In a decision issued last week, an Administrative Law Judge (“ALJ”) for the National Labor Relations Board (“NLRB”) ruled that an interim grievance procedure between an employer and a newly-certified union did not have to include an arbitration option in order to relieve the employer of the obligation to provide the union with notice and an opportunity to bargain before imposing significant discretionary discipline.
As we previously posted, in late 2012, the NLRB issued a groundbreaking decision in Alan Ritchey, Inc., requiring for the first time that in the absence of a binding agreement addressing discipline, an employer must provide the union with a bargaining opportunity prior to issuance of significant discretionary discipline (i.e., suspension, demotion, or discharge). This issue would ordinarily arise during the period after a union is newly certified, but before an agreement has been reached with the employer on an initial contract.
The Alan Ritchey decision did not specifically address whether an interim grievance procedure had to offer an arbitration option if internal grievance efforts failed to resolve any disagreement over the proposed discipline. There was no binding agreement between the employer and the union in the Alan Ritchey case and, recognizing the significant change in the law that the decision entailed, the NLRB decided to apply the new requirement on a prospective basis only.
In Medic Ambulance Service, ALJ Cracraft found that an interim grievance procedure did not require an arbitration option to satisfy the Alan Ritchey requirements. In Medic Ambulance, while negotiations for an initial collective bargaining agreement were underway, the employer and the newly certified union agreed to follow the first two steps set forth in the grievance/arbitration section of the employer’s expired agreement with a prior union. The parties also expressly agreed, however, that the third step (arbitration) would not be available until a new contract was signed.
ALJ Cracraft found that the agreement regarding the first two grievance steps constituted an agreed-upon interim grievance procedure that relieved the employer of its obligation to bargain with the union prior to imposing significant discretionary discipline. The General Counsel for the NLRB contended that the procedure did not satisfy the Alan Ritchey requirements because it did not include an arbitration option, but ALJ Cracraft summarily rejected that argument:
Surely if the Board intended to mandate arbitration as a part of an interim grievance procedure, its decision would have clearly provided such guidance. Thus, in disagreement with the General Counsel, I find that Alan Ritchey does not specifically require that an interim grievance procedure contain an arbitration component.
Having concluded that arbitration was not a required element of an interim grievance procedure, the ALJ held that the two-step “grievance only” procedure was sufficient to relieve the employer of its obligation to provide the union with notice and an opportunity to bargain before it terminated several employees.
The ALJ's Medic Ambulance decision offers a welcome constraint to the far-reaching scope of the NLRB's Alan Ritchey decision. Employers should be cautioned, however, that the ALJ's decision is not binding precedent and the union may still pursue an appeal to the NLRB.
For the first time in New York State, a Regional Director for the National Labor Relations Board ("NLRB") has asserted NLRB jurisdiction over a New York charter school, and ordered an election for a unit of approximately 35 teachers at the school. The decision, Hyde Leadership Charter School Brooklyn, Case No. 29-RM-126444, preempts the New York Public Employment Relations Board ("PERB") from asserting jurisdiction, and conflicts with prior PERB decisions holding that charter schools are public entities for labor relations purposes.
The Hyde Leadership decision involved a representation petition for teachers at a charter school in Brooklyn, New York. On April 14, 2014, the United Federation of Teachers, Local 2 (the "Union"), filed a petition with PERB seeking certification for a unit of approximately 35 teachers at the school. That same day, the school filed a representation petition with the NLRB seeking an election for the same unit of employees. Because the National Labor Relations Act excludes “any state or political subdivision thereof,” the NLRB was tasked with deciding the public or private nature of the charter school.
To establish jurisdiction over the Hyde Leadership school, the NLRB would have to determine that the school was not a “political subdivision” of the state under the Supreme Court’s standard set forth in its NLRB v. Natural Gas Utility District of Hawkins County decision. Under the Hawkins County decision, an entity is a political subdivision if it is created directly by state so as to constitute a department or administrative arm of the government, or if it is administered by individuals who are responsible to public officials or to the general electorate.
Applying the Hawkins County standard to the Hyde Leadership school, the NLRB acknowledged the blend of public and private characteristics embedded in New York charter schools and the New York State Charter Schools Act (“Charter Schools Act”). Factors suggesting a public character include: the Board of Regents, a public entity, issues the charter and can revoke the charter upon discovering certain problems such as fiscal mismanagement; the school is funded almost entirely with public funds; the language of the Charter Schools Act refers to charter schools as independent and autonomous public schools and states that charter school employees are public employees for purposes of New York’s public employment relations law; the charter schools are subject to certain public officers laws; and New York City charter schools are subject to audit by the city comptroller.
However, factors suggesting a private character include: private individuals create and submit the charter agreement for approval (although this can optionally be done in conjunction with a public entity); except for laws specified in the Charter Schools Act, the charter schools are exempt from “all other laws and regulations governing public or private schools”; the charter schools are non-public for designation of textbooks, health services, student transportation, and other services; charter school employees are employees of the “education corporation” that runs the charter school, not the public school district; and there is no requirement that the board of directors for the charter schools be appointed or elected by any public entity or include any public officials.
The Regional Director weighed the factors and concluded that the Hyde Leadership school was not a political subdivision under the Hawkins County test and therefore was subject to NLRB jurisdiction. Specifically, the Regional Director held that the charter school was not “created by the state” because private individuals applied to establish the charter school, and it was not an “administrative arm of the government” because the governance and control of the charter school “vested solely in the private incorporators” rather than in the public entities. Moreover, the school was not administered by individuals who are responsible to public officials or the general electorate, as none of the school’s governing trustees are appointed by public officials.
Accordingly, the Regional Director asserted NLRB jurisdiction over the school and directed an election. Although this does not establish a “bright line” rule that all New York charter schools will necessarily be subject to NLRB jurisdiction (and the Union may still challenge the Regional Director's decision), the factors that contributed to the holding are largely statutory, and may compel a similar conclusion for other charter schools in New York.
In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the “University”) are “employees” under the National Labor Relations Act. In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.” Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University.
In support of his decision, the Regional Director found that the players receive compensation for the athletic services they perform in the form of scholarships, which pay for the players’ tuition, fees, room, board, and books and can total as much as $76,000 per calendar year for up to five years. Furthermore, the Regional Director found that the players are under the strict control of the University throughout the year. The coaches determine the location, duration, and manner in which the players carry out their football-related activities; they monitor the players’ adherence to NCAA and team rules; and they control “nearly every aspect of the players’ private lives,” including their living arrangements, applications for outside employment, off-campus travel, social media posts, and communications with the media. In contrast, the Regional Director held that “walk-ons do not meet the definition of ‘employee’ for the fundamental reason that they do not receive compensation for the athletic services that they perform.”
The University has confirmed that it plans to appeal the decision to the full National Labor Relations Board in Washington, D.C. If upheld, the decision has the potential to dramatically alter the world of big-time athletics in higher education as it would open the door for scholarship athletes at all private universities to unionize. Indeed, the decision could have implications for scholarship students in a number of areas beyond athletics.
The Union, College Athletes Players Association (“CAPA”), which has the financial backing of the United Steelworkers, is seeking, among other demands, financial coverage for former players with sports-related medical expenses and the creation of an educational trust fund to help former players graduate.
The National Labor Relations Board ("Board") reissued a proposed rule today that would significantly shorten the timetable for union representation elections. This same proposed rule (which has become known as the "quickie" or "ambush" election rule) was initially issued by the Board on June 22, 2011. After the proposed rule was met with strong opposition from employer organizations, the Board issued a final rule on December 22, 2011, that was a scaled-down version of the proposed rule. The final rule became effective on April 30, 2012. However, on May 14, 2012, the U.S. District Court for the District of Columbia declared the final rule to be invalid because the Board lacked a quorum when it voted on the final rule. The Board appealed the decision, but recently announced that it was withdrawing its appeal. As some had predicted, the Board's withdrawal of its appeal set the stage for its reissuance of the broader June 22, 2011, proposed rule. The proposed rule:
Establishes electronic filing of election petitions and other documents (intended to speed up processing);
Requires pre-election hearings to begin seven days after a petition is filed (currently, pre-election hearings can begin up to two weeks after a petition is filed);
Defers litigation of all “eligibility” issues if they involve less than 20% of the proposed bargaining unit until after the election (these issues would be decided post-election if needed);
Eliminates pre-election appeals of rulings by Board Regional Directors; and
Reduces the time in which an employer must provide an electronic list of eligible voters from seven days to two days.
If this proposed rule is implemented, it will significantly shorten the time period from the filing of a union representation petition to the date on which a representation election is held. This creates a distinct advantage for the union, because it gives the employer less opportunity to counteract a union campaign which likely began well before the filing of the representation petition. Comments on the proposed rule from interested parties must be received on or before April 7, 2014. After the comment period, the Board may revise the proposed rule, or may issue it as a final rule. The Board’s decision to reissue the original proposed rule that was issued on June 22, 2011 (rather than the final rule that was issued on December 22, 2011) seems to indicate that the Board may not be willing to make significant changes before a final rule is issued. However, it is likely that the final rule -- in whatever form it is issued -- will once again be challenged by employer organizations in federal court on the ground that the Board exceeded its rulemaking authority.
In collective bargaining, a “final” proposal is often a term of art, used to signal the end of a party’s willingness to move. However, negotiators frequently will continue to move even after a purportedly final offer. In the view of the National Labor Relations Board ("NLRB"), “final” does not always really mean final. Recently, the Fifth Circuit Court of Appeals agreed with the NLRB's view. In Carey Salt Co. v. NLRB, the Fifth Circuit Court of Appeals affirmed the NLRB's holding that labor negotiations had not reached impasse, even though the union had asked for the company’s “final” proposal, the company had provided it, the union had rejected it, and the parties had thereafter confirmed that they were far apart. These facts, on their face, would seem to suggest that the parties had reached impasse, and that the company was therefore entitled at that point to suspend negotiations and implement its final offer. However, the NLRB looked behind these facts, and concluded that the union, when it requested the company’s final offer, had not intended to bring negotiations to a halt. The NLRB credited the union’s testimony that the union had wished only to poll its membership on the company’s position and continue bargaining. The union’s negotiator testified – without significant rebuttal – that his request for a “final” offer had included the caveat that the parties negotiate further after receiving it. Under these circumstances, the NLRB held, and the Fifth Circuit affirmed, that the company had prematurely seized on the final offer phraseology to declare impasse and to decline to meaningfully negotiate thereafter. This strategy had disastrous consequences for the company, not the least of which was that it was ultimately responsible for wages lost during an ensuing strike, which – as a result of the company’s premature cessation of negotiations and implementation of its final offer – was held to constitute an “unfair labor practice strike.” Although the Fifth Circuit does not have jurisdiction over employers in New York, the Court's decision illustrates the treacherous waters that employers in any state must navigate when assessing whether impasse – always an evasive concept – has truly been reached. The Fifth Circuit's decision includes a particularly scholarly recitation on the subject of impasse in collective bargaining, recounting and discussing precedent on this difficult issue. A second issue addressed in the case is whether, and under what circumstances, purportedly “regressive” proposals – i.e., company proposals that reduce previous terms or concessions – can be a factor in assessing “bad faith” bargaining on the part of the company. The NLRB held that the company had bargained in bad faith by introducing so-called regressive proposals. However, the Fifth Circuit rejected the NLRB's position, clarifying that regressive proposals are lawful as long as they are not designed or intended to avoid or frustrate bargaining. The Fifth Circuit found no evidence that the regressive proposals had been deployed in a bad faith manner in this instance. Therefore, the Court rejected the NLRB’s sweeping conclusion of bad faith based on these proposals alone.
In D.R. Horton, Inc., the National Labor Relations Board ("NLRB") held that a mandatory arbitration agreement between an employer and an employee that included a class action waiver was unlawful under Section 8(a)(1) of the National Labor Relations Act ("NLRA") because it prohibited the employee from engaging in concerted activity with other employees. The NLRB's D.R. Horton ruling, which was the subject of a prior blog post, dealt a significant blow to employers who sought to manage their litigation risk by requiring employees to sign mandatory arbitration agreements and class action waivers as a condition of employment. The Second Circuit Court of Appeals, in a separate case decided on August 9, 2013, expressly declined to follow the NLRB's D.R. Horton ruling and held that a class action waiver in an arbitration agreement was enforceable under the Fair Labor Standards Act ("FLSA"). Recently, the Fifth Circuit Court of Appeals rejected the NLRB's D.R. Horton ruling, holding that class action waivers contained in mandatory arbitration agreements do not violate the NLRA and are enforceable under the Federal Arbitration Act ("FAA"). The Fifth Circuit began its analysis by noting that the FAA requires arbitration agreements to be enforced according to their terms, with two exceptions: (1) an arbitration agreement may be invalidated "upon such grounds as exist at law or in equity for the revocation of any contract" (commonly referred to as the FAA's "saving clause"); and (2) application of the FAA may be precluded by another statute's contrary congressional command. The Court concluded that neither of these exceptions applied to preclude the enforceability of the class action waiver contained in the mandatory arbitration agreement. The Court stated that the saving clause "is not a basis for invalidating the waiver of class procedures in the arbitration agreement." The Court then examined whether the NLRA contained a congressional command to override the provisions of the FAA, and found that it did not. The Court found that the "NLRA does not explicitly provide for such a collective action, much less the procedures such an action would employ," and concluded that "there is no basis on which to find that the text of the NLRA supports a congressional command to override the FAA." The Court also looked to the legislative history of the NLRA for evidence of a congressional command to override the FAA, and found no such evidence. Finally, the Court determined that no congressional command to override the FAA could be inferred from the underlying purpose of the NLRA. Accordingly, the Court held that the class action waiver in the mandatory arbitration agreement was valid and enforceable under the FAA. The Fifth Circuit recognized that every other Circuit Court of Appeals that considered the issue (including the Second Circuit, as noted above) either suggested or expressly stated that they would not defer to the NLRB's rationale, and held class action waivers in arbitration agreements to be enforceable. The Court stated that it did not want to create a split among the Circuit Courts by enforcing the NLRB's D.R. Horton decision. Although the Court refused to enforce the NLRB's ruling that the class action waiver violated the NLRA, the Court agreed with the NLRB that the mandatory arbitration agreement violated the NLRA to the extent that it would lead an employee to believe that the filing of unfair labor practice charges was prohibited. The employer argued that this was not the intent of the mandatory arbitration agreement, and that employees remained free to file unfair labor practice charges with the NLRB. However, the Court nevertheless enforced the portion of the NLRB's order requiring the employer to clarify the language of the mandatory arbitration agreement to permit the filing of unfair labor practice charges. It remains to be seen whether the NLRB will ask the U.S. Supreme Court to review the Fifth Circuit's decision. In the meantime, employers should consider whether arbitration agreements with employees containing class action waivers might be a useful tool to limit the risk and cost associated with employment-related litigation.
Recently, in Quicken Loans, Inc., the National Labor Relations Board ("NLRB") continued its close scrutiny of employers' confidentiality rules by affirming an administrative law judge's decision invalidating a rule prohibiting non-union employees from disclosing personal information about themselves or their co-workers, such as home phone numbers, cell phone numbers, addresses, and email addresses. Quicken's "Proprietary/Confidential Information" rule that was included in certain employment agreements prohibited employees from disclosing non-public information relating to the company's personnel, including "all personnel lists, rosters, personal information of co-workers, managers, executives and officers; handbooks, personnel files, personnel information such as home phone numbers, cell phone numbers, addresses, and email addresses" to any person, business, or entity. In affirming the administrative law judge's decision, the NLRB held that "there can be no doubt that these restrictions would substantially hinder employees in the exercise of their Section 7 rights." Quicken defended the rule as necessary to protect the time and expense invested in its employees, and to protect the confidential and proprietary information entrusted to the company. The NLRB rejected this defense, and agreed with the administrative law judge that complying with Quicken's rule would prohibit employees from discussing with union representatives or their co-workers their own wages and benefits, or the names, wages, benefits, addresses, or telephone numbers of other employees. The NLRB concluded that "this would substantially curtail their Section 7 protected concerted activities." The NLRB also affirmed the administrative law judge's invalidation of Quicken's Non-Disparagement provision in its entirety. The provision stated that employees would not "publicly criticize, ridicule, disparage or defame the Company or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral statement or image . . . ." The NLRB concluded that an employee would reasonably construe this provision as restricting his or her rights to engage in protected concerted activities. In the wake of this decision, and considering the fact that the NLRB is now comprised of a Senate-approved Democratic majority led by Chairman Mark Gaston Pearce, employers should expect continued close scrutiny of confidentiality policies. Employers should carefully review their confidentiality rules to ensure that they do not prohibit employees from discussing wages, benefits, or other terms and conditions of employment either with their co-workers or with union representatives. Employers should also consider including specific examples of prohibited disclosures and a clause specifically providing that the rule is not intended to prohibit an employee's exercise of rights protected by Section 7 of the National Labor Relations Act.
On July 17, 2013, the Fourth Circuit Court of Appeals held, in a 2-1 decision, that President Obama's January 4, 2012 recess appointments to the National Labor Relations Board ("NLRB") were unconstitutional because the Senate was not in "recess" at the time of the appointments. The Fourth Circuit is the third federal appellate court to weigh in on this issue, joining the D.C. Circuit (which also held that the January 4, 2012 recess appointments were unconstitutional) and the Third Circuit (which held that Craig Becker's March 27, 2010 recess appointment was unconstitutional).
In the two consolidated cases before the Fourth Circuit, the majority followed the logic of the D.C. Circuit and the Third Circuit, and determined that the President is only authorized to make recess appointments without confirmation by the Senate during recesses that occur between sessions of the Senate rather than breaks in activity that occur while the Senate is in session. This issue will ultimately be decided by the Supreme Court, which has agreed to consider the NLRB's appeal from the D.C. Circuit's Noel Canning decision.
A recent Advice Memorandum from the National Labor Relations Board's Division of Advice provides employers further guidance on how to address and structure employee confidentiality requirements during investigations. As we reported before on this blog, in Banner Health System, the Board held that an employer violated Section 8(a)(1) of the National Labor Relations Act by directing employees not to discuss complaints made to the employer with co-workers while an investigation into the matter is pending. In doing so, the Board put employers on notice that “blanket” confidentiality requirements would violate the right of employees to engage in protected concerted activity.
In the recent Advice Memorandum, the Division of Advice addressed the application of Banner Heath in reviewing Verso Paper’s confidentiality rule. This case raised the question whether Verso’s confidentiality requirement “unlawfully interfered with employees’ Section 7 rights by precluding employees from disclosing information about ongoing investigations into employee misconduct.” Verso’s Code of Conduct provided:
Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up. To assist Verso in achieving these objectives, we must maintain the investigation and our role in it in strict confidence. If we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.
Citing the Board’s decision in Banner Health, the Division of Advice agreed with the Regional Director that the rule was unlawfully overbroad, and advised that a complaint should be issued, absent settlement, against Verso for violating Section (8)(a)(1) of the NLRA. The Region reasoned that Verso’s provision was in fact a “blanket rule” regarding confidentiality of employee investigations. Instead, Verso’s rule needed to demonstrate a case-by-case need for confidentiality. The Division of Advice stressed that the employer has the burden to show in each particular situation that it has a legitimate and substantial business justification for confidentiality, which will outweigh the interference with employees' Section 7 rights. The Division of Advice also reiterated that a general concern with the investigation’s integrity is not enough, and cited the following factors mentioned in Banner Health where an employer may require confidentiality: (1) there are witnesses in need of protection; (2) evidence is in danger of being destroyed; (3) testimony is in danger of being fabricated; or (4) there is a need to prevent a cover-up.
One could argue that the Verso Advice Memorandum did not plow any new ground beyond the Board's decision in Banner Health. The Advice Memorandum reaffirms the principle set forth in Banner Health that a simple “blanket rule” of confidentiality during an investigation into employee misconduct will be found to be unlawful. Rather, the employer must engage in an individualized assessment considering the need for confidentiality in each particular case, analyzing the factors mentioned in Banner Health.
Given the Board’s current position, employers are well advised to draft confidentiality rules consistent with Banner Health’s “specificity” requirements. In this respect, the Verso Advice Memorandum provides some helpful guidance. First, the Division of Advice noted that the first two sentences of Verso’s rule lawfully set forth the interest in protecting the integrity of Verso’s investigations, which were:
Verso has a compelling interest in protecting the integrity of its investigations. In every investigation, Verso has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.
Second, the Division of Advice suggested that, consistent with Banner Health, Verso could modify the remainder of the rule to lawfully advise its employees that:
Verso may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If Verso reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.
We must note that this is only an Advice Memorandum, and the guidance is not binding on the Board. Employers should also note that the Banner Health case may not survive the Supreme Court's consideration of the D.C. Circuit's decision in Noel Canning v. NLRBand the Third Circuit's decision in NLRB v. New Vista Nursing and Rehabilitation, LLC. If the Banner Health decision survives, however, the Verso Advice Memorandum at least provides some insight to employers on how to comply with Banner Health. Avoid blanket rules and tailor policies to specific facts involved in the employee investigation.
On June 14, 2013, the U.S. Court of Appeals for the Fourth Circuit held that the rule promulgated by the National Labor Relations Board ("NLRB") requiring employers to post a notice of employee rights under the National Labor Relations Act ("NLRA") is invalid. The Fourth Circuit is the second appellate court to strike down the NLRB's notice posting rule. The U.S. Court of Appeals for the D.C. Circuit issued a decision on May 7, 2013 also holding that the rule is invalid.
The Fourth Circuit affirmed a decision rendered by the U.S. District Court for the District of South Carolina, holding that the NLRB did not have the authority under the NLRA to promulgate the rule. The Fourth Circuit examined the plain language of the statutory text, which grants the NLRB the authority to issue rules that are "necessary to carry out" the provisions of the NLRA, and determined that the notice posting rule was not necessary to carry out any of the provisions of the NLRA. The Fourth Circuit observed that the NLRB "serves expressly reactive roles," such as conducting representation elections and resolving unfair labor practice charges, and that Congress did not intend to grant the NLRB the authority to take on a proactive role such as requiring employers to post a notice of employee rights under the NLRA.
The Fourth Circuit also noted that Congress explicitly included notice posting requirements in several federal employment and labor laws passed during the span of years from 1935 to 1974, such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and the Occupational Safety and Health Act, but did not include such a requirement in the NLRA despite the fact that the NLRA was amended in other ways three times during that time period. The Fourth Circuit stated that "Congress's continued exclusion of a notice-posting requirement from the NLRA, concomitant with its granting of such authority to other agencies, can fairly be considered deliberate. . . . Had Congress intended to grant the NLRB the power to require the posting of employee rights notices, it could have amended the NLRA to do so."
It remains to be seen whether the NLRB will ask the U.S. Supreme Court to consider this issue. Stay tuned for further developments on this blog.
The Third Circuit Court of Appeals, in NLRB v. New Vista Nursing and Rehabilitation, LLC, held on May 16 that the March 27, 2010 recess appointment of former National Labor Relations Board ("NLRB") member Craig Becker was unconstitutional. The Third Circuit is the second appeals court to weigh in on the validity of President Obama's recess appointments to the NLRB, but is the first to specifically address the validity of Craig Becker's appointment. The D.C. Circuit Court of Appeals held, on January 25, 2013, that the January 2012 recess appointments of Sharon Block, Terence Flynn, and Richard Griffin were unconstitutional.
In the New Vista case, a three-member panel of the NLRB, which included Craig Becker, Wilma Liebman, and Brian Hayes, issued a decision and order in August 2011 requiring New Vista to bargain with the union that had won an election to represent a bargaining unit of New Vista's licensed practical nurses ("LPNs"). New Vista had previously argued unsuccessfully that its LPNs were supervisors who were not entitled to unionize.
In analyzing the issue of whether Craig Becker's recess appointment on March 27, 2010 was unconstitutional, the Third Circuit considered three potential interpretations of the word "recess" in the Recess Appointments Clause of the U.S. Constitution: (1) intersession breaks (breaks between sessions of the Senate); (2) intersession breaks and intrasession breaks (breaks during a session of the Senate) that last a non-negligible period of time (historically considered to be at least 10 days); or (3) any period of time when the Senate is not open to conduct business, and therefore cannot act upon nominations. The Third Circuit determined that the word "recess" applies only to intersession breaks. Accordingly, Craig Becker's appointment was held to be invalid at its inception because he was appointed during a two-week intrasession recess in March 2010. The Third Circuit vacated the NLRB's decision and order because the panel that issued the decision and order did not have three validly appointed members.
The Third Circuit's decision could have far-reaching consequences that go beyond the D.C. Circuit's Noel Canning decision. The D.C. Circuit's Noel Canning decision called into question the validity of every decision issued by the NLRB from January 4, 2012 to the present because the NLRB lacked a quorum of three validly appointed members during that entire period of time. The Third Circuit's decision now also calls into question the validity of every NLRB decision from March 27, 2010 to the present that was issued by a three-member panel on which Craig Becker was a participant.
The Supreme Court may soon take up the issue of the validity of President Obama's recess appointments to the NLRB. On April 25, the NLRB filed a petition for certiorari to the Supreme Court from the D.C. Circuit's Noel Canning decision. In light of the fact that the Third Circuit's decision addressed the issue in a slightly different context from the D.C. Circuit's decision, and in light of the additional NLRB decisions that could be impacted by the Third Circuit's decision, it is expected that the NLRB will file a petition for certiorari asking the Supreme Court to review the Third Circuit's decision as well.
On May 7, 2013, the U.S. Court of Appeals for the D.C. Circuit held that the rule promulgated by the National Labor Relations Board ("NLRB") requiring employers to post a notice of employee rights under the National Labor Relations Act ("NLRA") is invalid. The D.C. Circuit had previously granted an injunction on April 17, 2012 precluding the NLRB from implementing its notice posting rule.
The appeal to the D.C. Circuit came after the U.S. District Court for the District of Columbia issued a decision in the lawsuit filed by the National Association of Manufacturers and the National Right to Work Legal Defense and Education Fund. In that lower court decision, the District Court held that the NLRB had the authority to require employers to post the notice, but did not have the authority to determine that failure to post the notice would be an unfair labor practice and did not have the authority to permit tolling of the six-month statute of limitations for unfair labor practice charges if an employer fails to post the notice.
The D.C. Circuit held that all three of the mechanisms for enforcing the NLRB's posting requirement were invalid, which rendered the entire rule invalid. The three enforcement mechanisms set forth in the rule were: (1) failure to post the notice would be an unfair labor practice; (2) failure to post the notice could be used as evidence of anti-union animus in unfair labor practice cases in which the employer's motive is at issue; and (3) failure to post the notice could result in tolling of the six-month statute of limitations for unfair labor practice charges.
The D.C. Circuit found that the first two enforcement mechanisms constituted violations of an employer's free speech rights under Section 8(c) of the NLRA. Section 8(c) of the NLRA provides that "the expressing of any views, argument, or opinion, or the dissemination thereof . . . shall not constitute or be evidence of an unfair labor practice . . . if such expression contains no threat of reprisal or force or promise of benefit." The D.C. Circuit analyzed this provision in the context of Supreme Court decisions interpreting the First Amendment, and concluded that Section 8(c) not only protects an employer's right to express its views regarding unionism in a non-coercive manner, but also protects an employer from being compelled by the NLRB to disseminate information about unionism that it does not wish to disseminate. The D.C. Circuit also found that the third enforcement mechanism -- the tolling of the six-month statute of limitations -- constituted an impermissible amendment to the statute of limitations that Congress expressly set forth in the NLRA.
There is still an appeal pending in the Fourth Circuit Court of Appeals on the same issue of whether the NLRB's notice posting rule is invalid. That appeal arose out of a decision rendered by the U.S. District Court for the District of South Carolina, holding that the NLRB did not have the authority under the NLRA to promulgate the rule.
