The NLRB Puts Its Thumb on the Scale

by Butler Snow LLP
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President Obama’s recess appointments of three members to the National Labor Relations Board were unconstitutional, held the United States Court of Appeals for the District of Columbia Circuit in Noel Canning Div. of Noel Corp. v. NLRB (1/25/2013).  According to the D.C. Circuit, a President’s power to make recess appointments to federal agencies applies only during an “intercession” recess of the Senate, and not during adjournments of the Senate during the term of its session.  By appointing members Sharon Block, Terence Flynn, and Richard Griffin during intrasession breaks, the President exceeded his authority under the Constitution. 
 
Obama Administration Promises Appeal And Business As Usual At NLRB
 

Not surprisingly, the Obama Administration has vowed to appeal the decision to the United States Supreme Court.  Further, the Board does not intend to let the ruling slow its pace of rendering decisions.  According to NLRB Chairman Mark Gaston Pierce, “The Board respectfully disagrees with [the D.C. Circuit’s] decision and believes that the President’s position in the matter will ultimately be upheld. … In the meantime, the Board has important work to do. …[W]e will continue to perform our statutory duties and issue decisions.” 
 

If Upheld, Noel Canning May Slow Pace of NLRB’s Otherwise Pro-Labor Rulings
 
If upheld, Noel Canning has far-reaching implications.  It potentially invalidates all decisions in which Members Block, Flynn or Griffin participated. Going forward, it prohibits the NLRB from deciding any cases until such time it has three validly appointed members, representing a quorum of the five-seat Board.
 
The Noel Canning decision may be the obstacle needed to slow the path of the Obama Administration NLRB’s pro-labor string of decisions.  For example, in the past couple of months, the NLRB has issued two significant decisions that reversed longstanding precedent that had passed muster in multiple Democratic as well as Republican Administrations.  These decisions caused some to speculate whether traditional notions of precedent and predictability may have given way to unabashed predetermined outcome decision-making.
 
For 50 years, under the authority of Bethlehem Steel, 136 NLRB 1500 (1962), the NLRB has held that a union dues check-off provision in a collective bargaining agreement terminates upon the expiration of the agreement.  There are few practitioners alive today who can remember a different construction of the Act.  On December 12, 2012, however, the NLRB held that Bethlehem Steel was incorrectly decided and held that employers must continue to honor dues check-off provisions after the contract expires.  WKYC-TV, Inc., 339 NLRB No. 30 (2012).
 
The decision is a big victory for organized labor since a union’s previous inability to receive employer-deducted union membership dues post-contract expiration has played well for employers in leveraging unions to accede to company bargaining demands.  No contract, no dues; an especially costly position if the union is also paying benefits to employee-strikers.
 
Three days after issuing its opinion in WKYC-TV, a second black-letter law decision on the books since 1978 was overruled.  In American Baptist Homes of the West, 359 NLRB No. 11 (2012), the NLRB rejected the bright-line holding in Anheuser-Busch, Inc., 359 NLRB 982 (1978), which held that employers have no duty under the Act to disclose witness statements obtained in workplace investigations during pre-arbitration discovery, in favor of disclosure, which the employer carries the burden of rebutting.
 
Under the new standard, employer promises of confidentiality to witnesses who have given statements must be supported by legitimate substantial confidentiality interests.  Even if those interests can be demonstrated by the employer, the NLRB further held that possible accommodation of those interests must be bargained with the union.
 
And there we have it:  full-blown pre-arbitral discovery.  Query the impact on sexual harassment, substance abuse and dishonesty investigations in unionized workplaces.  How many employees will “rat” on a brother/sister knowing full well that the union will quickly and almost certainly have the statement?  Solidarity.
 
It is yet to be determined, of course, whether the NLRB will be able to sustain these positions and departures from precedent before the United States Courts of Appeals and perhaps the United States Supreme Court.  It seems unlikely, however, that the NLRB will take its thumb off the scale, particularly if the Supreme Court reverses the Noel Canning decision.
 
Takeaways
 

Perhaps now more than ever, traditional labor law under the National Labor Relations Act is in a disruptive state.  We recommend that you contact the author of this article or another Butler Snow Labor and Employment attorney prior to making any significant changes to labor law policies or to conduct a compliance review for your facility. 
 

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