On March 10, 2009, the Employee Free Choice Act was introduced in Congress, which would have amended the National Labor Relations Act (“NLRA”) in various ways to make union organization quicker and easier. Long a dream of union supporters, the act was intended to curtail the long-term decline in union membership. With every Senate Republican and several Democrats threatening a filibuster and preoccupied with other legislative priorities, Congress never acted on this measure. Following the 2010 congressional elections in which the Democrats lost control of the House of Representatives, it was clear that Congress would not pass the Act. The Administration decided to go around Congress by adopting much of the substance of the Act under the guise of regulatory changes clarifying the Act’s existing provisions. The National Labor Relations Board (the “Board”), then promulgated many significant new regulations affecting unionization and regulation of non-union employers. Perhaps most significantly, the Board streamlined the unionization process and required even non-union employers to post notices regarding employees’ NLRA rights. Some of these regulations are the subject of lawsuits brought by the National Chamber of Commerce and others arguing that they are substantively or procedurally deficient. However, the most significant changes are scheduled to take effect on April 30, 2012. Notably, however, there is some possibility that the Board’s actions have been unconstitutional because of the participation of members appointed through the “recess appointment” process. One cannot assume that the courts will ultimately invalidate the new regulations, so it is prudent to comply with them until the court’s weigh in.  

Regulations Regarding Expedited Union Representation Elections

For years, unions have complained that existing union election procedures allow unnecessary delays between the filing of unionization petitions and the union elections. On June 22, 2011, the Board issued its Notice of Proposed Rulemaking signaling its intent to enact significant new rules regarding union elections.

The rule makes the following changes to the elections procedure:

  1. hearing officers will have greater discretion to limit the evidence presented at pre-election hearings to evidence that is “relevant to a genuine issue of fact material to whether a question of representation exists”;
  2. hearing officers will have discretion to deny requests by parties to submit post-hearing briefs;
  3. parties will no longer have the right to file requests for review with the Board challenging the regional director’s decision or the direction of election until after the election, and only rulings not rendered moot by the election will be reviewable;
  4. the 25-day period between the issuance of the regional director’s decision directing an election and the holding of the election will be eliminated;
  5. the rules regarding a party’s ability to seek and obtain special permission to appeal a hearing officer ruling to the Board will be “clarify[ied]” at some future time; and
  6. the Board will now have discretion to refuse to review a regional director’s resolution of pre- and post-election disputes.

In what appears to be the first deviation from the standard procedure, the final published rule does not contain Republican Board Member Brian Hayes’ dissent because the rule was published less than 90 days following the vote on the rule. This likely occurred because the recess appointment of Democratic Member Craig Becker was set to expire at the end of 2011, leaving the Board with only two members. Under the Supreme Court’s New Process Steel decision discussed below, any action taken with the participation of only two Board members is void for want of a quorum. In addition, the Board broke with its practice of making significant legal, policy or procedural changes only when at least three members supported the change.

These procedural irregularities as well as the substance of the new rules led the United States Chamber of Commerce to file a legal challenge in the U.S. District Court for the District of Columbia. In March of 2012, the Chamber and the Board filed cross-motions for summary judgment. The Chamber’s motion argued that (1) the two Board members in the majority denied Member Hayes the opportunity to fully participate in the rulemaking, thus denying the Board an official quorum; (2) the Board’s actions to expedite the adoption of the rule violated the Administrative Procedure Act by arbitrarily and capriciously failing to follow well-established Board practices; and (3) the new rule is substantively inconsistent with Sections 3 and 9 of the NLRA. The Board’s motion argues that (1) the Chamber’s suit is not ripe for adjudication as the rule has not yet been applied; (2) the Board is entitled to deference in rulemaking; (3) the rules are consistent with the substantive provisions of the NLRA; and (4) the Board “fully considered and appropriately rejected” all the Chamber’s substantive arguments against the rules in the course of its rulemaking process, which was not “totally unjustified.” The court has yet to act on the parties motions, and these new rules are scheduled to take effect on April 30, 2012.

NLRA Posting Requirements

The Board also issued a new rule on August 30, 2011 requiring all employers covered by the NLRA to post notices to their employees in conspicuous locations in the workplace informing employees of their rights under the NLRA. Contrary to a common misconception, the NLRA applies to most private employers not just those with unionized workforces. Significantly, the notice indicates the following to employees:

Under the NLRA, as an employee you have the right to:  

  • organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment;
  • form, join, or assist a union;
  • bargain collectively through representatives of your own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions;
  • discuss your terms and conditions of employment or union organizing with your co-workers or a union;
  • take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union;
  • strike and picket, depending on the purpose or means of the strike or the picketing; or
  • choose not to do any of these activities, including joining or remaining a member of a union.

The notice also lists several examples of unlawful employment practices under the NLRA and provides instructions for contacting the Board to pose questions or lodge complaints. Not only must the poster be placed in conspicuous places where it can be readily seen by employees, but it must be posted “on an intranet or internet site if the employer customarily communicates with its employees about personnel rules or policies by such means.”

Under the rule as adopted by the Board, failure to comply with the new posting requirement may be considered an unfair labor practice under Section 8(a)(1) of the NLRA, which prohibits employers from interfering with, restraining, or coercing employees in the exercise of the rights guaranteed by Section 7 of the NLRA. In addition, the rule provides that failing to post the notice may toll the six-month statute of limitations on complaints of unfair labor practices.  

The National Association of Manufacturers, the National Federation of Independent Businesses, and the Chamber of Commerce of the United States, among others have filed lawsuits challenging the posting requirement and the Board’s authority to implement them asserting four main arguments: (1) the NLRA does not expressly authorize the Board to promulgate notice posting rules; (2) the Board has authority over employers only after a representation petition or an unfair labor practice charge is filed; (3) the rule purports to create a new unfair labor practice without statutory authority to do so; and (4) the new regulation purports to provide for an exception to the NLRA’s 6-month statute of limitation with no defined limits or legislative authority.  

On March 2, 2012, in National Association of Manufacturers v. NLRB, Case No. 2:11-cv-01629 (D.D.C. Mar. 2, 2012), Judge Amy Berman Jackson of the U.S. District Court in Washington, D.C., upheld the notice-posting requirement. But the court found that the Board had exceeded its authority by attempting to create a new unfair labor practice based on failure to post the notice and by creating a rule that a failure to post the notice would toll the limitations period for filing unfair labor practice charges. While this seems like a win for employers, the latter part of the ruling comes with a big caveat. The decision would allow the Board to pursue unfair labor practices charges, and to pursue those charges beyond the normal six-month limitations period, on a case-by-case basis. Only the Board’s taking these actions through general rulemaking was prohibited, according to the court. The National Association of Manufactures has appealed the ruling.

Then, on April 13, 2012, Judge David C. Norton of the U.S. District Court for the District of South Carolina held that the Board lacked the statutory authority even to promulgate the posting requirement. The court held that the Board does not obtain authority over employers until a petition or charge is filed with the Board. Accordingly, the Board’s attempt to exercise jurisdiction over all employers was beyond its statutory authority. Chamber of Commerce of the United States et al. v. National Labor Relations Board et al., Case No. 2:11-cv-02516 (D.S.C. April 13, 2012). The Board has indicated that it will appeal this ruling.  

The Court of Appeals for the District of Columbia has issued an emergency stay preventing the Board from enforcing the posting requirement. Therefore, until the question of the Board’s authority is resolved, employers do not have to following any of the proposed posting requirements.

Board Recess Appointments: Constitutionality and Effect

These regulations are potentially clouded by the constitutional question of whether the Board members enacting them were properly appointed. On January 4, 2012, the President appointed Democratic union lawyer Richard Griffin, Democratic labor department official Sharon Block, and Republican NLRB lawyer Karen Flynn to the Board through a procedure known as “recess appointment.” Recess appointments are authorized by the Constitution, which provides that “[t]he President shall have the power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” U.S. Constitution, Article II, Section 2.  

Recess appointments have been used regularly by every president since George Washington, but in recent years they have become somewhat controversial as presidents have used recess appointments to install nominees who the Senate was expected to reject. Congress has responded by declining to go into recess, thereby precluding recess appointments. For example, following the Thanksgiving break in November of 2007, Senate Majority Leader Harry Reid did not allow the Senate to adjourn or recess for more than 3 days at a time until the end of the Bush presidency. Instead the Senate held pro forma sessions to prevent President Bush from making any recess appointments. Adopting the same tactic over the traditional winter recess for the 2011–12 legislative year, Congress did not consent to adjournment to prevent President Obama from making recess appointments. During this time, President Obama made several recess appointments including the Board appointments noted above. Under the Supreme Court’s New Steel Process LP v. NLRB, 560 US __, 130 S. Ct. 2635, 2638 (2010) decision, the Board may only act where the Board has a quorum of three or more members. At present, only one sitting Board member was confirmed by the Senate. Accordingly, if the President’s recess appointments are not constitutionally valid, the regulations and actions of the Board may be void.  

To get around the fact that Congress was not in session, the President sought the advice of the Office of Legal Counsel at the Department of Justice which, on January 6, 2012, issued an opinion regarding recess appointments made when the Senate is in pro forma session. This opinion stated that “[t]he convening of periodic pro forma sessions in which no business is to be conducted does not have the legal affect of interrupting an intra-session recess otherwise long enough to qualify as a ‘Recess of the Senate’ under the Recess Appointments Clause. In this context, the President, therefore, has discretion to conclude that the Senate is unavailable to perform its advise-and-consent function and to exercise his power to make recess appointment.” Memorandum Opinion for the Counsel to the President; Lawfulness of Recess Appointments During a Recess of the Senate Notwithstanding Periodic Pro Form Session, available here. These appointments have already been challenged in court. See Nat’l Assoc. of Mfrs. v. NLRB, 1:11-CV-1629, (D.D.C.) (discussed below). Given the President’s position that Congress was in recess because it was not available to serve in its advise-and-consent role, it is notable that the President does not appear to have submitted any nominations to Congress to give Congress the opportunity to take up the nominations.  

In National Association of Manufacturers v. NLRB, the court declined to address the plaintiffs’ claims that the rules were invalid because certain board members participating in the rulemaking process were improper recess appointments when it denied the plaintiffs’ motion to amend the complaint to add the recess appointment claims. Notably, the argument was raised after the case had already been briefed and argued. The court, however, did observe that the rule was promulgated before the January 2012 recess appointments, so the rule was likely valid. Accordingly, the court held that the plaintiffs’ proposed amendment would be futile.

The court did not address the possibility that one of the Board member’s appointments had already expired when the final rule was promulgated on December 22, 2011. The argument goes as follows: if the President is correct that Congress is in recess when it ceases conducting business and goes into periodic pro forma sessions, Member Becker’s recess appointment had already expired by December 22, 2011. Member Becker was appointed in March of 2010 when Congress was in official recess. However, if the President’s right to make recess appointments begins when the Senate enters a prolonged period of not conducting business, logically, previous recess appointments—which the Constitution provides expire at the end of the congressional session following the appointment—must expire at the same time. To date, no court has addressed this argument.

Conclusion

While there is some possibility that the Board’s new regulations will be invalidated by the courts in the future, prudence requires that employers prepare to comply with these regulations. Accordingly, the Board’s poster should be posted in conspicuous locations in an employer’s workplaces and on the company’s intranet or internet pages if these are used to communicate with employees. If a unionization petition is filed after April 30, 2012, the new procedures will govern the election. We will continue to monitor this situation, and will provide updates to our clients.