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NLRB Case Creates Uncertainty
The Supreme Court will rule on whether decisions issued by the two incumbent members on the five member labor relations board are valid. A ruling throwing out all of the decisions issued since January 2008 could create chaos -- although there were few controversial decisions made during that time.
Are the decisions of a two-person National Labor Relations Board valid? That's the question now before the U.S. Supreme Court, which is expected to offer a verdict sometime next year. Yet while opinions differ as to how the high court will rule, employment attorneys agree that a decision nullifying the NLRB's decisions could have consequences that go beyond the cases in question. On Nov. 2, the Supreme Court agreed to consider the U.S. 7th Circuit Court of Appeal's decision in New Process Steel vs. NLRB to determine if a two-member NLRB had the authority to render decisions. A petition was also filed for another case in the District of Columbia Circuit, LaurelBaye Healthcare vs. NLRB, but the Supreme Court agreed only to consider New Process Steel. Three other courts have also weighed in on the issue: Snell Island SNF vs. NLRB (Second Circuit), Northeaster Land Services vs. NLRB (First Circuit) and, most recently, Narricot Industries vs. NLRB (Fourth Circuit). Of the five federal circuit court rulings, only the D.C. Circuit in Laurel Baye Healthcare ruled the two-member NLRB -- Wilma Liebman, a Democrat who chairs the board, and Peter Schaumber, a Republican -- had no authority to issue decisions. The question before the Supreme Court justices is whether the National Labor Relations Act gives the NLRB members the ability to delegate decision-making powers to a quorum of three members -- an action taken in late 2007 when the board had four members. The labor relations board has had only two members since January 2008. Since that time, the NLRB has issued roughly 500 decisions, with 77 of them currently being appealed or awaiting resolution. A ruling overturning the Seventh Circuit's opinion would likely lead to a review of all of those cases. A decision in New Process Steel vs. NLRB is expected by mid-year. Nominations to fill the three remaining seats are currently before the Senate, though one of the nominees -- Craig Becker, associate general counsel of the Service Employees International Union -- has run into significant resistance in the Senate. On Oct. 21, Sen. John McCain, R-Ariz., announced he would place a hold on Becker's appointment. Mark Gaston Pearce, a labor attorney, and Brian Hayes, labor policy director for the U.S. Senate Committee on Health, Education, Labor and Pensions, are the two other nominees. Employment attorneys have mixed opinions on how the Supreme Court might rule, with some predicting the high court will support a majority of the rulings and others expecting it to side with the D.C. Circuit decision. Joshua Ditelberg, a partner with Seyfarth Shaw in Chicago, says it could play out either way. "It strikes me as a close call," Ditelberg says. "Based on my reading of the statute and its language, it's hard to tell how the court will rule on this. Though there was a four-to-one split [in the circuit courts in favor of the NLRB's authority], that doesn't necessarily indicate how this will turn out, since the D.C. Circuit is of critical importance [because appeals can be brought before it from any region of the country]." Should the Supreme Court nullify the authority of the two-member NLRB, it would create a great deal of uncertainty, agree employment attorneys. But not everyone is of the same opinion as to what that might mean over time. "If you were the focus of one of these two-person decisions, there's going to be some uncertainty as far as where you stand with NLRB," Ditelberg says. "But the reality is, the [fully operational] board will eventually take steps to ratify or approve the decisions that were already made." Ditelberg notes that it is likely to lead to delays for those with matters currently before the board. "From a day-to-day standpoint," he says, "it won't shut the system down, but it will certainly slow it down." Most of the 500 decisions issued since January 2008 are not terribly controversial, experts point out. "The board's current composition is one Democrat and one Republican -- one pro-labor and one pro-business," Ditelberg says. "So, in a very conscious and deliberate way, what the board has done is defer [deciding] the controversial cases." Because of that, he adds, a decision to nullify the authority of a two-member NLRB should have limited consequences. Michael Lotito, partner with Jackson Lewis in San Francisco, notes that, were the Supreme Court to rule against the Seventh Circuit, things could get interesting. "Who knows what will happen if the 77 decisions are thrown out?" he asks. "There's certainly the potential for chaos." But Lotito also points out that a Supreme Court ruling negating the authority of a two-member board could have broader implications as well. It raises questions pertaining to the board's administrative responsibilities and the way it functions on a day-to-day basis, says Lotito, adding that such uncertainties can be problematic no matter what side of the aisle you're on. The NLRB was created to foster stability, he says, but instead, it's creating instability. By letting politics get in the way of filling the posts, Lotito says, policymakers are creating even more uncertainty. "How hard could it be to fill three vacancies?" he asks. Employment attorneys agree the lengthy vacancies are unfortunate. "I think the president will be putting more pressure to get the nominations through," Ditelberg says. "But the opposition from McCain and the Chamber [of Commerce] for the Becker nomination is very serious." Jim Haggerty, a labor and employment attorney with Cohen & Grigsby in Pittsburgh, notes that picking a controversial nominee such as Becker almost ensured the Obama administration that the selection would not sail through the Senate quickly. "Because [the Supreme Court's decision to hear the case] is a procedural issue and not a management versus union issue," he says, "it's not of major consequence to employers ... ." Haggerty is in the camp of those who believe it's likely the Supreme Court will find the rulings of the two-member panel invalid [because of the way the NLRA reads]. But whatever the outcome, he believes the issue offers one important take-away for HR leaders: "It shows the importance of preserving your rights to appeal if an open legal issue exists," Haggerty says. "Employers should have known that some litigant would appeal the legality of the decisions by a two-member panel."
November 30, 2009 Copyright 2009© LRP Publications |
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