National Labor Relations Board Full Of Drama – Courts Strike Down Controversial Rules And One Member Resigns

In the last several months, two courts handed down employer-friendly decisions invalidating (or at least delaying) the implementation of new rules instituted by the National Labor Relations Board (NLRB). One decision involved the so called “quickie election” or “ambush election” rules. The other decision addressed the notice posting rule. A summary of these key decisions follows, in addition to discussions of Board Member Terence Flynn’s resignation and the NLRB’s recently released report on social media policies.

“Ambush Election” Rules

The impetus for the ambush election rules dates back to June 22, 2011, when the NLRB proposed changes to the procedures for holding representation elections. Specifically, the proposed rule amended the procedures for determining whether a majority of employees want to be represented by a labor organization for the purposes of collective bargaining. The NLRB ultimately adopted a final rule amending its election case procedures, which went into effect on April 30, 2012.

Two weeks later, in Chamber of Commerce et al. v. NLRB, Judge James E. Boasberg of the U.S. District Court for the District of Columbia enjoined the NLRB representation case rules due to the lack of a quorum of three NLRB members acting on the final rule. Citing the U.S. Supreme Court’s decision in New Process Steel, the court noted that: “At the end of the day, while the Court’s decision may seem unduly technical, the quorum requirement, as the Supreme Court has made clear, is no trifle.”

The court did not reach the Chamber of Commerce’s challenge to the final rule on myriad grounds. Instead, the court reached only the first contention: that the rule was adopted without the statutorily required quorum.

Notice Posting Rule

On April 17, 2012, the D.C. Circuit Court of Appeals enjoined the NLRB from implementing the notice posting rule, which would have required private employers across the country to post a notice regarding the rights of employees to organize and join a union, until the D.C. Circuit had fully considered the issue on appeal. The appellate court cited the verdict obtained a few days earlier by the U.S. and South Carolina Chambers of Commerce in federal court in South Carolina.

Ogletree Deakins brought the lawsuit on behalf of the U.S. Chamber and the South Carolina Chamber. According to Gray Geddie, Ogletree Deakins’ former chairman and the attorney who argued the case, the decision both vindicates the rights of employers and constrains the power of the NLRB. “In striking down the rule, the court preserved the role of the NLRB as a quasi-judicial arbiter of employee rights, rather than an advocate for unions and unionization,” he said.

On April 27, the Office of General Counsel of the NLRB issued a letter clarifying its understanding of the D.C. Circuit Court of Appeals’ decision enjoining the NLRB’s implementation of the notice posting rule. According to the letter, which clarifies that the Board will comply with the District Court of South Carolina’s judgment invalidating the notice posting rule, “the NLRB will honor the District Court of South Carolina’s judgment and not implement the Rule against any person unless and until that judgment is reversed upon appeal by the Fourth Circuit Court of Appeals or the Supreme Court of the United States.”

It is expected that the NLRB will appeal Judge David Norton’s decision to the Fourth Circuit.

NLRB Member Flynn Resigns

The NLRB announced on May 27 that Member Terence F. Flynn had submitted his resignation to President Obama and NLRB Chairman Mark Gaston Pearce. Flynn also asked the President to withdraw his February 2011 nomination to the Board, which had never received Senate action.

In his resignation letter, Flynn stated that effective immediately he would recuse himself from “all NLRB activities.” Flynn’s resignation, dated May 25 and submitted May 26, will be effective on July 24, 2012.

Report on Social Media

On May 30, 2012, the NLRB issued a report on social media policies. The key issue that the report addressed was whether employers’ restrictions on the use of social media “would reasonably be construed to chill the exercise of Section 7 rights” by employees under the National Labor Relations Act. In the report, the NLRB found a number of social media restrictions unlawful.

For example, a policy barring workers from disclosing “confidential guest, team member or company information” on social networking sites was unlawful because it could “reasonably be interpreted as prohibiting employees from discussing and disclosing information regarding their own conditions of employment, as well as the conditions of employment of employees other than themselves – activities that are clearly protected by Section 7.” In addition, a policy instructing employees to ensure that their posts were “completely accurate and not misleading” would be “overbroad because it would reasonably be interpreted to apply to discussions about, or criticism of, the Employer’s labor policies and its treatment of employees.”

The NLRB also found policies cautioning employees to “think carefully” about “friending” colleagues and those prohibiting employees from commenting on any legal matters unlawful. The report included an example of an acceptable social media policy.

Conclusion

According to Harold P. Coxson, Jr., a shareholder in Ogletree Deakins’ Washington, D.C. office: “The significance of these four, seemingly unrelated issues is that employers are successfully challenging the activist, pro-union NLRB’s aggressive agenda, but there is much more still pending. For example, the Board’s Specialty Healthcare decision, which privileges unions to organize in micro-small, single-job classification bargaining units, is on appeal to the Sixth Circuit. Similarly, the Board’s D.R. Horton decision prohibiting employers from requiring employees to sign mandatory arbitration agreements that do not allow employees to bring class or collective claims, is on appeal to the Fifth Circuit.”

Undoubtedly, however, the most important ruling will be the business community’s challenge to the constitutionality of the President’s three NLRB “recess” appointments when Congress was not in recess but continued to operate in pro forma sessions. If the courts, and ultimately the U.S. Supreme Court, rule that the appointments were unconstitutional, then every Board action or decision since the January 4 recess appointments will be invalid and recalled for lack of a quorum under the authority of the Supreme Court’s New Process Steel decision. “That,” according to Coxson, “would be a ‘game changer’ – truly a ‘big deal’.”

Note: This article was published in the May/June 2012 issue of the Employment Law Authority.