NLRB Facing Constitutional Conundrum

The National Labor Relations Board (the “Board”) has always been somewhat political. At full complement, the Board consists of fi ve members, nominated by the President and appointed to the Board with the “advice and consent” of the Senate. When the Board is interpreting the National Labor Relations Act (the “NLRA”), or modifying Board procedures, its Members are roughly analogous to United States Supreme Court Justices. To a degree, they enjoy ultimate decision-making authority, although their decisions are subject to appeal in federal court, and they do not enjoy lifetime tenure.

Presidential appointments to the Board are typically stacked with a 3-2 Republican majority while a Republican occupies the White House. Conversely, Democratic appointments enjoy the same majority status while Democrats serve as President. This susceptibility to shifts in political power at times undermines the Board’s credibility. When Board appointees use their authority to pursue political agendas, rather than objectively analyze and enforce the terms of the Act, controversial and inconsistent decisions emerge.

Board controversy, and departure from long standing precedent, is exactly what has occurred in recent years. New and expanded interpretations of the NLRA have substantially impaired employer rights and breached areas previously untouched by NLRA restrictions. The Board’s procedural rules have also been dramatically modified in a manner that enhances the opportunity for successful union organizing, and undermines employer efforts to remain union free.

To better appreciate the controversial nature of recent Board decisions, consider the following developments, all of which occurred in the last few years:

1. Employer policies restricting publication of confi dential and personnel information on social media websites have been deemed illegal, unless they narrowly define the subject matter and illustrate how employees may exercise their NLRA rights.

2. The Board now considers some employment-at-will clauses to be illegal under the NLRA. Specifically, policies or handbooks that require employees to individually acknowledge that they “agree that the at-will employment relationship cannot be amended, modified or altered in any way” are now unlawful.

3. The current Board found illegal a long standing employer prohibition on employees conversing with coworkers about pending investigations. The Board concluded that such policies infringe on employees’ rights, unless the employer proves that “witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.”

4. The Board is now approving what has come to be known as “micro” bargaining units. The term “micro” describes smaller segments of larger employee groups that are targeted for union representation. Micro units place employers at a disadvantage during union organizing drives because majority support for union representation is easier to achieve in smaller groups, and employers are exposed to a divide and conquer organizing tactic. Under the micro unit standard, contrary to the Board’s longstanding historical approach to bargaining unit determinations, employers shoulder the burden of proving by “overwhelming” evidence that a larger bargaining unit is more appropriate.

5. Overruling precedent that has been in effect since 1962, the current Board announced that “an employer, following contract expiration, must continue to honor a duescheckoff arrangement established in that contract until the parties have either reached agreement or a valid impasse permits unilateral action by the employer.” In practical terms, that means that employers have now been denied a very significant means of pressuring unions to settle ongoing negotiations following contract expiration.

6. Perhaps most controversial among recent Board initiatives are new “quickie election” rules that essentially cut in half the typical campaign period following a petition for a union representation election. History unequivocally demonstrates that the shorter the preelection time period, the more likely it is that unions win the election. The quickie election rules were formally implemented by the Board in April 2012, only to be almost immediately stopped by a legal challenge, as further explained below. The quickie election rules surfaced, without public hearing or advance notice, in the summer of 2011. At that time, Board Chairman Pearce (D) announced the rules were necessary to modernize the election process, and to overcome employer abuses that unreasonably slowed the election process. Pearce was appointed to the Board by the President during what the President alleged was a Senate recess, in spite of the Senate’s refusal to “approve and consent” to his nomination. Board Member Hayes (R) immediately and very publicly objected, expressing his view that the new election rules were an obvious and politically motivated attempt to help organized labor win more elections.

When the new election rules were being publicly discussed, the Board was operating with only three of its five members. When the new rules were eventually approved in December 2011, they garnered supporting votes from only two Board members, shortly before the term of one of the supporters expired. Dissenting Board Member Hayes did not participate in the vote, setting the groundwork for a subsequent legal challenge to the validity of the new rules.

In essence, the challenge to the new election rules alleges that the Board lacked the three Board Member quorum required for approval. In May 2012, the D.C. Circuit found that that the Board in fact lacked the legally required quorum since Member Hayes did not support the rules, or even participate in the vote. The NLRB then placed the new election rules “on hold” pending its appeal of the D.C. Circuit’s decision.

Further complicating matters, within a matter of weeks of the invalid Board approval of the new election rules, President Obama appointed three new Board Members during what he alleged to be another Senate recess in January 2012. Those appointments were recently deemed unconstitutional by the Court of Appeals for the District of Columbia. Last week, the Third Circuit Court of Appeals held that the 2010 Obama recess appointment of another Board member was also unconstitutional. These decisions have far greater implications. Recall that Board Member Pearce, one of only two Board Members to support the new election rules, was also appointed by the President during an alleged Senate recess, under circumstances identical to the January 2012 recess appointments that have been deemed unconstitutional.

If Member Pearce’s recess appointment is deemed unconstitutional like the other appointments, then the new elections rules are unequivocally invalid, as are any other Board decisions that lack the support of at least three validly appointed Members. The United States Supreme Court will likely further review this entire mess as early as later this year.

Stay tuned. We will keep you posted.

Read the Full Newsletter: Labor & Employment Law Update May 23, 2013 »

Mark McQueen