Last week the House Committee on Oversight and Government Reform released a staff report highlighting rulemaking, decisions, and other actions taken in recent years by the National Labor Relations Board (NLRB or “Board”) that the Committee contends are indicative of the agency’s pro-union bias. Rep. Darrell Issa (R-CA) chairs the Committee. The report – President Obama’s Pro-Union Board: The NLRB’s Metamorphosis from Independent Regulator to Dysfunctional Union Advocate (pdf) – claims that these legislative, regulatory, and internal missteps “compromise the perceived fairness of the NLRB that Congress deemed necessary for its successful operation,” and have created a “rogue agency plagued by systemic problems.” Continue reading this entry at Littler's Labor Relations Counsel.
On Wednesday a House Appropriations Subcommittee voted 8 to 6 in favor of advancing a bill (pdf) that would provide fiscal year 2013 funding for the Department of Labor (DOL), the Department of Health and Human Services (HHS), the National Labor Relations Board (NLRB), and other related agencies. This measure contains a number of significant limitations on how these agencies would be entitled to use such funding. Among other restrictions, this funding legislation would curtail the implementation and enforcement of several labor, employment, and healthcare-related regulations and programs.
Overall, the bill would allocate $12 billion to the Department of Labor, an amount that is $497 million less than that granted to the agency for 2012 and $72 million below the President’s request. The measure includes the following restrictions on the use of these funds:
- The Wage and Hour Division (WHD) would be prohibited from pursuing its companionship exemption regulation.
- The bill would prohibit the enforcement of a final rule implementing Executive Order (E.O.) 13502, Use of Project Labor Agreements for Federal Construction Projects. This E.O. declared it the policy of the federal government “to encourage executive agencies to consider requiring the use of project labor agreements in connection with large-scale construction projects . . .”
- The measure includes a prohibition on the Office of Labor-Management Standard’s (OLMS) creation and implementation of a regulation that would narrow the scope of the “advice” exemption under the Labor-Management Reporting and Disclosure Act (LMRDA).
- The bill would prevent any funds allocated to the Employee Benefits Security Administration (EBSA) from being used to promulgate a rule that would amend the definition of “fiduciary” under ERISA. Although the proposal to amend the definition of fiduciary was issued in October 2010, in September 2011 the EBSA announced that it would gather more input from stakeholders and re-issue the rule after additional consideration.
- The bill would prevent the Occupational Safety and Health Administration (OSHA) from using funds to develop and implement a rule creating an injury and illness prevention program.
- A provision in the appropriations bill would prevent the DOL from enforcing its new rule governing H-2B visas for temporary, seasonal nonagricultural workers for the fiscal year. The rule is currently facing a legal challenge.
- The measure would prohibit funds from being used to enforce the Fair Labor Standards Act (FLSA) regulation that makes automotive service managers, service writers, service advisors and service salesmen who are “not primarily engaged in the work of a salesman, partsman or mechanic” subject to minimum wage and overtime requirements.
- The bill includes a provision that prohibits the Mine Safety and Health Administration (MSHA) from proceeding with development or implementation of a rule governing coal mine dust.
The appropriations bill would provide $258.3 million for the NLRB, $20 million below last year’s funding level, and $34.5 million less than the President’s budget request. The bill includes the following restrictions:
- The measure includes a provision that would prevent the NLRB from using any funds provided in the bill to enforce its decision in Specialty Healthcare, which allows union certification of smaller bargaining units.
- The bill prevents funds from being used to “implement, create, apply, or enforce through prosecution, adjudication, rulemaking, or the issuing of any interpretation, opinion, certification, decision, or policy, any standard for secret-ballot elections that conflicts with the standard articulated in the majority opinion in Dana Corp., 351 NLRB 434 (2007).”
- The bill prevents the NLRB from using funds “to issue any new administrative directive or regulation that would provide employees any means of voting through any electronic means that enables off-site, remote, or otherwise absentee voting in an election to determine a representative for the purposes of collective bargaining.”
- The NLRB would also be precluded from using funds to implement its rule amending representation election procedures. In light of ongoing litigation opposing this rule, the NLRB has suspended its enforcement.The appropriations bill would also prevent the NLRB from using funds to develop portions of the proposed rule that were omitted from the final regulation.
As expected, the funding bill would defund a number of Affordable Care Act provisions and programs that would effectively prevent the law’s implementation. Specifically, the bill would rescind prior-year mandatory funds, and prevent the HHS from using any new discretionary funding to implement the health care reform law.
Last month the Senate Appropriations Committee approved its own version of this multi-agency funding bill. In advancing the Senate bill, Senate Appropriations Committee members rejected amendments that would have prevented the NLRB from enforcing the Specialty Healthcare decision and its expedited election rule, as well as prevented the agency from bringing lawsuits against states that have enacted secret ballot protection measures. The two drafts – if eventually approved by their respective chambers – would therefore need to be reconciled. However, the prospects for agreement on this and other appropriations bills this year appears unlikely.
Photo credit: Kent Weakley
The National Labor Relations Board has created a new webpage that explains an employee’s section 7 rights under the National Labor Relations Act (NLRA) and allows the user to click on various Board cases that address protected concerted activity. The focus of these examples is to apprise workers of their rights under the Act, without the involvement of a labor union. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: doram
On Saturday, National Labor Relations Board member Terence Flynn announced his resignation from the Board following allegations cited in an NLRB Inspector General report (pdf) that he committed ethics violations while employed by the Board, but before he assumed his Board member position. Flynn repeatedly denied such allegations. President Obama named Flynn – who had worked as Chief Counsel to NLRB member Brian Hayes – as a nominee in January 2011 and seated him via recess appointment along with nominees Sharon Block and Richard Griffin in January 2012. Facing the impending loss of a quorum at the Board, the President’s decision to exercise his recess appointment power while the Senate was still holding brief pro forma sessions has generated a substantial amount of controversy. The critical question as to whether these recess appointments are in fact valid remains a contested issue and will persist even after Flynn’s resignation, which is effective July 24, 2012. According to the NLRB’s announcement, Flynn has immediately recused himself from all agency business.
The remaining Board members include Chairman Mark Pearce (D), Brian Hayes (R), Sharon Block (D) and Richard Griffin (D).
Photo credit: NLRB
In light of yesterday’s federal court decision finding that the NLRB lacked a quorum necessary to issue the controversial new representation election rule, the Board has decided to suspend the rule’s implementation. The Board’s Acting General Counsel has similarly withdrawn guidance released last month governing the representation case procedure changes, which had taken effect on April 30, 2012.
According to the NLRB’s announcement, an estimated 150 election petitions have already been filed under the new procedures. The announcement states that “Many of those petitions resulted in election agreements, while several have gone to hearing. All parties involved in the 150 cases will be contacted and given the opportunity to continue processing the case from its current posture rather than re-initiating the case under the prior procedure.”
Photo credit: istockphoto
In a long-awaited ruling, the U.S. District Court for the District of Columbia has found the National Labor Relations Board’s expedited representation election rule invalid because the Board lacked a quorum when it issued the rule in December 2011. Specifically, the court in Chamber of Commerce v. NLRB (pdf) determined that because only two of the three sitting Board members actually cast a vote to adopt the rule – Member Brian Hayes had voted against an earlier version of the rule but declined to participate in the final vote – the agency did not have the authority to act under the U.S. Supreme Court decision New Process Steel. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: evirgen
A measure designed to prevent the National Labor Relations Board’s new election rule from taking effect next Monday was defeated in the Senate. On Tuesday the Senate voted 45-54 in favor of a motion to proceed to a vote on S. J. Res. 36, a resolution disapproving of the Board’s rule that expedites and makes other dramatic changes to the representation election process. At least 60 votes were needed to allow the resolution to proceed to a vote. The vote was largely along party lines, with no Democrats supporting the resolution and Senator Lisa Murkowski (R-AK) the only Republican to vote against the measure.
Sen. Mike Enzi (R-WY), ranking member of the Senate Help, Education, Labor and Pensions (HELP) Committee, introduced S.J. Res. 36 in the Senate with 44 co-sponsors on February 16, 2012. Lawmakers introduced an identical resolution (H.J. Res. 103) in the House the same day. The text of this resolution is as follows:
Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the National Labor Relations Board relating to representation election procedures.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the National Labor Relations Board relating to representation election procedures (published at 76 Fed. Reg. 80138 (December 22, 2011)), and such rule shall have no force or effect.
Under the Congressional Review Act (CRA), a House or Senate joint resolution, if approved, has the force of law to prevent an agency rule from taking effect. Even if opponents of the NLRB rule had garnered sufficient votes to advance and ultimately pass the resolution, however, President Obama had indicated that he would veto such a measure.
During Tuesday’s two-hour debate of S.J. Res. 36, Sen. Enzi urged his colleagues to vote in its favor, saying that the NLRB’s job is to ensure fairness to the representation election process, not to tip the scales in favor of unionization.
The rule is scheduled to take effect on April 30, 2012, although litigation challenging the rule is pending.
Photo credit: MBPHOTO, INC.
Following a South Carolina federal court’s finding that the National Labor Relations Board lacked the authority to promulgate its notice posting rule, the U.S. Court of Appeals for the D.C. Circuit has granted an emergency motion enjoining the Board from enforcing the rule. Last month in a separate lawsuit brought by the National Association of Manufacturers (NAM) and the National Right to Work Legal Defense and Education Foundation (NRTW), the U.S. District Court for the District of Columbia upheld the Board’s authority to issue the rule, but struck down the rule’s enforcement provisions. The parties in the D.C. case promptly appealed the portion of the decision affirming the Board’s rule-making authority and moved to enjoin enforcement of the rule while the appeal was pending. The appellate court initially denied this motion for an injunction but reversed course in an order (pdf) issued on April 17, 2012. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: istockphoto
Federal Court Partially Invalidates NLRB Notice Posting Rule, Rejects First Judicial Attempt to Contest Board Recess Appointments
UPDATE: Plaintiffs filed notice on March 5, 2012 that they are appealing the decision upholding the Board’s authority to issue its notice posting rule and moved to enjoin enforcement of the rule while the appeal is pending. On March 7, 2012, the district court denied plaintiffs’ motion for an injunction pending appeal.
The U.S. District Court for the District of Columbia issued a ruling (pdf) on Friday that strikes down part of the National Labor Relations Board’s notice posting rule, but declines to address whether the three recess appointments to the Board are valid.
The lawsuit at issue was brought by, among other entities, the National Association of Manufacturers (NAM) and the National Right to Work Legal Defense and Education Foundation (NRTW). It sought to enjoin the enforcement of the Board’s new rule mandating that as of April 30, 2012, private sector employers subject to the National Labor Relations Act (NLRA) post a notice informing employees of their rights under the NLRA in a "conspicuous place" readily seen by employees and penalizing employers for non-compliance. In the event an employer is found to have violated the posting rule, the Board would be permitted, among other remedies, to toll the six month statute of limitations for an employee who files an unfair labor practice (ULP) charge. This provision would extend the statute of limitations for all unfair labor practice actions against the employer, not just those ULPs arising from the failure to post the notice. The rule would deem a failure to post the required notice a ULP in its own right. Continue reading this entry at Littler's Labor Relations Counsel.
On February 13, 2012 President Obama formally sent the nominations of Sharon Block, Terence Flynn, and Richard Griffin, Jr. to the Senate for confirmation as National Labor Relations Board members. The three most recent Board additions were seated via recess appointment last month. The President’s decision to exercise his recess appointment power while the Senate was still holding brief pro forma sessions has generated a substantial amount of controversy, as expressed during a congressional hearing held last week. The legality of this move is currently being challenged judicially and through legislation. While Obama announced his intent to nominate Flynn in January 2011, he did not name Block and Griffin as his choices until December 14, 2011.
Given the ongoing disagreement about the validity of the recess appointments, the Senate is not likely to confirm the appointees. If the Senate were to approve their nominations, however, Block’s term would expire on December 16, 2014; Flynn’s term would last until August 27, 2015; and Griffin’s term would end on August 27, 2016.
Littler Shareholder Stefan Marculewicz Testifies at Congressional Hearing Addressing NLRB Recess Appointments
Littler Shareholder Stefan Marculewicz was among the panelists testifying on Tuesday before the House Committee on Education and the Workforce about the legal and practical implications of the President’s decision to make recess appointments to the National Labor Relations Board (NLRB or Board) last month. On January 4, 2012, President Obama sat three new members to the NLRB, as well as a new director to lead the Consumer Financial Protection Bureau (CFPB), while the Senate was still holding periodic pro forma sessions. This move has provoked a pointed response from various sectors, inviting a lawsuit from a group of business advocacy groups, a resolution and bill condemning the appointments, and a series of congressional hearings to discuss the legitimacy of the President’s actions.
Tuesday’s hearing focused specifically on the effects the NLRB recess appointments will have on businesses and the operation of the Board. According to Committee Chairman John Kline (R-MN), because the legitimacy of the President’s ability to make the appointments is in question, every action taken by the Board “will be constitutionally suspect and legally challenged.” The hearing was therefore brought to examine “the fear and uncertainty that this action has unleashed” on employers. As a result of the Supreme Court’s 2010 decision in New Process Steel, hundreds of Board decisions were invalidated after it was determined that the agency could not issue decisions with only two acting members. If the Court similarly determines that the recess appointments in this instance are invalid – a process that witnesses testified could take two to three years – “the lasting effects could be substantial.” According to Marculewicz, “every decision issued by this Board will be accompanied by the very real possibility that it might not be sustained.”
Marculewicz explained (pdf) that the prospect of this outcome means that confusion and uncertainty in labor relations will follow. He stated that after the New Process Steel decision, the NLRB had to revisit and resolve more than 600 cases. While many of these decisions were initially decided by two members and were noncontroversial, the instant situation will have a much different result, as a five-member Board will be empowered to resolve substantive issues with far-reaching consequences. The impact of these substantive decisions “will be seen far and wide,” and have a “disparate impact on small businesses that lack the resources” to challenge the decisions. According to Marculewicz, NLRB regional offices will be forced to rely on “unstable” Board precedent, and employers will bear substantial and potentially unnecessary costs in complying with new Board orders that might not be upheld in the long-term.
Under questioning, Marculewicz explained that if the NLRB issues an order to bargain with a union representative, and the Board’s authority to do so may ultimately be reversed, one option for the employer would be to simply refuse to bargain with the union, an option he claimed is neither good for the employer nor the employee.
When asked by a member of Congress what the President should have done, Marculewicz noted that two current Board members were, in fact, confirmed by the Senate, and that there was nothing to prevent the President from nominating potential candidates that would have had a good chance of being confirmed by the Senate. He also noted that in anticipation of a possible loss of quorum in 2012, the Board had already put in place a rule revising its representation case certification process as well as special procedures governing the filing of certain motions and appeals in unfair labor practice cases. Marculewicz claimed that these rules would have ensured that the NLRB – especially regional offices where much of the agency’s workload is handled – would still have been able to operate, albeit in a more limited capacity.
Others called the decision to seat members to the NLRB bad public policy and a politically expedient move. Another witness claimed, however, that because the Board is the sole entity to administer labor law in this country, it must be permitted to function. According to the union attorney witness, had the President not made the appointments, the Board would have shut down, and that there would be no place for employees to judicially seek a remedy for unfair labor practices. This witness claimed that there should be a “balance of horribles” when examining the legitimacy of the recess appointments. If the move is ultimately deemed unlawful, she testified, the Board will be put in the same place it was after New Process Steel. If, on the other hand, no appointments were made and the Board left without a functioning quorum, the agency “would be rendered impotent.”
Constitutionality of the Recess Appointments
Although much of today’s hearing addressed the recess appointments’ practical considerations for employers, the constitutionality of the appointments was the subject of significant debate among some witnesses and Members. The constitutionality of the recess appointments was also discussed during a hearing held on February 1 by the House Committee on Oversight and Government Reform.
According to the White House, making the recess appointments when the Senate is holding pro forma sessions is a legitimate exercise of executive authority. A memorandum opinion (pdf) issued by the Department of Justice’s Office of Legal Counsel (OLC) concluded that:
. . . the text of the Constitution and precedent and practice thereunder support the conclusion that the convening of periodic pro forma sessions in which no business is to be conducted does not have the legal effect of interrupting an intrasession recess otherwise long enough to qualify as a “Recess of the Senate” under the Recess Appointments Clause. In this context, the President therefore has discretion to conclude that the Senate is unavailable to perform its advise-and-consent function and to exercise his power to make recess appointments.
Michael J. Gerhardt, a Constitutional law professor at the University of North Carolina School of Law, agreed with the DOJ’s assessment, and testified during the Feb. 1 hearing that the President took a functional and credible approach in deciding to make the appointments. He said that the President had competing considerations to take into account, including the fact that the Constitution requires him to “take care that the laws are faithfully executed.” Gerhardt explained that without a director, the CFPB could not carry out its duties under the Dodd-Frank Wall Street Reform and Consumer Protection Act, and without a quorum, the NLRB could not fully execute its duties under the National Labor Relations Act.
Other witnesses and lawmakers speaking at both hearings contended, however, that making recess appointments when the Senate was still in session – albeit pro forma – is a violation of article 1, section 5, clause 4 of the U.S. Constitution, negates the Senate’s Constitutional power “to determine the Rules of its Proceedings,” and runs contrary to long-standing practice.
According to the attorney witness during Tuesday’s hearing, the OLC’s memorandum supporting the President’s decision bases its view on the fact that the Senate was unavailable at the time, an “assertion that collapses” by the “single inconvenient truth” that the Senate passed a 2-month extension of a tax cut bill on December 23, when the Senate was holding a pro forma session. According to the witness, if the Senate can pass legislation by unanimous consent during a pro forma session, it is able to confirm an agency appointment. The witness testified that the “recess appointments had nothing to do with whether the Senate was able to act, and everything to do with its unwillingness to act.”
During last week’s Committee hearing, Senator Mike Lee (R-UT) similarly denounced the President’s decision to bypass Congress in making the appointments: “If we, as Congress, do nothing, January 4, 2012 may well live on in infamy as a day the Congress refused to enforce a provision of the Constitution and instead ceded one of its rightful powers to the executive.” Other witnesses emphasized the short two-week period between the time the NLRB appointees were nominated and when they were seated to the Board as evidence that Congress’s role in the confirmation process was unlawfully circumvented.
Ranking member George Miller (D-CA) concluded his remarks during Tuesday’s hearing by stating that he welcomes a Supreme Court resolution to this issue.
A complete list of panelists for Tuesday’s hearing and links to their testimony can be found here.
Photo credit: webphotographeer
In its most recent effort to draw lines on the self-described “hot topic” of the “lawfulness of employers’ social media policies and rules,” the National Labor Relations Board’s (NLRB) Office of General Counsel has taken the position that many policy provisions commonly seen in employers’ social media policies violate the National Labor Relations Act (NLRA). This most recent shot across the bow came on January 24, 2012, in the form of a report, (pdf) issued to senior regional staff, on 14 cases which, according to the General Counsel, “present emerging issues in the context of social media.” This report follows a previous General Counsel report, dated August 18, 2011, which discussed 14 prior NLRB cases involving social media issues. Continue reading this entry at Littler's Workplace Privacy Counsel.
Photo credit: Warchi
Federal agencies, including the U.S. Department of Labor (DOL), Equal Employment Opportunity Commission (EEOC), and National Labor Relations Board (NLRB) have issued their regulatory plans and agendas for 2012. Issued on January 20, 2012, the agencies’ semi-annual regulatory unified agendas outline the regulatory actions that the agencies will likely propose or issue in final form during the upcoming fiscal year. The unified agendas are published in the spring and fall of each year. Although published in January, the latest documents represent the fall 2011 agendas. The fall agendas include the agencies’ regulatory plans, which set forth their statements of regulatory priorities and additional information about the most significant rule-making activities planned for the coming year. The latest agenda indicates that employers can expect aggressive regulatory activity impacting multiple aspects of the workplace in the year ahead.
According to information published by the Office of Information and Regulatory Affairs, the latest regulatory plans differ from those issued in the past in that they do not include information on regulations that are either longer-term or in the pre-rule stages. Longer-term items are listed separately. Regulatory action on these long-term items is not expected to occur until more than 12 months after publication of the agenda.
Department of Labor
According to the DOL’s statement of regulatory priorities, the agency will continue to implement rules pursuant to its “Plan/Prevent/Protect” regulatory and enforcement strategy that will require businesses to establish and enforce plans for identifying and remedying labor law violations. According to the agency, employers “who fail to take these steps to comprehensively address the risks, hazards, and inequities in their workplaces will be considered out of compliance with the law and, may be subject to remedial action.” It will also undertake review of a number of existing rules to determine if more efficient and less burdensome regulatory alternatives are available. A complete list of rules the DOL plans to actively consider in the coming months can be found here. Highlights of the DOL’s regulatory priorities are as follows:
Of the 60 DOL rules at the pre, proposed, and final rule stages, 23 are under active consideration at the Occupational Safety and Health Administration (OSHA). In addition to targeting specific hazards, OSHA announced that it is “focusing on systematic processes that will modernize the culture of safety in America's workplaces and retrospective review projects that will update regulations and reduce burdens on regulated communities.” OSHA is in the process of evaluating the need for rules governing standards for bloodborne pathogens and infectious diseases in healthcare and other related high-risk environments. OSHA plans to issue a proposed standard on crystalline silica exposure in February 2012.
Also under development is a proposed rule implementing a new injury and illness prevention program (I2P2). OSHA describes the I2P2 rulemaking as the prototype for the Department's Plan/Prevent/Protect strategy. As discussed in the DOL’s statement of regulatory priorities, this proposal
will explore requiring employers to provide their employees with opportunities to participate in the development and implementation of an injury and illness prevention program, including a systematic process to proactively and continuously address workplace safety and health hazards. This rule will involve planning, implementing, evaluating, and improving processes and activities that promote worker safety and health hazards. OSHA has substantial evidence showing that employers that have implemented similar injury and illness prevention programs have significantly reduced injuries and illnesses in their workplaces.
According to the agenda, the agency intends to convene the Small Business Advocacy Review panel on this regulation this month.
The agency also has proposed changes to its reporting system for occupational injuries and illnesses that it contends “would enable a more efficient and timely collection of data and would improve the accuracy and availability of the relevant records and statistics.” OSHA is scheduled to complete its review of public comments on the proposal in May of this year.
OSHA also intends to issue final rules governing procedures for processing whistleblower retaliation complaints under various whistleblower statutes under the agency’s jurisdiction, including those created by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Affordable Care Act.
A final rule on a revised Hazard Communication Standard is also anticipated to be issued in February of this year. OSHA is embarking on a review of its chemical standards, beginning with developing a request for information seeking input from the public to help the agency identify effective ways to address occupational exposure to chemicals.
Notably, regulations addressing occupational exposure to beryllium and food flavorings containing diacetyl and diacetyl substitutes, a standard for combustible dust, and a rule revising occupational injury and illness recording and reporting requirements to include a column for musculoskeletal disorders (MSD) are now considered longer-term regulatory efforts with no set issue date.
The Office of Federal Contract Compliance Programs (OFCCP) intends to issue a number of proposed and final rules governing contractor affirmative action and nondiscrimination requirements. A proposed rule revising construction contractor affirmative action requirements is slated to be released in April 2012. The OFCCP plans to propose new sex discrimination guidelines by this time period as well. According to the agency, current guidelines are “more than 30 years old and warrant a regulatory lookback.” In April 2012, the OFCCP plans to issue a proposal “to create sex discrimination regulations that reflect the current state of the law in this area.”
The agency is still considering comments it solicited regarding plans for a new compensation data collection tool “to identify contractors likely to violate” sex- and race-based compensation discrimination laws, as well as those it receives in response to its proposed rule governing affirmative action and nondiscrimination obligations of contractors and subcontractors regarding individuals with disabilities. The OFCCP issued the proposed rule on this topic in December 2011.
By July 2012, the agency plans to issue a final rule on revised contractor affirmative action requirements for veterans.
The Employee Benefits Security Administration (EBSA) will focus its regulatory efforts on implementing provisions of the Affordable Care Act, as well as “expand[ing] disclosure requirements, substantially enhancing the availability of information to employee benefit plan participants and beneficiaries and employers, and strengthening the retirement security of America's workers.”
The agency also intends to issue rules “in a number of areas including pension benefit statements, participant education, and fiduciary guidance.” Among other regulatory items, the EBSA plans to re-propose a rule that would clarify who constitutes a “fiduciary” under ERISA when providing investment advice to retirement plans and other employee benefit plans. The revised proposal is expected to be issued in May 2012. After withdrawing the initial proposal, the EBSA in September 2011 announced that it had decided to re-propose this rule.
With respect to pension benefit statements, the EBSA “is working on a proposed rule under ERISA section 105 that would require or facilitate the presentation of a participant's accrued benefits; i.e., the participant's account balance, as a lifetime income stream of payments, in addition to presenting the benefits as an account balance.” This proposal is expected to be released by June 2012.
EBSA will be finalizing amendments to the disclosure requirements applicable to plan investment options, including Qualified Default Investment Alternatives, to better ensure that participants understand the operations and risks associated with investments in target date funds. In addition, EBSA will be issuing a final rule addressing the requirement that administrators of defined benefit pension plans annually disclose the funding status of their plan to the plan's participants and beneficiaries. Final rules on target date disclosures and annual funding notices are slated for release in April and May of this year, respectively.
The agency also is planning to propose changes to the rules governing the internal claims and appeals process. EBSA recently proposed a rule that would implement reporting requirements for multiple employer welfare arrangements (MEWAs) and certain other entities that offer or provide health benefits for employees of two or more employers. The proposal amends existing reporting rules to incorporate new requirements enacted as part of Affordable Care Act and to more clearly address the reporting obligations of MEWAs that are ERISA plans.
In June 2011 the Office of Labor Management Standards (OLMS) issued a proposed rule regarding employer and consultant “persuader activity” reporting under the Labor Management Reporting and Disclosure Act (LMRDA). Specifically, the DOL proposed to broaden the scope of reportable activities by substantially narrowing its interpretation of the “advice exemption” in Section 203(c) of the LMRDA. According to the agency’s regulatory agenda, the OLMS plans to issue a final rule on this matter by August 2012. If the proposal is finalized, employers (and their advisors, including legal counsel) will have to treat activities that have not been reportable for the past 50 years as now subject to reporting requirements, which potentially could result in substantial interference with an employer’s attorney-client relationship, disrupt an employer’s ability to obtain legal advice when confronted by union campaigns, and have a chilling effect on employer free speech during such campaigns. Rulemaking seeking changes to the Form LM-21, Receipts and Disbursements Report, which is required pursuant to section 203(b) of LMRDA, is slated for long-term action with no set date. The rulemaking will propose mandatory electronic filing for Form LM-21 filers, and it will review the layout of the Form LM-21 and its instructions, including the detail required to be reported.
In past regulatory agendas the DOL’s Wage and Hour Division had stated that it would issue a proposed rule that would update the recordkeeping regulations under the Fair Labor Standards Act (FLSA) “in order to enhance the transparency and disclosure to workers of their status as the employer's employee or some other status, such as an independent contractor, and if an employee, how their pay is computed” and to “clarify that the mandatory manual preparation of ‘homeworker’ handbooks applies only to employers of employees performing homework in the restricted industries.’ According to the current agenda, it appears the WHD has put this “Right to Know” rulemaking effort on the back burner, as no date for the proposal’s issuance has been set.
The agency’s regulatory agenda also includes changes to the application of the FLSA to domestic service. The comment period on the proposed rule ends February 27, 2012. According to the agenda, this month the Department plans to propose amendments to the regulations implementing the Family and Medical Leave Act to incorporate amendments made by the National Defense Authorization Act for FY 2010 and the Airline Flight Crew Technical Corrections Act.
Equal Employment Opportunity Commission
The EEOC’s statement of regulatory priorities includes only one substantive item: “Disparate Impact and Reasonable Factors Other Than Age Under the Age Discrimination in Employment Act.” This rule purports to clarify the meaning of the “reasonable factors other than age” (RFOA) defense used against an Age Discrimination in Employment Act (ADEA) claim and the disparate impact burden of proof under the ADEA. In Smith v. City of Jackson, the U.S. Supreme Court held that disparate impact claims were cognizable under the ADEA, and that an employer could use RFOA as a defense against such a claim. To that end, in March 2008, the EEOC issued a notice of proposed rulemaking (NPRM) regarding disparate impact claims under the ADEA. In this NPRM, the EEOC asked whether more information was needed on the meaning of RFOA in this context. In light of the 2008 U.S. Supreme Court opinion in Meacham v. Knolls Atomic Power Lab, in which the Court held that the employer bears the burden of production and persuasion when using a RFOA defense in an ADEA case, and comments it received from its NPRM, the EEOC issued a new NPRM to address the scope of the RFOA defense in February 2010. According to the EEOC’s agency rule list, a final regulation on this topic was scheduled to be issued by the end of 2011. The agency approved by a 3-2 vote a final draft of this rule in November 2011. The final rule currently is under review by the Office of Management and Budget.
The EEOC also intends to issue a proposed rule that would update its race and ethnicity data collection method to conform with current reporting instructions for the EEO-1 Report, making employee self-identification the preferred method for collecting race and ethnic data on employees. This proposal as well as final rule amending its current Title VII and ADA recordkeeping regulations to address recordkeeping obligations under the Genetic Information Nondiscrimination Act (GINA) are expected to be released shortly.
National Labor Relations Board
In December, the National Labor Relations Board issued a final rule that will radically change representation election procedures. The initial proposal contained even more extensive changes. The regulatory agenda notes that the Board is “continuing to deliberate on the rest of the proposed amendments and expects to address them in a subsequent final rule.” The release date for a final rule incorporating the omitted representation election proposals remains “to be determined.”
Additional information on the unified and regulatory agendas can be found here.
Photo credit: istockphoto
As expected, members of the House of Representatives opposed to the President’s recent recess appointments to the National Labor Relations Board have voiced their disapproval legislatively. On January 10, 2012, Rep. Diane Black (R-TN) introduced a resolution formally condemning Obama’s controversial decision to make recess appointments while the Senate was holding periodic pro forma sessions. Although the Department of Justice issued a memorandum opinion (pdf) sanctioning the President’s authority to make these appointments, Rep. Black claimed that “[t]hese appointments are an affront to the Constitution.” According to Black, “the appointments in question were made while the Senate was in pro forma session and the House had not consented to a Senate adjournment,” as is required under article 1, section 5, clause 4 of the U.S. Constitution.
To date, the House has not yet scheduled a vote on this resolution. Even if approved, the measure can be considered largely symbolic, as it would be nonbinding.
Days after Black offered her resolution of disapproval, however, Rep. Jeff Landry (R-LA) introduced the Executive Appointments Reform Act (EARA) (H.R. 3770), a bill that would, among other things, prevent the NLRB from having a quorum until the Senate confirms the new appointees. Without a quorum, the Board would lose the power to issue decisions, promulgate and enforce new rules, and preside over appeals.
Specifically, the bill would amend the National Labor Relations Act by adding the following provision to Section 3(b): “A quorum shall not be constituted by any member of the Board who shall not have been confirmed by the Senate.” In addition, the bill would prevent individuals from being paid who are “appointed during a recess of the Senate to fill a vacancy in an existing office, if the vacancy existed while the Senate was in session and was by law required to be filled by and with the advice and consent of the Senate.” The measure also would ban individuals from volunteering to fill the vacant positions or otherwise working for free under such circumstances. If enacted, the provisions of this bill would be retroactive to the first of the year.
In a press release, Landry stated:
As a tireless supporter of the Constitution, I believe the Recess Appointments Clause serves a very important purpose; however, it’s clear the Founding Fathers included the clause to provide the continuity of government not as a way to circumvent the “Advice and Consent of the Senate.” So as we wait for the Court to declare Obama’s appointments as unconstitutional, it is important Congress take steps now to end this gross Executive overreach and prevent similar power grabs from happening again.
The same day Rep. Landry introduced the EARA, President Obama’s move to seat three new Board members via recess appointment received its first judicial challenge. The U.S. District Court for the District of Columbia will likely be the first federal court to consider the legality of the appointments.
The President’s move to seat three new members to the National Labor Relations Board via recess appointment has its first official court challenge. On January 13, 2012, the National Right to Work Foundation (NRTW) along with other business advocacy groups filed a motion (pdf) in the U.S. District Court for the District of Columbia to contest the constitutionality of the President’s actions. The crux of the argument is that since the Senate was not technically in recess at the time of the appointments, the President lacked the authority to seat new Board members without the Senate’s advice and consent. When Obama made these appointments, the Senate was holding regular pro forma sessions in which the chamber convenes but conducts no substantive business. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: evirgen
On January 4, 2012, President Obama announced his intention to make three recess appointments to the National Labor Relations Board. According to the White House press release, the President will seat Sharon Block (D), Richard Griffin (D), and Terence Flynn (R) to the Board via recess appointment. Anticipating that in 2012 the five-member Board would be left with just two sitting members – Chairman Mark Gaston Pearce (D) and Brian Hayes (R) – Obama nominated Block and Griffin to serve on the Board last month. The third recess appointee, Terence Flynn, was named as an NLRB candidate last year, but the Senate did not act on any of these nominations in 2011. Continue reading this entry at Littler's Labor Relations Counsel.
Days after a U.S. District Court judge for the D.C. Circuit suggested that the National Labor Relations Board postpone the effective date of its notice posting rule, the agency has agreed to do so. As announced in a press release, the Board:
has agreed to postpone the effective date of its employee rights notice-posting rule at the request of the federal court in Washington, DC hearing a legal challenge regarding the rule. The Board’s ruling states that it has determined that postponing the effective date of the rule would facilitate the resolution of the legal challenges that have been filed with respect to the rule. The new implementation date is April 30, 2012.
Photo credit: sumak77
During oral argument in a lawsuit challenging the National Labor Relations Board’s notice posting rule, presiding judge Amy Berman Jackson of the U.S. District Court for the D.C. Circuit suggested that the agency postpone the rule’s January 31, 2012 implementation date. The rule at issue – Notification of Employee Rights under the National Labor Relations Act – mandates that private sector employers subject to the National Labor Relations Act (NLRA) post a notice informing employees of their rights under the NLRA in a "conspicuous place" readily seen by employees and penalizes employers for non-compliance. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: dra_schwartz
President Obama has announced that he intends to nominate Sharon Block (D) and Richard Griffin (D) to fill two vacancies on the National Labor Relations Board. When Member Craig Becker’s term expires at the end of this year, the Board will be left with only two members, Chairman Mark Gaston Pearce (D) and Member Brian Hayes (R). As the Supreme Court decided in last year’s New Process Steel decision, the Board must operate with at least three members to exercise its full authority. In January of 2011, Obama nominated Terence Flynn (R) to fill one of the vacant slots on the five-member Board, but the Senate has not yet acted on his nomination. It is expected that the Senate will similarly take no action on the latest nominees. The possibility of the President seating Block and Griffin by recess appointment is also low, as the House will likely take steps to block his ability to do so. Continue reading this entry at Littler's Labor Relations Counsel.
NLRB Issues New Order Anticipating the Loss of One or More Members as Concern Mounts over Potential Hayes Resignation
The National Labor Relations Board has issued a new order temporarily delegating administrative authority over certain agency matters to the General Counsel (GC) and Board Chairman in the event the Board is left with fewer than three sitting members. In last year’s New Process Steel opinion, the Supreme Court held that the National Labor Relations Act requires that the Board operate with at least three members in order to exercise its full authority. When Member Craig Becker’s term expires at the end of the year, the Board will be left with Chairman Pearce (D) and Member Brian Hayes (R), assuming the Senate does not confirm additional members and the President is unable to make any recess appointments by that time. There also has been speculation that Member Hayes might resign to prevent the remaining members from finalizing contentious Board rules. Continue reading this entry at Littler's Labor Relations Counsel.
The National Labor Relations Board has announced that on November 30, 2011, it will vote on a portion of its controversial proposed rule that would dramatically change representation election proceedings. Among other significant revisions to the long-standing election process, the rule would require that pre-election hearings be held within seven calendar days after a petition is filed; postpone voter eligibility determinations until after the election; require employers to complete their statement of position before evidence is heard at a pre-election hearing; and require employers to provide the union with a preliminary voter list before the pre-election hearing. The Board stated that at the November 30 meeting the three remaining members will decide whether to adopt “a small number” of these proposed changes, although which ones were not specified. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: ericsphotography
Anticipating that the National Labor Relations Board may be left with only two sitting members come January, the agency has issued an order (pdf) temporarily granting the General Counsel (GC) full authority over litigation matters that would otherwise require Board authorization and the ability to certify the results of any secret ballot election conducted under the National Emergency provisions of the Labor Management Relations Act (LMRA). Currently, the Board is comprised of Chairman Mark Gaston Pearce and Members Brian Hayes and Craig Becker. Terence F. Flynn’s nomination to fill the vacant Republican seat on the Board is still pending, and Becker’s controversial recess appointment is set to expire at the end of 2011. While President Obama re-nominated Becker to serve a full term, it is virtually assured that the Senate will not confirm him. Procedural maneuvers may prevent the President from making recess appointments, leaving just two sitting members in 2012.
In last year’s New Process Steel opinion, the Supreme Court held that the National Labor Relations Act requires that the Board operate with at least three members in order to exercise its full authority. While regional NLRB offices would still be able to conduct representation elections and investigate unfair labor practice charges, any appeals to those decisions or outcomes would be unable to progress to the highest administrative level. Therefore, unless the Senate confirms Board nominations or the President is able to make recess appointments, the Board could be rendered effectively powerless in 2012.
To that end, the Order – effective as of November 3, 2011 – authorizes the GC:
to initiate and prosecute injunction proceedings under section 10(j) or section 10(e) and (f) of the Act, contempt proceedings pertaining to the enforcement of or compliance with any order of the Board, and any other court litigation that would otherwise require Board authorization; and to institute and conduct appeals to the Supreme Court by writ of error or on petition for certiorari. The Board also delegates to the General Counsel full and final authority and responsibility on behalf of the Board to certify to the Attorney General the results of any secret ballot elections held among employees on the question of whether they wish to accept the final offer of settlement made by their employer pursuant to section 209(b) of the Labor Management Relations Act, 29 U.S.C. 179(b). These delegations shall become and remain effective during any time at which the Board has fewer than three Members, unless and until revoked by the Board.
The Order explains that because this action relates to the Board’s internal management, it is exempt from public input.
During a hearing conducted by the House Committee on Education and the Workforce to address perceived union favoritism by the National Labor Relations Board, a number of witnesses and members of Congress primarily criticized the Board’s recent decisions and regulatory activity. Lawmakers focused their inquiries on the Board’s decision in Specialty Healthcare, in which the Board adopted a new standard for determining appropriate bargaining units, the agency’s proposed expedited election rule, and its final Notification of Employee Rights Under the National Labor Relations Act posting rule. According to Committee Chairman Rep. John Kline (R-MN), the current labor Board “is especially active,” and it is incumbent upon Congress to provide the Board with continued checks and legislative oversight.
Opening the hearing, Chairman Kline stated that the Board “issued three significant decisions at the end of August that overturn long-standing Board precedent.” According to Kline, through these decisions the Board: “restricted workers’ right to a secret ballot election, undermined employers’ ability to maintain unity in the workplace, and created new barriers for those who wish to challenge union representation.”
Of the three cases, the one that garnered the most attention was Specialty Healthcare, in which the Board overruled an earlier decision (Park Manor) that set forth the appropriate standard for determining bargaining units. Under the revised standard, so long as a union's petitioned-for unit consists of a clearly identifiable group of employees, the Board will presume the unit is appropriate. If an employer believes that additional employees belong in that unit, it must prove that these employees share an “overwhelming” community of interest with those in the petitioned-for unit. According to Kline, as a result of this decision, “it will be virtually impossible for employers to challenge the group of employees handpicked by the union.”
This prediction was echoed by some witnesses, who claimed that this decision will result in highly fragmented, “micro” bargaining units that are easier to unionize and harder to contest.
Moreover, one panelist noted that if the Board is left with only two acting members as of January 2012, it will be rendered unable to hear challenges to these bargaining units.
Hearing members also criticized the Board’s “recognition bar” decision in Lamons Gasket Company. In this case, which reversed the earlier Dana Corp. decision, the Board held that a “reasonable period” of time must pass before an employer’s voluntary recognition of a union can be challenged. Previously, as established under Dana Corp., employees were given 45 days to request a secret ballot election after the employer voluntarily recognized the union as the exclusive bargaining representative. Now, employees must wait at least six months after the first bargaining session before doing so. One employee witness claimed that doing so deprived her and her colleagues of their right to a secret ballot election to decline union representation.
With respect to the Board’s recent rulemaking efforts, a former NLRB regional director testifying at the hearing found fault with the agency’s proposed changes to its representation election procedures. The witness stated that among other problems with these proposed changes, the expedited time frame for conducting an election “eviscerates” an employee’s NLRA rights, as it would “sharply reduce the time for employees to weigh whether or not to support a union.” In addition, the rule “would interfere with employers’ right to discuss collective bargaining with employees and employees’ right to discuss collective bargaining among themselves.”
Notice Posting Rule
Panelists also took aim at the NLRB’s final notice posting rule, claiming the Board lacks the statutory authority for mandating that employers post notices informing employees of their rights under the NLRA. Other witnesses criticized the required poster for its vagueness. Yet another panelist found fault with the fact that if an employer fails to post the notice, it faces an independent ULP charge and may also be found to harbor anti-union “animus” in a separate ULP proceeding, “shifting the presumption of guilt” on to the employer. Moreover, failure to post the notice could toll the six-month statute of limitation period contained in Section 10 of the NLRA, which prevents a complaint from being “based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board.”
Legislation has already been introduce that would rescind this posting rule. Lawsuits to enjoin its enforcement are also pending.
Several bills have been introduced in recent weeks that would curtail the NLRB’s authority. Committee member Trey Gowdy (R-SC) – who called the NLRB a “shill” for organized labor during the hearing – last week introduced legislation that would abolish the NLRB entirely. Although this measure has very little chance of being enacted, Gowdy – as well as other Committee members and hearing witnesses – criticized the Board’s ability to relocate a business’s employees and/or operations as a ULP remedy. The House of Representatives recently passed a bill that would prevent the Board from ordering an employer to close, relocate, or transfer its operations under any circumstances. This bill, however, is not likely to advance in the Senate, as evidenced by a September 21 Senate Appropriations Committee vote rejecting an amendment to a FY 2012 appropriations bill that would have incorporated such language.
Nonetheless, bills challenging or limiting the Board’s authority will likely continue to be introduced. The most recent bill proposing to curb the Board’s authority is the Protecting American Jobs Act (H.R. 2978), a measure that would limit the scope of the Board’s rulemaking ability, as well as its authority to issue complaints and process unfair labor practice charges. Specifically, the bill would limit the Board’s rulemaking authority to those issues concerning the agency’s internal functions and prohibit the Board from promulgating rules that affect the substantive rights of any person, employer, employee, or labor organization.
In addition, the legislation would strike several provisions from the National Labor Relations Act granting the Board certain powers to investigate and adjudicate unfair labor practice claims. For example, the bill would rescind the section empowering the Board to “prevent any person from engaging in any unfair labor practice . . . affecting commerce.” The bill also would strike the provision granting the Board the power “to issue and cause to be served upon such person” an unfair labor practice complaint, as well as NLRA sections authorizing the Board to take testimony and make findings; set aside findings or orders prior to filing record in court; petition the court for enforcement of an order; issue injunctions, among other functions.
This bill, which was introduced by Rep. Austin Scott (R-GA) and cosponsored by 26 others, has been referred to the House committee that held Thursday’s hearing on the NLRB.
A full list of the panelists and links to their testimony, as well as a link to an archived webcast of the hearing, can be found here.
The National Labor Relations Board has made available for download a copy of the Employee Rights poster required under the Board’s new rule: Notification of Employee Rights under the National Labor Relations Act. This final rule, issued on August 25, 2011 and effective November 14, 2011, mandates that private sector employers subject to the NLRA post a notice informing employees of their rights under the NLRA in a “conspicuous place” readily seen by employees and penalizes employers for non-compliance. This new obligation applies to virtually all private sector employers, regardless of whether or not their workforces are unionized and regardless of whether they are federal contractors. The agency has also posted to its website a list of Frequently Asked Questions regarding the notification requirement. Continue reading this entry at Littler's Labor Relations Counsel.
While Hurricane Irene churned up the East Coast this weekend, quieter, albeit significant changes were taking place at the National Labor Relations Board. Long-time Board member and Chairman Wilma Liebman’s term expired on Saturday, August 27. Fellow Democratic member Mark Gaston Pearce has been designated as the new Board Chairman. The remaining members include Brian Hayes, a Republican, and Craig Becker, a Democrat, whose recess appointment expires at the end of this year and will not likely be confirmed for a full term. The vacancy left when Republican member Peter Schaumber left the Board after his second term expired in August 2010 has yet to be filled. In January 2011, President Obama nominated Terence F. Flynn – who currently works as Hayes’ Chief Counsel – to fill that vacancy. Senate action on Flynn’s nomination, however, is still pending. The probable result of these changes will be that the Board will be left with only two acting members come January 2012. Continue reading this entry at Littler's Labor Relations Counsel.
Bill That Would Remove NLRB's Authority to Order Employers to Relocate or Close Their Facilities is Introduced
UPDATE: On July 21, 2011, the House Committee on Education and the Workforce approved this bill by a vote of 23-16 along party lines.
A bill that would prevent the National Labor Relations Board from ordering an employer to close, relocate, or transfer its operations under any circumstances is being fast-tracked in the House of Representatives. The Protecting Jobs From Government Interference Act (H.R. 2587), introduced on July 19 by Rep. Tim Scott (R-SC) and co-sponsored by Reps. John Kline (R-MN), Phil Roe (R-TN), Joe Wilson (R-SC), and Trey Gowdy (R-SC), is scheduled for markup by the House Committee on Education and the Workforce on Thursday, July 21, 2011. Continue reading this entry at Littler's Labor Relations Counsel.
As one of the final speakers concluding two days of public meetings to discuss the NLRB’s proposed changes to its election procedures, Littler attorney David Kadela stated that the proposed changes “would unduly and severely cut into the time that employers have to communicate with employees during election campaigns, and establish unnecessary procedural requirements that would stack the deck against and increase the burdens upon employers.” Kadela joined more than 60 other participants in the two-day event, many of whom articulated the same profound faults with the proposed expedited election procedures. Although a number of union supporters were on hand to speak in favor of the proposed rule, members of the business community and their representatives urged the Board to reconsider its proposal, which was even the subject of a recent Congressional hearing. Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: webphotographeer
In a move decried by the business community and even National Labor Relations Board Member Brian Hayes, the NLRB has issued a proposed rule (pdf) that would dramatically change pre- and post-representation election case procedures. It is predicted that the results of this proposed rulemaking will substantially expedite the election process and thereby deny workers the ability to fully exercise their right to make an informed and well-reasoned decision whether to join or not to join a labor union. In the words of Member Hayes in his strongly-worded dissent, (pdf) the proposed rulemaking “substantially limit[s] the opportunity for full evidentiary hearing or Board review on contested issues involving, among other things, appropriate unit, voter eligibility, and election misconduct.” Summing up his criticisms of the proposed changes, Hayes claims:
Today, my colleagues undertake an expedited rulemaking process in order to implement an expedited representation election process. Neither process is appropriate or necessary. Both processes, however, share a common purpose: to stifle full debate on matters that demand it, in furtherance of a belief that employers should have little or no involvement in the resolution of questions concerning representation.
Continue reading this entry at Littler's Labor Relations Counsel.
Photo credit: ericsphotography
The NLRB’s Office of the General Counsel has issued a new memorandum (pdf) outlining the categories of cases that must be submitted to the agency’s Division of Advice.
Acting General Counsel (GC) Lafe Solomon has indicated that the current list, which was last updated in 2007, needs to be revised on account of the new agency and court decisions, as well as policy issues that have emerged in recent years.
The revised list provides some insight into the nature of cases the GC considers to be of particular importance from a policy standpoint. It also reflects current areas of the law where the GC may be seeking to overturn existing precedent or decisions issued by the Board during the previous presidential administration. Continue reading this entry at Littler's Labor Relations Counsel.
Although it is considered a long-shot attempt, President Obama is trying once again to seat controversial nominee Craig Becker to the National Labor Relations Board for a full term. First nominated in July 2009 and seated via recess appointment in April 2010, Becker, who served as Associate General Counsel to both the SEIU and the AFL-CIO, has not tread an easy path to the NLRB and faces certain opposition in light of Obama’s latest move. Continue reading this entry at Littler’s Labor Relations Counsel.
The National Labor Relations Board on August 27, 2010, issued its long-awaited decision in a trio of cases involving the use of stationary banners by unions to advertise secondary boycott activity to the public. In a 3-2 decision split along partisan lines, the Board majority (Chairman Liebman and Members Becker and Pearce) concluded that bannering, when conducted peaceably and independent of other, possibly coercive, conduct, does not violate Section 8(b)(4)(ii)(B) of the National Labor Relations Act ( the “Act”). The decision in United Brotherhood of Carpenters and Joiners of America, Local Union No. 1506, 355 NLRB No. 159 (2010) has the practical effect of broadening the arsenal of weapons organized labor can bring to bear to force a primary employer in a labor dispute to yield to union demands. As a result, the decision may signal an increase in the frequency of secondary boycott activity and the embroiling of neutral employers in labor disputes not of their own making.
The underlying unfair labor practice charges all arose in 2003, when the Carpenters Union was engaged in a campaign aimed at a number of Arizona construction employers that, according to the union, were not providing pay and benefits to their employees in accord with area standards. In each instance, the union set up a large stationary banner at a location operated by a secondary employer that had a business relationship with the targeted primary employer. In only one instance was the primary employer present and performing work at the location where the union displayed its banner. In two cases, the banner contained the message “SHAME ON [SECONDARY EMPLOYER]”, and in the third, the banner read “DON’T EAT [SECONDARY EMPLOYER] SUSHI.” In all instances, the central message was flanked on both sides by the words “Labor Dispute” in smaller letters. Between two and four union representatives held the stationary banner on a sidewalk or right-of-way in a manner that did not block the flow of traffic. While holding the banner, the union representatives also offered handbills to passers-by, explaining that the labor dispute was with the primary employer and that the union believed that the secondary employers’ business relationships with the primary employers contributed to undermining area standards. The union representatives did not chant, yell, march, or engage in similar activities.
The Board ruled that the conduct at issue was noncoercive and did not violate the Act. In crafting its ruling, the Board majority emphasized that it is constrained “to seek to avoid construing the Act in a manner that would create a serious constitutional question,” and added that government “regulation of nonviolent speech – such as the display of stationary banners – implicates the core protections of the First Amendment.” In light of those constraints, the majority framed the issue in the following terms:
The crucial question here, therefore, is whether the display of a stationary banner must be held to violate Section 8(b)(4)(ii)(B) or, instead, “whether there is another interpretation, not raising these serious constitutional concerns, that may be fairly ascribed to” the statutory provision.
(Emphasis in original.) (Citing Edward J. DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 485 U.S. 568, 577 (1988).) The majority concluded that nothing in the legislative history or the language of the Act itself requires the Board to find the display of a banner aimed at a neutral employer to constitute a violation of the Act. As such, the majority concluded that bannering is, like handbilling, noncoercive conduct that falls outside of the Act’s proscription against certain types of secondary boycott activity.
Dissenting, Members Schaumber and Hayes took issue with the majority’s reliance on “a strained definition of statutory language, and selective and ambiguous excerpts from the legislative history” to reach its conclusion. They further criticized the majority for failing to constrain their decision to the facts of the case presented, accusing the majority of “capitaliz[ing] on the opportunity to narrowly circumscribe the Board’s historically expansive definition of ‘picketing’,” while simultaneously increasing the burden on employers seeking to challenge secondary activity under Section 8(b)(4)(ii)(B). According to the dissent, the majority’s decision “invites a dramatic increase in secondary boycott activity.”
The decision signals a break in the log-jam of bannering cases that have been sitting before the Board for a number of years now. In a press release (pdf) issued September 2, the Board indicates that there are at least ten additional bannering cases currently pending before the Board.
This entry was written by Jack Lambremont.
Photo credit: Wissmann Design
Ronald Meisburg, General Counsel (GC) to the National Labor Relations Board (NLRB), plans to leave the Board eight weeks shy of the end of his term in order to enter private practice. A former management-side lawyer, Meisburg was seated via recess appointment as a Board member in 2004, and as General Counsel in 2006. Meisburg, after the Senate confirmed his nomination in August 2006, was to serve as GC until August 14, 2010. His vacancy will allow President Obama to appoint his own choice to fill this position, which has been held by a Republican since 2001. In March, Obama used the recess appointment process to seat Democrats Craig Becker and Mark Pearce as NLRB members. Republican nominee Brian Hayes was not similarly seated, and has yet to receive a Senate confirmation. The sole remaining Republican member, Peter Carey Schaumber, will complete his term on August 27, 2010.
Although a significant amount of controversy surrounded Obama’s choice of former union general counsel Becker as an NLRB member, the general counsel pick could be equally contentious, given the enforcement power that accompanies the position. The NLRB traditionally makes changes to labor law through its rulings and the general counsel determines which cases are put before the NLRB. Therefore, which cases the general counsel chooses to pursue are a critical component with regard to what issues the NLRB will have an opportunity to decide. The selection of the person who determines which cases will be considered is likely to be as controversial as the selection of individuals who ultimately will decide those cases. At this point, however, there is no clear front-runner as Meisburg’s replacement. In a letter to NLRB employees, Meisburg announced that Deputy General Counsel John Higgins will take over any new cases presented to the Board.
On Tuesday, the Senate rejected advancing the nomination of Craig Becker to serve as a member of the National Labor Relations Board (NLRB). Becker’s proponents failed to garner the 60 votes needed to limit debate over his nomination and allow a confirmation vote to occur. The 52-33 vote took place less than a week after the Senate Health, Education, Labor and Pensions (HELP) Committee approved Becker’s nomination by a party-line 13-10 margin.
Becker’s fate seemed sealed after Republican Scott Brown was sworn in last Thursday as a Massachusetts senator, eliminating the Democrat’s 60-seat filibuster-proof majority. Any hope that at least one Republican would cross party lines to vote in Becker’s favor was all but lost when it was announced on Monday that Democratic Senator Ben Nelson (D-NE) opposed Becker’s nomination. In a press release, Nelson stated, “Mr. Becker’s previous statements strongly indicate that he would take an aggressive personal agenda to the NLRB, and that he would pursue a personal agenda there, rather than that of the Administration.” Nelson added that many of Becker’s positions he advocated in scholarly works “fly in the face” of Right to Work laws. Senator Blanche Lincoln (D-AR) joined Senator Nelson in opposing cloture on Becker’s nomination.
Senator Nelson highlighted some of the positions taken by Becker, including his belief outlined in a 1993 Minnesota Law Review article that “[o]n account of the asymmetry between representation elections in the workplace and the polity . . . employers should have no legally sanctioned role in union elections." In this article Becker also suggested that employees should be compelled to join labor unions: “…it could be argued that industrial democracy should be made more like political democracy by altering the nature of the choice presented to workers in union elections. Such a reform would mandate employee representation, and the question posed on the ballot would simply be which representative.”
Although Becker testified at a hearing before the HELP Committee that such statements were intended to be provocative and that he would respect the role of Congress in creating labor law policy, many lawmakers and members of the business community have feared that Becker would try to implement his views through Board decisions or rule-making.
It is unclear when or if the Senate will vote on President Obama’s two other NLRB nominees, Mark Pearce and Brian Hayes. There has been some speculation that Becker could be seated by means of a recess appointment when the Senate adjourns for the Presidents Day recess. According to an article in The Hill’s Blog Briefing Room, Obama is not adverse to this possibility, saying: “If the Senate does not act to confirm these nominees, I will consider making several recess appointments over the upcoming recess, because we cannot allow politics to stand in the way of a well-functioning government.” If the President takes this route, the recess appointment would expire by the end of the next Congressional session, roughly the end of the next calendar year, unless the Senate confirms the appointment.
Photo credit: MBPHOTO, INC.
Due to the massive snowstorm that hit the Washington, D.C. area over the weekend, the cloture vote on Craig Becker’s nomination to be a member of the National Labor Relations Board (NLRB) has been rescheduled to Tuesday at 5:00 pm. At least 60 votes are needed to lift the blanket hold Sen. Richard Shelby (R-Ala.) put on his nomination, among others, and effectively limit debate. Unless Becker can garner the requisite 60 votes – made more difficult now that Scott Brown has been sworn in as the Senate’s 41st Republican – it is expected that those opposed to Becker will filibuster to prevent a confirmation vote.
On February 2 at 4:00 pm, the Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing on the controversial nomination of Craig Becker to be a member of the National Labor Relations Board (NLRB). In December, the Senate returned the nomination to the White House for reconsideration after Sen. John McCain (R-Ariz.) put a hold on it. Instead of withdrawing the nomination, President Obama re-nominated Becker last week.
Many in Congress and the business community fear that Becker – who serves as Associate General Counsel to both the Service Employees International Union (SEIU) and the American Federation of Labor & Congress of Industrial Organizations – would try to implement portions of the beleaguered Employee Free Choice Act (EFCA) through rulemaking or Board decisions. Now that EFCA’s chances of passage this term are greatly diminished by the new composition of the Senate, organized labor may look to the NLRB to advance its agenda. A HELP Committee vote could come as early as February 4. In October, the HELP Committee approved Becker’s nomination by a 15-8 vote. At that time, the HELP Committee also approved the nominations of Mark Pearce and Brian Hayes by voice vote. It is believed that Democrats want to submit all three nominees for a full Senate vote as a package, a move that would place less scrutiny on Becker as an individual.
On Wednesday, President Obama re-submitted to the Senate his nomination of controversial candidate Craig Becker to be a member of the National Labor Relations Board (NLRB). Obama announced his intent to nominate Becker, who serves as Associate General Counsel to both the Service Employees International Union (SEIU) and the American Federation of Labor & Congress of Industrial Organizations, in April, and officially nominated him in July. The Senate Health, Education, Labor and Pensions Committee approved Becker’s nomination – as well as those of Mark Pearce and Brian Hayes – in October. The belief was that all three nominations would be presented to the Senate as a package, a move that many Republican lawmakers and members of the business community opposed, as doing so would limit the Senate’s ability to evaluate Becker on an individual basis. Becker’s divisive views regarding an employer’s role during a representation election campaign as well as the fear that he would be willing to use Board decisions to effectively institute elements of the proposed Employee Free Choice Act were likely factors causing Sen. John McCain (R-Ariz.) to put a hold on Becker’s nomination. Before the holiday recess, the Senate returned his nomination to the White House for reconsideration.
It is unclear whether Becker’s nomination will face a similar fate this time around. To complicate the matter, the NLRB is currently operating with only two members. Whether the traditionally five-member Board has the authority to decide cases with only two sitting members is an issue the U.S. Supreme Court will determine this term in New Process Steel v. NLRB. At stake in this case are hundreds of Board decisions. It is believed that if the Supreme Court effectively invalidates those two-member decisions, a full Board would simply re-issue those opinions. The failure of the three NLRB nominees to be confirmed, however, will necessarily impact this strategy.
President Obama has announced his nomination of Brian E. Hayes, Republican Labor Policy Director for the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP), to be a Member of the National Labor Relations Board (NLRB or Board). If confirmed, Hayes would join current member Peter Schaumber as the second Republican to serve on the five-member Board. Board Members are appointed to five-year terms, with the term of one member expiring each year. The Board traditionally consists of three members selected by the party controlling the White House, and two from the opposing party. In April, Obama named Democrats Craig Becker and Mark Pearce as his other picks to fill the three vacant seats. Current NLRB Chairman Wilma Liebman is also a Democrat. On July 9, the White House sent the nominations of Becker, Pearce and Hayes to the Senate for confirmation.
According to information provided by the White House announcement, before serving as a Senate staffer, Hayes worked for 25 years in private practice as a management-side labor and employment attorney. Prior to entering the private sector, Hayes clerked for the Chief Judge of the National Labor Relations Board and then as Counsel to the Chairman of the NLRB. While working in private practice, Hayes taught classes in Labor Law, Collective Bargaining, Arbitration and Employment Litigation at Western New England Law School. Has earned his undergraduate degree at Boston College and his law degree from Georgetown University Law Center.
It is not yet clear when confirmation proceedings will occur, or whether the three pending nominees will be considered as a package or individually.
The following is a summary of the legislative and regulatory news for the week of April 26, 2009:
President Obama has announced his plans to nominate Craig Becker and Mark Pearce as board members of the National Labor Relations Board (NLRB or Board), and Alejandro Mayorkas to serve as the director of the U.S. Citizenship and Immigration Services (USCIS).
In addition, labor advocate and founding executive director of the American Rights at Work (ARW) Mary Beth Maxwell is joining the Department of Labor (DOL) as a senior advisor to Secretary of Labor Hilda Solis.
Senator Russ Feingold (D-WI) has reintroduced the Arbitration Fairness Act (S. 931), a bill that would render unenforceable predispute agreements mandating arbitration of employment, consumer, franchise or civil rights claims.
The recently-introduced Alert Laid off Employees in Reasonable Time (ALERT) Act (H.R. 2077) would require employers to provide Worker Adjustment Retraining Notification (WARN) Act notices to employees in the event of mass layoffs that occur at more than one worksite, and would double the penalties for violations.
Senator Arlen Specter (R-Pa) recently announced his intent to run for reelection as a Democratic in the 2010 primary, bringing Democrats closer to a filibuster-proof majority.
Discrimination in the Workplace
The Fair Pay Act (S. 904, H.R. 2151) was reintroduced in both the House and Senate. This bill would amend the Fair Labor Standards Act (FLSA) by introducing the concept of equal pay for comparable – not equal – work.
Assistant Senate Majority Leader Richard Durbin (D-Ill.) and Sen. Charles Grassley (R-Iowa) introduced the H-1B and L-1 Visa Reform Act (S. 887), legislation that would completely reform the H-1B and L-1 visa guest worker programs.
The Department of Labor’s (DOL) Office of Labor-Management Standards (OLMS) has announced that it plans to issue a notice of proposed rulemaking regarding revisions to the Labor Organization Officer and Employee Report (LM-30) financial disclosure form.
Meanwhile, the U.S. Court of Appeals for the District of Columbia Circuit has held that the National Labor Relations Board acted without authority in entering an order against a company for alleged unfair labor practices, as the two-member panel did not constitute a quorum as required by the National Labor Relations Act.
Two bills were introduced this week that seek to amend the Family and Medical Leave Act (FMLA) and its regulations. The Family and Medical Leave Restoration Act (H.R. 2161) would essentially nullify the new DOL regulations, restore prior ones, and direct the Secretary of Labor to revise additional regulations under this Act. The Family and Medical Leave Inclusion Act (H.R. 2132) would amend the FMLA to permit eligible employees to take up to twelve weeks of unpaid leave to care for a same-sex spouse, domestic partner, parent-in-law, adult child, sibling or grandparent who has a serious health condition.
Employers are advised to establish a workplace safety plan to specifically address the public health emergency surrounding the swine flu outbreak. On April 29, 2009 the World Health Organization (WHO) raised the pandemic alert level to Phase 5, with Phase 6 indicating that a global pandemic is under way.
In legislative news, the Protecting America’s Workers Act (PAWA) (H.R. 2067), a bill that would amend the Occupational Safety and Health (OSH) Act by expanding its coverage, increasing whistleblower protections, and enhancing employer penalties for violations, was reintroduced. Additionally, on April 28, both the House and Senate conducted hearings to address the adequacy of employer incentives for maintaining safe workplaces and penalties for violating OSH laws. Lawmakers in both chambers stressed the need for OSH reform.
The U.S. Court of Appeals for the District of Columbia Circuit has held that the National Labor Relations Board (“NLRB” or “Board”) acted without authority in entering an order against a company for alleged unfair labor practices, as the two-member panel did not constitute a quorum as required by the National Labor Relations Act (NLRA). In Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB (pdf), the only issue before the appellate court was whether the Board had the statutory authority make its decision, not whether its findings, conclusions and remedies were justified.
Prior to issuing its order in the underlying decision, one Board member’s term had expired. The remaining four members of the five-member Board voted to delegate its powers to a three-member group, pursuant to Section 3(b) of the NLRA, which reads:
The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.
29 U.S.C. § 153(b).
As two additional members’ terms were set to expire on December 31, 2007, it was anticipated that the Board would be left with only two members due to the Senate’s failure to confirm any new nominees for the open and expiring positions; and President Bush’s inability to make recess appointments for procedural reasons. Thus, according to the D.C. Circuit, the purpose of delegating powers to a three-member group was to ensure that the remaining two Board members whose terms had not yet expired would be able to operate as a fully-functioning Board. The question before the D.C. Circuit, therefore, was whether two members constituted an effective quorum. Finding that they did not, the court reasoned that had Congress intended a two-member Board to be able to function as a quorum “the existing statutory language would be an unlikely way to express that intention.” Thus, according to the D.C. Circuit, three members are necessary for the Board to exercise any real authority. Under that reasoning, any order issued by the two-member Board would be unenforceable.
This issue is far from resolved. The Seventh Circuit also issued a decision today, New Process Steel, L.P. v NLRB (pdf) that upholds a two-member Board decision. In March, the First Circuit similarly upheld the two-member panel’s authority to issue orders in Northeastern Land Services, Ltd. v. NLRB. It is anticipated that other circuit courts that address this question will differ as to the ability of a two-member Board to issue enforceable decisions.
The practical implications of the D.C. Circuit’s decision will be few for employers. President Obama recently announced his decision to nominate Democrats Craig Becker and Mark Pearce to fill two of the three remaining open Board seats. Obama, however, failed to announce the nomination of a Republican member to fill the remaining seat which may cause Senate Republicans to put a hold on the expected nominations of Becker and Pearce until a Republican is named as well. The longer it takes to fill the vacant seats, the longer it will be until the Board’s orders are deemed legitimate by every appellate court. Assuming Becker and Pearce are eventually seated, they – along with Democratic Chair Wilma Liebman – will constitute a quorum able to re-issue or adopt all of the decisions made by the 2-member Board, including the immediate decision in Laurel Baye.
President Obama has designated Wilma B. Liebman as the Chairman of the National Labor Relations Board (NLRB). As an ardent supporter of unions and a vocal critic of right to work laws and recent NLRB decisions promoting an employee’s ability to reject unionization, Liebman will surely take the NLRB in a new direction – and one that is not necessarily favorable to employers.
First appointed by former President Clinton, Liebman has served on the Board since November 14, 1997. Prior to joining the NLRB, Liebman worked at the Federal Mediation and Conciliation Service as Special Assistant to the Director and then as Deputy Director. In addition, Liebman has worked as a lawyer for the NLRB, the International Brotherhood of Teamsters, and the International Union of Bricklayers and Allied Craftsman. She is also an elected member of the Executive Board of the Industrial Relations Research Association and of the College of Labor and Employment Lawyers, Inc.
In testimony before the House Committee on Education and Labor, and in an article published in the Working USA: Journal of Labor and Society, Liebman takes issue with the NLRB’s focus on protecting an employee’s right to decline union representation over the promotion of collective bargaining. In the abstract to her article: Labor Law Inside Out, Liebman writes:
Today, some sixty years after passage of the Taft-Hartley amendments to the National Labor Relations Act, it seems that the centerpiece of the Act has become the right to refrain from protected, concerted or union activity. The original 1935 legislation was enacted, of course, to protect the right to engage in that activity, and to encourage the practice of collective bargaining. For nearly sixty years after Taft-Hartley added the right to refrain to Section 7's employee protections, the Board has struggled to reconcile the sometimes competing statutory goals of promoting the stability of collective bargaining relationships and the individual freedom of choice, preserved by Section 7. That has changed, however, as the National Labor Relations Board, in several recent decisions, has said for the first time, that freedom of choice - which is to say, the freedom to reject union representation - prevails in the statutory scheme. It is as if the law, in abandoning the primacy of achieving economic justice through collective action, has been turned inside out. The stakes for this shift in policy are great.
In essence, Liebman bemoans the fact that the NLRB has focused its efforts on preserving an employee’s freedom of choice. This theme continues in the last page of her article, where Liebman emphasizes that:
[A]n exclusive orientation toward an individual-rights regime could have troubling political and social consequences. Workers may view the employment relationship in purely individual terms and may fail to grasp common economic interests and the potential of collective action at work, as well as in the public sphere. Collective action at work encourages engagement in the community and in politics. Without a functioning collective bargaining system, fundamental economic issues are placed off the table: distribution of wealth, control, and direction of economic enterprises. What institution will be as effective in efforts to minimize the randomness of fortune of democratic capitalism? And without a strong independent trade union movement, what institution will stand effectively as a counterweight in our democracy to the growing political influence of corporations? What institution will speak for working people—indeed for the middle class—as effectively?
It is evident by this passage that Liebman views with disdain the “political influence” of the business community. As Chairman of the NLRB, it can be reasonably expected that she will direct the Board’s energies to enforcing labor laws, promoting collective bargaining, and issuing rulings that effectively overturn a number of Bush-era NLRB rulings that organized labor and some Democratic Senators are determined to reverse. Moreover, if the Employee Free Choice Act (EFCA) is ever enacted, the NLRB will have the regulatory opportunity to shape how the new law will operate in practice in a way that is favorable to organized labor. As a proponent of unions, Liebman will surely do just that if given the opportunity.