Tag: Marvin Kaplan

Joint Employer NLRB Rulemaking

NLRB Suggests Joint Employer Rules

On May 9, 2018, the National Labor Relations Board announced that is considering rulemaking on the subject of joint employer status. The joint employer standard has received much attention in recent year. The Board’s Republican majority tried to change the standard for this important analysis through a December 2017 case decision. However, the NLRB later withdrew that decision upon allegations that one of the Republican members had a conflict of interest. Shifting to rulemaking to change the joint employer standard may overcome the conflict issue.

Current Joint Employer Analysis

In 2015, a 3-2 Democratic majority Board decided a case involving whether Browning-Ferris Industries of California (BFI) was a joint employer with a company that supplied workers onsite at BFI. The NLRB departed from precedent and applied an “indirect control” standard that considerably expanded the situations where two entities would be joint employers under the National Labor Relations Act. The broad test only requires that the entities “share or codetermine those matters governing the essential terms and conditions of employment.” This is evaluated by asking whether each entity “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.”

Before this case, the NLRB applied a “direct” and “substantial” control standard.

The primary difference was the shift from requiring actual exercise of control over workers to mere potential of control.

Initial Attempt to Return to Previous Standard

When President Trump took office, he named Philip Miscimarra the Chairman of the NLRB. Miscimarra was on the Board when the NLRB decided the Browning-Ferris case. He and the other Republican member at the time issued a vigorous dissent to the Democratic majority’s decision. Just before Miscimarra’s term expired in December 2017, he and a new Republican majority issued several prominent decisions reversing Obama-era NLRB precedent. This included an attempted reversal of the joint employer standard.

In a December 14, 2017, 3-2 Board decision, the NLRB announced it was returning to the earlier test. The restored test focused on which business(es) have “direct and immediate” control over terms and conditions of employment. It dismissed analysis of “indirect” factors that the Democrat majority introduced in 2015.

However, on February 26, 2018, the NLRB vacated the December 14, 2017 decision, reverting to the “indirect control” standard. Marvin Kaplan, whom Trump had appointed Chair upon Miscimarra’s departure, joined the two Democratic members in that decision. The other Republican member, Bill Emanuel, was not allowed to participate in the decision. The NLRB Inspector General’s Office had opined that Emanuel had a conflict of interest. His previous law firm had represented a party in the Browning-Ferris case, which the December 14, 2017 decision effectively overturned.

The alleged conflict may prevent Emanuel from deciding any case involving a change in the joint employer standard.

Shift to Rulemaking

The NLRB recently regained full strength with the Senate confirmation of Republican attorney John Ring as the fifth member. President Trump promptly replaced Kaplan with Ring in the Chairman seat. Ring, like Emanuel, may also face conflict challenges given the extensive client-base of his former firm.

Likely because the Republican majority would face repeated conflict claims in attempting to overturn Browning-Ferris through adjudication of an actual case, Chairman Ring has shifted to administrative rulemaking as the vehicle to change the joint employer standard. The NLRB has seldom relied on rulemaking to establish policy. So, this attempt to do so will itself likely face legal challenges.

Nonetheless, Chairman Ring offers a compelling argument for the rulemaking approach:

“Whether one business is the joint employer of another business’s employees is one of the most critical issues in labor law today,” says NLRB Chairman John F. Ring. “The current uncertainty over the standard to be applied in determining joint-employer status under the Act undermines employers’ willingness to create jobs and expand business opportunities. In my view, notice-and-comment rulemaking offers the best vehicle to fully consider all views on what the standard ought to be.”

His Democratic colleagues unsurprisingly disagree. The NLRB’s press release on the matter specifically noted that “The inclusion of the proposal in the regulatory agenda does not reflect the participation of Board Members Pearce and McFerran.”

The press release explained that the next step would be the issuance of a Notice of Proposed Rulemaking. Although it added that “[a]ny proposed rule would require approval by a majority of the five-member Board,” that statement notably recognizes that the opposition of Members Pearce and McFerran will not be enough to overcome the expected consensus of the three Republican members.

Expected Outcome of Joint Employer Rulemaking

Chairman Ring even took to Twitter to make his views known: “The joint-employer standard is one of the most critical issues in labor law today—affecting millions of Americans in nearly every sector of the economy. Uncertainty over the standard undermines job creation & economic expansion. The new majority intends to get the job done.”

There’s no mystery of what that job is. It’s finding joint employers status only where multiple entities have “direct and immediate” control over workers.

And, although administrative rulemaking takes some time, Ring wants to do this quickly: “The Board majority will work to issue a proposed rule ASAP, and we will consider the views of all interested parties.”

Member Pearce, who was the NLRB Chair when it decided Browning-Ferris, also tweeted on this subject. Among his pointed comments: “Board majority “considering rulemaking” but @NLRBChairman says “Board majority…work[ing] to issue proposed rule ASAP” — certainly sounds like another objective is already set. .”

 

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John Ring NLRB Chair

John Ring Joins the NLRB

On April 11, 2018, the U.S. Senate narrowly confirmed management-side labor attorney John Ring as the fifth member of the National Labor Relations Board. Ring fills the seat vacated in December 2017 by former Board Chairman Philip Miscimarra. The Senate voted 50-48 along party lines. Ring, a Republican, was a partner with Morgan, Lewis & Bockius LLP before his confirmation.

Current NLRB

Following Ring’s confirmation, the White House announced that he would replace Marvin Kaplan as Chair of the NLRB. President Trump had just named Kaplan the Chair in December. Despite the unusual demotion, Kaplan confirmed he would remain on the Board.

In addition to Kaplan, Ring joins members William Emanuel, Mark Pearce, and Lauren McFerran on the Board.

Other than formally making Ring the Chair, no further changes to the Board’s composition are expected until Member Pearce’s term expires on August 27, 2018. Traditionally, no more than three members of the Board have represented the same political party. However, that is not dictated by law. Thus, it will be interesting to see what the White House does regarding Pearce’s seat.

Republican Majority

Republicans now hold 3-2 majority control of the Board. This foretells a continued shift away from pro-labor decisions by the Obama-era NLRB. The Republicans recently held the majority for just a short time before Miscimarra’s term expired. They issued several significant reversals in the last days of his term. (Read more in 2017 NLRB Buzzer Beaters.)

However, the Republican majority still faces a hurdle that may slow the anticipated shift in federal labor law. Member Emanuel’s vote in one of the December 2017 reversals (regarding the joint employer standard) created controversy based on an alleged conflict of interest. Emanuel’s former firm had represented a party in the case that was overruled. The Board subsequently excluded Emanuel and vacated the decision in which he had participated, reverting to the Obama-era precedent.

Emanuel, who had been a partner at national labor law firm Littler Mendelson, may face similar conflicts in many other cases. Ring could also struggle with conflict issues given Morgan Lewis’ substantial client list.

More About John Ring

Before his confirmation, John Ring was a co-leader of Morgan Lewis’ labor/management relations practice.

He received his Bachelor’s Degree from Catholic University and his law degree from Catholic University’s Columbus School of Law. He is a Fellow of the College of Labor and Employment Lawyers.

Marvin Kaplan New NLRB Chairman

Marvin Kaplan Named New NLRB Chairman

On December 21, 2017, President Trump named Marvin Kaplan Chairman of the National Labor Relations Board. The new NLRB Chairman originally joined the Board in August. His term expires on August 27, 2020.

“The President’s announcement is an honor and privilege, and I look forward to serving as Chairman of the National Labor Relations Board.” Kaplan said. “I remain committed to working with my colleagues to achieve the important goal of issuing timely decisions that apply the National Labor Relations Act in a way that protects the rights of employees, employers, and labor organizations throughout the country.”

Current Composition of the NLRB

Fellow 2017 Trump appointee William Emanuel joins Kaplan as Republican members of the Labor Board.

Two holdover NLRB members from the Obama Administration, Mark Pearce and Lauren McFerran, are both Democrats.

Former Chairman Philip Miscimarra left the Board when his term expired on December 16, 2017. President Trump has not yet formally nominated someone to fill that seat. However, management-side labor attorney John Ring is believed to be the leading candidate, pending background checks.

Until Ring or another Republican joins the Board, the 2-2 party deadlock will likely prevent the NLRB from issuing any decisions on politically charged subjects. But, a series of actions by the Republican majority just before Miscimarra’s term expired predict additional policy changes once the Board regains full strength in 2018.

Meet the New NLRB Chairman

Before joining the NLRB, Marvin Kaplan was legal counsel to the federal Occupational Safety and Health Review Commission. Before that, he served as workforce policy counsel for the U.S. House Committee on Education and the Workforce. He also served as counsel for the House Oversight and Government Reform Committee and the Office of Labor-Management Standards.

Kaplan received his B.S. in Policy Analysis and Management from Cornell University. He earned his J.D. from Washington University in St. Louis.

Before starting his public service career, Kaplan worked briefly in private practice as an associate in the Kansas City law firm of McDowell Rice Smith & Buchanan.

 

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