Invalid NLRB Recess Appointments Mean Controversial Decisions Get a Second Look

by Davis Wright Tremaine LLP
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In Noel Canning, the U.S. Supreme Court unanimously decided that President Obama’s January 2012 recess appointments to the National Labor Relations Board (“NLRB” or the “Board”) violated the Constitution. Non-union and union employers alike are affected by this historic ruling which invalidates more than 400 NLRB decisions. Included in that group are a number of significant and very controversial cases dealing with issues related to social media and handbook rules, access rules for off-duty employees, and limitations on the economic weapons available to employers during contract negotiations. All these decisions likely will be revisited by the NLRB and courts, and the current make-up of the Board means new arguments for and against the Board’s ultimate decision could surface.

What happens next?
It is unclear precisely how the NLRB will respond to the Supreme Court’s decision. The decisions by the invalid appointees occurred between Jan. 4, 2012 and July 30, 2013. Although NLRB Chairman Mark Gaston Pearce said the NLRB is still “analyzing the impact [of] the Court’s decision,” we anticipate that the Board will take it upon itself to review the cases decided by the invalid appointees, and will ask the various Courts of Appeal to remand the more than 100 pending cases affected by the Supreme Court ruling. It also is unclear how the Court decision will affect other Board actions during that time, including the appointments of as many as 11 Regional Directors (including the Regional Director in Region 19 (Seattle) and in Region 31 (Los Angeles)). Until those questions are answered, actions by those Regional Directors will continue to be challenged and scrutinized.

Many of the affected decisions will likely be ratified by the current Board, but, ratification is not a given. Consistent with tradition, the current five member panel is made up of three members that reflect the President’s party, and two members representing the rival party. The two Republican members of the Board, Harry I. Johnson and Philip A. Miscamarra, will be entitled to participate in the review of the remanded decisions.

If the Board delegates a case to a three-member panel and only one Republican member is on the panel, a 2-1 result is not a foregone conclusion. Any Board member assigned to the panel has the authority to request that a full panel review the case. If the full panel splits 3-2 (as it often will), each participating member has an opportunity to present his or her argument for or against the majority holding which might give rise to arguments not previously explored. In any event, a more complete debate will help the parties understand how the Board reached its ultimate conclusion, and give a reviewing court more to evaluate if the case is appealed.

The composition of the Board is significant for other reasons. The term for one of the Democrat members, Nancy J. Schiffer, is set to expire on Dec. 16, 2014. If Member Schiffer is not quickly reappointed or replaced, it is possible that some of the more controversial decisions could head to a 2-2 deadlock if the remaining Democrat and Republican members stake out opposing positions. In any event, the process will take considerable time and Board resources to sort out, and likely will not suggest an assembly line of “rubber stamps.” Revisiting the affected decisions may also delay resolution of numerous new cases in which the Board has recently invited briefing.

What cases are affected?
Decisions of particular importance to non-union employers (as well as union employers) involve:

  • Invalidating Terminations for Social Media Activity: Although the Board has handed down a number of cases since Hispanics United of Buffalo, 359 NLRB No. 37, slip op. (Dec. 14, 2012) it was the first case where the Board found a termination of employment in response to harassing Facebook posts unlawful. Other cases, like Knauz BMW, 358 NLRB No. 164 (Sept. 28, 2012), and Bettie Page Clothing, 359 NLRB No. 96 (April 19, 2013), both finding terminations related to Facebook posts unlawful, should also get a second look.
  • Finding Rules Unlawfully Overbroad: For example, in Costco Wholesale Corp., 358 NLRB No. 106, slip op. at 2 (2012), the Board; invalidated as unlawfully overbroad a policy prohibiting employees from making “defamatory” statements about the company. Cases relying on that decision, like Dish Network Corporation, 359 NLRB No. 108, slip op. (April 30, 2013), also are suspect in light of the Supreme Court’s ruling.
  • Prohibiting Confidentiality Related to Workplace Investigations: In Banner Estrella Medical Center, 358 NLRB No. 93, slip op. (July 30, 2012), the Board held that the employer violated the law by requesting that an employee refrain from discussing his workplace complaint with coworkers while the employer was conducting a confidential internal investigation; the Board provided guidance for situations where confidentiality could be requested.
  • Invalidating Arbitration Agreements: In Supply Technologies, LLC, 359 NLRB No. 38, slip op, (Dec. 14, 2012), the Board struck down an agreement setting forth the procedure for handling employment claims because, the Board felt, it interfered with the employee’s right to take a claim to the NLRB.
  • Forced Tolerance for Vulgar and Threatening Statements: The Board handed down another controversial decision when it held that discipline of a pro-union employee who left vulgar and threatening statements on union newsletters in the workplace was unlawful because the statements constituted protected activity under the NLRA. See Fresenius USA Manufacturing, Inc., 358 NLRB 138, slip op. (Sept. 19, 2012).
  • Off-Duty Employee Access to the Workplace: The Board found to be unlawful a rule prohibiting employees from remaining in the building 15 minutes beyond their shift. J.W. Marriott Los Angeles at LA Live, 359 NLRB No. 8 (Sept. 28, 2012).
  • Pre-contract bargaining over discipline: In Alan Ritchey, Inc., 359 NLRB No. 40, slip op. (Dec. 14, 2012) the Board held that employers in new collective-bargaining relationships, but without a contract addressing discipline or a grievance procedure, must give the union notice and opportunity to bargain over discretionary discipline.
  • Termination of Dues Check-Off: In WKYC-TV, 359 NLRB No. 30, slip op. (Dec. 12, 2012), the Board reversed 50 years of precedent make it unlawful for an employer to stop collecting from employee’s paychecks and remitting to the union automatic dues payments upon contract expiration, taking an important bargaining tool from employers.
  • Disclosure of Confidential Witness Statements: In another reversal of established precedent that had guided collective-bargaining relationships, in Piedmont Gardens, 359 NLRB No. 46, slip op. (Dec. 16, 2012), the Board held that employers are required to turn over witness statements in response to valid union requests for information.

As before, we will continue to provide updates on the NLRB’s case processing and the impact of those moves in the wake of Noel Canning. For issues related to the more controversial cases cited above, consult a labor lawyer for a current assessment of the Board’s initial decision, and to explore effective strategies for moving forward.

 

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