Tag: National Labor Relations Board

Employee Codes of Conduct: Really? Requiring Someone To Use Information “Fairly And Lawfully” Can Be Illegal?

Allen Matkins Law Firm

Companies have lots of very good reasons for adopting codes of conduct.  These reasons include:

  • Ensuring compliance with applicable exchange listing rules (e.g., NYSE Rule 303A.10 and NASDAQ Rule 5610);
  • Minimizing the risk of securities law violations (e.g., Regulation FD and Rule 10b-5);
  • Protecting company assets (trade secrets as well as reputational assets);
  • Complying with contractual obligations requiring confidentiality; and
  • Complying with customer and employee privacy laws and regulations.

Thus, I was amazed to see a recent decision by a panel of the National Labor Relations Board finding the following language in a code of conduct to be unlawful:

Keep customer and employee information secure.  Information must be used fairly, lawfully and only for the purpose for which it was obtained.

Fresh & Easy Neighborhood Market and United Food & Commercial Works Int’l Union, Cases 31-CA-077074 and 31-CA-080734 (July 31, 2014).   The NLRB found that this language violated employees’ rights under Section 7 of the National Labor Relations Act which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”.  Reversing the administrative law judge, the panel found that employees would reasonably construe the above language “to prohibit discussion and disclosure of information about other employees, such as wages and terms and conditions of employment”.  Really?  This admonition was included at page 16 of a 20 page booklet primarily dedicated to a variety of ethical matters.  In my view, it is arbitrary and capricious, if not just plain bizarre, to interpret this language as conveying any limitation on employees’ Section 7 rights.

ARTICLE BY

Keith Paul Bishop
OF
Allen Matkins Leck Gamble Mallory & Natsis LLP

U.S. Supreme Court Upholds D.C. Circuit Decision in Noel Canning

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In a lengthy opinion authored by Justice Stephen Breyer, and drawing heavily on historical practice of Presidents and the Senate, the United States Supreme Court has upheld the decision of the U.S. Court of Appeals for the D.C. Circuit in Noel Canning v. NLRB, concluding that President Obama’s three recess appointments to the National Labor Relations Board in January 2012 (Sharon Block, Richard Griffin, and Terence Flynn) were invalid. The Court upheld the right of the President to make recess appointments both inter- and intra-session, but held that it is the Senate that decides when it is in session by retaining the power to conduct business pursuant to its own rules. The Court also found that a recess of less than ten days “is presumptively too short” to permit the President to make a recess appointment, except in “unusual circumstances”, such as a “national catastrophe”. (The recess here was three days.) The Court also decided that the recess appointment power applies to appointments that first come into existence during a recess and to those that initially occur before a recess but continue to exist during a recess.

As a result of the decision, over 1,000 Board decisions likely are now invalid. According to the National Right to Work Foundation, 999 unpublished decisions and 719 published decisions (totaling 1,718) could be affected. The Chamber of Commerce estimates 1,302 decisions from August 27, 2011 through July 17, 2013 to be suspect.

Article By:

Howard M. Bloom
Of:
Jackson Lewis P.C

Employer Email Policies on Chopping Block as General Counsel Seeks to Overrule Register Guard and Board Calls for Amicus Briefs

Proskauer

In a development of importance to both union and non-union employers, the NLRB General Counsel has asked the NLRB to overrule its 2007 decision in Register Guard, 351 NLRB 1110 (2007).  In Register Guard, the Board had held that employers could bar employee use of the employer’s email for non-business purposes, including union or other communications protected under Section 7 of the National Labor Relations Act, so long as the employer did so on a non-discriminatory basis.

The General Counsel now seeks a new rule that employees may use employer email for union or other Section 7 protected purposes so long as doing so does not impede production or workplace discipline. The Board has issued a notice the case, Purple Communications, Inc., Case Nos. 21-CA-095151, 21-RC-091531 and 21-RC-091584, inviting interested parties to file amicus briefs by June 16, 2014.

In its notice, the Board asked the amicus briefs to address the following questions:

  1. Should the Board reconsider its conclusion in Register Guard that employees do not have a statutory right to use their employer’s email system (or other electronic communications systems) for Section 7 purposes
  2. If the Board overrules Register Guard, what standard(s) of employee access to the employer’s electronic communications systems should be established? What restrictions, if any, may an employer place on such access, and what factors are relevant to such restrictions?
  3. In deciding the above questions, to what extent and how should the impact onthe employer of employees’ use of an employer’s electronic communicationstechnology affect the issue?
  4. Do employee personal electronic devices (e.g., phones, tablets), social media accounts, and/or personal email accounts affect the proper balance to be struck between employers’ rights and employees’ Section 7 rights to communicate about work-related matters? If so, how?
  5. Identify any other technological issues concerning email or other electronic communications systems that the Board should consider in answering the foregoing questions, including any relevant changes that may have occurred in electronic communications technology since Register Guard was decided.

How should these affect the Board’s decision?

The Board also invited amici to submit “empirical and other evidence”, which most likely means studies showing how employees use email in the workplace, how much productive time is lost because of over-use of email, and the like.  It is also possible the Board’s eventual decision could have an impact on other types of employee communications through various electronic devices and social media.

It has long been anticipated that the new Board and General Counsel would want to revisit the Register Guard decision.  Now that the time has come, it will be important for employers to engage as amici in an effort to shape the outcome and provide all Board members — including possibly dissenting ones — with both legal analysis and practical and operational considerations that should inform the Board’s policy choices in this important area.

Article By:

Ronald Meisburg
Of:
Proskauer Rose LLP

Revitalized National Labor Relations Board (NLRB) Takes on Vigorous Agenda Including Reissued Quickie Union Election Rules And Greater Employee Handbook Scrutiny

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The National Labor Relations Board (“NLRB” or the “Board”) has been notably active in the first quarter of 2014.

As addressed in our March 2013 Alert, the Board faced uncertainty regarding its power to act following the January 23, 2013 decision in Noel Canning v. NLRB by the U.S. Court of Appeals for the District of Columbia Circuit. Noel Canning held that President Obama’s three recess appointments to the Board, made on January 4, 2012, were unconstitutional. Then, in August 2013, the NLRB received a full complement of five Senate-confirmed members.

While it has taken a few months for the Board to ramp up after the new members were sworn in, the newly invigorated NLRB is quickly making up for that time. For instance, the Board issued 19 decisions in January 2014 alone.

Below are summaries of certain significant NLRB developments from the first quarter of 2014:

NLRB Proposes Quickie Election Rules Again – Will Help Unions to Organize On February 5, 2014, the Board reissued proposed amendments to its existing rules governing union election procedures, new rules which it first proposed in2011. These rules will make union organizing easier by dramatically expediting the Union election process. In May 2012, the United States District Court for the District of Columbia had blocked the prior rules, holding that the NLRB lacked a quorum when it adopted those rules.

The new proposed rules, which the Board issued with a full quorum, would make several significant changes that would greatly benefit unions. The proposed rules would:

  • speed up union elections by ending the current practice of scheduling pre-election hearings within fourteen days from the petition filing and instead requiring hearings to be held within seven days of the filing;
  • substantially reduce an employer’s right to litigate whether employees are eligible to vote prior to an election, by automatically deferring such issues until after the election; and
  • require employers to provide union organizers with the names, addresses, email addresses and phone numbers of employees once a petition has been filed.
  • The NLRB is accepting public comments on the proposal until April 7, 2014. In addition, the Board will hold a public hearing on the proposed rules during the week of April 7, 2014.

NLRB Employee Handbook Scrutiny The Board has been more closely examining provisions in companies’ employee handbooks. This increased scrutiny impacts employers in both union and non- union workplaces.

As noted in our April 2013 Alert, several of the Board’s prominent decisions over the past few years have addressed social media policies. Recently, the NLRB has expanded its focus to other aspects of employer handbook policies, such as those policies pertaining to confidentiality, dispute resolution, at-will employment statements, and non-union statements.

A recent example is a decision issued by an NLRB Administrative Law Judge (“ALJ”) that partially invalidated an employer’s dress code. Boch Imports, Inc., NLRB, No. 1-CA-83551 (Jan. 13, 2014).

In Boch, the ALJ found that a dress code provision in a Honda dealer’s employee handbook that prohibited employees who have contact with the public from wearing pins, insignia, or other message clothing violated section 8(a)(1) of the National Labor Relations Act (“NLRA” or the “Act”) (which prohibits employers from interfering with employees as they engage in protected concerted activity). Although the dress code rule applied to all pins, insignia, or other message clothing, the ALJ found that the rule violated an employee’s presumptive right to display a union insignia in the workplace.

Notice Posting Rule Abandoned – But New Emphasis on Digital Media to Publicize NLRA’s Protections in Union and Non-Union Workplaces The Board has decided not to seek U.S. Supreme Court review of two U.S. Court of Appeals decisions which held that the NLRB’s Notice Posting Rule was invalid. The Notice Posting Rule would have required private employers to post a notice in the workplace of employee rights under the Act.

The Board has issued an update on its website stating that the NLRB remains committed to making sure that “workers, businesses and labor organization are informed of their rights and obligations under the National Labor Relations Act.” According to that update, the workplace poster is available on the NLRB website and may be disseminated voluntarily. The Board has also established a free mobile app for iPhone and Android users, which provides information about the NLRA.

Although the NLRB chose to abandon its proposed Notice Posting Rule, the Board’s subsequent statements and its use of digital media to disseminate information about the Act demonstrate a commitment to remain relevant, modernize, and seek to influence employees in both unionized and non-unionized workplaces.

Employer Take Aways

  • Employees must prepare for the new quickie election rules. Management must promote positive employee relations before union organizing occurs. Employers will no longer have the time to campaign fully against unionization once a labor organization files a petition.
  • Employers must be very mindful of the Board’s increased focus on non-union workplaces, including its scrutiny of employee handbook and social media policies.

The NLRA applies to virtually all private sector employers, whether unionized or not unionized. If the NLRB finds that a policy violates the NLRA, the Board may order that the employer rescind that policy and may also require management to post a notice to employees stating that the employer will not violate the Act. The NLRB may also invalidate any discipline or termination that the employer based on that policy and can require the reinstatement, with back pay, of any discharged employee.

  • The U.S. Supreme Court is still considering the Board’s appeal of Noel Canning, which may require the Board to revisit certain prior rulings. In the meantime, the NLRB is moving forward with its vigorous agenda.
Article By:

David I. Rosen
Galit Kierkut
Charles S. Zucker
Grace A. Byrd
Of:
Sills Cummis & Gross P.C.

Northwestern Scholarship Football Players Found to be Employees Eligible for Union Representation

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Peter Sung Ohr, the Regional Director for Region 13 of the National Labor Relations Board issued a Decision and Direction of Election pertaining to the effort of the Northwestern University football players to unionize. The Regional Director found that scholarship football players at Northwestern University are “employees” within the meaning of the National Labor Relations Act and eligible for union representation. The Regional Director found appropriate a bargaining unit composed of “all football players receiving a grant-in-aid football scholarship and not having exhausted their playing eligibility.”

The Regional Director used the common law definition of employee in reaching his decision. Under the common law test, a person is an employee if he performs a service for another, under a contract of hire, for compensation, and is subject to the other’s right of control. He found the following:

  • The scholarship football players perform a service (playing football) for compensation (a scholarship)
  • The scholarship players’ commitments to play football in exchange for the scholarship constitutes a contract for hire
  • The scholarship players are under the control of the University for the entire year, including in-season and out-of-season workouts, restrictions on their entire personal life and detailed regulations players must follow at the risk of losing their scholarship

The Regional Director decided the NLRB’s 2004 Brown University decision, in which the NLRB found graduate assistants not to be employees of the university, to be inapplicable here because playing football is not part of the players’ academic degree program. However, he wrote that even if the Brown University test was applied, the scholarship football players would be found to be employees. He noted:

  • The scholarship players are not primarily students due to the 50-60 hours a week during the season that they devote to football
  • The scholarship players’ football “duties” do not constitute a part of their academic degree requirements
  • The academic faculty does not supervise the players’ football duties; rather, coaches who are not part of the faculty do so
  • The grant-in-aid football scholarship is not need-based like the financial aid other students receive but is given solely in exchange for playing football

The Regional Director rejected two additional arguments made by the University:

  • He decided the scholarship football players are not “temporary employees” (who are generally ineligible to participate in collective bargaining) because they work more than 40 hours a week during the season, work year round, expect to work for 4-5 years and play football as their prime consideration
  • He did not include the “walk-on” players in the bargaining unit. He found that they are not employees within the meaning of the NLRA because they do not receive a scholarship and are not subject to the conditions for its receipt

The University now has until April 9, 2014 to file a Request for Review to appeal the Regional Director’s ruling to the NLRB in Washington, D.C.

Article By:

Gregg E. Clifton
Paul V. Kelly
Of: 
Jackson Lewis P.C.

The NLRB Revives Controversial Expedited Election Rules – National Labor Relations Board

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On February 6, 2014, the National Labor Relations Board (NLRB) reissued its controversial rules aimed at expediting union elections in the workplace. This rule, referred to as the “Ambush Election Rule,” could limit an employer’s right to express its views to employees and respond to union statements. The proposed rules mirror the NLRB’s June 2011 proposal, which ultimately was struck down by a district court in May 2012.

Analogous to the June 2011 proposal, the NLRB’s most recent proposal seeks to significantly impact the current union election process. The proposed reforms are aimed at shortening the election cycle from the current median of 38 days from petition to election to as little as 10 to 21 days. The proposed reforms also would move resolution of voter eligibility determination to after the election; reduce the NLRB’s review of representation cases; expand employer disclosure of employee contact information (including e-mail addresses); and allow more electronic filing with the NLRB.

Despite reducing the amount of time an employer has to communicate its message or rebut the union’s statements, NLRB Chairman Mark Gaston Pearce has stated the proposed rules are intended to “improve the process for all parties.” The NLRB is likely to issue a final rule governing union elections later this year.

Action Steps?

The NLRB has issued a proposed rule, and by law, will allow for public comments through April 7, 2014. Employers may direct comments regarding the proposed reforms to the NLRB here. Additionally, the NLRB will hold a public hearing on the proposed rules in Washington D.C. during the week of April 7, 2014, and employers may voice their concerns at the forum.

Finally, employers should consider conducting a vulnerability audit to identify any concerns that can be addressed now (rather than after a final rule is put in place) and should provide supervisors and management with training so they are prepared to address any potential NLRB election situation.

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Michael Best & Friedrich LLP

Are Union-Free Strikes Protected? The NLRB (National Labor Relations Board) Thinks So.

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In June 2013, we issued a client alert discussing the efforts of unions and the National Labor Relations Board (NLRB) to target the primarily union-free big box retailer and fast food industries. After describing how Target had come under scrutiny from the NLRB, the client alert detailed how the United Food & Commercial Workers Union (UFCW) and the UFCW-backed group “OUR Walmart” had been coordinating strikes and filing charges with the NLRB against Walmart. The client alert then foreshadowed: “[g]iven the Board’s recent penchant for union activism, do not be surprised if it takes a close look at Walmart’s policies and practices in the coming months.”

As predicted, the Board filed a consolidated complaint against Walmart on January 14, 2014 alleging the union-free retailer violated workers’ rights in response to coordinated strikes across 13 states. The complaint alleges dozens of Walmart supervisors and one corporate executive threatened, disciplined, surveilled, and/or terminated more than 60 workers in response to the union-free strikes.

The complaint is significant for two reasons: (1) the Board is taking the position that union-free workers have a protectable right to strike; and (2) the Board is testing its position against the nation’s largest employer. The Board views the union-free strikes as a form of protected concerted activity, and its press release states that the National Labor Relations Act (NLRA) guarantees employees the right to “act together to try to improve their wages and working conditions with or without a union.” The complaint alleges Walmart violated the NLRA by maintaining a policy that treats absences for participation in strikes as unexcused. The complaint also details alleged retaliatory disciplinary actions taken by Walmart supervisors at particular store locations, though many of the listed locations involved only a single worker being absent.

From an employer perspective, the Board’s position raises many questions. For example, how is a supervisor to know whether a non-union worker is participating in a “strike” or just absent? Can a single worker go on strike, or is there a minimum number of strikers for the activity to be “concerted”? Can strikers be permanently replaced? Are “intermittent” strikes prohibited? It is easy to see why union-free strikes create tough questions for union-free employers.

The Board’s actions against Walmart are worth watching as they come amidst a larger backdrop of worker protests and political debates over minimum wage and working conditions that are likely to remain in the spotlight for the foreseeable future. How courts ultimately grapple with the Board’s position and the resulting questions could have far-reaching effects on the labor market in 2014 and beyond.

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Michael Best & Friedrich LLP

National Labor Relations Board (NLRB) Judge Gives a “Like” to Facebook-Related Termination

Barnes & Thornburg

National Labor Relations Board (NLRB) Administrative Law Judge Jay R. Pollack recommended the dismissal of a complaint involving the termination of two former employees of the Richmond District Neighborhood Center, a non-profit organization in the San Francisco Bay Area that runs community programs including after-school and summer programs for youth.

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The decision is all the more surprising because Judge Pollack agreed with the General Counsel that the employees at issue were engaged in protected concerted activity in complaining about their employer on Facebook; yet he found that some of the actions described by the employees (including having “crazy events [without] permission,” “do[ing] cool [expletive] and let[ting] [the employer] figure it out,” “playing loud music and get[ting] graffiti artists to place graffiti on the walls,” and hav[ing] clubs and tak[ing] the kids”) in their Facebook conversations were not protected. Accordingly, the Judge found that the employer could lawfully find that the employees conduct was not protected and that they were unfit for further service.

While this decision shows that not all social-media misconduct must be tolerated by employers, it is important for employers dealing with these types of issues to contact competent labor and employment counsel prior to making any termination decisions involving social media, as defending against an action of this nature before the NLRB can be costly.

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Barnes & Thornburg LLP

 

Recent Social Media Developments Impacting Employers

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NLRB: Latest Decisions Addressing Social Media Policies and Activities

Within the past several months, the National Labor Relations Board (“NLRB“) has issued four precedent-setting opinions addressing the legality of an employer’s use of social media as a basis for taking adverse employment action. These decisions apply to both unionized and non-unionized workforces.

The key issue in each of these cases was whether the employer’s actions compromised the right of employees to engage in “protected concerted activities” for the purpose of their “mutual aid and protection.” However, as noted in a prior alert, recent federal case law could void all NLRB decisions dating back to January 4, 2012 (including those discussed below). Until there is clarity the NLRB decisions continue to be significant in shaping social media use, policy and practice.

On April 19, 2013, the NLRB, in Design Technology Group, LLC, found that an employee’s Facebook posts that criticized a manager’s handling of employee concerns were a “classic connected protected activity” under the National Labor Relations Act (“the Act”).

In that case, workers had approached their manager about closing the store they worked in at 7 PM instead of 8 PM, because of safety concerns. The manager advised that she would discuss those concerns with corporate officials, but the issue was never resolved. Subsequently, two employees posted messages on Facebook that were critical of how the manager handled that issue. Another employee showed the manager those posts and six days later, both employees who made the critical Facebook posts were fired by the manager.

The NLRB determined that the Facebook posts were part of the employees’ efforts to convince their employer to close the store earlier in the evening, based on their concerns about working late in an unsafe neighborhood. The NLRB found that those posts were protected under the Act and that the employees’ terminations constituted unfair labor practices.

Design Technology comes on the heels of three other NLRB social media rulings issued late last year.

In Hispanic United of Buffalo (December 14, 2012), the NLRB held that the termination of five employees for violating an employer’s policies on the basis of their social media activity was unlawful. In that case, five employees posted comments on Facebook that were critical of a co-worker who was scheduled to meet with and complain to management about their work performance. The employer terminated the five employees for “bullying and harassing” the co-worker in violation of its policies.

Hispanics United of Buffalo applied settled NLRB law regarding oral communications among co-workers to the social media context. Under NLRB precedent, employees’ comments regarding the terms and conditions of their employment are protected if their comments are “concerted” — meaning they are “‘engaged in, with or on the authority of other employees,” not only by “one employee on behalf of himself.” Finding the actions of these employees to be protected, the NLRB set a relatively low threshold for interpreting social media activity as protected concerted activity under the Act.

The Hispanics United decision is especially controversial because it may conflict with an employer’s competing obligation under federal and state discrimination laws to prevent workplace harassment. And, the decision may ultimately be in conflict with workplace anti-bullying laws in those states where such legislation is being actively considered. In Karl Knauz Motors, Inc. (September 28, 2012), the NLRB ordered another employer to rescind its social media policy. In that case, the employer terminated the employee for multiple reasons, including violation of the employer’s “Courtesy” rule requiring employees to be “courteous, polite and friendly” to customers, vendors, suppliers and fellow employees and not to use “language which injures the image or reputation of the Dealership.”

The NLRB held that the “Courtesy” rule violated the NLRA because employees could “reasonably construe its broad prohibition against ‘disrespectful’ conduct and ‘language’ which injures the image or reputation of the Dealership as encompassing Section 7 activity.” However, the NLRB upheld the employee’s termination, finding it was not motivated by protected concerted activity, but rather was solely based on the employee’s Facebook postings that did not relate to the terms and conditions of his or any other employee’s employment. The NLRB did not address whether other posts would be protected by the Act.

In Costco Wholesale Corp. (September 7, 2012), the NLRB ruled that an employer’s overbroad social media policy violated the National Labor Relations Act because it prohibited employees from posting statements “that damage the Company, defame any individual or damage any person’s reputation or violate the policies outlined in the Costco Employee Agreement.” The NLRB ordered Costco to rescind the policy based on its finding that the policy inhibited employees from engaging in protected concerted activity.

NJ Legislative Update: Proposed Law Seeks to Protect Employee and Job Applicant Passwords

A-2878, a bill that prohibits employers from requiring, or requesting, a current or prospective employee to reveal, as a condition of employment, his or her user name, password or other means of accessing the employee’s personal social media account, has passed both houses of the NJ Legislature and is awaiting further action by Governor Chris Christie. While it is not clear as of this writing whether Governor Christie will sign or veto this bill, the implications to employers of this potential new law are far reaching.

If enacted, this bill would prohibit employers from even asking an employee or prospective employee whether he or she has a profile on a social media site. In addition, the bill would prohibit employers from requiring prospective employees to waive or limit any protection granted to them under the law as a condition of applying for or receiving an offer of employment. It provides for a $1,000 civil penalty for the law’s first violation and $2,500 for each subsequent violation. If Governor Christie signs this bill into law, New Jersey would join other states that have enacted legislation preventing employers from requesting social media access information, including Arkansas, California, Delaware, Illinois, and Michigan, though it would be the first state to prevent employers from inquiring if employees or applicants have a social media account.

Notably, the bill does not prevent employers from performing their own online search to determine if a prospective or current employee is on a social media site. Accordingly, if a social media account is publically available, an employer would not run afoul of this proposed law by independently viewing an employee’s or prospective employee’s social media account. This type of activity could have other potential pitfalls associated with it however, such as learning protected class information about applicants.

We will continue to monitor the signing status of this bill.

What These Decisions and the Prospective NJ Statute Mean to Employers

In light of the foregoing, we recommend the following:

  • Employers should review and consider revising social media polices and hiring practices to address the NLRB decisions, the new NJ legislation, if enacted, and EEO issues associated with searches on applicants.
  • With respect to policies, employers should ensure that prohibitions placed on employees’ communications do not prohibit employees’ rights to engage in protected concerted activity.
  • Employers should continue to exercise caution when disciplining or terminating any employee based on his/her social media activities and should also consider training its managers in this area so that they do not inadvertently run afoul of these laws.
  • It is important to consult with counsel to consider whether an employee’s comments or posts would be deemed to be protected concerted activity under the Act before any disciplinary action is taken by the employer based on those comments or posts.
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NLRB Appointments are “Constitutionally Invalid”

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The D.C. Circuit Court of Appeals has invalidated the appointments of three members of the National Labor Relations Board who were designated on January 4, 2012. On January 25, 2013, the Court issued its ruling in Noel Canning v. NLRB, et al. Docket No. 12-1115.  http://www.cadc.uscourts.gov/internet/opinions.nsf/ 13E4C2A7B33B57A85257AFE00556B29/$file/12-1115-1417096.pdf. In Noel Canning, the employer sought to prohibit enforcement of a February 8, 2012 NLRB decision concluding it violated the National Labor Relations Act.

The Court granted the Petition of Noel Canning on the basis that the NLRB lacked a sufficient quorum of members when it reached its decision. In February 2012, the NLRB was putatively staffed with a full complement of five members. However, three of those members were appointed by the President, without confirmation by the Senate, on January 4, 2012. The NLRB maintained the appointments were legitimate “recess” appointments made while the Senate was out of session. The Petitioner argued that, in fact, the Senate was in pro forma session and as such, the President had no constitutional authority to make “recess appointments” of the NLRB members.

The D.C. Circuit agreed with the Petitioner that the President’s appointments were “constitutionally invalid.” As such, the Board did not have a “quorum for the conduct of business” on the date of its decision as only two members of the NLRB were properly seated.

The impact of the decision is likely substantial. In an appearance before the Oversight Committee of the U.S. House of Representatives on February 1, 2012, Dinsmore Labor Practice Group Chair Mark Carter testified, that if the recess appointments on January 4, 2012 were determined to be improper “every administrative decision and every administrative rule or regulation implemented by the National Labor Relations Board will be subject to appeal or attack.” http://oversight.house.gov/wp-content/uploads/2012/02/2-1-2012_Carter-Full.pdf.

Carter testified that if the appointments were invalidated, as they have been, “the actions of the NLRB will be ultra vires” and every decision and regulation will be subject to attack. The NLRB has been active both in the arenas of decision-making and regulatory action over the past year. If the decision of the D.C. Circuit is upheld, the decisions of the Agency since January 4, 2012 may have no mandatory impact on employers, unions or employees.

The NLRB reacted to the decision on the afternoon of January 25 by insisting that the remaining recess appointees, Richard Griffin and Sharon Block, will continue to perform their statutory duties and issue decisions along with Chairman Mark Pearce. House Oversight Committee Chairman Darrell Issa (R – CA) called upon the NLRB to “take the responsible course and cease issuing further opinions until a constitutionally-sound quorum can be established.” Chairman Issa stated “(t)he unconstitutionally appointed members of the NLRB should do the right thing and step down.”

© 2013 Dinsmore & Shohl LLP