Trump Labor Board Appointee Is Probed by DOJ Over Ethics Allegations

  • In Business
  • 2021-08-26 22:46:17Z
  • By Bloomberg

(Bloomberg Law) -- National Labor Relations Board member William Emanuel, who was appointed by former President Donald Trump, recently was interviewed by the U.S. Justice Department over allegations from the NLRB inspector general that he participated in five labor law cases involving a company or companies in which he owned stock, according to eight sources briefed on the matter.

U.S. Attorney General Merrick Garland declined to prosecute Emanuel, whose term on the NLRB expires Friday, said three of the sources, most of whom spoke on condition of anonymity because they didn't have approval to disclose private conversations.

The decision punted the matter back to the federal labor board, which is now determining how to handle four prior rulings in which NLRB Inspector General David Berry has determined that Emanuel had a conflict of interest that should've prompted him to recuse himself, according to one of the sources. A fifth case flagged by Berry hasn't been decided and remains pending before the board.

Although the significance of the allegations will hinge on which cases are affected, the investigation could reignite an ethics saga that's pitted Trump's Republican board appointees against unions and Democrats. This latest chapter comes two days before Democrats take control of the NLRB; President Joe Biden appointed two new members, both of whom have a background as union-side attorneys.

The type of investment or any individual company or companies involved wasn't immediately known. It also wasn't immediately clear which cases Berry said may have been compromised.

The NLRB has a five-member panel that adjudicates disputes involving union organizing and collective bargaining law, including accusations of businesses interfering with workers' rights.

Emanuel and DOJ didn't immediately respond to requests for comment. An NLRB spokeswoman declined to comment. Berry, the inspector general, when reached by phone said he couldn't confirm or deny any open investigations.

A 'Vindictive Response'

Emanuel, who has served on the board since 2017, came under scrutiny early in his tenure for participating in a landmark case linked to his former law firm, Littler Mendelson. In that case, Hy-Brand Industrial Contractors, the board invalidated its decision because of Emanuel's involvement, nullifying a decision that loosened the standard by which employers could be held legally liable for labor violations by franchisees and contractors.

The NLRB last year released a rule that achieved largely the same result, after a lengthy process prompted by Emanuel's perceived conflict of interest in the case.

Berry in 2018 released a scathing report on a "serious and flagrant" problem with the board's ethics procedures, in that members can participate in decisions that indirectly help former clients, as long as the client isn't a party in the case. Some labor lawyers disagreed with Berry's analysis, saying it would prevent qualified lawyers from serving on the board, but it's provided ammunition for Democratic lawmakers, including Sen. Elizabeth Warren (Mass.), who called on Emanuel to resign in 2018.

Roger King, a senior labor and employment counsel at the HR Policy Association, said he'd discussed with Emanuel the watchdog's allegations.

"This appears to be a vindictive response from the inspector general and the ethics officer, given their previously rejected attempt to impeach member Emanuel's ethics credibility on the joint employer issue," said King, who is friends with Emanuel. "At best, this is a highly technical matter involving an investment decision made by Member Emanuel's financial adviser, unbeknownst to him. When it was brought to member Emanuel's attention he immediately corrected it."

In 2019, then-Chair John Ring, a Republican who remains on the board, released a revised ethics policy that gave members authority to insist on participating in cases, even when internal ethics officials determine they may have a conflict of interest.

Ring said last year he would ask DOJ to review the ethics reforms in response to confusion over the role of the Office of Government Ethics in adjudicating disputes. Ring didn't transmit the request to DOJ's Office of Legal Counsel until Jan. 19, 2021, his last day as chairman.

-With assistance from Josh Eidelson (Bloomberg News)

To contact the reporters on this story: Ben Penn in Washington at bpenn@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

(Updated with additional reporting throughout.)

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©2021 Bloomberg L.P.


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