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Bar News - April 16, 2014

Labor & Employment Law: Noel Canning Decision: What Will it Mean for the NLRB in 2014?


Many labor and employment attorneys have been closely following the development of Noel Canning, a case that challenges the validity of the so-called “recess appointments” of three National Labor Relations Board (NLRB) members by President Barack Obama.

The Court of Appeals for the District of Columbia Circuit ruled in January 2013 that the recess appointments were invalid and, consequentially, at least 600 NLRB decisions may be subject to vacatur as ultra vires acts of a quorum-less board. The DC Circuit decision was appealed by the NLRB to the US Supreme Court, which heard argument in January and is expected to issue a decision before the end of the session in June.

In the meantime, a new debate has begun: Will the outcome of Noel Canning really make a substantial difference with respect to NLRB action, precedent and policy? There is a fair amount of evidence suggesting it will not.

Although the NLRB will not “speculate on the impact of the Supreme Court’s decision,” Gregory King, director of NLRB office of public affairs, responded by email that, “If the Supreme Court does not agree with the position argued for the Board by the Solicitor General, we are prepared to deal with cases that need to be reviewed.”

King further confirmed that, when the board was last faced with the vacatur of hundreds of decisions following the Supreme Court’s decision in New Process Steel in 2010, a two-member NLRB panel did not make a quorum, and of the 554 decisions affected by that case, “[o]nly 112 of the cases required new decisions by the Board, as many of the cases were settled.” The three-member panel established after New Process Steel affirmed the prior panel’s decision in the vast majority of those 112 cases, in most cases simply incorporating the prior decision by reference.

Similarly, should the Supreme Court agree with the DC Circuit, and some portion of the decisions vacated require further review by the NLRB, it is unlikely the board would stray very far from the policies and precedents it has developed over the past couple of years. The now five-member board, entirely Senate-confirmed as of last summer, has retained its Democratic majority and appears to be continuing the prior board’s policy, announced upon the issuance of the DC Circuit’s decision in Noel Canning, of continuing to rely on the precedents and rationales of decisions issued during the questioned time period. These decisions include the highly publicized, and sometimes highly criticized and controversial:
D.R. Horton, 357 NLRB No. 184 (2012) (mandatory agreement by employee to abstain from engaging in class or collective action in arbitral or judicial forums violated NLRA), enf’d in part, rev’d in part, D.R. Horton v. NLRB, 737 F. 3d 344 (2013)(upholding validity of class action waiver, but requiring employer clarification to employees that employees retained right to file unfair labor practice charges with the NLRB).
Banner Health Systems, 358 NLRB No. 93 (2012) (blanket confidentiality requirement, even if informal, even absent threat of discipline, regarding internal investigations is illegal, employer carries burden to prove particular need for confidentiality); see also Am. Baptist Homes of the West, 359 NLRB No. 46 (2012)(where employer assured witness of confidentiality of statement in misconduct investigation, need of the union for the statement will be balanced against “legitimate and substantial” confidentiality interests of employer), rev’ing Anheuser-Busch, Inc., 237 NLRB 982 (1978);
Sabo Inc.(Hoodview Vending), 359 NLRB No. 36 (2012) (creating category of per se concerted activity regarding conversations about wages, and possibly, job security regardless of employee intent);
Costco Wholesale Corp., 358 NLRB No. 106(2012) (overbroad anti-defamation clause which covered, among other things, electronic postings, impermissibly restrained employees’ Section 7 rights); see also Flex Frac Logistics, 358 NLRB No. 127 (2012) (confidentiality policy requiring nondisclosure of “personnel information and documents” “outside of the organization” overbroad); Taylor Made Transp. Servs. Inc., 358 NLRB No. 53 (2012) (overbroad confidentiality provision regarding wage rate information);
Hispanics United of Buffalo Inc., 359 NLRB No. 37 (2012) (Facebook’s posting of employees’ negative feedback regarding another employee’s criticism of “we don’t help our clients enough” was protected activity, employees’ discharge based on harassment was violation); see also Karl Knauz Motors Inc., 358 NLRB No. 164 (2012) (employer courtesy policy violated act, but termination did not because it was based on unprotected Facebook post, and not on protected concerted activity); and
WKYC-TV, Inc., 359 NLRB No. 30 (2012) (employer’s obligation to check of union dues from employees’ wages subject to status quo requirements until bargaining impasse reached), rev’ing Bethlehem Steel, 136 NLRB No. 1500 (1962).
Additionally, the Office of the General Counsel, headed by former NLRB member Richard Griffin Jr., since November 2013, has recently issued two memoranda that appear to substantially continue the agenda pursued by former Acting General Counsel Lafe Solomon. At the end of February, Griffin identified categories for mandatory submissions to the Advice Division in a memorandum that is strikingly similar to a mandatory-submissions memorandum Solomon issued in April 2011. A few notable departures in the updated memorandum involve novel issues arising from the application of NLRB decisions issued in 2012, including D.R. Horton, United Nurses (the chargeability to objectors of union lobbying expenses), Alan Ritchey (employee discipline is mandatory subject of bargaining); and cases involving “the applicability of Weingarten principles in non-unionized setting,” certain successor-related bargaining issues, and “at-will” provisions in employer handbooks that are not resolved by extant Advice memoranda.

Griffin also recently noted in his report on the Midwinter Meeting of the ABA Practice and Procedure Committee of the Labor and Employment Law Section that “there are no immediate plans to issue new guideline memoranda regarding work rules and handbooks” based on recent decisions, which “should provide valuable assistance to practitioners.” Both memoranda suggest that Griffin is comfortable with recent decisions and prior general counsel guidance and expects to implement those policies without interruption.

If the NLRB loses its appeal in Noel Canning, there will likely be some strain on the agency’s administrative capacity to handle the sudden influx of cases requiring further resolution. However, based on the foregoing, it is unlikely the resolution of those cases will result in many surprises.

Katherine DeForest is an attorney at Sulloway & Hollis and regularly advises public and private sector employers, including representation in litigation, arbitration, and administrative matters.

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