In his first year, President Trump appointed enough members to tilt the National Labor Relations Board (NLRB) in an anti-union direction for about two months. One of the Trump NLRB’s most high-profile decisions during that time came in a case known as Hy-Brand. There, the NLRB reversed Browning-Ferris International (BFI), a 2015 decision by the Obama Board that modestly expanded the scope of “joint employer” liability. But Hy-Brand was not long for this world: the Board vacated its decision after the Board’s Inspector General concluded that Trump-appointed Board member William Emanuel should have recused himself from the case, depriving the Hy-Brand majority of its required third vote. Member Emanuel’s participation in Hy-Brand was a serious error – one that will be difficult to fully unwind – but there is a bigger story here, about the Trump Board GOP majority’s rush to judgment in Hy-Brand and a handful of other recent cases.
What’s Controversial About Joint Employment?
Labor law has largely been crowded off the national stage during the Trump era, which can make it hard to remember the controversy that accompanied BFI. But to say the reaction to BFI from Republican members of Congress as well as groups like the International Franchise Association was negative would be a serious understatement; reversing BFI has probably been the GOP’s number one labor law-related priority since the decision came out. That’s because BFI makes it easier for the Board to hold large employers accountable when they influence working conditions for other companies’ employees.
Joint employment is implicated in situations like that in BFI itself, where one company contracts with another to do a specific on-site job. But it can also come into play in franchise relationships, like the ones that McDonalds has with its thousands of US franchisees—a fact that goes far towards explaining why BFI attracted so much attention. In fact, whether McDonalds exercises enough control over working conditions at franchises to be considered a joint employer of franchise employees has been the subject of a years-long NLRB inquiry.
After more than a year, the McDonalds joint employment trial is nearly complete—but it may not result in a decision, because the Board’s Trump-appointed General Counsel moved to settle it. This move was ostensibly because Hy-Brand placed the General Counsel’s case in jeopardy. However, as Sharon Block pointed out at OnLabor, the GC’s decision to continue to pursue settlement even after Hy-Brand was vacated at least suggests that this stated reason for settling was pretextual. In short, even though BFI is now back on the books, the clear signal from the McDonalds case is that employers can safely ignore it.
The Recusal SNAFUsal
Recently, the NLRB’s Inspector General offered an explanation for Member Emanuel’s failure to recuse himself in Hy-Brand as well as a later decision directing the General Counsel to move to remand BFI from the DC Circuit, where an appeal was pending. That explanation: he forgot. More specifically, he forgot that his former firm, Littler Mendelson, had represented a client in BFI when it was before the Board, even though the case was listed on a conflicts form that Littler had compiled on Emanuel’s behalf during the confirmation process.
That’s bad enough on its own, but it gets worse: Member Emanuel’s forgetfulness caps off a seriously flawed decision-making process. The IG’s recent report details what happened, and its conclusions implicitly call into question other decisions issued around the same time. To see why, one needs to understand the chain of events that led to Hy-Brand.
“Significant Time Related Pressures”
The relevant timeline began with Member Emanuel’s swearing in on September 26, 2017, giving the Board a Republican majority for the first time in ten years. President Trump’s other appointee, Marvin Kaplan, was sworn in about six weeks earlier. A third Republican, Board Chairman Philip Miscimarra, was first appointed to the Board by President Obama in 2013—but his term was due to expire December 16, 2017. In other words, Chairman Miscimarra had less than two months to lead a GOP-majority Board.
What happened next was remarkable. In the last week of Chairman Miscimarra’s term, the Board issued five major decisions, including Hy-Brand, each of which reversed significant pro-union precedents. To be clear, it isn’t unusual in itself for big decisions to issue at the end of a Board Member’s Term. But Miscimarra’s last week stands out because of the number of decisions issued, the fact that they were issued so close to the beginnings of two other Members’ terms, and the fact that they involved other irregularities. For example, in Hy-Brand itself, no party had asked for BFI to be re-considered, and so the issue had not been briefed.
You might wonder how two brand-new Members managed to get up to speed on such an important issue (without the benefit of briefing) while learning the ropes at the Board and grappling with four other big cases. The IG’s report on Emanuel’s recusal problem sheds light on that question, and its implications are troubling.
The report sketches a timeline in which Members Kaplan and Emanuel voted over the course of only three days to approve Chairman Miscimarra’s proposal that the Board essentially recycle the dissent from BFI as the majority opinion in Hy-Brand. First, on October 18, Chairman Miscimarra emailed a proposed opinion, writing that while the draft opinion was “clearly an imperfect compromise,” recipients should “resist” the urge to “suggest a few or massive improvements,” and instead “circulate the draft with very few minor changes,” albeit with the possibility of making “some adjustments” after the draft was circulated to the two dissenting Board members. By October 20, the opinion was approved and ready to be circulated to the dissenting Board members. The final opinion (with dissent) was issued less than two months later, on December 14.
The IG concluded that “significant time related pressures” were an exculpatory factor in Member Emanuel’s failure to recuse: “Although [Member Emanuel] stated that he agreed with the outcome of each of the decisions, he explained that he felt significant time related pressures to act on the decisions prior to the end of the former Chairman’s term,” and “he did not think that he could make significant editorial changes to the decision.” The IG is probably correct that the timeline contributed to Member Emanuel’s failure to recall that his former firm had represented a party in BFI. For example, if he had longer to consider Hy-Brand, he might have gone back to the briefing in BFI—remember, the joint employer issue was not briefed in Hy-Brand itself—and noticed his old firm’s name on at least one of the briefs. Better yet, more time would have allowed for the Board to call for briefing from the parties and amici in Hy-Brand itself—a step that would have been in line with Obama Board’s practices.
But while time pressure explains Member Emanuel’s failure to recuse, the timeline that the IG described only raises larger questions about the thoroughness—indeed, the existence—of the GOP majority’s deliberative process. To put a finer point on it: everything we now know about Hy-Brand implies a rush to judgment, and that in turn raises questions about the quality of the decision-making processes in the Board’s other December 2017 reversals.
The IG’s investigation revealed a decision-making process that barely looks like a process at all — instead, it looks more like a last-minute push to erase an important Obama-era case before former Chairman Miscimarra’s term expired. To the extent the Board’s December 2017 decisions are reviewed by circuit courts, these circumstances will surely influence the courts’ assessments of whether the Board’s actions satisfy the requirements of the Administrative Procedure Act (APA). Beyond that, the Board’s new Chairman, Marvin Kaplan, should ensure that the Board’s future deliberations are meaningful. At the risk of stating the obvious, the Board should at minimum decide cases on narrow grounds when possible, and should not decide issues that have not been briefed by the parties. It should also return to the Obama Board’s practice of calling for amicus briefs in cases in which it is considering reversing existing precedent. These simple and obvious measures would go far towards restoring the public’s faith in the Board’s adjudicative processes.