Is the NLRB "Open for Business?" U.S. Chamber Lawsuit Says No

Sep 19, 2012

Imagine your company just received an adverse ruling from the National Labor Relations Board, compelling your company to retroactively modify the benefits it provides to union employees. Or, imagine you’re the unionized employee for the same company, and you are expecting the new benefits package ordered by the Board.

As it turns out, 3 out of the 5 members of the NLRB may not have been constitutionally appointed to the Board. So what does your company do with the NLRB’s order, knowing there’s a chance that a court will later rule that the Board wasn’t even legally “open for business” to issue the decision? And if you’re the employee – can you count on the new benefits package ordered by the Board?

This unpredictability is reality for a host of employers and employees with matters currently pending, or recently decided by, the National Labor Relations Board, ever since the President used a dubious tactic to attempt to “recess” appointment Sharon Block, Terence F. Flynn, and Richard Griffin earlier this year (though Flynn has since left the Board).

It was inevitable that someone – whether an employer or a union – would eventually challenge an adverse decision of the Board on the grounds that the appointments were unlawful. So last March, the U.S. Chamber joined a lawsuit brought by a small bottling company based in Washington state to get the courts to settle this question quickly – and correctly. As the Chamber’s president, Tom Donohue, explained back in March:

We cautioned in January that shoehorning these nominees into office in this controversial way would throw the legal validity of every decision of the Board into question.  Our concern has now become a reality. We are simply asking the courts to sort out the question of the NLRB’s authority quickly, so that employers and employees alike can have predictability and certainty.

Today, the U.S. Chamber filed its opening brief in the lawsuit filed in March. In a nutshell, today’s brief argues that the NLRB is not legally open for business. It explains that the three attempted recess appointments were not legally effective because the President made them when the Senate was in session, not in recess. Therefore, the Board lacks the statutorily required quorum of at least three members to adjudicate disputes and issue rules.

There are some who argue the Senate wasn’t busy enough during the “pro forma” session in question to count as “really” in session. But as the Chamber’s brief explains, the Senate not only could conduct business during the session in question, it in fact did conduct important business – including legislation later signed into law. What’s more, if a court were to adopt the theory that the Senate wasn’t ‘busy enough’ to be in session, as the brief explains, recess appointments could be made during Senate lunch breaks or over the weekend.

Such unpredictability about whether an appointee will take office, and whether the appointee will go through Senate vetting and confirmation, would add to the regulatory uncertainty that frustrates economic development. And allowing the Board to continue to act when it might not have the legal authority to do so injects even more doubt into our economic climate, at a time when American businesses and consumers, employers and employees, need predictability the most.

The case, Noel Canning v. NLRB, is pending before the D.C. Circuit. You can learn more about the case from the website of the National Chamber Litigation Center, the Chamber’s public policy law firm handling the litigation along with the Chamber’s co-counsel, Jones Day LLP.

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