Vorys on Labor : Labor Relations Lawyer & Attorney: Vorys, Sater, Seymour and Pease Law Firm: National Labor Relations

By Nelson Cary and Micah Dawson

In College Football Bowl week terminology, some would say President Obama ran an “end-around” play on the Senate yesterday.  Using his recess appointment power, he filled the three vacancies on the National Labor Relations Board, despite the Senate's refusal to act on those appointments.  President Obama appointed his two most recent nominees, Deputy Labor Secretary Sharon Block (D) and union attorney Richard Griffin (D), to year long positions.  Obama also appointed Board counsel Terence Flynn (R), whose appointment had lingered for nearly a year, to fill the final vacancy on the five-member board, giving it a full contingent for the first time in a number of years.

The Chamber of Commerce, and Republicans, expressed immediate outrage and questioned whether the recess appointments were legal.  The argument against the appointments centers on the meaning of the recess appointment power contained in the U.S. Constitution.  Republicans point out there is not currently a “recess” as neither chamber has passed an adjournment resolution, and both chambers have been holding pro-forma sessions every three days. 

Whether the Chamber of Commerce or other business groups will file a lawsuit challenging the recess appointments is yet to be seen.  Labor professionals should monitor these developments as such a lawsuit would join a growing string of litigation involving the NLRB.

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Earlier this week, President Obama nominated two Democrats, Sharon Block and Richard Griffin, to serve as members of the NLRB.  Ms. Block currently works at the U.S. Department of Labor, an agency which has attracted attention over its controversial proposal to modify the rules governing "persuaders" in labor organizing campaigns.  Mr. Griffin serves as General Counsel for the International Union of Operating Engineers.  Additional information about Ms. Block and Mr. Griffin can be found in the NLRB's press release regarding their nominations.

The nominations come at an interesting time for the NLRB.  Currently, there are only three members on the NLRB.  One of those members, Craig Becker (D), holds a recess appointment that will expire at the end of the year.  If the Senate does not act on these nominations, or the nomination of Terence Flynn (R), whose nomination has been pending for months, the NLRB will fall to two members.  It will then no longer be able to issue decisions or new administrative rules.

Labor law professionals should not expect quick action on these nominations.  Sen. Lindsey Graham (R-S.C.) declared, even before the President announced his nominations, that he would continue to place a "hold" on any nominees to the NLRB.  According to his press release:  "I will continue to block all nominations to the NLRB until we get satisfactory answers regarding their role in [the decision to issue a complaint against The Boeing Company's decision to open a new plant in South Carolina]. Given its recent actions, the NLRB as inoperable could be considered progress." 

While the President could make recess appointments to the NLRB, like he did with Member Becker, the House has taken steps to remain in session.  Reportedly, these steps will prevent the Senate from going into full recess, preventing recess appointments from being made. 

Issues awaiting NLRB action, and that could be delayed if the NLRB were unable to act, range from a proposed rule that would speed up the union election process to a decision on a case with potentially significant impact on employer solicitation and distribution rules. 

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The headline on our last post certainly seems apt now.  A battle truly has erupted -- and not just here in Ohio -- over the issue of public sector employee collective bargaining rights.  Wisconsin also confronts the issue; coverage of that dispute is easy enough to come by, but here is a recent example.  Michigan, however, appears set to stay out of the fray.  The issue has even garnered President Obama's attention.

Here in Ohio, the hearings on Senator Jones' bill continue, as do the mass crowds at the Statehouse.  Supporters and opponents of the bill have testified.  Supporters tell the Senate committee, among other things, that the bill provides needed flexibility in the management of their workforces, helps address looming budget problems, and addresses imbalances of power between unions and the public employers.  Opponents of the bill tell the committee, among other things, that the law isn't needed and that concessions have already been made.

While the back and forth is certainly an interesting case study in politics, the labor professional will want to remain focused on what is actually in the bill.  And so far, that hasn't changed.  Despite invitations to unions during the hearings to provide suggested changes to the bill, no amendments have yet been proposed. 

For an excellent summary of the content of the bill, check out the bill analysis (pdf) prepared by the Ohio Legislative Services Commission.  The Commission is a non-partisan state agency that is part of the General Assembly.  As the legislative process continues, monitoring what is actually in the bill will help the labor professional plan for future developments.

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Last year, President Obama nominated Craig Becker to the NLRB.  Mr. Becker's nomination, however, bogged down in the U.S. Senate over his controversial views on the NLRA.  The U.S. Chamber of Commerce even took the step of opposing Mr. Becker's nomination, a position it had not taken since the early 1990's.  Ultimately, Mr. Becker's nomination failed to garner the 60 votes needed to overcome a threatened filibuster in the Senate.

In response, President Obama used a recess appointment to place Mr. Becker on the NLRB in 2010.  Since that time, he has participated in a number of decisions the NLRB has issued.

Rather than looking for a different individual to fill this seat on the NLRB, last week the President again nominated Mr. Becker.  Given the change in composition of the Senate in the 2010 election cycle, it seems unlikely that Mr. Becker will be confirmed by the Senate.

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The NLRB has functioned with only four members and without a General Counsel for a number of months.  Yesterday, President Obama announced his nominations for those key remaining vacanices at the NLRB.

For General Counsel, the President nominated Lafe Solomon.  Readers of this blog know Mr. Solomon as the NLRB's current Acting General Counsel, and the author of memoranda detailing new, and not very employer friendly, enforcement procedures.  Mr. Solomon joined the NLRB in the 1970's.

For the remaining vacancy among the members of the NLRB, the President nominated Terence F. Flynn.  Mr. Flynn is presently the Chief Counsel for Member Hayes (R) and previously served as Chief Counsel for Member Schaumber (R).  Before joining the NLRB, Mr. Flynn was a labor and employment lawyer in private practice.

The NLRB's press release with additional information about the appointments is available here.

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Under current law, employers confronted with union organizing drives face an important question: whether to take steps to oppose that effort. Under the Obama Administration, employers holding federal contracts also face an additional question: how will they pay for their efforts to prevent employees from organizing a union?

Federal contractors are allowed to claim certain costs of doing business as "allowable." Generally speaking, an allowable cost is one that can be charged to the government. Shortly after his inauguration, Pres. Obama signed an executive order that prevented contractors from treating costs related to opposing union organizing drives as "unallowable." See Executive Order 13494. Thus, a contractor who wants to exercise its right to express its views on the question of unionization must be willing to shoulder the cost of that effort and will not be able to shift those costs (or a even portion of them) to the government.

Yesterday, three federal agencies (the Department of Defense, NASA, and the General Services Administration) announced proposed regulations further implementing Pres. Obama's 2009 executive order. The proposed regulation provides examples of the types of unallowable costs, such as (1) preparing and distributing materials; (2) hiring or consulting legal counsel; (3) meetings (including the salary costs of those attending the meetings); and (4) planning or conducting activities related to a union organizing campaign by managers or supervisors during working hours.

Those wishing to comment on the proposed regulations should visit http://www.regulations.gov/ and input "FAR Case 2009-006" under the heading "Enter Keyword or ID". The comment period is open until June 14, 2010.

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