As a result of the recent federal court decision that President Obama’s three recess appointments to the NLRB were unconstitutional, past and future Board decisions and agency actions are constitutionally suspect and open to judicial challenge, according to lawmakers and panelists during a congressional subcommittee hearing held on Wednesday. The House Subcommittee on Health, Employment, Labor, and Pensions conducted this hearing, entitled: “The Future of the NLRB: What Noel Canning vs. NLRB Means for Workers, Employers, and Unions” to examine the implications of the U.S. Court of Appeals for the D.C. Circuit’s Noel Canning v. NLRB decision.

Labor Law Uncertainty

In 2010, the U.S. Supreme Court held in New Process Steel that the Board must operate with at least three sitting members. After this decision was issued, the NLRB had to revisit and resolve more than 600 cases. As discussed in a subcommittee media advisory and reiterated during the hearing, since January 4, 2012 the Board:

has issued a number of controversial decisions that expand the power of union interests and overturn long standing precedent. For example, one ruling (Piedmont Gardens) overturned more than thirty years of board precedent by allowing unions to obtain witness statements gathered during an employer’s internal investigation. Another recent decision (Kent Hospital) undermined the right of workers to not fund union lobbying activities. The fate of these and other decisions issued over the last year are now in jeopardy . . .

During the hearing, attorney G. Roger King, testifying on behalf of the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace, explained why the Board’s current position is worse than the one it found itself in following New Process Steel. According to King, when former Board members Wilma Liebman (D) and Peter Schaumber (R) were the only seated members, they agreed to set aside the more controversial cases. Therefore, it was a relatively uncontentious – albeit time-consuming – process to reconsider these decisions. In contrast, the current board has issued several complex and precedent-reversing decisions in the past year. If the Supreme Court should eventually find that the current recess appointments were improper, revisiting these cases would be a much bigger ordeal.

King mentioned that there is already a split in the judicial circuits on the legality of the recess appointments, and thus waiting for other decisions would be a waste of time. “This is ripe for certiorari today.”

King said that in addition to decision-making, a three-member quorum is needed to make appointments of NLRB regional directors; delegate to the acting general counsel the ability to issue injunctive relief; and make rules. Delaying Supreme Court consideration would hurt employers, employees, and unions, he testified.

Various Republican congressional leaders have echoed this concern in letters sent to the President and NLRB Chairman Mark G. Pearce. In the letter to the President, the House leaders explain that “unlike other courts of appeals, aggrieved parties can always appeal a Board order to the U.S. Court of Appeals for D.C. Therefore, all prior and future orders issued by a Board that relied on intrasession appointments to constitute a quorum could be overturned.” The letter further states that:

Only three things are certain: decisions issued by the current Board cannot be relied upon, every losing party will be justified in filing an appeal, and no prevailing party can be assured they will ever benefit from a Board-ordered remedy. This uncertainty is not what the law anticipates and cannot be permitted.

Precedent-Setting Decisions

Attorney Lawrence Z. Lorber discussed some of the precedent-setting decisions the Board has issued since January 4, 2012. He claimed that these rulings indicate that the Board has “misunderstood the role that the NLRA plays.” The decision in Banner Health System, for example, has broad implications for how an employer must conduct business during an internal investigation. In this case, the Board interpreted Section 7 of the NLRA to preclude an employer from establishing a blanket policy of keeping ongoing investigations of employee misconduct confidential until they are concluded. An employer is now required to establish a specific legitimate business justification for requiring employees to maintain confidentiality during internal investigations of employee complaints. According to Lorber, the Board “cavalierly created precedent without considering other laws.” He explained that other workplace statutes, such as the Americans with Disabilities Act and the Sarbanes-Oxley Act, require investigations to be kept confidential. In addition, the Equal Employment Opportunity Commission (EEOC) “has long stated that confidentiality is important.” The Board’s decision in Banner Health System, therefore, has “precluded other agencies from carrying out their functions.”

Lorber criticized also the Board’s decision in Fresenius USA Manufacturing and International Brotherhood of Teamsters, in which the Board “elevated the rights conferred by § 7 [of the National Labor Relations Act] to outweigh the other protections afforded employees and obligations placed upon employers.” In that case, the Board found that the termination of an employee who sent harassing messages to coworkers during an election campaign violated the NLRA. According to Lorber:

Both of these decisions show a surprising disregard of the necessity for the NLRB to interpret the NLRA in a manner consistent with its own purposes but at the same time consistent with the related employment, labor and governance laws which impact the employment relationship.

Raymond J. LaJeunesse, Jr., Vice President & Legal Director of the National Right to Work Legal Defense Foundation, Inc., testified about the Board decisions that he claims infringe upon an employee’s right to object to how union dues and agency fees are spent. In the landmark Supreme Court case Communications Workers of America v. Beck, the Court held that the NLRA “does not permit a union, over the objections of dues-paying nonmember employees, to expend funds collected from them on activities unrelated to collective-bargaining activities.” Unions must therefore give employees the option of paying only the portion of dues that will be spent on collective bargaining – and not political – activities. According to LaJeunesse, “the NLRB has failed to enforce Beck vigorously, both in processing cases and applying judicial precedent.” Namely, the witness said, the Board has upheld the requirement that objections be submitted annually and filed within a certain window.

Recess Appointees Re-Nominated

During the question and answer period of the hearing, ranking subcommittee member Robert Andrews (D-NJ) stated that on Wednesday President Obama resubmitted the nominations of Sharon Block (D) and Richard Griffin (D) to the Senate for confirmation. He urged the Senate to take a simple up or down vote on their nominations instead of proceeding through the longer Senate confirmation process. He argued that “the power to advise and consent is not the power to paralyze and obstruct,” and said that both parties have been guilty of abusing use of pro forma sessions to prevent presidents from making recess appointments.

Some panelists expressed reluctance to put the NLRB nominations to a simple up or down vote, however. LaJeunesse, for example, said that that the nominations of Block and Griffin “should be defeated in any way possible” given their track record this past year.

Similarly, in the letter to the White House, the House leaders urge the President “to nominate four qualified individuals for the [Board] immediately, and work with the Senate to confirm them. Until a constitutionally appointed Board is seated, uncertainty will reign in labor-management relations to the determent [sic] of America’s workers, employers, and unions.” The lawmakers likewise implore the Board to “cease all activity” until the Supreme Court evaluates the legitimacy of the recess appointments, or until “all members of the Board are confirmed with the advice and consent of the U.S. Senate in a number sufficient to constitute a quorum. . .”

A complete list of the panelists and links to their testimony can be found here.

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