After the Canning v. NLRB Decision

In its recent decision in the case of Noel Canning v. the National Labor Relations Board, a panel of the D.C. Circuit Court of Appeals invalidated the recess appointments of three members of the National Labor Relations Board, because the Court found the U.S. Senate was not in recess at the time President Obama made the appointments. We asked labor and employment attorney Joel S. Barras of Reed Smith to weigh in on how the decision may ripple outward toward employers.

Monday, February 4, 2013
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HREOnline: Were you surprised by the recent appeals-court decision deeming President Obama's NLRB appointments unconstitutional?

Joel S. Barras: I was not surprised by the Court's decision. Although I am a labor attorney and do not profess to be a Constitutional scholar, I found the Court's unanimous opinion well-reasoned and persuasive. While I am not overly surprised by the NLRB's decision to limit the application of this decision to Noel Canning, I am disappointed. The Board's decision to continue operating in the face of this decision as if it had a properly appointed quorum adds to the uncertainty for employers, unions and employees alike. Unless the en banc D.C. Circuit Court of Appeals or the Supreme Court reverses the D.C. Circuit panel's decision, every NLRB case issued since January 2012 is invalid and must be re-decided when a quorum is properly appointed.

HREOnline:   Is this appeals-court decision reminiscent of any other recent court decisions regarding the NLRB?

JSB: This decision is reminiscent of the June 2010 U. S. Supreme Court case [involving] New Process Steel, where the Court overturned more than five hundred decisions issued by a Board that lacked a quorum of members.

HREOnline:  Can you provide some examples in which the NLRB's recent decisions overturned cases that had previously stood for years prior?

JSB: Recently, the Board issued two decisions that overturned decades-long precedent. First, in Piedmont Gardens, the NLRB reversed a more-than-30-year-old Board ruling which protected confidential witness statements during workplace investigations from disclosure to the labor organization representing the employee or employees involved in the investigation. It had been well-settled that the law exempted witness statements made with employer assurances of confidentiality from the requirement to provide the union with copies of the statements, even though such statements were arguably relevant to the Union's representation of bargaining unit employees. In overturning this rule, the Board concluded that witness statements are "fundamentally the same" as other "confidential" information an employer may be required to provide to a union.

Second, in WKYC-TV, Inc., the Board issued a ruling that preserves the flow of dues income to unions during protracted labor negotiations. Under a case that stood for more than 50 years, employers have had the option to stop dues check-off after expiration of a collective-bargaining agreement.  In WKYC-TV, Inc., employers must continue to deduct union dues from employee paychecks, despite the expiration of a collective-bargaining agreement that required the payments.

HREOnline: Can you explain how the Canning decision affects all the decisions the Board made since Jan. 2012? Are they now invalid? What happens to the employers who had judgments rendered against them? Are they no longer on the hook?

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JSB: The NLRB issued a statement saying the decision applies only to the specific case before the court, and noting that it will continue to operate as usual. With the Noel Canning decision, it is now more likely that every decision issued since January 2012, including all prospective decisions issued by the current recess Board members, is invalid.

It is important to note that, even if these cases are invalid and the NLRB members lack the authority to take direct action, many of the Board's processes will continue. The various NLRB regions will continue to investigate unfair labor practice charges, issue complaints and try cases. Administrative law judges will continue to issue decisions and find violations of the Act. 

The losing party, however, will likely appeal the decision to the Board, which will effectively stay the [administrative law judge's] decision. That case will then be left in limbo until a quorum is properly appointed and rules on the decision, which would likely be delayed given the tremendous backlog of cases. In some limited instances, the Board's general counsel may seek injunctive relief in federal court to force a losing party who has appealed the decision to comply with the [administrative law judge's] order, pending the NLRB's eventual decision. 

HREOnline: If they do file an appeal with the U.S. Supreme Court, what are the NLRB board's chances of success, in your estimation?

JSB: I believe a majority of current Supreme Court justices will agree with the D.C. Circuit panel's decision and uphold the Noel Canning decision.

Joel Barras is based in Reed Smith's Philadelphia office.


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