Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

DOL

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.

NLRB

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.

HHS

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.

Senate Bill

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.

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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.

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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.

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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:

OSHA

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.

OFCCP

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.

EBSA

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.

OLMS

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.

WHD

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.

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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.

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.

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.

Expedited Elections

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.

NLRB Authority

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 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.

For more information on this decision, see Littler's ASAP:  A Banner Day for Union Boycotts by Russell McEwan.

This entry was written by Jack Lambremont.

Photo credit: Wissmann Design

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.

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.

Arbitration

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.

Business Restructuring

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.

Congressional Leadership

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.

Immigration

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.

Labor-Management Relations

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.

Work/Family Balance

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.

Workplace Safety

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.

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.

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.