Senate Confirms New Five-Member NLRB: What Just Happened and What’s Next?

On the evening of July 30, the U.S. Senate confirmed all five pending nominations to the National Labor Relations Board (NLRB), giving the agency a fully operational complement of Board members for the first time in over a decade.

Meet the New Board Members

The new members and their terms are: Nancy Schiffer (D) for a term expiring on December 16, 2014; Harry I. Johnson, III (R) for a term expiring on August 27, 2015; Kent Hirozawa (D) for a term expiring on August 27, 2016; Philip A. Miscimarra (R) for a term expiring on December 16, 2017; and Chairman Mark Gaston Pearce (D) for a term expiring on August 27, 2018.

Board Members Schiffer and Hirozawa were confirmed by the identical, nearly party-line vote of 54-to-44, with two Senators not voting and only Republican Senator Lisa Murkowski (AK) crossing party lines to vote for confirmation. Chairman Pearce was confirmed by a vote of 59-to-38, with three Senators not voting. Republican Senators Lamar Alexander (TN), Saxby Chambliss (GA), Susan Collins (ME), Johnny Isakson (GA), John McCain (AZ), Rob Portman (OH), and Murkowski (AK) crossed party lines to vote in favor of confirmation. Board Members Miscimarra and Johnson were confirmed by voice vote.

Schiffer is a former associate general counsel with the AFL-CIO and earlier was a staff lawyer with the United Auto Workers and the NLRB. Hirozawa was chief counsel to Board Chairman Pearce after spending most of his career as a union lawyer. Pearce, of course, was a long-time union lawyer in private practice in Buffalo, New York, while Miscimarra and Johnson both practiced with management-side labor law firms in Chicago and Los Angeles, respectively.

What Happened?

Among the group of Republican Senators who voted for the confirmation of Chairman Pearce were the Senators, led by Senator McCain, who negotiated a “deal” not to filibuster the Board nominations and to allow a simple majority vote for confirmation. The “deal” involved a majority vote for confirmation in exchange for: (1) an agreement by the White House to withdraw the nominations of recess appointees Richard Griffin (D) and Sharon Block (D); and (2) an agreement by Majority Leader Harry Reid (NV) to drop the threat of a “nuclear option” to advance presidential nominations. Senate Republicans strongly opposed and had threatened to filibuster the nominations of Griffin and Block who were both serving recess appointments at the Board—which three federal courts of appeals ruled were unconstitutional. Their continued service meant that while the Supreme Court of the United States reviewed the D.C. Circuit Court of Appeals’ decision in Noel Canning v. NLRB on the constitutionality of their recess appointments, each decision Griffin and Block rendered was invalid for lack of a legitimately-confirmed or appointed quorum of three members required to decide cases.

The “nuclear option” would have eliminated filibusters on executive branch nominations and, Senate Republicans feared, in the future on judicial nominations and perhaps even on legislation as well. The threat to eliminate the filibuster was termed the “nuclear option” because Majority Leader Reid threatened to blow up the long-standing requirement for 67 votes to change Senate rules and instead allow rules to be changed by a simple majority vote—what Republican Minority Leader Mitch McConnell (KY) referred to as “breaking the rules in order to change the rules.”

What’s Next at the NLRB?

So what’s next? Business can count on Chairman Pearce revisiting the Board’s representation  election (or “ambush election”) rule, which he promised to do when he was forced to drop some of the most objectionable provisions from the rule as originally proposed in order to issue the rule before then-Member Craig Becker’s recess term expired thus losing a quorum.

Since then, the rule has been blocked by the U.S. District Court for the District of Columbia. Chairman Pearce has promised to “keep his eyes on the prize” for when he had a majority of confirmed Board members to restore the original rule. Some predict that the new ambush election rule will be even more extreme, dramatically reducing the time employers have to fully inform employees regarding unionization before a union representation election is held.

Employers also should expect the issuance of several controversial decisions pending before the Board, including an expansion of Specialty Healthcare to rubber stamp a union’s petitioned-for bargaining units of multiple small, single job classifications unless the employer can overcome the nearly impossible hurdle of proving that other employees have an “overwhelming” community of interest—which the Board describes as nearly a complete overlap of job duties and interests with the petitioned-for unit. By, in effect, picking their voters to the extent of their ability to organize, unions obviously will be able to win far more elections.

Non-union employers should also expect a continued expansion of the concept of “protected concerted activity,” which the Board applies to union and non-union workplaces through policies, work rules, handbooks, employment arbitration agreements, and even at-will employment policies, which may “chill” employees’ rights to engage in concerted activity.

Of course, the newly-confirmed Board may be slowed down depending on the Supreme Court’s ruling in Noel Canning on the validity of the “recess” Board’s prior decisions. The new Board may be forced to spend considerable time recalling and reconsidering the more than 1,000 decisions issued by the previous “recess” Board—although the new Board majority will be able to “rubber stamp” the 30-40 most problematic decisions fairly quickly. Either way, do not expect many of those decisions to change. However, the Board’s new members will be forced to reconsider them under de novo review.

Finally, there is the issue of the “persuader activity” rule, requiring public reporting and disclosure of confidential legal and labor relations “advice” from law firms and consultants during union organizing campaigns and collective bargaining under the Labor-Management Reporting and Disclosure Act of 1959. If, in November, as forecast, the U.S. Department of Labor (DOL) issues a final “persuader activity” rule, employers can expect the NLRB to work hand-in-glove with the DOL in identifying violations of the public reporting and disclosure requirements for employers and outside parties.

The effect would be to make it more difficult for employers to retain outside counsel—which would be especially damaging for small businesses without in-house labor counsel. Uncounseled employers are more likely to commit unfair labor practices and, as a result, could possibly face bargaining orders from the NLRB to recognize and bargain with a union without a secret ballot election, but instead based purely on signed union authorization cards. In other words, implementing “back door” card check without the need for Congress to pass the so-called “Employee Free Choice Act.”

Stay tuned.