Labor Law in Limbo: Despite a stinging court defeat, the NLRB isn't backing down

Anyone who thought a recent federal court beat-down would chasten the National Labor Relations Board – and give employers some room to breathe – got a rapid-response “not so fast” from NLRB Chairman Mark Gaston Pearce.

The NLRB’s determination, based on the conviction the ruling has only limited application, was but the latest act in an unfolding legal drama that has most employers in limbo as they decide how much legal weight to give to dozens of decisions made by the NLRB since January of 2012.

The unanimous decision, issued by the U.S. Court of Appeals for the D.C. Circuit in Noel Canning v. the NLRB, found that the Jan. 4, 2012, recess appointments of three members to the NLRB were invalid because they were not actually made while Congress was in recess. The ruling drew cheers from business groups, but it didn’t take long for Pearce to rain on their parade.

In Noel Canning, a Washington state Pepsi bottler challenged an NLRB decision on the grounds that the recess appointments were invalid and therefore the board did not have the three-member quorum required to make decisions. Pearce’s response indicates that employers should probably proceed as though the NLRB had not been rebuked:

“The Board respectfully disagrees with today’s decision and believes that the President’s position in the matter will ultimately be upheld. It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals. In the meantime, the Board has important work to do. The parties who come to us seek and expect careful consideration and resolution of their cases, and for that reason, we will continue to perform our statutory duties and issue decisions.”

While the validity of the aforementioned NLRB rulings is still in question, employers with business before the board should proceed with caution, and businesses in general should abide by pre-2012 rulings on social media, according to Nilesh Patel, principal attorney, Mahadev Law Group, and Margaret Kurlinski, an attorney with Godfrey & Kahn. Their counsel was directed at both union and non-union workplaces.

Kurlinski noted that in past presidential administrations, the National Labor Relations Act, which the NLRB enforces, was something non-unionized private-sector employers paid little attention to. “If they didn’t have a union, they weren’t concerned about it,” Kurlinski said, “but the act has always applied to every employer. Every employee has the right to engage in mutual aid and protected concerted activity, but it just hasn’t been aggressively pursued by the board, and now we’re in a whole new world where the board is pretty active.”

Isolated case?

Patel said that, technically, the D.C. Court’s decision should invalidate decisions made by the NLRB since January 2012, but the board is not acting as if the decision is binding, except for in that one case. Under normal circumstances, Patel would advise employers negatively affected by the board’s previous decisions to appeal them if possible, and appeal to the same D.C. Circuit.

However, the D.C. Circuit has given the government time to consider appealing its Noel Canning ruling to the U.S. Supreme Court; in the meantime, it put all NLRB appeals on hold. By Patel’s count, there are 38 cases on hold, and some of them were major cases that overturned legal precedent or established new standards.

(Editor’s note: On March 12, the National Labor Relations Board decided not to seek an en banc (full bench) rehearing in Noel Canning v. NLRB. The board, in consultation with the Department of Justice, intends to file a petition for certiorari with the United States Supreme Court for a review of that decision. The petition for certiorari, which asks the nation’s high court to review the Noel Canning decision, is due on April 25.)

 

Patel advised employers with business before the NLRB to raise an objection during enforcement actions stating that any board decisions since January 2012 that affect their cases should not be binding. The NLRB judge may overrule the objection, but actually making the objection would avoid an argument at a later appeal that the employer waived the issue. 

Kurlinski sees short-term and long-term questions. In the short term, employers who have been the subject of unfavorable board decisions could certainly appeal, citing the lack of a quorum. “If you have things pending before the board at this point, you certainly want to object to the board’s authority and preserve the arguments in this period of uncertainty,” she said. “In the short term, I think those are important implications for employers that are currently tied up with the NLRB.”

In addition, employers should follow established board procedures, even if they are in doubt, when appealing the administrative judge’s decision in a timely manner, Patel counseled.

Policy pause

Employers should not change their employment policies in response to this development. “It would be a big mistake,” Patel stated. “First, the NLRB enforcement attorneys and officers will continue acting as if the previous rules are still the standard. They can still pursue unfair labor practices, and the NLRB judges will likely look to the established standards. 

“Second, at some point, the board will get confirmed, and if it needs to, it will go back and simply vote that the previous decisions are now valid. So changing policies in response to the D.C. Court’s decision would be a short-term change that could result in NLRB enforcement actions.”

Patel also noted that legwork on enforcement actions is done by regional offices, enforcement attorneys, and the administrative law judges. If employers act as if nothing has changed, then any enforcement actions that go against the employer will go to the board for final approval. “So basically, the body (enforcement officials) will keep doing what it has so far, while the head (the board) will also behave as if it has authority to act.”

If employers are able to appeal their cases, they should still file with the D.C. Circuit. Patel acknowledged that in this scenario, employers would be betting that the D.C. Circuit’s decision will be affirmed by the Supreme Court, or that the Supreme Court will not take up the appeal. In either event, the Noel Canning decision would be a binding precedent for appeals filed with that particular court.

In that case, Patel said, employers would be in a much better position to challenge any new precedents or standards approved by the NLRB since January 2012, or to place board actions in limbo (such as the approval or reversal of administrative decisions that negatively affected the employer). “It’s hard for me, as a general opinion, to predict how advantageous it would be for an employer to have a board action placed back in limbo or back in the hands of the administrative law judge,” he added.

With the recess appointments judged invalid, President Obama has submitted the same candidates to the Senate for confirmation. They may or may not survive the Senate confirmation process, but the president still has nearly four years to fill the board. Kurlinski said that in the long term, businesses must adjust to the more aggressively pro-labor pattern the board has established with the president’s appointments. 

 

“My guess is that the current trajectory of the board will stay at least similar,” Kurlinski said. “They probably will continue to pursue the same kinds of rulings. We might have this uncertainty for a couple of years out. If we get a quorum, the board is going to continue in this same vein or pattern.

“It could be moderated if the president runs into problems getting a quorum appointed, but I don’t think in the long term the general outlook of the board, or the position the board is taking on some of these relevant issues, is going to change significantly.”

Social media status quo

Patel and Kurlinski said the Noel Canning decision has no impact on the NLRB’s controversial rulings on social media policy, which were made prior to the 2012 recess appointments. Among other things, those rulings held that an employee’s work-related social media communications, even if they were disrespectful to supervisors and reflected badly on the company, should not lead to any disciplinary action if employees are engaged in “protected, concerted” actions pertaining to working conditions.

Translation: If one of your employees gets in your face on Facebook, there isn’t much you can do about it, provided the employee is communicating something about working conditions. “That definitely remains the same,” Patel said. “I think that was advanced by the general counsel of the NLRB. They have been enforcing the concerted activity across the board.”

Kurlinski believes that, taken collectively, the NLRB’s Obama-era rulings aggressively enforce the NLRA’s Section 7 protections relative to the enforcement of employment policies on confidentiality and, relatedly, the engagement of co-workers in a particular manner. 

“They are very quick to find infringement of Section 7 rights to engage with others about terms and conditions of employment,” Kurlinski said. “For my private-sector employers that are non-unionized, it’s an important reminder to them that they should be cognizant of what kinds of restraints they are placing on employee speech.”

What about significant NLRB rulings that are unrelated to social media? There have been a few, but one that stands out to Kurlinski involves workplace investigations. “That was a pretty shocking decision for a lot of folks who have pretty strict confidentiality requirements as it relates to workplace investigations, to the extent that interviewed employees in investigations should not speak about the terms of the investigation with others,” she explained. “The NLRB took the opposite position, that an investigation and the topics of an investigation are often about a term and a condition of employment, so employees can, in a protected and concerted manner, discuss them.

“It gets back to that same core theme. The reason social media cases are so hot is that they are about confidentiality and what you can’t discuss and in what forum, and what language you can use to discuss those things.” 

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