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.