Supreme Court's Noel Canning Decision Invalidates Numerous NLRB Decisions

by Stoel Rives LLP
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The U.S. Supreme Court has invalidated President Obama's 2012 "recess" appointments of several members of the National Labor Relations Board ("NLRB" or "Board"), which occurred while the Senate was in a three day recess. As a result, every decision issued by the Board between January 4, 2012, and July 30, 2013, is void, including some highly controversial decisions which negatively impacted employers. National Labor Relations Board v. Noel Canning (June 26, 2014). A copy of the Noel Canning opinion is here: http://www.supremecourt.gov/opinions/13pdf/12-1281_bodg.pdf

About The Board and Recess Appointments

A full Board consists of five Members, each appointed by the President and subject to Senate confirmation. Historically, the President fills three of the five seats with members from his (or, maybe one day, her) own party, giving the President’s party majority control of the agency charged with overseeing federal labor relations law.

But since 2007, the Board Member appointment process has been broken. In late 2007, the appointments of three Members expired, and political wrangling left those seats unfilled for 27 months. The remaining two Members (one from each party) attempted to continue the Board’s business. In 2010, however, the United States Supreme Court ruled in New Process Steel v. NLRB that the Board must have a quorum of at least three members to take action, invalidating hundreds of decisions issued by the 2--Member Board.

The Supreme Court’s 2010 New Process Steel decision did not break the logjam in the appointment process. As a result, on January 4, 2012, President Obama completely bypassed the Senate by making three “Recess Appointments” to the Board. We blogged about the politics of those appointments here.

The Noel Canning Decision and its Aftermath

In today’s Noel Canning decision, the Supreme Court, affirming the DC Circuit’s decision on different grounds, concluding that the U.S. Constitution’s Recess Appointments Clause applies to both intra-session and inter-session Senate recesses. The Court’s majority noted that the appointments at issue had occurred during a mere three-day recess. The Court ruled, “Three days is too short a time to bring a recess within the scope of the Clause. Thus we conclude that the President lacked the power to make the recess appointments here at issue.” The Court’s 108-page opinion goes on to strongly suggest, however, that recesses of longer than ten days might be sufficient for a President to make a recess appointment.

Because the Board lacked a quorum to act from January 4, 2012 until July 30, 2013, every decision issued between these dates is now invalid. Other acts requiring Board approval, including the appointment of some of the Board’s Regional Directors during the period where the Board lacked a quorum, are also imperiled as a result of the Noel Canning ruling. Regional Director decisions made during this period could conceivably also be challenged.

Some of the Board’s more controversial, and now invalidated, decisions include:

Alan Ritchey, Inc., 359 NLRB No. 40 (Dec. 14, 2012) – in which the Board created an entirely new obligation for employers operating a workplace where a union has been recognized or certified, but no collective bargaining agreement has yet been agreed to. In this setting, the Board concluded, an employer must notify the union and provide it with an opportunity to bargain over individual discretionary discipline before the discipline is imposed.

WKYC-TV, 359 NLRB No. 30 (Dec. 12, 2012) – in which the Board concluded that even after a collective bargaining agreement contract has expired, the employer remains obligated to collect union dues.

American Baptist Homes of the West, 359 NLRB No. 46 (Dec. 16, 2012) – in which the Board overruled longstanding precedent and concluded that employers were not entitled to keep witness statements confidential from a requesting union. Rather, the Board concluded that employers must turn over witness statements as part of the duty to provide information to the union, stating such statements could be withheld.

Fresenius USA Manufacturing, Inc., 358 NLRB 138 (Sept. 19, 2012) – in which the Board concluded that, although the employer’s investigation into a harassment complaint was lawful, its discipline of a union member for writing a vulgar term was unlawful because the activity was “protected” by the National Labor Relations Act.

These and many other invalidated Board decisions no longer govern the labor relations landscape. They may or may not be resurrected upon reexamination by the now properly constituted Board, which includes Members from both political parties and is viewed by some pundits as creating a more even playing field than before. From this, employers may glean some hope. However, the Board’s recently re-proposed “quickie election” rule and its General Counsel’s continued position on social media and other workplace topics, remain sobering for employers.

The Board itself reacted to Noel Canning with a short press release from its Chairman, promising “The Agency is committed to resolving any cases affected by today’s decision as expeditiously as possible.” The Board’s full statement is here: http://nlrb.gov/news-outreach/news-story/statement-nlrb-chairman-mark-gaston-pearce-supreme-courts-noel-canning.

We will keep you posted on further developments following Noel Canning as they occur.

 

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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