Federal Appeals Court Finds Recess Appointments to NLRB Unconstitutional

On January 25, 2012, a three-judge panel of the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) ruled that the National Labor Relations Board (“NLRB”) had no authority to rule that an employer violated the National Labor Relations Act (“NLRA”) when it refused to sign a contract with a union representing its employees. Ordinarily, this would have been a garden variety decision by the NLRB and the Court of Appeals’ review would have been of little note. But because the NLRB issued the decision at a time when three of its members were serving pursuant to “recess appointments” that President Obama made when the Senate was not actually in “recess,” the Appeals Court concluded that the NLRB did not have a quorum and thus had no authority to enforce an order issued by an administrative law judge to the employer.

This decision will have far-reaching implications because it throws into question the validity of all NLRB decisions issued during 2012, in particular a number of decisions that overturned existing precedent and established rules which apply, in some cases, to employers whose employees are not represented by unions. Included among those now in doubt are the following decisions:

  • Banner Health System, 358 NLRB 1 (2012), where the Board held that an employer violated the NLRA by routinely asking employees who made a complaint to human resources not to discuss their complaint with their coworkers while the investigation was ongoing.
  • Hispanics United of Buffalo, Inc., 359 NLRB No. 37 (Dec. 14, 2012), in which the NLRB held that employees’ Facebook comments about another employee’s criticism of their job performance constituted protected concerted activity under Section 7 of the National Labor Relations Act. Thus, the employer could not terminate the five employees for their Facebook comments.
  • WKYC-TV, Inc., 359 NLRB No. 30 (Dec. 12, 2012), where the Board overruled a 50-year-old policy relating to an employer’s obligation to deduct union dues pursuant to a check-off provision after expiration of a collective bargaining agreement and found that the obligation to deduct union dues continues after the contract expires.
  • Alan Ritchey, Inc., 359 NLRB No. 40 (Dec, 14, 2012), where the NLRB reversed a long-standing precedent and held that an employer whose employees are represented by a union must bargain with the union before imposing discretionary discipline on a unit employee.
  • American Baptist Homes, 359 NLRB No. 46 (Dec. 15, 2012), where the Board reversed a 34-year-old rule issued in Anheuser-Busch, Inc., 237 NLRB 982 (1978), which established a general exemption from disclosure to a union for witness statements obtained during an employer’s investigation of employee misconduct. Under the new NLRB decision, a party asserting the confidentiality defense (almost always the employer) has the burden of proving that a legitimate and substantial confidentiality interest exists, and that it outweighs the requesting party’s need for the information.
  • IronTiger Logistics, Inc., 359 NLRB No. 13, (Oct. 2012), where the Board ruled that an employer’s failure to respond in a “timely” fashion to a union’s request for information the union claimed it needed for bargaining violated the employer’s duty to bargain in good faith under the NLRA.
  • Marriott International, Inc. d/b/a J.W. Marriott Los Angeles at L.A. Live, 359 NLRB No. 8 (Sep. 28, 2012), where the Board ruled that a policy that restricted access of off-duty employees to the employer’s premises except when granted approval at a manager’s discretion violated the NLRA.

We expect the NLRB to ask the United States Supreme Court to reverse this far-reaching decision of the D.C. Circuit. Whether, pending possible Supreme Court action, the NLRB will continue to enforce the rules that it adopted in cases it decided with the recess appointees is not clear at this time. It could continue to do so, if it chooses, because the direct effect of the D.C. Circuit’s ruling is only that the NLRB will not be able to enforce in that Court of Appeals any of its orders issued by the present Board, but might be able to do so before another Court of Appeals.

The D.C. Circuit, however, is a forum to which all employers have access when appealing NLRB decisions, provided that the NLRB does not first seek to enforce its orders in another Court of Appeals. For this reason the NLRB might choose not to seek enforcement of some or all of its controversial 2012 decisions, knowing what the result will be if an employer is able to bring its appeal to the D.C. Circuit.

For More Information

Stevens & Lee’s Labor and Employment Department will be closely monitoring developments in this area and will provide updates as they become available. For more information, please contact the Stevens & Lee attorney with whom you normally work or Joseph P. Hofmann at 717.399.6643.

This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.