Heritage Legal Analysis Confirms That NLRB Member William Emanuel Had No Obligation to Recuse in the Controversial “Joint Employer” Case

In a blog here I argued that the National Labor Relations Board’s Inspector General David Berry erred in concluding that NLRB Member William Emanuel should not have participated in the Board’s December 14, 2017, decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (3-2 decision), vacated, 366 N.L.R.B. No. 26 (Feb. 26, 2018). In Hy-Brand, a Board majority, including Member Emanuel, appointed by President Trump overruled an Obama Board decision, Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (3-2 decision), that had significantly loosened the standard for determining when a company is a joint employer. The Hy-Brand majority instead returned “to the principles governing joint-employer status that existed prior to [the Obama Board’s] decision.” However, citing an intervening opinion of the NLRB Designated Ethics Officer, Lori Ketcham, adopting IG Perry’s reasoning and conclusion three Board Members, without even notice to Member Emanuel, two months later vacated the Hy-Brand decision.

My contention that IG Berry and, thus, Ethics Officer Ketcham erroneously ruled that Member Emanuel should have recused himself from the Board’s consideration of Hy-Brand has now been supported by a lengthy Legal Memorandum released on August 7, 2018, by Thomas Jipping, Deputy Director of the Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies. Jipping’s lengthy Memorandum, entitled “National Labor Relations Board Inspector General and Ethics Officer Employ Erroneous Ethics Standard,” concludes:

The Ethics Pledge is a guide for those appointed to lead agencies in the performance of their duties. The pledge is straight-forward. It requires recusal in “a particular matter involving specific parties that is directly and substantially related to my former employer or former clients.” In this case, neither William Emanuel nor his former employer, Littler Mendelson, had ever represented the parties in Hy-Brand v. Industrial Contractors, Ltd. and, therefore, Emanuel had no obligation to recuse himself.

That conclusion is not affected by the fact that, in Hy-Brand, the NLRB reconsidered the definition of “joint employers” established in a previous case, even though Emanuel’s former law firm represented one of the parties in that case. Nor is it affected by the Board’s conclusion that the Browning-Ferris decision, or the joint-employer standard on which it was based, should be overruled. Nor is it affected by how the Board reached or expressed that result, by issuing an opinion drafted in a particular way.

The standard employed by the NLRB Inspector General and Designated Agency Ethics Official to find otherwise is without any known legal basis and has no identified precedent. It is inherently subjective, undefined, and retroactive, creating an untenable catch-22 for officials to whom it is applied. In effect, they concluded that Emanuel should have recused himself at the start of the Hy-Brand case because of the way that the Board’s decision would be explained at the end of the case.

The Ethics Pledge is focused on discreet cases and specific parties, not issues that might surface in subsequent cases or by agency decisions made in other cases. Emanuel did not violate the Ethics Pledge by participating in Hy-Brand and, by applying their novel and flawed recusal standard, Berry and Ketcham unnecessarily cast Emanuel in a negative light. Nothing in the Ethics Pledge, the facts of this case, or basic logic compels or even justifies this result.