Supreme Court Rules that Obama Recess Appointments Invalid

In a major decision yesterday, the U.S. Supreme Court held that the recess appointments President Obama made to the NLRB in January 2012 were unconstitutional. The case related to the appointments of three members of the NLRB on January 4, 2012, during a period of time in which the U.S. Senate was in an intra-session recess, punctuated by "pro-forma" sessions every three days. One such session had been held on January 3 and another was scheduled for January 6.

The Supreme Court unanimously concluded that the appointments were invalid, although the reasoning for that conclusion split the Court into two camps. The majority view would permit some intra-session appointments, but held that in this case the three day break was not long enough to trigger the President's recess appointment power. The concurring view was that there could be no recess appointments during an intra-session recess, and that only positions that became vacant during that recess could be filled by the recess appointment power.

While the constitutional scholar will spend many hours parsing the decision (and there is plenty of decision to parse, with the opinions in the case running over 100 pages), the implications for labor professionals are more practical. These include:

  • All opinions decided by the NLRB during the period from January 2012 to August 2013 are suspect. Given the invalidity of the recess appointments, there were not enough properly appointed and confirmed NLRB members to lawfully issue decisions.
  • The last time a group of NLRB decisions were invalidated by a Supreme Court ruling, involving whether two members the NLRB could properly conduct its business, the NLRB set up a process for reviewing these decisions and ultimately affirmed the outcome of those decision in the vast majority of cases.
  • Some very significant decisions are potentially in question. These include, among others, the NLRB's first Facebook termination case, a case addressing whether the employer has the right to suspend dues check off when a union contract expires, and the decision limiting an employer's confidentiality instruction to employees during a workplace investigation.
  • With the need to reassess these and many other cases, the NLRB's agenda on other items may be slowed. For example, the resources necessary to reexamine the numerous decisions invalidated by yesterday's ruling may cause the NLRB's "ambush" election rule to be delayed.

While the NLRB's Chairman made a brief statement yesterday, the NLRB has not yet announced how it will address the Court's ruling.

Take Two: NLRB Begins its "Do Over" on Union Election Rules

As expected, the NLRB has again proposed to amend various procedural rules that relate to the way in which union election petitions are processed. These changes are primarily designed to speed up the processing of requests for secret ballot elections. They are widely regarding in the employer community as the "quickie" or "ambush" election rules.

The procedural history of this rulemaking effort begins in 2011 when the NLRB proposed numerous changes to the union election rules.   After receiving extensive public comment, and holding public hearings, the NLRB adopted a subset of the proposed rules on December 22, 2011.  Employer groups then challenged the rule in federal court.  The court held that the NLRB lacked a quorum when it issued the final rule because then Member Hayes (R) was absent from the vote.  While the NLRB appealed the ruling, it ultimately decided to withdraw that appeal and return to the rulemaking process.

The notice of proposed rulemaking issued by the NLRB last week is a nearly verbatim recitation of the 2011 proposal.  It updates some of the data that the NLRB relied upon in 2011.  It also includes a new dissent to the rulemaking effort written by Members Miscimarra (R) and Johnson (R), and a new response from the NLRB majority to that dissent.  Otherwise, the changes proposed are the same.

Some of the changes the NLRB is proposing include:

  • Permitting the filing of petitions for election electronically with the NLRB;
  • Requiring the union's showing of interest (usually, signed union authorization cards) to be filed with the petition, rather than permitting an additional 48 hours for the submission of such evidence;
  • Requiring that the employer provide to the union, in addition to the names and addresses of employees in the bargaining unit, the email address (if available), location, shift, and classification of each employee;
  • Shortening the period of time for making available the foregoing information about employees from seven days to two days;
  • Requiring that the representation case hearing begin on the seventh day after filing of the petition;
  • Adopting a new "Statement of Position" form in which the parties explain their respective position on any issues relating to the petition (e.g., exclusion of individuals as supervisors or the appropriateness of the unit), and further providing that failure of a party to complete the Statement of Position would constitute a waiver of the right to litigate any issue not identified;
  • Delaying until after the election resolution of certain questions about the eligibility of or inclusion of employees in the bargaining unit, provided that the numbers affected by such questions do not exceed 20% of eligible voters;
  • Limiting the types of evidence that can be introduced at the representation case hearing;
  • Limiting the opportunity to file written briefs after the close of the representation case hearing;
  • Eliminating the right of a party to request that the NLRB review decisions of the Regional Director regarding the representation petition; and
  • Requiring that a party filing objections to the election results submit their objections, and the evidence supporting those objections, within seven days after the votes have been counted.

For the labor professional, the NLRB's changes are quite significant.  For some of the changes, their significance is easy to grasp.  For example, the substantial expansion of the information about employees that the employer must provide to the union after a petition is filed is one that helps unions in their organizing efforts.  Other changes, while more procedurally obscure, are substantively even more troubling.  For example, limiting the resolution of questions about the unit means that employees, when they go to vote in a secret ballot election, may not understand with any degree of certainty with whom they are banding together to negotiate with their employer. 

Those desiring to comment on the proposed rulemaking have until April 7, 2014 to do so.

NLRB Abandons its Appeal of Union Election Rule Decision, May Re-issue Challenged Rule

By Nelson Cary and Michael Shoenfelt

Earlier this week, the NLRB voluntarily dismissed its appeal of a 2012 decision invalidating a rule designed to “streamline” union elections.

Commonly known as the “ambush” or “quickie” election rule, the rule would have significantly decreased the amount of time between the filing of a petition to unionize with the NLRB and the employee’s secret ballot vote. It also limited the scope of the pre-election hearing and reduced employers’ ability to file post-hearing briefs and appeals.

ballot boxA federal district court initially invalidated the rule because the NLRB lacked a quorum when it issued the rule. In December 2011, when the NLRB voted to adopt the rule, the NLRB had only three of its five seats filled. Only two of those three members took part in the electronic vote on the rule. While the two votes would have been enough to pass the rule, the district court held that the absence of the third member was fatal for purposes of establishing quorum. 

The NLRB appealed that decision to the court of appeals. The appeals court had placed the case on hold in light of the dispute over the NLRB recess appointees. The NLRB got out of that waiting game by voluntarily dismissing its appeal Monday.

The NLRB's decision to drop the appeal, however, is not a victory for employers.  Instead, it merely sets the stage for the next act in this drama.  The NLRB has five members now for the first time in more than a decade, and is expected to re-issue the rule, or a similar rule.  Labor professionals should keep an eye on that process, as the NLRB is free to act on its previously-expressed intent to implement changes that go even further in “streamlining” elections that the rule that was the center of this dispute.

NLRB Responds to Court's Decision on Election Rule

The NLRB responded to the decision of Judge Boasberg today.  In a press release, the NLRB announced that it will suspend implementation of the election rule.  Acting General Counsel Lafe Solomon has also withdrawn the memorandum issued to the regional offices at the end of last month explaining how to implement the rule.  Finally, Chairman Pearce (D) said that the NLRB was reviewing the court's decision and considering how to respond. 

Labor professionals with election petitions that were filed on or after April 30 should review the press release.  It contains information on how the NLRB will process these cases.

Federal Judge Invalidates NLRB Election Rule

Satisfying his promised timeline, Judge James E. Boasberg issued a decision (pdf) today finding the NLRB's election rule invalid.  Quoting Woody Allen that "eighty percent of life is showing up," Judge Boasberg found that the rule was invalid because one of the NLRB members did not participate in the vote to adopt it.  

When the final rule was approved last December, Member Hayes (R) did not vote on it.  Two other members, Chairman Pearce (D) and Member Becker (D), did so, and voted in favor of the rule.  While Member Hayes had participated in earlier votes on procedural issues related to the rule, and even made his opposition to the rule known, that was not enough in the court's view.  Rather, in a vote that was held electronically, Member Hayes had to do something in order to "show up" and constitute the three-member quorum required in the statute, and reaffirmed by the Supreme Court less than two years ago.

Accordingly, the judge ruled in favor of the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace.  The judge held that elections must continue to be conducted under the old rules.  The court noted, however, that nothing prevents the NLRB from holding a proper vote with a quorum present to adopt the rule again.  The court did not opine on any of the substantive arguments that were made against the election rule.

For the labor professional, the court's ruling may ultimately just delay the adoption of new election rules.  The NLRB now has a full five members, although there is controversy surrounding those appointments.  Another vote on the rule will present an opportunity to challenge the appointments in court.  Judge Boasberg's decision not to reach the substantive arguments against the rule means that any future litigation may still need to address those issues as well.

The court's decision, then, likely removes the immediate concern employers had with the adoption of the election rule.  It is not, however, an issue that employers can now set aside as resolved, but rather is yet another one that the prudent employer will want to continue to monitor.  The NLRB may announce its position on the decision soon.  If so, the NLRB's position will be covered in this blog.

AGC Issues Guidance on New Election Rules; Court Denies Motion to Stay

With the effective date of the NLRB's new election rules now less than 48 hours away, the NLRB's Acting General Counsel (AGC) continues his implementation efforts.  On Thursday, the AGC issued a memorandum (pdf) to the various regional offices of the NLRB containing additional information interpreting the new rule.  It also contains implementation instructions for the regional offices.

The memorandum is quite lengthy and detailed.  Perhaps the most interesting issue for the labor professional, however, is the guidance the memorandum contains on how regional offices should exercise the discretion the new rule gives them on limiting issues that can be litigated in the initial representation case hearing.  It was this litigation, among other items, that the NLRB majority believed to be unnecessary and slowing down the election process.  Thus, the NLRB's rule announced that "ordinarily" disputes over eligibility to vote or inclusion in the bargaining unit need not be resolved before the election is held. 

The AGC defined "ordinarily" by reference to the number of possible employees impacted by the eligibility or inclusion issue.  If 10% or more of the employees in the particular unit are impacted, the question could be addressed in the representation case hearing. 

The AGC also specifically commented on the issue of deciding which employees are supervisors.  The memorandum makes clear that these questions are subject to the rule.  Thus, if there are only a small number of employees who are claimed to be supervisors, the regional office has the discretion to refuse to decide those questions until the election has taken place.

In related developments, Chairman Pearce (D) issued a concurring opinion and Member Hayes (R) issued a dissenting opinion about the new rule yesterday. These opinions continue to debate the questions that have been presented to the court in the Chamber's lawsuit. 

In addition, the federal court handling the Chamber of Commerce's lawsuit challenging the rule denied a motion filed by the Chamber to prevent the rule from going into effect.  In his ruling earlier today, the judge stated that he would issue his opinion on the merits of the rule before May 15, 2012. 

In light of these developments, labor professionals should review the guidance from the AGC, or discuss it with their labor counsel, to determine how it will impact their operations.  The AGC's guidance and the NLRB's rule is very technical and detailed.  Even the FAQs the AGC issued are lengthy, although not quite as technical as the memorandum itself.  It is quite likely, therefore, that the guidance will effect employers in different ways.  In addition, labor professionals will want to watch closely for the court's ruling in the Chamber's lawsuit.  That ruling will be reported on this blog.

Highlights From Acting General Counsel's Annual Operations Summary

Last week, AGC Lafe Solomon issued his annual summary of operations (pdf) for FY 2011. The summary reviews the various functions of the Acting General Counsel's office, which include conducting secret ballot union elections and investigating and prosecuting unfair labor practice charges against employers and unions.

Of the information reported, perhaps the most interesting given the NLRB's current regulatory efforts was the data on union representation elections.  The AGC reported that 91.7% of all union representation elections were completed within 56 days of filing the election petition.  Moreover, the median time taken to conduct the union election was 38 days from the filing of the petition.  Of the elections conducted, 89% were held pursuant to agreement of the parties.

Despite the speed with which regional offices conduct union elections, the NLRB continues to explore administrative rulemaking designed to accelerate the election cycle.  Moreover, in the face of evidence that the vast majority of elections are held pursuant to an agreement (i.e., without any litigation or disputes), the NLRB's rulemaking process targets the elimination of various procedures the NLRB says lead to litigation that slows down the election process.

The AGC also reported that total case intake for union election petitions was down in FY 2011 by 12.2%.  This statistic is particularly striking given the continuing weakness in union membership data.  The Bureau of Labor Statistics reported earlier this year that union membership stood at 11.8% of the total workforce, and only 6.9% of the private sector workforce.  Given these numbers, a decline in representation petitions (one way in which unions can increase membership) is unexpected. 

Other highlights from the report of interest to the labor professional include:

  • Total intake of all types of cases during FY 2011 was down 5.9%.
  • Of the 22,177 total unfair labor practice cases filed in FY 2011, the AGC found that additional proceedings were warranted in 37% of them.
  • The number of unfair labor practice complaints (which required the employer or union to defend its conduct before an administrative law judge (ALJ)) issued in FY 2011 increased to 1,342 cases.
  • The AGC won 87% of all the cases litigated before the NLRB or an ALJ.
  • The amount of backpay, fees, dues or fines recovered on behalf of employees was down significantly from FY 2010 at a total of just over $60 million.  The figure in 2010 was over $85 million.

NLRB Election Process Rulemaking: It's Not Over Until It's Over

The NLRB published a final rule on the election process late last year.  In doing so, however, the final rule left out a number of changes to the election process that were originally proposed in June 2011.  For example, there were proposed changes to the requirements to provide lists of employee names and contact information after an election petition is filed, the timing of providing that list, and other issues.  As previously explained, the NLRB announced last month that it would keep these additional changes to the election rules under consideration for possible future action.

In an interview published by the Associated Press yesterday, NLRB Chairman Pearce (D) confirmed his intention to continue pushing forward with these additional regulatory proposals.  "We keep our eye on the prize," the AP quotes Chairman Pearce as saying. "Our goal is to create a set of rules that eliminate a lot of waste of time, energy and money for the taxpayers."  Chairman Pearce announced his hope that the NLRB will propose the rules "soon," according to the AP.

For the labor professional, this most recent development confirms that there is likely more rulemaking yet to come on the so-called "ambush election" or "quickie election" rule.  This announcement does not, however, alter the currently announced effective date for the final rule published last month on the election process.  It is still scheduled to become effective on April 30, 2012.

Details of NLRB Election Rule Published; Chamber Files Lawsuit

By Nelson Cary and Micah Dawson

Earlier today, the NLRB formally published their new election rules in the Federal Register.  Chairman Pearce (D) and Member Becker (D), whose term ends next week, voted in support of the new rule. Member Hayes (R) withheld his vote. Member Hayes can vote against finalizing the rule and publish a statement of dissent any time before the rule takes effect on April 30, 2012.

As expected, the new rule makes significant changes to union election procedures, including:

  • Empowering the hearing officer to limit evidence produced at the initial hearing to only that necessary to determine whether a question concerning representation exists;
  • Eliminating the automatic right to file briefs with the regional director after the initial hearing;
  • Eliminating a party's right to appeal the regional director's determinations to the NLRB prior to the election, and providing for only a single appeal, after the election, and then only over issues that the election hasn't rendered moot;
  • Eliminating language in the NLRB's regulations providing that elections are typically not scheduled for a date sooner than 25 days after the election petition has been filed;
  • Clarifying the standard for seeking special permission to appeal to the NLRB from a regional director's decision; and
  • Making NLRB review of the regional director's decisions discretionary, rather than mandatory.

The rule, which has increasingly been referred to as the “ambush election” rule by those opposed to it, significantly limits employers’ legal right to object to the petitioned-for unit prior to a union election.  By shortening the amount of time between petition and election, it also curtails employers' ability to communicate with workers during the union election process.  With less ability to communicate, the rule limits the time during which an employee is certain to hear both sides of the story:  both the case for and the case against union representation.   

Even before the NLRB announced that it would publish this final rule, the U.S. Chamber of Commerce sought to nullify it.  On December 20, 2011, the Chamber filed a federal lawsuit challenging the new rule. The lawsuit attacks the validity of the new rule, stating that it violates Board procedure and denies employers' free speech rights. In addition to asking the court to vacate the rule, the Chamber’s lawsuit (pdf) seeks a preliminary injunction barring the rule from being enforced.

For the labor professional, the final rule is a major development.  Employers that are currently non-union should carefully consider the implications of the rule in light of their individualized circumstances.  Those employers may want to revisit their strategies given this development. 

The Chamber's lawsuit adds an additional level of complexity for the labor professional.  After business groups filed court challenges against the NLRB's notice posting rule, the NLRB delayed the effective date of that rule.  It is uncertain whether a similar delay will be announced here, given that the NLRB is at risk of losing one of its three members, and thus being unable to act.

NLRB Adopts New Election Rules Adopted

The NLRB announced today that it has formally adopted the revisions to the election rules that were originally proposed earlier this year.  The official notice will be published in the Federal Register tomorrow.  The rule, which some have referred to as the "quickie" or "ambush" election rule, will become effective on April 30, 2012.  Stay tuned to for additional details about the final rule.

Hayes Stays: NLRB Moves Forward with Election Rule

The NLRB headed into a public vote today over a proposed rule on election procedures summarized yesterday on this blog.  It did so without assurances that one of its members, Brian Hayes (R), would be present. While tensions were high, Member Hayes did attend the meeting and the NLRB voted along party lines, 2-1, to move forward with the slimmed down, but still controversial, election rule proposal. As the lone dissent, Member Hayes again made it clear that he opposed the short time frame for elections under the proposal. Despite that opposition, the final language of the rule will now be drafted for another NLRB vote before it goes into effect. 

Although there was information suggesting that Member Hayes was seriously considering resigning in an effort to eliminate the NLRB’s power to move forward on the proposal, he has apparently decided against resignation. Member Hayes explained at the meeting that “it is not my nature to be obstructionist.” Further, he believed that “resignation would cause the very same harm and collateral damage to the reputation of this agency” as the rule changes the majority voted to advance.

With Hayes staying put, labor professionals should stay alert for the final language of the rule, as it is certain to have a impact on employer policies.  Nor should labor professionals expect any legislative change from Congress that would trump the administrative rule.  Although the U.S. House voted today to approve legislation that would do so, the prospects of that legislation appear dim in the Senate.