News & Updates

NLRB Blasted by House Oversight Committee December 17, 2012

On December 13, 2012, the Committee on Oversight and Government Reform of the U.S. House of Representatives issued a 33-page report accusing the National Labor Relations Board (NLRB or Board) of express pro-union bias, pursuing a program of aggressive tactics designed to promote union agendas, making substantive decisions without legal authority, violating its own ethical and procedural rules, and hostility to Congressional oversight. The report, titled “President Obama’s Pro-Union Board: The NLRB’s Metamorphosis from Independent Regulator to Dysfunctional Union Advocate,” can be accessed here. For employers that have been involved in cases brought before NLRB this year, the implications of this report could raise questions about those decisions or even cast them into doubt.

The report summarizes its theme as follows: “[T]he NLRB appears to be sacrificing fairness to ‘job creators’ in order to promote pro-union policies. To make matters worse, its leadership disregarded ethics and internal rules along the way.” Specific charges in the report include: 

  • NLRB personnel have internally expressed views to each other that reflect a pro-union bias.
  • There have been improper internal communications between the Board and its Office of General Counsel concerning the merits of pending cases. These communications have violated the Board’s own principle of separation, which is based on due process principles, just as if a prosecutor had ex parte communications with a judge. It is the Office of General Counsel that initiates NLRB complaints and litigates those cases, and the Board that decides them.
  • The report also recounts past allegations against acting General Counsel Lafe Solomon and former member Terence Flynn regarding financial conflict of interest and breach of confidentiality.
  • The NLRB pursued an improper results-oriented agenda in two prominent matters: (a) the Board’s 2010 attempt to prevent Boeing from installing a second Dreamliner production line in South Carolina, and (b) the NLRB’s 2011 decision in the Specialty Healthcare and Rehabilitation Center of Mobile case, which overturned decades of labor law precedent by allowing micro-unions in non-acute healthcare settings and has since been applied to other industry settings as well.
  • The NLRB opposed and thwarted Congressional oversight during the Committee’s investigation of the Boeing complaint, by misleading the Committee and delaying the production of documents. Further, internal NLRB communications during the investigation reveal an attitude of gamesmanship and hostility toward the Committee.
  • The NLRB hastily issued two important substantive rules in 2011 — (a) requiring employers to post a notice of employees’ rights under the statute, and (b) radically changing the procedures for union organizing elections — ignoring past precedent favoring a more deliberative process, and with disregard for whether the new rules were legal. Both rules have been determined by lower courts to have been improperly issued, and the NLRB is appealing both those decisions.
  • In January 2012, three new members joined the Board as “recess” appointments. Those appointments have been challenged as unlawful in pending litigation. (Member Flynn, one of the recess appointees, later resigned, leaving only four members.) The report points out that if the recess appointments are ultimately determined to be unlawful, the Board has lacked a quorum all this year, which could mean that scores if not hundreds of substantive decisions and other actions taken by the Board this year have been invalid.

The Committee, chaired by Darryl Issa (R-Calif.), has had the NLRB in its sights at least since 2011, when the Committee commenced an investigation of NLRB’s complaint against Boeing. During that investigation, the Committee discovered internal NLRB emails that form the basis of some of the charges in the report. However, many of the charges in the report are unrelated to that investigation, and have been widely reported elsewhere in the past. Given the Committee’s decision to publicly release a report listing all of these issues, as well as the politically charged language it has used in the report, it now seems clear that the Committee’s leadership has decided to take whatever measures are available to it to curb what it perceives as an activist, job-killing agenda on the part of the NLRB. Specific legislative initiatives designed to restrain the NLRB will presumably be seen in the near future, at least in the House of Representatives.

It should be noted that the term of the only Republican board member, Brian Hayes, expired on December 16, 2012. That leaves only three members, all Democrats. All three of these members have pro organized labor resumes.  Of these, only Chairman Mark Pearce has been confirmed by the Senate. While three Members is a quorum, there will not be a quorum if the other two members, both recess appointments, are determined to have been appointed unlawfully.

In New Process Steel, L.P. v. NLRB, the Supreme Court ruled in 2010 that the NLRB acted without authority when it operated with only two members during a 27-month period. The effect of that ruling was to cast a cloud over hundreds of Board cases, many of which were supposed to be reconsidered by the current Board. But even prior to the departure of member Hayes, the Board has again been without a quorum all this year if the January 2012 recess appointments are ruled to have been unlawful. This would bring even more uncertainty and doubt to employers that were involved with cases brought before the Board during this time.

If the recess appointments are ruled lawful, trouble could still be coming in 2013. Chairman Pearce’s term expires in August, and the recess appointments will expire at the end of 2013. The Board cannot continue doing its business without the addition of new members, but if Congressman Issa’s Committee Report is any indication, the President may find it difficult to get Republicans to cooperate in that effort.

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