is then reduced in half for hours beyond 40.

But the Obama administration had a different idea. The DOL in 2011 killed the earlier proposal, citing a concern that businesses would take advantage of the new rules by reducing workers’ base salaries and shifting a large share of their pay over to bonuses.

The Trump administration now gets to take another whack at it, with an intention of freeing businesses to offer bonuses to workers on varying schedules. Companies would then be able to take advantage of the fluctuating method with less fear of plaintiffs’ bar allegations that workers are owed more overtime pay.

Except this time, the agency should have ample time to finalize the regulation and protect it from a future Democrat in the White House. That said, the WHD will be hard pressed to complete everything on its rulemaking agenda in a timely fashion over the next 14-plus months remaining in President Donald Trump’s first term (see joint employment, tip credit, regular rate, request for info on FMLA, and more).

That’s why we’re eager to lay our eyes on the fall regulatory agenda. Will this be the week the White House releases its twice-a-year calendar of anticipated rulemakings over the next year? With a new secretary installed and a WHD chief appearing to grow more confident after six months in office, we can’t rule out the possibility that the division adds even more rulemakings to the docket.

Jaclyn Diaz: It’s November already and before we know it, it’ll be time to carve up a turkey and dust off our ugly holiday sweaters. Congress is still in full swing though, grappling with impeachment and government funding even as the session nears its close. Members must be counting the days until they can bury their heads in some eggnog.

Before the year is out, we’ll have a better idea of who might take over for Sen. Johnny Isakson’s (R-Ga.) spot as he says goodbye to the Senate. Isakson is retiring at the end of the year, leaving the Health, Education, Labor and Pensions Committee down a top Republican. Isakson announced back in August that he was stepping down due to health problems. His departure opens up a leadership post on the workplace safety subcommittee.

Who might replace the Georgian on the HELP subcommittee on employment and workplace safety remains a question. I thought the next Republican in line in terms of seniority on the subcommittee would be the most plausible person to take over the throne. However, Sen. Tim Scott (R-S.C.) told me last week that he isn’t eligible for the job because of GOP limits on committee assignments. Scott said he “isn’t gaining seniority on this committee” despite the fact he’s served on it for longer than some other members.

Senators are limited to the number of “A” committees they can sit on. Those “A” committees include: Agriculture, Banking, Commerce, Intelligence, as well as HELP and several others. A senator may not serve as a chairperson or ranking member of more than two “A” subcommittees, according to Republican conference rules. Scott is already chairman of a Banking subcommittee as well as a Finance subcommittee.

It should be interesting to see who might be in play for Isakson’s gavel, as several other Republicans appear to be ineligible due to other committee or subcommittee leadership roles.

This will be the first taste of who is looking to gain a leadership position on HELP as the committee prepares to lose two other top Republicans next year. Committee Chairman Sen. Lamar Alexander (R-Tenn.) and Subcommittee Chairman Sen. Mike Enzi (R-Wy.) will retire at the end of their terms. If Republicans maintain control in the Senate, we could see a big shakeup.

In other news, Sen. Bill Cassidy (R-La.), another member of the Senate HELP committee, told me he’s feeling confident that his family leave plan with Sen. Kyrsten Sinema (D-Ariz.), will move before the end of the year. He said last week that his office is working on a date to introduce the bill. He’s allegedly made progress on gaining co-sponsors on both sides of the aisle in the House and Senate, potentially creating a rival leave plan to Rep. Rosa DeLauro’s FAMILY Act, a broad leave plan backed by many House Democrats. His office declined to provide more details on who’s co-sponsoring it and when they might introduce the bill.

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: copfer@bloomberglaw.com, jdiaz@bloomberglaw.com, and bpenn@bloomberglaw.com or on Twitter: @ChrisOpfer, @jaclynmdiaz, and @benjaminpenn.

See you back here next Monday.

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