Recent developments in the United States Senate will have a significant impact on the future agenda and initiatives of both the National Labor Relations Board and the United States Department of Labor. For the first time during President Obama's administration, the NLRB will soon be operating with five confirmed Board members—ending, at least prospectively, the firestorm over the Board's ability to operate with the President's recess appointees. Employers can now expect the fully confirmed Board to decide a number of important cases in the pipeline on topics like union access to employer property and social media, and to re-engage in rulemaking on election rules. Whether the confirmed Board will have to revisit the flurry of game-changing decisions that it issued with panels consisting of challenged recess appointees must await the outcome of the Supreme Court's decision in Noel Canning, 705 F.3rd 490 (D.C.Cir. 2013).
Background
Following a lengthy impasse between Democrats and Republican senators over how and when—if at all—the full Senate would consider certain of the President's nominees for Executive Branch positions, in late July, the Senate leadership and the White House reached a compromise, avoiding a potential change in the Senate's filibuster rules. The Republican Members of the Senate agreed to permit a number of the President's nominees, including NLRB members and the U.S. DOL Secretary, to receive expeditious confirmation votes. In exchange, the President withdrew his two recess appointment nominees to the NLRB, Members Sharon Block and Richard Griffin, and nominated two new Democrat candidates for the Board, Nancy Schiffer and Kent Hirozawa. By essentially a party line vote, the Senate HELP Committee approved Schiffer and Hirozawa and forwarded their nominations to the full Senate, along with the nominations of Democrat Chairman of the Board, Mark Pearce, and two nominated Republicans, Harry Johnson and Phil Miscimarra. On July 30, the full Senate voted to confirm all of these NLRB nominees.
What to Expect from the Newly Confirmed Board
With a full quorum for the first time in many years and with
three confirmed Democratic members, the Board is expected to
continue the aggressive pro-labor agenda of the previous Board. On
the rulemaking front, the Board will likely renew its efforts to
change, through rulemaking, its long-standing election rules to
make union elections quicker and more difficult for employers to
challenge through agency appeals. The Board's first effort to
implement new election rules faced stiff employer challenges and
was judicially invalidated based on a technical quorum issue.
Chamber of Commerce v. NLRB, No. 11-2262 (D.D.C. May 14,
2012).
On the decision-making front, the new Board is also expected to
issue significant decisions in a number of areas. For example, the
Board should issue the long-awaited decision in
Roundy's, the case involving the proper standards
governing union access to an employer's private property. 356
NLRB No. 27 (2010). In addition, the new Board will have the
opportunity to decide cases in the pipeline that involve the
lawfulness of employer social media policies and employee access to
employer's email systems.
The Prior Board's Decisions
Over the past two years, with panels consisting of challenged
recess appointees, the Board issued a number of decisions that
uprooted long-settled Board law or otherwise changed the legal
landscape for employers. See, e.g., Jones Day
Commentary, "NLRB Issues Significant Decisions at
Year's End," Jones Day (January 2013); Jones Day
Commentary, "NLRB Finds NLRA Violation for Asking
Employees to Refrain From Discussing Ongoing Internal
Investigations," Jones Day (August 2012); Jones Day
Commentary, "Labor Board Purports to Invalidate Class
Action Waivers in Employment Arbitration Agreements," Jones
Day (January 2012). The fate of the standards announced in those
controversial decisions must await the outcome of the Supreme
Court's review of the Noel Canning case, where the
Court is poised to review the D.C. Circuit's decision that the
President's January 4, 2012 recess appointments of members
Block and Griffin to the NLRB did not meet the requirements of the
Recess Appointments Clause of the Constitution, rendering the
decisions of the improperly appointed Board
invalid.
If the Supreme Court agrees with the D.C. Circuit in Noel
Canning, the Board will presumably have to review all of the
controversial decisions that it issued without a proper quorum,
consistent with the Supreme Court's decision in New Process
Steel, _U.S. _, 130 S. Ct. 2635 (2010). Whether the new
Democratic-majority Board will reach different outcomes in those
cases remains to be seen. Cases to watch include:
- WKYC-TV, 359 NLRB No. 30 (Dec. 12, 2012), where the Board overruled 50 years of precedent in holding that an employer's obligation to automatically deduct union dues from employees' paychecks continues after expiration of a collective bargaining agreement containing a dues check-off provision.
- Banner Health System, 358 NLRB No. 93 (July 30, 2012), where the Board held that an employer's blanket policy requiring confidentiality from its employees involved in an ongoing internal investigation violated the Act.
- Piedmont Gardens, 359 NLRB No. 46 (Dec. 15, 2012) and Hawaii Tribune-Herald, 359 NLRB No. 39 (Dec. 14, 2012), where the Board reversed a rule established in 1978 privileging employers to withhold confidential witness statements obtained by an employer during an internal investigation.
- Alan Ritchey, Inc., 359 NLRB No. 40 (Dec. 14, 2012), where the Board held that employers must give notice and offer to bargain before enforcing discretionary discipline on its union-represented employees where the parties are negotiating a first contract and do not yet have a grievance and arbitration process in place.
- Finley Hospital, 359 NLRB No. 9 (Sept. 28, 2012), where the Board held that an employer had to continue paying annual wage increases on employees' anniversary dates, even though the contract providing for those increases had expired, as part of the status quo.
- Albertson's, LLC, 359 NLRB No. 147 (July 2, 2013), overruling 29 years of precedent in holding that an employer violated the Act by soliciting grievances during a union campaign even though the solicited employee did not respond to the solicitation.
The confirmation of the new five-member NLRB is not expected to
affect the U.S. Supreme Court's decision to hear the Noel
Canning case in its October 2013 Term. Two additional Circuit
Courts of Appeal, the Third Circuit in NLRB v. New Vista
Nursing & Rehab. LLC, No 11-3440 (3d Cir. May 16, 2013)
(petition for reh'g filed July 1, 2013), and the
Fourth Circuit in the NLRB v. Enterprise Leasing Co. Se.
LLC, No. 12-1514 (4th Cir. July 17, 2013) and Huntington
Ingalls Inc. v. NLRB, No. 12-2000 (4th Cir. July 17, 2013),
have now also followed the same rationale of the D.C. Circuit and
found that the recess nominees to the NLRB violated the Recess
Appointments Clause. Oral Argument in the Noel Canning
case is likely to occur early in 2014, and Jones Day and the
National Chamber of Commerce Litigation Center will be representing
the Noel Canning Corporation in the Supreme Court.
DOL Developments
The Senate also approved, on a party-line vote, the
President's nomination of Thomas Perez to be the new Secretary
of the U.S. DOL. Mr. Perez has faced substantial Republican
opposition in the Senate, including criticism of his handling of
certain matters while he was an Assistant Attorney General with the
Department of Justice. With Mr. Perez's confirmation, the
Department can be expected to continue to pursue an aggressive
agenda with respect to wage and hour audits and active enforcement
of OSHA rules and regulations, and to continue an aggressive agenda
by the Office of Federal Contract Compliance Programs
("OFCCP"). Indeed, the OFCCP can be expected to issue
final rules later this year with respect to requirements that
federal contractors and subcontractors reach an "aspirational
goal" of up to 7 percent of their workforce consisting of
individuals with veteran status and individuals who are disabled.
There is substantial employer opposition to these initiatives based
on practical and legal concerns with respect to meeting such goals,
and litigation certainly can be expected to challenge the
rules.
The Department, according to its recent regulatory agenda filing,
can also be expected to issue its regulations implementing the
public disclosure requirements of the Labor Management Reporting
and Disclosure Act ("LMRDA"). Under Section 203 of the
LMRDA, employers are required to file a report (Form LM-10) with
the Department concerning any agreements with third parties to
persuade employees concerning their rights to organize and
bargaining collectively. The Department's earlier proposed
rulemaking in this area met with substantial employer and trade
association opposition, and it would impose significant new
reporting burdens on employers, consultants, and lawyers who advise
employers on labor relations matters by limiting the exception to
the filing requirement for third parties that provide
"advice" to employers regarding union organizing and
collective bargaining issues. The impact of such proposed rules
will be to add an additional regulatory burden on employers,
attorneys, and consultants, and potentially make it more difficult,
particularly for small and medium-size businesses, to obtain
effective counsel regarding union-related matters.
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