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Outten Wants NLRB's Emanuel Recused Due To Littler Ties

Law360—Dorothy Atkins

Outten & Golden LLP urged the National Labor Relations Board Tuesday to block new member William Emanuel from participating in any cases applying its controversial D.R. Horton ruling on collective action waivers, arguing he has a conflict since he litigated suits that attempted to discredit the board's decision while working for Littler Mendelson PC.

Emanuel was confirmed by the Senate and sworn in as an NLRB member on Monday, replacing Kent Y. Hirozawa. Prior to his appointment, Emanuel served as a shareholder at Littler Mendelson, where he served as counsel for an employer in several D.R. Horton cases since 2012, including multiple cases that are still pending before the NLRB, according to Outten & Golden.

If Emanuel doesn’t recuse himself, he could choose to participate in pending suits that consider the D.R. Horton ruling, and overturn it, impacting cases that involve his former clients and law firm, Outten & Golden said.

“The rules of ethics do not permit such obvious evasion,” the firm said.

The D.R. Horton line of rulings go back to January 2012, when the board found workers’ rights to engage in collective action under the National Labor Relations Act supersede the presumption of validity of arbitration agreements detailed in the Federal Arbitration Act. As a result, employers may not force employees to sign arbitration agreements that include class action waivers involving issues like overtime and pay.

The board has since reaffirmedits controversial ruling, but the decision has been panned by the Fifth Circuit and it’s been seen as unpersuasive by other federal appeals courts. In June, the U.S. Department of Justice did a rare about-face and refused to throw its weight behind the NLRB’s precedent. Now the question is being considered by the U.S. Supreme Court, where five cases that turn on the collective action issue have been appealed.

Outten & Golden noted in its motion for recusal Tuesday that NLRB members are bound by multiple ethical standards, prohibiting government employees from acting partially toward a private organization or individual. There are also federal rules prohibiting executive branch employees from participating in any matter related to their former employers or clients for two years. Additionally, the federal code requires recusal when a “reasonable person” would question the impartiality of the member, as is happening in this case, Outten & Golden argued.

Outten & Golden said Littler Mendelson has drafted, enforced and defended the legality of multiple mandatory arbitration agreements with collective action prohibitions before the NLRB and other courts, so it has a significant stake in the outcome of all D.R. Horton pending cases.

Therefore, Emanuel must recuse himself from participating in any case raising the D.R. Horton issues, Outten & Golden argued. Those cases will necessarily involve “similar controlling questions of law” as those he’s worked on in the past, and ruling on them could have a “controlling and fully dispositive” effect in suits involving Emanuel’s former clients, the firm said.

“The principle is well established: if a public official is recused from participating in Case X, that official must also be recused from every case that may have a controlling effect on Case X, even if those cases are separate,” Outten & Golden said.

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The motion was drafted by Justin M. Swartz, Darnley D. Stewart and Michael J. Scimone of Outten & Golden LLP and Joseph A. Fitapelli and Brian Scott Schaffer of Fitapelli & Schaffer LLP.

The case is Raymours Furniture Co. Inc. and Outten & Golden LLP, case number 02-CA-136163, before the National Labor Relations Board.