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Trump Labor Board Lawyers’ Former Lives Tangle McDonald’s Case

Jan. 29, 2019, 8:31 PM

The federal labor board, whose push to put the Trump stamp on workplace policy has been slowed by conflict-of-interest questions, won’t wait to finish updating its ethics rules before two members decide whether to participate in a controversial case involving McDonald’s.

“I think we all generally have a sense of what our rules are,” National Labor Relations Board Chairman John Ring (R) told Bloomberg Law of an ongoing ethics review in a Jan. 28 interview. “We just want to wrap this up so that those rules are clear to everyone and in one place.”

The board is currently reviewing an unfair labor practice case against McDonald’s by workers who say they were fired for participating in Fight for $15 walkouts. Lawyers for the workers argue Ring and Member William Emanuel (R) have conflicts of interest because at the time they were working for law firms—Ring at Morgan Lewis and Emanuel at Littler Mendelson—that helped the company respond to those campaigns. But they haven’t presented any evidence that Ring and Emanuel were personally involved in that work.

Agency ethics officer Lori Ketcham is reviewing the recusal requests and will make recommendations about whether Ring and Emanuel should sit out the case, Ring said. The members themselves have the final say, but their decisions can be appealed in federal court. Ring said they won’t wait for Ketcham and the board to finish a broader review and possible update of recusal rules, prompted by concerns about indirect conflicts and the appearance of conflicts.

Board members, like other administration officials, are covered by an ethics pledge requiring them to sit out matters involving their previous employers or their own former clients for two years after taking a government job. But the recent ethics questions have focused on cases in which a member’s former firm has worked behind the scenes or a client may benefit indirectly from a case decision.

That’s sparked a debate within the labor-relations community. Critics of the Trump board say members seem too cozy with business interests, while supporters point out that Democratic board members often work for labor unions before joining the board.

“Clearly it’s a problem because if you want an experienced board member, they’re going to come with a history of having handled board cases,” Jack Toner, a former NLRB attorney who represents businesses at Seyfarth Shaw in Washington, D.C., told Bloomberg Law. “If they get something out there so the agency is on the record about how they’re going to handle the cases in the future, that could be helpful. But you can’t wait for that, you still have to decide cases.”

The board and Ketcham are working on new rules detailing when a member should recuse himself from a case, Ring said. Those rules, developed in consultation with the Office of Government Ethics, will be subject to vote by the five-member board, he said.

Representatives for McDonald’s and Fight for $15 didn’t immediately respond to Bloomberg Law’s requests for comment.

Jumbled Over ‘Joint Employment’

The NLRB last year walked back a landmark case decision after the board’s inspector general said Emanuel, the former Littler attorney, should have sat out the case.

The scrapped decision would have overturned the Obama board’s approach to “joint employer” liability, or when two or more companies in franchise, staffing, and other relationships are required to bargain with or are responsible for labor law violations against the same set of workers. It would have returned to a conservative approach favored by the business community that makes it harder to tag multiple companies as joint employers.

Emanuel before joining the board represented a staffing firm involved in the case that the scrapped decision would have overturned. Inspector General Dave Barry said Emanuel should have sat out the decision because the staffing firm case was still on appeal and would have been affected by the new ruling.

The joint employment issue is at the center of the McDonald’s case, in which workers at franchise restaurants argue the company is their joint employer along with individual franchise owners. The issue was also highlighted by unfair labor practice allegations against Microsoft by software testers hired by a staffing firm.

The board is currently working on a new regulation to limit joint employer liability. Ketcham, the agency ethics officer, cleared Emanuel to participate in drafting the regulation. Democrats in Congress say that allows him to work on a rule that will benefit his former client.

“There are legitimate public concerns as to whether the board has initiated this rulemaking in order to circumvent the ethics requirements that protect agency decisionmaking against both actual conflicts and the appearance thereof,” Sen. Patty Murray (D-Wash.) and Rep. Bobby Scott (D-Va.) said in a Jan. 28 letter opposing the regulation. Scott, the top Democrat on the Education and Labor Committee, is expected to eventually call hearings on the issue.

Peter Robb, the board’s general counsel and a Republican, agreed to settle the McDonald’s litigation last year in part because of the Trump board’s more limited approach to joint employer liability. But an administrative law judge shot down the agreement, in which McDonald’s franchisees would have paid $170,000 to resolve the case.

McDonald’s wants the board—currently composed of three Republicans and one Democrat, with one open seat—to approve the agreement. The outcome of that case may depend largely on who gets to decide it.

To contact the reporter on this story: Chris Opfer in New York at copfer@bloomberglaw.com

To contact the editors responsible for this story: Phil Kushin at pkushin@bloomberglaw.com; Terence Hyland at thyland@bloomberglaw.com