On Labor, Trump Remains Outmanned by Democrats

Five months into President Donald Trump's administration, the federal agency that referees disputes between unions and business is still controlled by Democrats, complicating the White House's effort to roll back government oversight of the labor market.

National Labor Relations Board decisions during President Barack Obama's tenure resulted in some big victories for labor, including an easier path for employees at franchise businesses and contractors to join unions. The board's position in the months ahead will shape how far these efforts go, with big implications for chains like McDonald's and others.

With two of the board's five seats vacant since August 2016, Mr. Trump has an opportunity to flip the board controlled by two Democrats into Republicans' favor. The president may make nominations as soon as this week as part of a focus on labor policy, but Senate confirmation might not occur until well into the fall.

Mr. Trump has elevated the sole Republican, Philip Miscimarra, to chairman. That move slowed issuance of agency decisions, since he can control which cases are decided but lacks the votes to win rulings.

The board "functions best with a full complement of five Board members, and I hope that our two existing vacancies will be filled as soon as possible," Mr. Miscimarra said in a statement to The Wall Street Journal. "My primary focus is to facilitate the board's timely resolution of our cases, and to support the agency generally. This will be enhanced when we return to having five confirmed Board members."

The White House is considering William Emanuel, an attorney representing employers at the Littler Mendelson law firm, and Marvin Kaplan, counsel at the independent Occupational Safety and Health Review Commission, according to people familiar with the vetting process.

Mr. Emanuel has a background similar to the chairman's; both spent much of their careers at major law firms representing large companies in employment-law cases. Mr. Kaplan previously was policy counsel to the House Education and the Workforce Committee.

Mr. Emanuel declined to comment through his firm. Mr. Kaplan didn't respond to requests for comment. A White House spokesman said the administration doesn't comment on personnel matters.

Through the first five months of this year, the board has decided about 40% fewer cases compared with the same period in 2016. This year, it hasn't issued any "notable decisions," the designation given to cases that are of broad interest to employers and unions. Last year, 10 such decisions were issued before June.

"The delays are concerning," said Robert Cresanti, president of the International Franchise Association trade group. Uncertainty about how the board could rule in future cases is keeping firms from expanding and leaving it unclear how much involvement a franchise can have in its franchisee's employment policies, Mr. Cresanti said.

Cases decided before the board don't in themselves set precedent, but that can change if rulings are challenged in federal court. NLRB decisions also guide businesses and unions on how the board could rule in future cases.

Filling out the board has been a politically fraught process in the past. The board had only two members from January 2008 until March 2010, meaning President Barack Obama didn't have a body controlled by Democrats until more than a year after he took office. President George W. Bush didn't see the board turn to Republicans' favor until January 2002, a year after his inauguration. President Bill Clinton faced a similar wait for a return to a Democratic majority.

For each of the three prior administrations, the board was split for at least a portion of the time.

Business groups such as the franchise association and Chamber of Commerce say they are anxious to have the board take another at look organizing rules revised in recent years -- and to find a case that would overturn a ruling that made it easier for contract workers and employees of franchises to collectively bargain.

The board in 2015 found that contract workers at a recycling facility had the right to bargain with the company that owned their facility, Browning-Ferris Industries, not just the local contractor that paid them.

Franchise businesses are concerned the case opened the door to the determination that employees of franchised locations -- like McDonald's restaurant -- could bargain with the parent brand.

A case involving McDonald's is in the board's pipeline, still pending before an administrative law judge. Based on the judge's ruling, that case would likely be elevated to the full board.

The board's general counsel, a Democrat in place until November, has sway over which cases are allowed to proceed to administrative judges.

Kristie Arslan, owner of the Popped Republic popcorn shop in Alexandria, Va., said she decided not to expand her brand through franchises after learning about the board's joint-employment ruling.

It could make her legally liable for employees of her franchisees. She now lobbies on behalf of small businesses against such policies.

"We've had to take the slow-and-steady approach even though franchising could help us grow much quicker," she said. "Regulation is holding back small-business growth."

Some say that businesses are overstating the reach of recent board decisions.

Craig Becker, general counsel at the AFL-CIO labor federation, said major rulings during the Obama administration were mostly about interpreting a 1930's law in the context of the modern work force.

That included looking at rules around use of employer email systems and how bargaining applies to a modern workforce that makes greater use of contract labor. Mr. Becker, a Democrat, served on the board from 2010 to 2012.

"Attempting to reverse everything that has been done, doesn't advance the agency's mission," he said. "The board should figure out how the law is best applied going forward."

(END) Dow Jones Newswires

June 14, 2017 09:14 ET (13:14 GMT)