Witnessing History: The State Of Labor Law In 2012

Monday, May 21, 2012 - 16:05
Glenn Spencer

Glenn Spencer

No matter where you stand on the issues, it would be hard to deny that 2012 has been an extraordinary period in the arena of labor law.  Recess appointments to the National Labor Relations Board (NLRB), a plethora of litigation, escalating acrimony over regulations and battles at the state level have made it a year like no other.

Perhaps the most unprecedented of these affairs are the NLRB recess appointments.  As 2011 drew to a close, the Board, consisting then of just three members, was in danger of losing its quorum due to the end-of-year departure of Member Craig Becker.  Under New Process Steel, a two-member Board is prohibited from deciding cases or issuing new regulations.  Thus, on January 4, the President made three dubious recess appointments:  Democrats Robert Griffin, an attorney with the International Union of Operating Engineers, and Sharon Block, a deputy assistant secretary for congressional affairs at the Department of Labor, and Republican Terence Flynn, who was serving as counsel to Board Member Brian Hayes.

The appointments caught much of Washington by surprise.  For starters, as has been widely discussed elsewhere, the Senate considered itself in session on January 4.  However, the administration decided that the pro forma sessions being held at the time actually constituted a recess period.  As such, the White House determined it could make appointments without hindrance. 

Second, two of the individuals receiving a recess appointment were, to put it mildly, recent nominees.  In fact, Block’s and Griffin’s nominations had been made just days before they were appointed.  Not only had the Senate not received the usual background materials on the nominees, their names did not even appear on the White House’s list of pending nominations.

Nonetheless, the NLRB now has a full roster of five members: Democrats Mark Pearce (the chairman), Block and Griffin, and two Republicans, Hayes and Flynn.  With a quorum in place, the Democratic majority is poised to continue the agenda of the past two years, with potentially far-reaching consequences. 

But perhaps not.  The controversial nature of the recess appointments has sparked multiple lawsuits questioning their legitimacy.  A few have been dismissed, but one case, Noel Canning, may go further.  In this case, an employer, Noel Canning, is appealing a Board order to meet the terms of a contract to which it argues it did not agree.  The crux of the case is that if the recess appointments were invalid, the Board lacks a proper quorum to issue the order. 

The stakes in Noel Canning are rising.  Senate Republicans, seeking to protect their Constitutional prerogatives, have announced that they will file an amicus brief in the case, and the U.S. Chamber of Commerce filed a motion to intervene.  Should Noel Canning succeed, the recess appointments would be deemed improper.  Despite Chairman Pearce’s assertion that the Board is now properly constituted, this issue is far from settled.

Yet even if the recess appointments are found to be invalid, the many contentious rules and decisions issued by the Board prior to January 4 would remain in place.  That is, unless they are overturned as well, a process that is well underway.

Last year, the NLRB issued a regulation requiring every employer subject to the National Labor Relations Act (NLRA) to post notices of union rights and imposed new penalties for failure to do so.  This rule immediately triggered litigation, raising, among other issues, questions about whether the Board had exceeded its statutory authority.  

On March 2, a federal judge in Washington, DC ruled that while the Board had the authority to require employers to put up the poster, the majority of the rule’s enforcement provisions exceeded the scope of the NLRA.  Then on April 13, Judge David C. Norton of the U.S. District Court for the District of South Carolina invalidated the entire regulation, ruling that the NLRB had exceeded its authority.  Four days later, the U.S. Court of Appeals for the District of Columbia enjoined the Board from enforcing the posting requirement.  The rule, which had been scheduled to go into effect on April 30, has now been put on hold. 

The Board’s second formal regulation has been called the “ambush election” rule.  Under this rule, the Board seeks to shorten the window between the date a union asks for an election and when that election occurs.  Unions, and the Board majority, describe the regulation as a modest change.  Others take a different view.

In his dissent to the rulemaking, Member Hayes noted that it could cut the election window from a current median time of 38 days to as few as 10.  The concern for employers is that this leaves little time to respond to an organizing drive — particularly for employers who are not well versed in the NLRA. It would also shortchange workers who do not want a union and need time to organize their opposition.  Not only would this give unions an inherent advantage, since they will have been making their case to employees for months, but it would deprive workers of the ability to get balanced information about a critical workplace decision.

Other worrying facets of the regulation limit employers’ legal rights.  For example, the pre-election hearing would deal only with issues relevant to determining if there is a question concerning representation — in other words whether or not there is sufficient interest in holding an election.  Most disputes about voter eligibility and the scope of the bargaining unit would be deferred until after the election has taken place.  Finally, employers would no longer have a guaranteed right to seek Board review of regional director’s decisions.

Like the posting rule, this regulation also triggered a legal challenge.  And like the posting rule, the courts once again rebuked the Board.  On May 14, Judge James E. Boasberg of the U.S. District Court for the District of Columbia struck down the ambush election rule, determining that it was finalized by an improperly constituted quorum of just two members.  However, this is not the end of the story.  Judge Boasberg did not rule on the merits of the regulation, writing that the newly constituted Board could approve the final rule, so long as at least three members actually voted.  Of course, that would now require the vote of at least one of the controversial recess appointees, and it could be subject to new legal challenges.  

Other notable Board actions have resulted in still more litigation.  The NLRB’s decision in Specialty Healthcare, a ruling that allows unions to gerrymander the bargaining units they wish to organize, is now being appealed to federal court.  The D.R. Horton case, which bars employers from requiring workers to sign arbitration agreements that preclude class actions, is likewise being appealed.  And a little-discussed case called Camelot Terrace, under which the Board seeks to grant itself the ability to impose litigation fees, is also headed to the courts.

These various rulemakings and case decisions were put in place prior to the recess appointees’ arrival at the NLRB.  But the newly constituted Board is likely to put its own stamp on things. 

First up may be a new vote on the ambush election rule. In addition, Chairman Pearce has strongly indicated he will pursue an “ambush election II” rulemaking.  Among further steps to speed up elections, such as electronic filing and the provision of the Excelsior list within two days, the rule may require employers to turn over to union organizers workers’ private information, such as home phone numbers and personal e-mail addresses.  No date has been set for its release, but as Chairman Pearce has said, “we keep our eye on the prize.”

The Board may also move forward with a rule on off-site, electronic voting, dubbed “Cyber Card Check.”  In 2010, the NLRB issued a Request for Information, an early step in rulemaking, seeking suggestions on how to implement a voting system workers could use away from the workplace, possibly over the Internet.  This fits with the apparent bias of the Democratic majority towards off-site voting (as exemplified by the 2 Sisters case, dealing with re-run elections).  The intent here is clear:  to move elections out of the workplace — where it is most convenient for people to vote — to another location, which is likely to depress turnout leaving core union supporters as a larger share of the electorate.  In addition, electronic voting would take workers out of the privacy of the voting booth, raising the same potential for intimidation found in the Employee Free Choice Act.  Voting by Internet may seem secure, but the ubiquity of the iPad and similar devices means it would be easy for organizers to stand over the shoulder of workers as they “encourage” them to vote online — either during home visits or in the parking lot.    

Congress included a rider in the NLRB’s FY 2012 appropriations bill blocking the Board from “issuing” a rule on cyber card check.  Of course, unless renewed, this rider remains in effect only during the life of the FY 2012 bill.  Moreover, the Board could take all steps short of issuing a rule and then announce a proposed regulation on the day the rider expired.

The NLRB is not the only regulator trying to shift the playing field.  The Department of Labor (DOL) is also taking steps to ease union organizing.  Aside from a generally punitive enforcement regime to soften up employers and formalize alliances with pro-union 501(c)(3) groups, like the Restaurant Opportunity Center, the Department’s major focus is changing the so-called persuader regulations. 

Under the 1959 Labor Management Reporting and Disclosure Act, employers, consultants and attorneys are required to file financial disclosure forms if they engage in persuader activity, that is, if they are attempting to influence a worker’s decision about whether or not to engage in union-related activity.  However, almost without interruption since 1959, DOL has recognized a fairly broad “advice exemption.”  If a consultant or attorney is merely providing advice to an employer about union issues rather than directly speaking to workers, then no filing is required.  This application of the statute has been in place during Republican and Democratic administrations, but DOL’s current management looks to dramatically reinterpret the law.

By redefining “advice,” the Department is seeking to compel financial disclosures for virtually any union-related interaction between an employer and a consultant or attorney.  It matters not whether this takes place in the context of a union organizing campaign or during contract negotiations; the mere fact that it takes place at all could trigger the reporting requirement. 

DOL’s clear intent is to discourage employers from engaging on union issues.  Most employers are not experts on labor law and will need to seek expertise if confronted by a union.  By compelling lengthy and detailed financial disclosures in these situations, DOL is hoping employers will be intimidated into a posture of neutrality.  Moreover, by requiring the same disclosures from consultants or attorneys an employer might retain, the Department wants to deter them from offering their services at all. Under these circumstances, the union’s point of view is the only one workers will hear.

In addition to federal activity, it has been a contentious time at the state level.  Early in the year, Indiana became the 23rd right-to-work state.  A fierce union-led campaign to recall Wisconsin Governor Scott Walker has led to a high-stakes election on June 5, during which unions will no doubt exceed the $11 million they spent on last year’s Senate recall campaigns.  Finally, unions in Michigan are seeking to pass a state constitutional amendment that would ban any law restricting collective bargaining or the ability to collect dues.  This amendment would not only block a future right-to-work bill, but because it also seeks to negate existing laws, it could well invalidate a raft of state and local provisions, including measures to help balance budgets, reform education, limit the collection of dues for political purposes, and cap the percentage of union health and pension benefits taxpayers must cover.  Unions need roughly 320,000 signatures by early July to put the measure on the November ballot.  If they are successful, a highly spirited — and expensive — campaign will surely ensue.

Suffice to say, it’s been a dramatic year.  The remaining seven months should prove just as interesting.


Glenn Spencer is Vice President of the Workforce Freedom Initiative at the U.S. Chamber of Commerce.

Please visit www.uschamber.com for more information.