Last week the House Committee on Oversight and Government Reform released a staff report highlighting rulemaking, decisions, and other actions taken in recent years by the National Labor Relations Board (NLRB or “Board”) that the Committee contends are indicative of the agency’s pro-union bias. Rep. Darrell Issa (R-CA) chairs the Committee. The report – President Obama’s Pro-Union Board: The NLRB’s Metamorphosis from Independent Regulator to Dysfunctional Union Advocate (pdf) – claims that these legislative, regulatory, and internal missteps “compromise the perceived fairness of the NLRB that Congress deemed necessary for its successful operation,” and have created a “rogue agency plagued by systemic problems.” The 33-page report touched on a number of perceived faults with the Board’s operation and decision-making process, including the following:
- Litigation overreach. According to the report, NLRB Acting General Counsel Lafe Solomon and the Board “are using their adjudicatory functions to wreak havoc on job creators.” The report criticized in particular the Board’s controversial decision in Specialty Healthcare, in which the Board reversed past precedent and adopted a new standard for determining appropriate bargaining units. The report states that this new standard – which makes it easier for unions to organize smaller “micro” bargaining units – “threatens to upset the delicate balance between the interests of employers and unions as practiced for 20 years.”
- Regulatory overreach. The Report characterized the Board’s notice posting and expedited election rules as regulatory overreach. The implementation of the Board’s controversial notice posting rule and expedited election procedures rule have both been declared invalid by federal courts. The U.S. Court of Appeals for the D.C. Circuit enjoined the enforcement of the notice posting rule after a South Carolina federal court found that the Board lacked the authority to promulgate the rule in the first instance. The U.S. District Court for the District of Columbia rule declared the expedited election rule unlawful because the Board lacked a quorum when it issued the rule in December 2011. The agency has appealed both of these decisions.
- Constitutionality of Recess Appointments. On January 4, 2012, President Obama announced his intention to seat Sharon Block (D), Richard Griffin (D), and Terence Flynn (R) to the Board via recess appointment. Flynn later resigned from the Board following allegations cited in an NLRB Inspector General report that he committed ethics violations while employed by the Board, but before he assumed his Board member position. Several lawsuits have been filed as a result of the move to seat the new members in this fashion, as it has been argued that the Senate was not technically in recess when the appointments were made. The report points out that as a practical matter, if the recess appointments are ultimately deemed unconstitutional – a determination that has already been made by at least one federal court and may ultimately be decided by the Supreme Court – many of the decisions and actions taken by the Board could be overturned. The Supreme Court in 2010 held in New Process Steel that the agency must operate with at least three sitting members. As a result of that decision, hundreds of Board decisions were invalidated. The report explains that the same fate could befall the decisions made by the recess appointees, creating great uncertainty for employers that rely on these decisions.
- Internal misconduct. The report discusses several instances in which it alleges that Board officials broke their own internal rules. Notably, the report contends that rules governing ex parte communications and the separation principle between the Board and the General Counsel may have been violated, and outlines other allegations of ethical and criminal misconduct.
More information on the Committee’s report can be found here.