Gavel and Books.JPGA decision from the U.S. Court of Appeals in the District of Columbia recently cast into doubt the validity of all National Labor Relations Board (“NLRB”) decisions in the year 2012 by holding that three of the current Board members were invalidly appointed.  Thus, in this Court’s view, potentially all the Board’s decisions for the last year have lacked effect.

The NLRB is the federal agency responsible for enforcing the National Labor Relations Act, the law concerned with labor relations in private businesses, including union-management relations, collective bargaining, union elections, and certain concerted actions by employees, among other things.  The public sector is governed by state labor relations laws and state agencies.  Nevertheless, public sector labor relations practitioners, as well as Public Employment Relations Board (“PERB”), often look to NLRB precedent for guidance.

Created in 1935 by Congress, the NLRB is one of the nation’s first and most venerable agencies charged with enforcing employment laws, and its activities in the past year have been particularly robust – the Board has acted to attempt to quicken the schedule for holding union elections, has acted to curtail the use of mandatory arbitration agreements in the employment law context in the much-debated D.R. Horton case, and perhaps most surprisingly, has aggressively enforced the rights of private sector employees to use social media to criticize their employers’ labor practices, and to use social media in other ways to act collectively.

The social media decisions by the NLRB have been closely watched even by the public sector.  Although state labor relations laws are structured differently than the federal private sector laws, there is a fair chance state law agencies will enforce employees’ social media rights in the same way that the NLRB has done in the last year.  Our firm has blogged extensively about the NLRB’s social media decisions (click here for posts), and about even public sector employers adopting social media guidelines that comport with them.

But now has all of that changed?  Not really.

Here are the details of the Court of Appeals’ decision.

Noel Canning, a family-owned bottler and distributor of soft drinks in Washington State, received an adverse decision from the NLRB.  The Board found that the company had improperly failed to reduce to writing and execute a collective bargaining agreement reached with the Teamsters Union.  Noel Canning challenged the decision, arguing that the NLRB lacked authority to decide the matter because three of the Boards’ members were unlawfully appointed.  The company argued that President Obama had appointed the members using his “recess appointment” powers under the U.S. Constitution at a time when Congress was not, in fact, in recess.  The Constitution allows the President to make recess appointments of a limited duration without the “advice and consent” of the Senate, but only when Congress is not in session.  As of January 2012, Board Member Craig Becker’s term would expire and leave the Board unable to function because it lacked the sufficient three members (of five seats) to constitute a quorum.  The President then appointed Democratic union attorney Richard Griffin, Democratic Labor Department official Sharon Block, and Republican NLRB attorney Terence Flynn.

Noel Canning argued to the Court that these appointments were all invalid, because Congress was not actually in “recess” at the time the President made them.  Although at the time in winter 2011-2012, Congress was not acting on legislation, and most members were not even in Washington, Congress had not in fact declared any actual “recess.”

The matter took on aspects of high political/legal drama.  Republican U.S. Senators and the Speaker of the House filed “friends of the court” briefs authored by prominent national appellate lawyers, arguing that the President had overstepped his powers in an effort to re-shape American labor law.  The U.S. Department of Justice submitted a brief in support of the appointments and of the NLRB decision.

The Court ultimately agreed with Noel Canning, and issued a decision finding that President Obama’s appointments violated the separation of powers principles set forth in the U.S. Constitution.  In the last month, the decision in Noel Canning v. National Labor Relations Board has garnered significant national attention, mostly partisan cheering or outcry.  The Friends of the U.S. Chamber of Commerce stated on their website: “I don’t need to tell you that the NLRB is one of the most activist agencies through its agenda against our country’s employers.  And the U.S. Chamber’s successful challenge to the appointments was viewed as a huge victory for America’s job creators.”  On the other hand, veteran legal author Jeffrey Toobin, writing for The New Yorker, called the decision an “atrocity,” and an “extravagant act of judicial hubris.”

Labor lawyers, who must now contend with the real practical aftermath, have offered less clear direction.

There are a number of strong technical, as well as practical, reasons why employers should not now feel free to disregard the NLRB’s last year of social media jurisprudence, or ignore the NLRB’s other rulings.  As to the technical reasons, there are a number of other similar recess appointment cases making their way through the federal appellate courts.  Other federal circuits may disagree with the D.C. Circuit and provide a split in authority as to whether the NLRB has been lawfully constituted during the last year.  Also, for what it is worth, the D.C. Circuit Court of Appeals itself has not opined on the retroactive effect of its Noel Canning decision, or on its effect on the NLRB’s 2012 precedents.  Finally, many commentators expect the U.S. Supreme Court to take up this case in its 2013-2014 term, and the Supreme Court could well uphold the recess appointments.  This will remove doubt as to the NLRB’s 2012 decisions and precedents.

As to practical considerations, regardless of the legality of the NLRB’s decisions, it is clear the agency has thought through its social media positions comprehensively and carefully, not just at the level of Board members, but by the Board’s regional directors, general counsel, and legal staff.  It is very unlikely that new appointments to the Board will substantially change the Board’s general position on social media, or its other recent significant decisions.  This is particularly true given that four years still remain for President Obama’s administration.  The most prudent course, certainly for private sector employers, is to consider the Board’s social media and other jurisprudence as in effect, and act accordingly.  Indeed, litigation matters that have their origins in today’s events (i.e., early 2013) will likely make it to adjudication at a time in the future when the Board has fully, and legally, regained its footing.

For the public sector, the NLRB’s decisions have been persuasive/advisory from the start.  The fact that they are arguably deprived of legal effect based on a procedural point does not make them significantly less persuasive, or reflect a sea change in this area of the law.  Accordingly, it is prudent for the public sector to continue to take heed of the NLRB’s social media and other decisions.

It will be productive and interesting to follow how this drama at the NLRB unfolds.  Indeed, this week on March 12, 2013, the Obama administration announced it would appeal the Noel Canning decision to the U.S. Supreme Court.