Last week, the U.S. Supreme Court granted certiorari in two high-profile labor cases. The cases will be heard in the Court's October 2013 term.
Noel Canning: As many expected, the Court agreed to review the Noel Canning decision, in which the U.S. Court of Appeals for the District of Columbia Circuit held that President Obama's January 2012 "recess" appointments to the National Labor Relations Board were unconstitutional and invalid. As we have previously reported, the D.C. Circuit held that recess appointments may be made only during "intersession" recesses (recesses between different sessions of the Senate rather than within a single session) and that the vacancies filled must "arise" during the recess (in other words, the vacancy cannot simply "exist" during the recess). The invalid appointments caused the Board to lack a quorum of at least three members who are validly appointed and thus made the Board's decision void and unenforceable.
The Supreme Court granted review on both issues decided by the D.C. Circuit, and also requested briefing from the parties on a third issue: whether the recess appointment power may be exercised when the Senate is convening in pro forma sessions, with adjournments of less than three days, as it was in January 2012. Before the D.C. Circuit issued its opinion this past January, many observers believed that this "pro forma session" issue was the central issue in the case, with the Board and the Obama Administration contending that these did not prevent a recess from occurring, and others – including Noel Canning and the U.S. Chamber of Commerce – asserting that they did.
A decision in Noel Canning may affect other "recess" appointments, including President Obama's appointment of Richard Cordray to the Consumer Financial Protection Board, and the outcome of similar cases, such as the decision of the U.S. Court of Appeals for the Third Circuit in New Vista Healthcare, in which the court held that the appointment of Craig Becker to the Board in March 2010 was an invalid intrasession recess appointment.
UNITE HERE Local 355 v. Mulhall: The second labor case that the Supreme Court agreed to review involves so-called "neutrality agreements" between companies and unions. A casino company agreed to be neutral in a union organizing drive, voluntarily recognize the union if it could show majority support, and give the union access to its property and employee information in exchange for the union's support in a legislative campaign for pro-gaming legislation in Florida and a union promise not to picket, strike or engage in economic action against the employer. An employee challenged the deal as an unlawful grant of a "thing of value" by an employer to a union under Section 302 of the Labor Management Relations Act. Section 302 generally makes it unlawful for an employer to "pay, lend or deliver any money or other thing of value to any labor organization" or any of its representatives.
The U.S. Court of Appeals for the Eleventh Circuit ruled last year that the agreement between the casino and the union might violate Section 302, remanding the case for a determination by a U.S. District Court as to the precise "intent" of the deal. Typically, intent is not relevant to a Section 302 inquiry -- provision of a "thing of value" by an employer to a union typically is unlawful regardless of intent. The case is important because unions are frequently seeking to pressure employers through "top-down" corporate campaigns to make their organizing easier. Neutrality agreements are often important goals of such corporate campaigns.
Contrary to the 11th Circuit, U.S. Courts of Appeals in the Third and Fourth circuits have held that neutrality agreements do not violate Section 302, so it is hoped that the Supreme Court decision will resolve the conflict.
As we have previously reported, parties are challenging NLRB actions on many fronts based on Noel Canning and New Vista, so a final resolution from the Supreme Court will be welcomed by all. Meanwhile, the President's five nominations to the Board are pending in the Senate, and confirmation will make the quorum issue moot for the future. There is no question that the coming year will be an interesting one.