D.C. Circuit Court Decision Creates NLRB Upheaval


On January 25, 2013, in Noel Canning v. National Labor Relations Board, the U.S. Court of Appeals for the District of Columbia ruled President Obama’s use of recess appointments to fill three vacancies on the National Labor Relations Board (“NLRB” or “Board”) was unconstitutional. Without the recess appointees, the NLRB lacks the required quorum to act. The decision, therefore, potentially invalidates NLRB decisions going back to August 2011, when a Board member’s term expired leaving the NLRB without the required quorum. The case also makes it unclear what authority the NLRB has going forward. Nonetheless, the NLRB has said it will continued issuing decisions despite the court’s ruling in the Noel Canning case.

Almost immediately after the decision, several companies that had been under attack by the NLRB indicated they intended to defy the Board. Prime Healthcare Services, which owns 21 hospitals in California, said it would not follow NLRB rulings mandating the collection of union dues after a collective bargaining agreement had expired or requiring employers to give unions certain materials relevant to internal investigations. Prime Healthcare has said it is taking the position that all NLRB cases decided after the disputed recess appointments are invalid, even if they were not addressed in the Noel Canning case.

Similarly, home builder D.R. Horton asked a federal appeals court to void another NLRB ruling on the basis that is was decided after the recess appointments and is, therefore, invalid. For its part, the NLRB takes the position that the Noel Canning case only applies to the specific NLRB decision at issue in that case and that it will continue to issue rulings as normal. It does not appear the NLRB will change its guidance or prosecute complaints differently than it has been over the past few years.

Although the Noel Canning decision offers a defense to current Board action and might invalidate all appealed NLRB decisions going back to August 2011, the reprieve likely will be short lived. President Obama can be expected to appoint NLRB members with similar mindsets to the recess appointees. If and when future appointees are confirmed by the Senate, the NLRB will likely get back to issuing decisions similar to those from the past several years. Therefore, cautious employers likely will continue to design policy and make employment decisions that do not conflict with current Board rulings, at least until the recess appointment issue is more exhaustively litigated.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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