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NLRB Member Is Under Investigation for a Conflict of Interest

William Emanuel, already criticized for allegedly favoring clients of the corporate law firm he used to work for, now faces a probe by the agency’s inspector general.

Update, Feb. 27, 2018: The National Labor Relations Board voted to undo one of its major recent decisions after an ethics officer concluded that NLRB member William Emanuel should have recused himself from the case. The now-nullified ruling, a December 2017 decision entitled Hy-Brand Industrial Contractors, had overturned a controversial Obama-era ruling in a case in which Emanuel’s former law firm represented one of the parties. As a result of the action on Feb. 27, the Obama-era decision is restored, giving workers and unions greater power to hold corporations responsible when their franchisees or contractors violate labor laws.

The board’s move follows a Feb. 9 memorandum by the NLRB’s inspector general that also concluded Emanuel shouldn’t have participated in Hy-Brand. The IG’s memo called Emanuel’s vote a “serious and flagrant problem and/or deficiency.” ProPublica has obtained an unredacted copy of the IG’s memorandum, which is part of the ongoing IG investigation into whether Emanuel breached conflict-of-interest rules.

Update, Feb. 1, 2018: After ProPublica published this report Thursday morning, William Emanuel informed several members of Congress that he plans to revise his Jan. 26 letter. “I have reviewed my responses,” he wrote in a new letter obtained by ProPublica, “and believe they require clarification.” Emanuel explained that he plans to provide “a further response, clarification, or correction soon.”

The inspector general for the National Labor Relations Board is investigating whether a Trump appointee to the board breached government ethics rules, according to two congressional officials with knowledge of the investigation.

The probe centers on whether the NLRB member, William Emanuel, took part in a case in December that had involved his former law firm and if so, whether his participation was improper because he had a conflict of interest. David Berry, the NLRB’s inspector general, opened the investigation several weeks ago, the officials said.

As a member of the labor board, Emanuel is subject to conflict of interest rules, which impose a two-year ban on participation in cases where a former client or employer is a party or represents one. Emanuel has faced mounting questions from union lawyers, former NLRB members and members of Congress about potential conflicts tied to his former law firm. ProPublica reported recently on how Emanuel has effectively sidestepped conflict of interest rules in some instances.

After the IG began his investigation, Emanuel conceded — in a Jan. 26 letter responding to questions from several Democratic members of Congress — that he took part in a decision in December to steer back to the labor board a case entitled Browning-Ferris Industries v. NLRB. The Jan. 26 letter, which has not previously been made public, was obtained by ProPublica. The labor board’s decision in Browning-Ferris, a high-profile dispute over corporate responsibility for violations of workers’ rights, is widely viewed as one of the most consequential labor law precedents of the past decade.

Decisions by the NLRB can be appealed to federal courts, and this one had been pending before the U.S. Court of Appeals for the District of Columbia Circuit for nearly two years, which suggested a ruling was likely imminent. The most likely reason for the NLRB to try to retake control of the case is that the board has shifted to a Republican majority and that majority would likely want to overturn the Obama-era ruling and avoid the risk that the appeals court would reach a different decision.

Emanuel’s former employer, the law firm Littler Mendelson, represents a company that was a party to Browning-Ferris before it was appealed — and will very likely be involved in future proceedings. Before he joined the board in September, Emanuel was a shareholder at Littler, which is known for representing corporations in labor disputes.

In the Jan. 26 letter, Emanuel defended his involvement in the case. Among other things, he claimed he was unaware that Littler had ever been involved in the Browning-Ferris case when he participated in it. “Littler Mendelson is a huge law firm of more than 1,000 lawyers,” Emanuel wrote, “and I was involved in only a small fraction of the firm’s practice.”

During the Senate confirmation process, however, Emanuel acknowledged that he knew about Littler’s involvement in the Browning-Ferris case. In response to a request from Sen. Patty Murray, D-Wash., Emanuel provided “a list of all cases decided by the NLRB and that are currently on appeal in which Littler Mendelson represents a party.” On that list is Browning-Ferris.

A spokesperson for Emanuel and the NLRB declined to comment; a representative for Littler did not respond to questions emailed to the firm.

Cases that come before the labor board often follow a labyrinthine path before resulting in a final decision, and at the heart of what the IG is investigating lies a complicated series of procedural twists and turns.

The Browning-Ferris case was highly contentious well before it reached the appellate court. The Obama-era NLRB decided the case in 2015, ruling against two companies in a dispute with a labor union. In doing so, the board revised its so-called “joint-employer rule” and made it easier for workers and unions to hold one company liable for the labor law violations of another company with which it’s associated, like a franchise holder or a contractor.

William Emanuel testifies on his nomination to the National Labor Relations Board on Capitol Hill in Washington, D.C., on July 13, 2017.

Corporations and their allies viewed the decision as exceedingly pro-labor and a shocking expansion of the NLRB’s mandate. At the time, attorneys at Littler called the decision “an extreme departure from established precedent.”

One of the two losing companies appealed the board’s Browning-Ferris decision to the federal appeals court in Washington.

The other company, Leadpoint Business Services, did not take part in the appeal. But when the Browning-Ferris case had been active before the NLRB, Leadpoint was represented by Littler, and according to the NLRB docket, Littler still represents the company before the labor board in that case. (Emanuel, in his Jan. 26 letter defending his conduct, cited the fact that Leadpoint wasn’t part of the appeal.)

While the case remained on appeal, the NLRB — with a new Trump-era Republican majority — took a step that all but ensured the appeals court wouldn’t have its say in Browning-Ferris. In mid-December, in a different case, the board voted along party lines to throw out the Obama-era joint-employer rule.

When the NLRB revises one of its rules, the board typically asks appeals courts to return cases affected by the rule change, so it can take a first crack at applying the new rule to the facts of those cases. The job of asking the courts to send cases back falls to the NLRB’s general counsel, who defends the board’s decisions in court when they’re appealed.

On Dec. 15, Emanuel voted to direct the board’s general counsel to do just that: Ask the appeals court to send Browning-Ferris back to the NLRB in light of its changed joint-employer rule. That would potentially allow the NLRB to overturn its previous ruling on Browning-Ferris. (The NLRB vote was followed by another strange twist: For reasons that remain unclear, the board unanimously voted four days later, on Dec. 19, to rescind that directive. Emanuel participated in that vote, too. The NLRB’s general counsel, whose spokesperson declined to comment, then chose to ignore the new vote.)

The central question for the IG to answer is whether Emanuel’s votes ran afoul of his government ethics obligations. Leadpoint remains a party to the Browning-Ferris proceedings before the NLRB, and Littler attorneys still represent Leadpoint in those proceedings.

The appeals court ultimately agreed to send the case back to the labor board. Assuming that occurs, Emanuel has acknowledged that government ethics rules prevent him from participating in it. “If Littler represents Leadpoint in the [Browning-Ferris] case after it is remanded to the Board,” Emanuel wrote, “I will recuse myself from participation in that case.”

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