March 30, 2020

New Rule Makes It Harder to Challenge Labor Practices

“After getting caught violating ethics rules the first time, Republicans on the board are now ignoring these rules and barreling towards reaching the same anti-worker outcome another way,” Senator Elizabeth Warren, the Massachusetts Democrat who is running for president, said in a statement when the board proposed its new rule in September 2018.

Wilma B. Liebman, who served as chairwoman under President Barack Obama, said pro-worker groups were likely to challenge the new rule in court. She said they could argue that the “blatant effort to evade the same conflict of interest problem” that plagued the initial attempt to reverse the Obama-era approach could also undermine the new rule.

The board member who the inspector general said had a potential conflict in the adjudication, William J. Emanuel, also had a role in proposing the rule. Mr. Emanuel’s former law firm had represented a party in the case that led the Obama labor board to hand down its joint-employer ruling in 2015.

Ms. Liebman said opponents could also argue that the board had not seriously considered alternatives and objections, something required by law, and noted that the new rule defied a federal appeals court decision largely upholding the Obama-era doctrine.

The board rejected such allegations in material it included with the new rule, citing court precedent that it said made clear that Mr. Emanuel did not have to recuse himself, and saying it had revised its initial proposal in response to the nearly 29,000 public comments. “Throughout this rule-making process, the board has been willing to reconsider the preliminary views expressed,” the agency said.

Michael J. Lotito, a lawyer who represents employers at the firm Littler Mendelson, said the board had devised the rule with an eye toward accommodating the appeals court decision by allowing indirect control of workers to be a factor in determining joint employment, just not one that could trigger the status on its own. But Ms. Liebman questioned whether courts would accept that argument.

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