What Does 'Noel Canning' Mean for the NLRB's Previously Decided Cases?

...many of the invalid decisions which the Board must now reconsider following Noel Canning are anything but non-controversial. Indeed ... many of the decisions reversed long-standing and well established legal precedent over a strong dissent.

On Thursday, June 26, the U.S. Supreme Court issued its long-awaited ruling in Noel Canning v. NLRB in which the Court by 9-0 upheld the D.C. Circuit and unanimously rejected the recess appointments of Board Members Richard Griffin, Sharon Block and Terrance Flynn to the National Labor Relations Board on January 4, 2012, even though the Court divided 5-4 on the basis for its ruling. The Court ruled that the recess appointments were made during a three-day period between “pro-forma” sessions, which is insufficient to trigger the Recess Appointments Clause of the U.S. Constitution. Thus, the appointments were unconstitutional and under the precedent established earlier by the Court in New Process Steel, the Board lacked a 3-Member quorum to act. Therefore, all of the unconstitutional Board’s decisions issued from January 4, 2012 to July 31, 2013 were invalid ab initio.

During the period in which the Board lacked a quorum to act, it issued more than 700 published and unpublished decisions, of which 128 remain active before the federal courts of appeal. Those cases will be remanded to the Board by the courts of appeal or set aside and recalled by the NLRB for re-consideration. Of those cases that are no longer active, which were either resolved by compliance or settlement, there is no statute of limitations limiting appeal from a final order of the Board and thus, theoretically at least, those cases are not waived and also may be revived even where the parties failed to raise an objection to the Board’s jurisdiction due to lack of a quorum.

On June 28, over the first weekend following the Noel Canning decision, the Board set aside the first series of many previously issued decisions...

First Series of Cases

The Board wasted no time. On June 28, over the first weekend following the Noel Canning decision, the Board set aside the first series of many previously issued decisions that had been held in abeyance by the circuit courts. The Board will retain jurisdiction for reconsideration of these previously-issued decisions pursuant to section 10(d) of the National Labor Relations Act.  See APPENDIX I below for the list of those decisions.

Significant Cases To Be Reconsidered

Among the most significant previously-issued decisions the Board can be expected to reconsider are the following:

Banner Estrella Medical Center (Banner Health System), 358 NLRB No. 93 (July 30, 2012).

The Board Majority struck down a rule prohibiting employees from discussing ongoing investigations of misconduct with other employees. The Board ruled that the employer must show a legitimate justification that outweighs the employees’ Section 7 rights.  The Employer argued that the request  not to discuss the on-going investigation was made to preserve the integrity of the investigation. In dissent, Board Member Hayes noted that the employer had not promulgated a work rule but had merely suggested that the employees not discuss the investigation and had made no threat of discipline.

WKYC-TV, Gannet Co., 359 NLRB No. 30 (Dec. 12, 2012):

The Board Majority ruled that an employer must continue to deduct union dues from employees’ paychecks after the expiration of a collective bargaining agreement, thus overturning more than 50 years of well-established precedent in Bethlehem Steel, 136 NLRB 1500 (1962). As dissenting Board Member Hayes noted, the Respondent was lawfully entitled to cease deducting and remitting union dues under Bethlehem Steel, but that under the Majority’s ruling once dues checkoff is instituted, employers must now continue doing so past expiration of the underlying collective bargaining agreement ad infinitum until the parties either agree to discontinue it or reach a valid impasse.

The Finley Hospital, 359 NLRB No.9 (September 25, 2012):

The Board Majority held that the employer violated the Act by failing to provide post- contract expiration wage increases under the expired collective bargaining agreement of 3% per year. In dissent, Board Member Hayes noted that there is neither a contractual nor a statutory duty to make further post-expiration adjustments. He described the Majority’s holding as “a startling and troubling revelation to employers of a heretofore unknown obligation to continue giving nondiscretionary wage and benefit increases post-expiration at the rate given in the final year of a collective bargaining agreement until the parties reach agreement on a successor contract or impasse.”

Alan Ritchey, Inc., 359 NLRB No. 40 (December 14, 2012):

The Board held for the first time in Board history that an employer must bargain with the newly-certified union before imposing discretionary discipline during the period before the parties have negotiated  a collective bargaining agreement. Board Member Hayes was recused from participating in the decision.

Fresenius USA Manufacturing, 358 NLRB No. 138 (Sept. 19, 2012):

Board Majority held that the employer violated the NLRA when it terminated an employee for writing vulgar, offensive, and threatening statements on materials left in a break room and subsequently lying during the employer’s investigation of the incident which was called for by women employees who alleged the comments were sexual harassment. The Board Majority held that the offending employee was privileged to lie during a harassment investigation because his inappropriate comments were related to protected activity during a decertification election. This case presents the dichotomy between an employer’s obligations under Title VII of the 1964 Civil Rights Act - which requires prompt investigation of sexual harassment charges, remedial action,  and truthfulness by the parties subject to the investigation - while apparently Section 7 of the National Labor Relations Act privileges the party being investigated to lie if the alleged offense occurred as part of concerted activity.

Dissenting Board Member Hayes noted that the Majority’s ruling “confers on employees engaged in Section 7 activities a degree of insulation from discipline for misconduct that the Act neither requires nor warrants.” He continued that the Majority “impermissibly fetters the ability of employers to comply with the requirements of other labor laws to maintain civility and order in the workplace by monitoring and enforcing rules nondiscriminatorily prohibiting abusive and profane language, sexual harassment, and verbal, mental and physical abuse.”

Piedmont Gardens, 359 NLRB No.46 (Dec. 15, 2012):

The Board Majority overturned longstanding and well-established rule of Anheuser-Busch, 237 NLRB 982 (1978) which held that an employer’s general obligation to provide relevant information in response to a union’s request does not include the duty to provide witness statements obtained during an employer’s investigation of employee misconduct. As dissenting Board Member Hayes noted, the rule in Anheuser-Busch had provided a bright-line test for more than 30 years which “protects the integrity of the arbitration process, protects employee witnesses who participate in workplace investigations from coercion and intimidation, and enables employers to conduct effective investigations into workplace misconduct.” In addition, he noted, by overturning that rule, the Board Majority conflicts with guidance from the Equal Employment Opportunity Commission (EEOC) regarding confidentiality.

Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012):

The Board held that the company’s social media policy violated the Act. The company's social media policy provided: “Employees should be aware that statements posted electronically (such as to online message boards or discussion groups) that damage the company, defame any individual or damage any person’s reputation or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.” The Board  found that employees would “reasonably construe the rule as one that prohibits Section 7 activity” because it “clearly encompasses concerted communications…”

Knauz BMW, 358 NLRB No. 164 (September 28, 2012):

A few weeks after its Costco decision, the Board once again analyzed the lawfulness of an employer’s social media policy. The company's policy stated as follows: “Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.” The Board Majority found that the policy was unlawful because employees would reasonably construe the prohibition against “disrespectful” conduct and “language which injures the image or reputation of the Dealership” as affecting their ability to engage in protected Section 7 activity. The Board added that employees would interpret the rule as meaning that “statements of protest or criticism” would violate the policy. Dissenting Member Hayes criticized the Majority’s method of “reading words and phrases in isolation” effectively “invalidat[ing] any handbook policy that employees conceivably could construe to prohibit protected activity, regardless of whether they reasonably would do so.”

J.W. Marriott Los Angeles at L.A., 359 NLRB No. 8 (September 28, 2012):

The Board Majority found that a company rule prohibiting off-duty employee access to interior areas of the hotel or to hotel property without managerial approval violated the Act. In reaching that decision, the Majority determined that the policy was unlawful under a three-part test announced nearly forty years ago in Tri-County Medical Center, 222 NLRB  1089 (1976) because it did not “uniformly prohibit access to off-duty employees seeking entry to the property for any purpose.” Dissenting Member Hayes argued that the Tri-County test "does not require a blanket prohibition on all off-duty access." In support of that position Hayes posed a rhetorical question: “what if an employee forgets her medication at the workplace and faces a medical emergency if she cannot retrieve it?”  In response to his own query, Hayes provided the common-sense answer that “[t]he Act cannot reasonably be interpreted to force employers to choose between inhuman rigidity and giving off-duty employees free rein to the interior of their facilities.” (See also Sodexo America LLC, 358 NLRB No. 79 (2012)).

Supply Technologies, LLC, 359 NLRB No. 38 (Dec. 14, 2012):

The Board Majority found that the non-union employer’s mandatory grievance-arbitration program violated the Act because it prohibited employees from filing unfair labor practice charges “or otherwise access[ing] the Board’s processes.” In so finding, the Majority noted that the arbitration agreement did not expressly designate complaints to the NLRB as exempt, and that its “ambiguity” made it unlawful.  In Dissent, Member Hayes summed up the Majority’s position as follows: “the test is not [now] whether ambiguous language would reasonably tend to interfere with employees’ Section 7 rights.  The test is simply whether the language is ambiguous.  If it is—that is, if it fails expressly to guarantee the right to file unfair labor practice charges with the Board and to access the Board’s processes—nothing can save the language from being found unlawful.”  

Hispanics United of Buffalo, Inc., 359 NLRB No. 37 (Dec. 14, 2012):

The Board Majority found that the employer violated the Act by firing five employees for comments that they posted on Facebook after learning that a co-worker criticized their work performance. Member Hayes dissented stating that the Facebook exchange was nothing more than griping around the “virtual water cooler.” He argued that while the exchange was concerted (in the sense that it was group activity), it was not undertaken for the mutual aid and protection of the employees involved.

Nurses and Allied Professionals (Kent Hospital), 359 NLRB No. 42 (December 14, 2012):

The Board Majority held that lobbying expenses may be charged to Beck objectors in some circumstances. In Dissent, Member Hayes argued that the Union “improperly charged the Beck objectors for lobbying expenses ... because those lobbying activities are not so related to the Union’s representational duties to employees…as to justify their compelled financial support of them.”

Flex Frac Logistics, LLC, 358 NLRB No. 127 (September 11, 2012):

The Board Majority held that the confidentiality agreement the employer required its employees to sign was unlawfully overbroad in violation of the Act. The company rule prohibited employees from, among other things, disclosing, “…personnel information and documents… to persons outside the organization….”  The Majority found that employees would reasonably construe this language as prohibiting them from discussing their wages and other terms and conditions of work with non-employees such as union representatives. As with previous work rules issues, Board Member Hayes Dissent is critical of the Majority for cherry picking words or phrases in isolation thereby failing to “read[] the entire rule  in context and with appropriate consideration of its obvious legitimate business justification… (i.e. ensuring [the company's] ability to bid for contracts without its competitors discovering its cost structure).”

Guide Dogs for the Blind, 359 NLRB No. 151 (2013):

While the underlying decision in Specialty Healthcare, 357 NLRB No. 83 (2011) is not impacted by Noel Canning, a number of decisions, such as this one, are. Guide Dogs for the Blind is yet another example of the Board using the Specialty Healthcare ruling to affirm a micro-unit. The Board affirmed the Regional Director’s Decision and Direction of Election finding that the petitioned-for unit of canine welfare technicians and instructors was appropriate because they shared a substantial community of interest. The employer argued that the smallest appropriate unit needed to include employees from five additional departments, including breeding, puppy-raising, kennel, admissions and graduate services, and veterinary. The Board found that the employer had not met its burden under Specialty Healthcare of demonstrating that those employees shared an overwhelming community of interest with the petitioned-for employees, so as to require their inclusion in the unit.

...the impact of Noel Canning might also be felt by several NLRB Regional Directors who were appointed by the invalid Board after that date but before July 31, 2013.

Regional Director Appointments Also Could Be Nullified

In addition to invalidating previously-decided cases following the January 4, 2012 recess appointments, the impact of Noel Canning might also be felt by several NLRB Regional Directors who were appointed by the invalid Board after that date but before July 31, 2013. For example, Regional Directors in Los Angeles, Tampa and Philadelphia, and possibly Boston, were appointed by the unconstitutional Board in 2012 and 2013 when the Board lacked authority to act, thus opening to question the validity of those appointments and all  subsequent acts of those Regional Directors.

Conclusion

Unlike the relatively non-controversial cases which were returned to the Board for reconsideration following the Supreme Court's decision in New Process Steel, many of the invalid decisions which the Board must now reconsider following Noel Canning are anything but non-controversial. Indeed, as the list of cases above reveal, many of the decisions reversed long-standing and well established legal precedent over a strong dissent.  Only one of the current Board Members - Chairman Mark Pearce - served on the Board and participated in deciding those cases. The other four Senate confirmed Board Members - Democrats Schiffer and Hirozawa, and Republicans Johnson and Miscimarra - will now be considering the difficult issues in the returned cases for the first time. It's likely that the Board will push for reconsideration of the most controversial cases first, before Board Member Schiffer's term expires this December, which would reduce the Board to a possible 2-2 deadlock. So Board watchers should once again be alert not only to the Board's current agenda but to its past agenda as well.

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APPENDIX I

Hartland Health Care Center - Plymouth Court, 359 NLRB No. 155 (2013) (where the Board held that the employer violated Sections 8(a)(1) and (5) of the Act by unilaterally reducing employee hours and by failing to engage with the Union in effects bargaining. In so holding, the Board found that the union had not” clearly and unmistakably waived” its right to bargain by failing to request effects bargaining).

Mardi Gras Casino and Hollywood Concessions, Inc.,  359 NLRB No. 100 (where the Board held that the employer violated Section 8(a)(1) of the Act during the course of the Union’s organizing campaign.

Grand Canyon Education, Inc., 359 NLRB No. 164 (2013) (where the Board held that the employer violated 8(a)(1) of the Act by maintaining a rule prohibiting employees from communicating with others about terms and conditions of work, and, by disparately enforcing its electronic communications policy).

G4S Regulated Security Solutions, 359 NLRB No. 101 (2013) (where the Board held that the employer violated Section 8(a)(1) of the Act by suspending and then discharging two of its lieutenants for engaging in protected concerted activity. In so holding, the Board rejected the employer’s contention that the lieutenants were statutory supervisors not afforded the protections of the Act).

Flamingo Las Vegas Operating Co., 359 NLRB No. 98 (2013) (where the Board held that the employer committed several violations of Section 8(a)(1) of the Act during the course of a union’s organizing drive among the employer’s security officers).

Alamo Rent-A-Car, 359 NLRB No. 149 (2013) (where the Board held that the company violated Section 8(a)(5) of the Act by unilaterally eliminating bargaining unit employees’ short-term disability benefit. In so holding, the Board rejected the employer’s contention that the terms of the collective bargaining agreement provided for a waiver of the Union’s right to bargain over the elimination of the benefit. The Board further held that the employer violated Section 8(a)(1) of the Act by telling employees, prior to taking the action, that it was eliminating the short-term disability benefit because of the union contract and that its non-union employees would continue to receive that benefit).

Coastal Sunbelt Produce, 358 NLRB No. 135 (2012) (where the Board held that the employer violated Sections 8(a)(1) of the Act by coercively interrogating an employee about her and her husband’s union activities, and that it subsequently violated Section 8(a)(3) of the Act by discharging the employee because of her husband’s union activities).

Champlin Shores Assisted Living, 359 NLRB No. 63 (2013) (The employer admitted its refusal to bargain with the union but sought to test the validity of the certification on the basis that the Specialty Healthcare standard for determining the appropriateness of the unit was improper. The Board rejected the employer’s test of certification and held that it violated Section 8(a)(5) of the Act by failing and refusing to recognize and bargain with the union).

Lederach Electric, Inc., 359 NLRB No. 71 (2013) (where the Board held that the Union met its burden under Oil Capitol Sheet Metal, 359 NLRB 1348 (2007), establishing that the discharged union salts would have continued to work for the entire backpay period claimed in compliance specification).

Fred Meyers Stores, Inc., 359 NLRB No. 34 (2012) (The Board Majority held that the employer violated Section 8(a) (5) of the Act by failing to adhere to the past practice of the parties when it limited non-employee union agents from engaging represented store employees in short conversations on the selling floor during working time. The Majority also found the employer committed a number of 8(a)(1) violations, several of which concerned statements to employees and union representatives not to speak on the store floor. In his Dissent, Member Hayes argued pursuant to the U.S. Supreme Court’s holding in Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992) that employers have a general right to bar nonemployee union agents from their property on a nondiscriminatory basis. While acknowledging that parties may, as here, establish a past practice that affords the union access rights, Member Hayes found that merely limiting such interactions to a discussion of 1 to 2 minutes versus the past practice permitting brief conversations is not a change that is material, substantial, or significant which would constitute a breach of the bargaining obligation. Member Hayes also noted that far in excess of the past practice permitting one or two agents on the selling floor, in the instant matter the Union sent a group of eight agents to the store floor. Because he would find no Section 8(a)(5) violation, therefore, Member Hayes would also dismiss the related 8(a)(1) allegations).

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[Hal Coxson is a Shareholder in Ogletree Deakins Washington Office. He chairs the firm's Government Relations Practice Group and is a Principal in Ogletree Governmental Affairs, Inc. Chris Coxson is Of Counsel in Ogletree Deakins Morristown (NJ) Office where he specializes in traditional labor law.]

Topics:  Canning v NLRB, Costco, Hispanics United of Buffalo, Karl Knauz Motors, Marriott, New Process Steel, NLRA, NLRB, Popular, Recess Appointments, SCOTUS

Published In: Business Organization Updates, Constitutional Law Updates, Labor & Employment Updates

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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