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NLRB recusal program `fully compliant’ with ethics requirements, Ring says

By WK Editorial Staff

A comprehensive review showed the agency’s ethics program complies with all applicable ethics requirements, but the report did call for gaps in the Board’s recusal protocol to be filled, among other recommendations.

The NLRB released the result of its 18-month review of its own ethics recusal program, the Board announced on Tuesday, November 19. The review included consultation with the Office of Government Ethics and benchmarking with other federal agencies. The result, the Ethics Recusal Report issued by NLRB Chairman John F. Ring, concluded that the agency’s ethics program for Board member recusals “is strong and fully compliant with all applicable government ethics requirements.”

Strong protections; potential gaps. The NLRB’s current practices for identifying conflicts, establishing screening procedures, and obtaining advice from the Designated Agency Ethics Official “provide strong protections against conflicts of interest in the Board’s adjudicative and rulemaking responsibilities,” according to the review’s findings. However, the Board identified potential gaps and other areas for improvement and has approved changes to address them.

The impetus for the comprehensive review was an internal agency dust-up following the Board’s issuance in December 2017 of Hy-Brand Industrial Contractors, Ltd., a full panel decision that purported to overturn the agency’s controversial Browning Ferris Industries of California, Inc., opinion. (That controversial Obama-era decision had outlined a new, more employee-friendly standard for determining whether an entity is a joint employer under the NLRA, and the more business-minded Trump NLRB was eager to undo it.).

However, the NLRB inspector general concluded that Board Member William Emanuel should have recused himself from participating in the Hy-Brand case because his former law firm had represented a party in the Browning-Ferris litigation. In the NLRB inspector general’s view, Hy-Brand was essentially a “do-over” for the Browning-Ferris parties. Accordingly, under the ethics pledge found in President Trump’s Executive Order 13770 (Ethics Commitments by Executive Branch Appointees), Emanuel should not have participated in the Hy-Brand decision. Consequently, Hy-Brand was vacated, and Browning-Ferris was restored as Board law.

According to a fact sheet accompanying the report, the review “established that the Agency’s ethics program for Board member recusals is strong, fully compliant with all applicable government ethics requirements and merits the full confidence of the Agency’s stakeholders.”

New procedures. As a result of the review conducted by the Board and based on the findings from that Review, the Board has directed the implementation of the following new procedures to ensure its full compliance with all ethics and recusal obligations:

1. Solicitor’s Office to develop, for Board approval, a process by which all parties appearing before the Agency will be required to file an Organizational Disclosure Statement at the outset of a matter. This action is in process.
2. ES Office to develop, for Board approval, a new protocol for public disclosure of Ethics Office Board member recusal lists. This action is in process.
3. ES Office to develop, for Board approval, a new protocol for Board member sign off of all revisions made to the member’s own recusal list. This action is in process.
4. Acknowledgement of the DAEO’s “red flags” checklist identifying atypical situations in which conflicts could arise; Ethics Office to incorporate the checklist into Board member and staff ethics training. This action is in process, and the checklist will be updated as appropriate.
5. Solicitor’s Office to develop, for Board approval, procedures for handling recusal motions consistent with the Board’s past practice of allowing individual Board members to determine their own recusal motions, with DAEO guidance. This action is in process.
6. Develop and implement Board member recusal protocol. This protocol has been developed and implemented by the Board (see Appendix 3).

McFerran’s approach. Member Lauren McFerran wrote separately to note the circumstances under which the Chairman’s review was undertaken which, she said, “reflects the work of Agency staff under the supervision and direction of the Chairman. Along with the other Board members, I have been regularly apprised of the progress of that work. I acknowledge and appreciate the time and the effort reflected in the Report and the work done by staff in this initiative. Its subject matter is vitally important.”

She further noted that the Board was asked to vote on six specific “Action Items” that emerged from the report; McFerran voted to approve three of these recommendations. She separately commented on the following issues, among others:

  • The Board and its members should adopt no policy or practice that undermines the independence or integrity of the Designated Agency Ethics Official or the Inspector General.
  • No Board member is entitled under the National Labor Relations Act to participate in a decision where that participation would violate a law, regulation, or executive order binding on the member.
  • Individual Board members and the Board as a body should defer to disqualification determinations made by the DAEO. The Board should accordingly adopt a rule providing that the Board as a body will prohibit a member who has been disqualified by the DAEO from participating in a matter.
  • The Board should disqualify a member if the member’s participation would be contrary to a disqualification determination made by the DAEO or if participation would be a clear violation of applicable ethical standards, including the Standards of Ethical Conduct for Employees of the Executive Branch and the ethical standards or rules that a federal court might apply on review of the Board’s decision.

Significant undertaking. “This was a significant undertaking that the Board took very seriously because ensuring the highest ethical standards is one of the most important things we do,” Ring said. “Unless those who rely on the Board can have complete confidence in its fairness, impartiality, and integrity, we are not doing our job.”

A full copy of the report, which includes a letter from Chairman Ring, a statement from Member Lauren McFerran, and the Report’s related appendices, is available here.