William (Bill) Emanuel nominated for NLRB post

The President has made his second nomination to fill out the membership of the National Labor Relations Board.

William (Bill) Emanuel is a shareholder at Littler Mendelson where he practices traditional labor law in the Los Angeles office.

A graduate of Georgetown University Law School and Marquette University, he has authored several amicus curiae briefs on behalf of trade associations in cases challenging state laws that allow labor unions to enter employers' private property. He is often recognized as a Best Lawyer in America©.

  • Fellow in the College of Labor and Employment Lawyers
  • Contributing editor of the ABA's treatise The Developing Labor Law
  • Member of the Practice and Procedure Committee and Developing Labor Law Committee of the American Bar Association
  • Member and past chairman of the Labor and Employment Law Section of the Los Angeles County Bar Association
  • Member and past chairman of the Labor Relations Advisory Committee
  • Member and past chairman of the Employers Group Legal Committee.
  • Member of the Labor and Employment Practice Group of the Federalist Society.
  • He earned his JD from Georgetown University and AB from Marquette University.

More at the Littler web site.

Earlier, the President nominated Marvin Kaplan [See here]. Once the two nominees are confirmed by the Senate, the NLRB will be at its full strength of five Members, and the majority will be in Republican hands.

Here's a 3:56 minutes video in which I make predictions of 10 things that will change once the Republican Members take over:

 
 

Does Dodd-Frank protect internal whistleblowers? SCOTUS will decide.

I can just hear Justice Gorsuch saying, "Paul Somers asks us to tweak a congressional statute – just a little – so that it might (he says) work a bit more efficiently. "Respectfully, I would decline Mr. Somers’s invitation and would instead just follow the words of the statute as written." [Changing the names in what he said in his dissent in Perry v. Merit Systems Protection Board (US Supreme Ct 06/23/2017).]

The US Supreme Court granted certiorari on June 26 in a case that will settle a circuit court split as to whether the Dodd-Frank Act's anti-retaliation provision for “whistleblowers” extends to individuals who make internal disclosures of alleged unlawful activity but do not report alleged misconduct to the Securities and Exchange Commission. Digital Realty Trust, Inc. v. Somers (cert granted 06/26/2017) [Cert petition] [9th Circuit opinion] [Supreme Court briefs].

The facts are simple. Paul Somers was a VP employed by Digital Realty Trust. Somers' complaint alleged that he made several reports to senior management regarding possible securities law violations by the company, soon after which the company fired him. Somers was not able to report his concerns to the SEC before Digital Realty terminated his employment.

Somers sued, claiming violation of Dodd Frank's anti-retaliation provision. Digital Realty sought to dismiss the claim on the ground that, because Somers reported the possible violations only internally and not to the SEC, he was not a “whistleblower” entitled to Dodd Frank's protections. The district court held in favor of Somers, and the 9th Circuit affirmed. Somers v. Digital Realty Trust (9th Cir 03/08/2017) [Opinion text].

The problem is that Dodd Frank has two different places where the word "whistleblower" is expressly used. One is the addition of Section 21F to the Securities Exchange Act of 1934, which defines a whistleblower as, “any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.” Obviously, this does not cover internal whistleblowers.

But there's another part of Section 21F which provides:

"No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—

"(i) in providing information to the Commission in accordance with this section;

"(ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or

"(iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter, including section 78j-1(m) of this title, section 1513(e) of Title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission."

The 9th Circuit reasoned that subdivision (iii) incorporates the Sarbanes-Oxley Act disclosure requirements and protections and therefore "necessarily bars retaliation against an employee of a public company who reports violations to the boss."

There is a split among circuits. Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2nd Cir 2015) is in agreement with the 9th Circuit. Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir 2013) is not.

Look for Supreme Court oral arguments in the Fall of 2017, with a decision during 2018.

[For recent decisions and pending employment law cases, see Supreme Court Watch.] 

SCOTUS: "Mixed" MSPB cases are reviewable in district court, not circuit court

The US Supreme Court has decided that when the Merit Systems Protection Board dismisses a "mixed" case on jurisdictional grounds, the proper forum for judicial review is district court rather than the Federal Circuit. Perry v. Merit Systems Protection Board (US Supreme Ct 06/23/2017 (7-2) [Opinion text]. And Justice Gorsuch filed a cogent and revealing dissent.

The Civil Service Reform Act of 1978 (CSRA) gives the Merit Systems Protection Board (MSPB) the power to review certain serious personnel actions against federal employees. If an employee asserts rights under the CSRA only, MSPB decisions are subject to judicial review exclusively in the Federal Circuit. If the employee invokes only federal antidiscrimination law, the proper forum for judicial review is federal district court.

When an employee complains of a serious adverse employment action and attributes the action, in whole or in part, to bias based on race, gender, age, or disability, then that's called a “mixed case.” If MSPB dismisses a mixed case on the merits or for procedural reasons, then review can be had in district court only.

Anthony Perry's case was dismissed by MSPB on the ground that there was a lack of jurisdiction. So the question before the Court was where does Perry go in order to get judicial review? The Court held:

"(1) the Federal Circuit is the proper review forum when the MSPB disposes of complaints arising solely under the CSRA; and

(2) in mixed cases, such as Perry’s, in which the employee (or former employee) complains of serious adverse action prompted, in whole or in part, by the employing agency’s violation of federal antidiscrimination laws, the district court is the proper forum for judicial review.

The government argued that Perry ought to split his case between the Federal Circuit and the district court. The Supreme Court majority was concerned about the "expense, delay, and inconvenience of requiring employees to sever inextricably related claims, resorting to two discrete appellate forums, in order to safeguard their rights." So. Hey. Send all the claims to district court. Voila.

Justice Gorsuch dissented. Here are some classic lines from his dissenting opinion:

  • Anthony Perry asks us to tweak a congressional statute—just a little—so that it might (he says) work a bit more efficiently.
  • Respectfully, I would decline Mr. Perry’s invitation and would instead just follow the words of the statute as written.
  • Having to contest Board rulings on civil service and discrimination issues in different courts, he says, is a hassle.
  • Mr. Perry’s is an invitation I would run from fast. If a statute needs repair, there’s a constitutionally prescribed way to do it. It’s called legislation.
  • At the end of a long day, I just cannot find anything preventing us from applying the statute as written—or heard any good reason for deviating from its terms. Indeed, it’s not even clear how overhauling the statute as Mr. Perry wishes would advance the efficiency rationale he touts. The only thing that seems sure to follow from accepting his invitation is all the time and money litigants will spend, and all the ink courts will spill, as they work their way to a wholly remodeled statutory regime. Respectfully, Congress already wrote a perfectly good law. I would follow it.

Whether right or wrong on the ultimate outcome, I respect jurists who try their best to apply statutes the way they are written. If it's broke, let Congress fix it.

[For recent decisions and pending employment law cases, see Supreme Court Watch.] 

Who is Marvin Kaplan, nominee to the NLRB?

The President officially sent Marvin Kaplan's nomination to the Senate on June 20. [White House Press Release] The White House's short bio for Mr. Kaplan is [here]. If confirmed by the Senate, the NLRB will have four members - two Republicans and two Democrats. But don't worry; the nomination of one more Republican an't be far off.

Who is Marvin Kaplan? The following information is from Mr. Kaplan's LinkedIn biography:

  • Counsel to Heather L. MacDougall, Acting Chair and Commissioner at the U.S. Occupational Safety and Health Review Commission, since September 2015.
  • Workforce Policy Counsel for the U.S. House Education and the Workforce Committee, January 2012 - September 2015. Drafted labor and employment legislation, including the Tribal Labor Sovereignty Act of 2015 and the Workforce Democracy and Fairness Act. Conducted oversight of and investigated allegations of waste, fraud, and abuse by the Department of Labor and National Labor Relations Board. Led efforts to fight DOL overtime rules and 2012 unconstitutional NLRB recess appointments. Provided legal and policy advice on all labor and employment legislation, including the Kline-Miller Multiemployer Pension Reform Act of 2014, and oversight within the committee’s jurisdiction.
  • Counsel, US House Oversight and Government Reform Committee, January 2009 - January 2011. Conducted oversight of and investigated allegations of waste, fraud, and abuse by the Department of Labor, National Labor Relations Board, and Federal employees generally.
  • Special Assistant, Department of Labor, Office of Labor-Management Standards, June 2007 - January 2009. Provided legal advice on issues related to the Administrative Procedure Act, Labor-Management Reporting and Disclosure Act, Labor Management Relations Act, National Labor Relations Act, and Employee Retirement Income Security Act. Drafted the union trust reporting notice of proposed rulemaking and final rule, and assisted in revising union reporting requirements on the Form LM-2/3.
  • Associate Attorney, McDowell Rice Smith & Buchanan, Kansas City, Missouri, February 2007 - June 2007. Drafted memos, motions, and briefs on subjects including Intellectual Property, Personal Injury, Products Liability and Contracts (Construction).
  • Juris Doctor, Washington University in St. Louis, 2003-2006.
  • Bachelor's Degree, Policy Analysis and Management, Cornell University, 2000-2003.

I'm also expecting the President to nominate William (Bill) Emanuel, a shareholder at Littler Mendelson where he practices traditional labor law in the Los Angeles office. [Emanuel's Littler bio]

I'm baffled why Kaplan got the first nod.

 

DOJ throws NLRB under the bus in SCOTUS class action waiver case (+ video)

Elections matter. The government has disowned the basic rule of the NLRB's 2012 D.R. Horton rule that class action waiver agreements are illegal because they deny employees the statutory right to engage in concerted activities for mutual aid and protection. We won't need to wait until the President appoints two new Board members.

 
2:04 minute video about the Solicitor General switching sides at the US Supreme Court in NLRB v. Murphy.

2:04 minute video about the Solicitor General switching sides at the US Supreme Court in NLRB v. Murphy.

 

The government's about-face was announced in an amicus brief [PDF] filed at the US Supreme Court on June 16 in Epic Systems Corp v. Lewis (consolidated with NLRB v. Murphy Oil and Ernst & Young v. Morris). [Other briefs here]

Facts: A non-union employer requires its employees to agree that they will arbitrate work-related legal claims – but not on a collective or class basis. Employees attempt to litigate or arbitrate (in a class action or collective action) claimed violations of the Fair Labor Standards Act (FLSA).

In Murphy Oil, the US Solicitor General originally filed a petition for a writ of certiorari on behalf of the NLRB, defending the Board’s position. But now, "After the change in administration, the [Solicitor's] Office reconsidered the issue and has reached the opposite conclusion."

The government now argues that the Federal Arbitration Act's policy favoring enforcement of arbitration agreements is not overridden by the "ambiguous NLRA language" that the NLRB used in finding that class action waiver agreements are illegal.

Summary of the government's arguments:

  • The FAA requires courts to enforce agreements to arbitrate federal claims unless the FAA's mandate has been overridden by a contrary congressional command or unless enforcing the parties' agreement would deprive the plaintiff of a substantive federal right.
  • The FAA's presumption in favor of enforcing arbitration agreements may yield where "Congress itself" has overridden that presumption in another statute. A statutory authorization to pursue class actions in court for violations of particular federal laws – such as the FLSA, which is involved in these case – is insufficient to override the FAA's directive that agreements to arbitrate must be enforced.
  • Plaintiffs' argument rests on the idea that the NLRA's recognition of a general right to engage in "concerted activities" confers greater rights to pursue FLSA claims collectively than does the FLSA itself. Nothing in the NLRA's legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here.
  • An agreement to arbitrate does not entail any surrender of substantive statutory rights. The arbitration agreements in these cases do not purport to authorize employer conduct that would violate the FLSA's wage-and-hour provisions, and they do not prevent a successful plaintiff from recovering (through arbitration) the full relief that a court could award for an FLSA violation.
  • Enforcement of the arbitration agreements will not deprive plaintiffs of any substantive right under the NLRA. Although NLRA Section 7 confers important substantive rights to organize and to engage in collective bargaining, the arbitration agreements do not constrain plaintiffs' exercise of those rights.
  • Even if using collective dispute resolution mechanisms for FLSA claims is included within Section 7's phrase "other concerted activities," it is a procedural right under the FLSA, and not a substantive NLRA right.
  • The FAA's saving clause provides no sound basis for declining to enforce the parties' arbitration agreements. The Supreme Court in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), held that a state-law rule against enforcement of class action waivers contained in certain consumer contracts fell outside the saving clause. The same result should follow in the present cases.

My views:

  • As one expects, the government's brief is nicely written. Indeed, many Supreme Court Justices might follow exactly the logic expressed in the brief.
  • As interesting as it is that the government switched horses in mid-stream, don't expect that to have any impact on the Supreme Court Justices. In a statutory interpretation case such as this one, they each do the best they can to figure out Congress' intent. They don't care much about the intent of the Justice Department.

Oral argument in these cases will be in the Fall of 2017, with a decision expected in 2018.

[For recent decisions and pending employment law cases, see Supreme Court Watch.]