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Invalidation of President Obama's Recess Appointments Undermines NLRB Actions, by David A. McClurg

Posted by Attorney Roger L. Pettit / Comments

The efforts of President Obama’s appointees on the National Labor Relations Board (“NLRB”) to push a decidedly pro-employee agenda have run up some significant judicial barriers. On January 25, 2013, the D.C. Circuit Court of Appeals ruled, in Noel Canning v. NLRB, that the three “recess” appointments President Obama made to the National Labor Relations Board on January 4, 2012 were invalid, and that the Board, thus being without a quorum, lacked the authority to conclude that Noel Canning had committed an “unfair labor practice” by refusing to execute an agreement with the union representing its workers. The court held that a president can make such recess appointments only during “intersession” recesses that occur between the extended sessions of Congress, and not, as President Obama attempted with the three NLRB appointees, during temporary recesses in the middle of a session of the Senate.

On May 16, 2013, the Third Circuit Court of Appeals joined the D.C. Circuit in concluding that recess appointments can only be made during “intersession” recesses. In that case, the Court held that the Appointment of Board member Craig Becker on March 27, 2010 was an invalid “intra-session” appointment. The decisions in these two cases have led to demands from a variety of congressional leaders and business groups for the resignation of those members still serving on the NLRB that the Courts have found to be invalidly appointed. The affected members have refused, and the Board has indicated that it considers the recent decisions to have applicability only to the specific cases under consideration by the courts. The Board has continued to hear cases, and it decisions continue to be followed by the NLRB’s regional offices when they are deciding on the issuance of charges and Complaints against employers.

The Noel Canning case has been appealed to the Supreme Court, and it is likely that the recent decision by Third Circuit Court of Appeals will also be appealed. However, it will likely take over a year for the Supreme Court to hear these cases and issue a ruling. In light of the strength of these two decisions it is possible that business groups upset with the Board’s recent actions will ask the courts to issue an order restraining the invalidly appointed Board members from participating in any further decisions or actions of the Board.

Because the U.S. Supreme Court ruled just two years ago that the five-member NLRB cannot act on issues absent a quorum of at least three Board members, (and the participation of illegally appointed members does not provide a quorum) these Appellate Court rulings, if upheld, could invalidate decisions in over 4-500 cases heard by, and several administrative rules promulgated by the NLRB since 2010 that adversely affected employers, including:

a)   The NLRB’s “quickie election” proposal that would shorten the timeframe for union elections and limit challenges to bargaining unit composition;

b)   The proposal to force employers to bargain with “micro-units” that represent narrow groups of workers within a company (even in a single job title);

c)   The ruling restricting workers’ right to resist funding union political activities;

d)   The rulings forcing employers’ to continue providing annual wage increases and deducting union dues after a collective bargaining agreement expires;

e)   The ruling restricting employers’ ability to limit off-duty access to a workplace – thus expanding access for union organizers;

f)   The ruling narrowing the definition of supervisors to expand the number of employees unions can organize;

g)   The ruling limiting employers’ ability to insist on confidentiality relating to internal investigations;

h)   The ruling requiring employers to give unions copies of sworn witness statements in investigations into workplace misconduct, chilling the ability of employees to speak freely without fear of repercussions.

i)    Multiple rulings expanding the definition of “concerted activity” to include public complaints about an employer in social media, and to preclude rules requiring that employees refrain from discussing investigations;

j)    Rulings challenging the legality of “At-Will” employment acknowledgements

k)   The ruling invalidating limitations on group or class actions in arbitration agreements; and

l)    The ruling imposing obligation on employers to “gross-up” lump back pay awards to include amounts for any increased taxes the employee may be required to pay as a result of receipt of the lump sum in a tax year after the amounts should have been paid.

In another major defeat for President Obama’s appointees to the NLRB, the DC Circuit Court recently held that the Board lacked the authority to issue a 2011 rule which would have required all employers covered by the National Labor Relations Act, including non-union employers, to post a workplace notice informing employees of their rights to join and be represented by unions and to engage in other activity protected by the Act. The rule would have made it an unfair labor practice for an employer to fail to post the required notice and such failure could also be used to prove the employer’s anti-union animus in other Board proceedings.

Although scheduled to become effective on April 30, 2012, the US District Court for the District of Columbia held that this rule exceeded the Board’s authority, and the DC Court of Appeals issued an emergency injunction barring implementation of the rule pending its full consideration of the case.

Perhaps most noteworthy about the Court of Appeal’s recent opinion was the Court’s reliance on the National Labor Relations Act’s protection of employers’ free speech rights, including employers’ rights  to communicate their views concerning unions to their employees. The Court stated that while the Act “precludes the Board from finding non coercive employer speech to be an unfair labor practice, or evidence of an unfair labor practice, the Board’s rule does both” because an employer’s failure to post the required notice would constitute an “unfair labor practice and evidence of anti-union animus in cases in which unlawful motive [is] an element of an unfair labor practice.”



Attorney Roger L. Pettit
Attorney Roger L. Pettit

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