ABOUT FACE! Under Pressure, NLRB Vacates Joint Employer Standard and Returns to Browning-Ferris

by Proskauer - Labor Relations
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In an unexpected and critical turn of events, after extensive political pressure, the NLRB, sitting as a three-member panel comprised of Chairman Kaplan and Members Pearce and McFerran, vacated last year’s decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 2017) due to Member William Emanuel’s participation in the decision. Prior to joining the Board, Member Emanuel was a partner at Littler Mendelson, and his firm represented one of the unsuccessful parties in the Browning-Ferris case—which established the “joint employer” standard that Hy-Brand overturned. The Board concluded that Emanuel should have recused himself from the decision.

The Hy-Brand decision, which we previously reported on here and here, reinstated the traditional joint-employer standard that was significantly relaxed under the Obama-era Board in Browning-Ferris. As a result of the Board’s order to vacate, Hy-Brand’s overruling of Browning-Ferris is of “no force or effect.” So for the time being, Browning-Ferris returns to being the law of the land, and this outcome could have far-reaching implications to future cases by the Board involving potential conflicts of interest involving Board members.

The Board’s decision vacating Hy-Brand arose in the context of intense scrutiny concerning Member Emanuel’s participation in the decision. On February 9, the Office of the Inspector General for the NLRB released a report to the Board in which he determined that Member Emanuel’s involvement in Hy-Brand ran afoul of Exec. Order. No. 13770(1) (Executive branch employees are prohibited from “participat[ing] in any particular matter involving specific parties that is directly and substantially related to [a] former employer . . .” ) and that Emanuel should have recused himself from taking part in the decision. The Inspector General reached his conclusion on the basis that the deliberative process in Hy-Brand was essentially a continuation of the deliberative process in Browning-Ferris—of which Emanuel’s former firm had represented one of the Charging Parties that has since been remanded to the D.C. Circuit.

On the same day the Board vacated the Hy-Brand ruling, Senator Elizabeth Warren (D-Massachusetts) and Senator Patty Murray (D-Washington), the ranking member on the Senate Committee on Health, Education, Labor and Pensions, criticized Member Emanuel’s involvement in the Hy-Brand decision and sent multiple requests for information regarding his involvement. Earlier this month, a group of Democratic Congressmen sent a letter to the NLRB clarifying whether Emanuel violated federal regulations and the ethics pledge by participating in the Hy-Brand case.

Pursuant to the Order, Hy-Brand is now before the Board for further proceedings in which Member Emanuel will be ineligible to participate. We will of course keep you up to date with further developments in this case.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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