New appointments to the NLRB may spell doom for joint-employment liability

If Marvin Kaplan and William Emanuel join the National Labor Relations Board, the NLRB will be controlled by Republicans.

On July 19, the Senate Committee on Health, Education, Labor and Pensions voted to approve President Donald Trump's nominees, Marvin Kaplan and William Emanuel, to the National Labor Relations Board, bringing the hotel industry one step closer to settling hang-ups on labor and employment left over from the Obama administration. One such issue, the concept of joint employment, is directly in the crosshairs.

The committee voted 12-11 on Kaplan, former counsel to the House Oversight and Government Reform Committee, and Emanuel, a member of the conservative Federalist Society and management-side labor attorney at Littler Mendelson. The two are expected to be confirmed to the NLRB pending a vote from the full Senate, which will be held on an as-of-yet unspecified date.

The concept of joint employment as dictated by the NLRB has been hotly debated since it was amended under the Obama administration in 2015 to include "indirect control." The updated definition has placed hotel operators in hot water as they attempt to reconcile the unclear concept while emboldening labor unions into sweeping liable parties into collective bargaining agreements. In some cases, fear of being attached to collective bargaining has scared potential investors away in union-rich locations such as New York City, but the recent appointments could play a role in revising the definition sooner as opposed to later.

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President Donald Trump nominated Kaplan and Emanuel, both of whom are conservatives, and according to Dana Kravetz, managing partner at law firm Michelman & Robinson, they are now in a position to drive more business-friendly decisions approached by the board, which will be Republican controlled if the two are confirmed.

Slow Start

While the hospitality community felt some relief at the election of Trump due to his pro-business stance when it comes to regulation, there seemed to be little confidence that things would be moving this quickly. At the NYU International Hospitality Industry Investment Conference, which took place in early June, Christian White, counsel at law firm BakerHostetler, said that due to a backlog of confirmations in the Senate there was little hope for a speedy confirmation process in the NLRB. Kravetz, however, said that the question right now pertains to how many positions within the government the President will be able to fill at a time, and if he will be able to shift these organizations to the party of his choosing.

"For the first time in a decade we are looking at an NLRB board that is Republican-leaning," Kravetz said. "The law moves at a glacier-like pace, but once you see these seats filled there are a number of top-of-mind issues that will be unraveled or pulled back in favor of business or the employer."

RELATED: Why labor and employment liability remain a persistent threat

Kravetz spoke in reference to a number of labor issues hoteliers take issue with, but spoke out on one in particular: the Aug. 27, 2015 decision regarding Browning-Ferris Industries, which found businesses liable in the event of employment and civil-rights violations when a company has “indirect control” over the workplace. Kravetz said the decision is currently on appeal, and if the apellate court kicks it back to the NLRB, the decision will be reversed. 

Until then, however, Kravetz still cautions operators against getting too comfortable with changes that have yet to be confirmed.

"I don't think any employer should rest comfortably and think that even if it passes there will be no findings of joint employment," he said. "Control is a place where employers have slipped, and often they exert control over a property even unknowingly. They have to be vigilant, and that comes with the notion of housekeeping, valet and even security, and the tendency is to control the entire scene."

The Trump Taj Mahal in Atlantic City, N.J., infamously closed its doors due in part to conflicts with the property's labor union.

Not All Sunshine

While Kravetz and those throughout the business community celebrate the potential new members of the NLRB, others aren't so happy. The AFL-CIO, a national trade union center and the largest federation of unions in the U.S., responded to the nominations of Kaplan and Emanuel with a letter to the Senate criticizing Emanuel's track record of solely representing employers, as well as his own admission that he has never taken on the case of a worker or union. The AFL-CIO also claimed that neither Kaplan or Emanuel have ever once "demonstrated a willingness to uphold the NLRB's basic mission of protecting workers rights."

"After reviewing their records and statements at their confirmation hearing, the AFL-CIO has concluded that we must oppose these nominees and urge the Senate to reject these nominations," the letter said. "In recent years, some in Congress and in the business community have launched relentless attacks on the NLRB and sought to get key NLRB decisions and actions overturned. Kaplan and Emanuel have been part of these attacks, and they said nothing at the confirmation hearing to distance themselves from these attacks or suggest that they would bring a less hostile, and more pro-NLRA view to their work," the AFL-CIO wrote. “Nor did either nominee make adequate commitments to recuse from cases and issues where there is real concern, based on their prior work and writings, that they have prejudged the issue and would not approach it with an open, unbiased mind."

Meanwhile, for all the discussion about what the Trump administration is trying to change and what the NLRB has power over, state and local governments are acting quickly to institute their own rules.

"Chicago, Seattle, Los Angeles, New York, those pro-employee locations are reacting somewhat as a response to actions taking place in the federal government," Kravetz said. "That's to be expected, and it will continue as a natural response to what occurs in the federal level. We saw that last year with Los Angeles' stance on minimum wage, and it went up as a way for cities to exert their own power."

In the face of this tangled web of change, Kravetz said hotels should look to their associations for assistance. He specifically pointed to the American Hotel & Lodging Association as an organization that reacts to "big-ticket items" that affect hoteliers as issues become increasingly difficult to keep track of.

"It's an evolving topic, and as these people get into their seats at the NLRB we will see which issues they decide to cover," he said.

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