Legal Alert: Court Invalidates Ambush Election Rule; Board Suspends Implementation

by FordHarrison
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[author: M. Martin]

Executive Summary:  A federal trial court in the District of Columbia has held that the "ambush election" procedures published by the National Labor Relations Board (NLRB) in December 2011 are invalid.  In response to the District Court's decision, on May 15th the Board temporarily suspended implementation of the changes to the elections process.  For now, employers can expect the same election rules and pre-election procedures that were in place prior to the rulemaking.

Discussion:

 "According to Woody Allen, eighty percent of life is just showing up."  Chamber of Commerce, et al v. NLRB, No. 11-CV-2262 (D.D.C. May 14, 2012).  This is Judge Boasberg's introductory line in his May 14th decision invalidating the Board's December 22, 2011 election procedure rulemaking on grounds that the Board failed to meet the Act's quorum requirement (a technicality).  This decision invalidated the Board's "ambush election rule" which contained three important changes to the Board's election procedures.  First, challenges to voter eligibility could no longer be made during the pre-election hearing.  Second, employers would be stripped of the (pre-election) opportunity to challenge a Regional Director's decision and direction of election.  And, most importantly, the Board eliminated the 25-day window following a direction of election in which the Board would not schedule a vote.  Needless to say, this opened the door to an abbreviated election timeline making it more difficult for employers to share the facts about unions with their employees.

The plaintiffs in this lawsuit, the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace, challenged the Board's rule change on myriad grounds, including that it was contrary to the National Labor Relations Act, that it violated the First and Fifth Amendments, and that the rule violated the Administrative Procedure Act.  The plaintiffs also objected to the Board's issuance of the final rule without satisfying the statutory quorum requirement.

Granting summary judgment for plaintiffs on Monday, Judge Boasberg relied entirely on plaintiffs' quorum argument.  The Act requires participation of at least three of the five Board members for a quorum.  The Court recognized that the Board's 3-1 vote (of the four-member Board) issuing the June 2011 Notice of Proposed Rulemaking (NPRM) complied with the quorum requirement.  The NPRM led to more than 65,000 written comments and days of hearings.  As the Board deliberated, Chairman Liebman's term expired, leaving the Board with only three members.  According to the Court, the Board also faced the imminent loss of recess appointee Member Becker.  In an effort to expedite a (partial) final rule before Member Becker's departure, the three-member Board passed a resolution on November 30 by a 2-1 vote with Member Hayes dissenting.  On December 9th and 12th, a draft of the final rule was circulated among the three members by e-mail and by the Board's Judicial Case Management System (JCMS) on the 13th.  On December 16th, a final iteration of the rule was circulated via JCMS, and Chairman Pearce and Member Becker voted to approve the rule; Member Hayes neither voted nor was he asked by e-mail or phone to record a final vote before or after Chairman Pearce and Member Becker approved the final rule.  The final rule was submitted to the Solicitor and published on December 22nd.

According to the Court, the question was whether a quorum participated in the final agency action promulgating the final rule, as is required by the Act.  The Court first concluded that the December 16th vote to adopt the final rule was the relevant final agency action.  The Court then concluded that this vote did not have the "participation of" three members – a quorum.  The Court reached this conclusion relying on New Process Steel, LP v. NLRB, 130 S.Ct. 2635 (2010), which makes clear that three members' participation is required for a quorum.  The Court reasoned that Member Hayes' failure to vote was not dispositive.  But, that the Board did not request Member Hayes to vote when it received neither a vote nor any response from him, per the agency's normal practice, was indicative of Member Hayes' lack of participation.  In other words, Member Hayes failed to "show up."  Without Member Hayes' participation, a quorum did not exist and, accordingly, the Court held that the final rule must be set aside.

Importantly, the Court suggested that quorum might have been present had Member Hayes "affirmatively expressed his intent to abstain or even acknowledged receipt of the [JCMS] notification."

In response to the District Court's decision, on May 15th the Board temporarily suspended implementation of the changes to the elections process.  Acting General Counsel Lafe Solomon withdrew the guidance issued to regional directors and instructed them to revert to previous practices for new election petitions.  As for the nearly 150 election petitions filed since April 30th, the parties in those matters will be notified and permitted to continue processing the case.

Employers' Bottom Line:

The final rule published on December 22, 2011 is invalid and the Board will investigate questions of representation under its old rules.  Importantly, while the Court did not address the merits of the Board's rule, it plainly laid out the steps the Board could take to achieve a quorum should it attempt to reissue the final rule. 

If you have any questions regarding this Alert or other labor or employment law issues, please contact the author, Blake Martin, bmartin@fordharrison.com or the Ford & Harrison attorney with whom you usually work.

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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