Monday morning musings for workplace watchers
Wilcox & the McDonald’s Case | Push for UI Fix in Budget Bill
Robert Iafolla: New NLRB Member Gwynne Wilcox’s recusal list doesn’t include a former client that’s trying to revive the agency’s joint employer case against
Wilcox, one of two Democratic members appointed to the National Labor Relations Board by the Biden administration, had represented Fight for $15 in the case but stopped appearing on the union-backed worker advocacy group’s filings three years ago. She did include her old law firm, Levy Ratner P.C., which continues to represent the worker group.
Her recusal list, published late last month, details former clients and employers from the two years prior to her joining the board Aug. 4. The White House’s ethics standard bars her from participating in cases that involve entities on the list for two years.
Ethics considerations that would be raised if Wilcox were to participate in the high-stakes McDonald’s case highlight the guardrails and gaps in the NLRB’s protocols for warding off conflicts of interest and maintaining public trust in board rulings.
“Member Wilcox’s recusal list complies with the Biden Ethics Pledge,” NLRB spokeswoman Kayla Blado said, adding that it was “prepared in accordance with recommendations” from the agency’s designated ethics official.
Alleged conflicts of interest are at the core of Fight for $15’s appeal of the NLRB’s decision authorizing a $170,000 settlement in the McDonald’s case. The group has argued that former Republican NLRB Member William Emanuel and current GOP Member John Ring should have recused themselves from the case because of connections between their former law firms and the company.
Emanuel, whose term expired Aug. 27, also had ethics issues that prompted the withdrawal of a major joint employer decision.
The NLRB could get another shot at the McDonald’s case if the U.S. Court of Appeals for the D.C. Circuit finds flaws in the board’s approval of the settlement. But chances are slim that Wilcox would participate in the case if the D.C. Circuit sends it back to the board, according to government ethics specialists.
“This is the textbook definition of a conflict of interest,” said Virginia Canter, chief ethics counsel for the watchdog group Citizens for Responsibility and Ethics in Washington.
Even if Fight for $15 were to fire Levy Ratner as counsel, the NLRB’s designated ethics official would most likely reject Wilcox’s participation based on her earlier advocacy in the case, ethics specialists said.
NLRB ethics protocols crafted during the Trump administration provide members with the power to override the ethic official’s judgment if they “insist” on participating in a case.
Walter Shaub, who led the U.S. Office of Government Ethics during the Obama administration, said that provision is illegal. Determinations from an agency’s designated ethics officials are legally binding, he said.
If Wilcox were to participate in the McDonald’s case over the judgment of an ethics official, it would make the board’s decision in the case vulnerable on appeal. That also could trigger OGE’s attention.
“In these cases, OGE will usually work behind the scenes and, if an administration is supportive of ethics, sometimes enlist the White House’s help in getting a rogue agency head in line,” said Shaub, now senior ethics fellow at the Project on Government Oversight.
—With assistance from Ian Kullgren
Chris Marr: Several left-leaning groups continue to advocate for using Democrats’ $3.5 trillion budget reconciliation package to permanently expand unemployment benefits—and they see the Senate as their best bet.
A key player in the effort is Senate Finance Chair
“Wyden is a great champion for UI reform,” said Judy Conti, government affairs director at the National Employment Law Project, one of several groups pressing the issue.
Conti and others voiced disappointment that the House Ways & Means Committee didn’t include unemployment expansion in legislative text that it marked up as part of the budget plan last week.
But while the reconciliation effort is far from an endgame, overhauling unemployment insurance is competing for attention with a long list of social spending and tax proposals that House committees are weaving into the plan. These include climate change measures, health-care expansion, paid family and medical leave, and child care spending.
Wyden’s office and Senate Finance staff didn’t respond to a request for comment. The Senate is expected to move toward legislative text later this month.
President
Getting unemployment into the reconciliation package, which can pass without GOP votes, is crucial to prevent state legislatures from cutting benefits to shore up their trust funds, as they did after the last recession, Conti said.
The Wyden and Biden proposals would force states to provide more generous benefits, likely funded by raising payroll taxes on employers in each state. Conti argued the changes still fit within the rules for budget reconciliation because all unemployment benefit money flows through trust funds held by the U.S. Treasury.
The goal for progressive groups and activists is to make benefits more accessible and more effective at supporting people financially while they seek another job.
Many unemployed people—such as part-time employees, those with a limited work history, or independent and gig workers—don’t meet the eligibility rules to get benefits.
And the average weekly benefit amount in normal economic times (not including the enhanced federal pandemic aid that recently expired) replaces only 44% of the weekly wage a person was earning, Conti said.
The average replacement is often lower in southeastern states, which also have larger percentages of Black workers.
“The exclusions and shortcomings fall disproportionately on workers of color and women,” she said. “If the administration and Congress is serious about achieving racial equity, one of the places they need to intervene right away is the unemployment insurance system.”
But there’s reason to doubt an unemployment overhaul will find its way into Democrats’ budget package, said Matt Weidinger, senior fellow at the conservative-leaning American Enterprise Institute. The proposals would result in higher payroll taxes for employers, he said.
Part of the goal would be to set benefits to automatically increase in duration or dollar amount during economic downturns, but those benefit expansions historically have been done in an ad hoc way by Congress and funded through the federal budget.
“They know in the next recession they can just do what they’ve always done—add these extraordinary benefits to the deficit,” he said.
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