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Chamber Urges Businesses to Appeal Labor Rulings

February 1, 2013
The Wall Street Journal
Melanie Trottman

The U.S. Chamber of Commerce is advising companies to try to reverse rulings the National Labor Relations Board made against them in the past year, following a court decision that has undermined the federal panel.

The chamber's push, outlined in a memo the business trade group began distributing to its members Wednesday, is the latest fallout from last week's federal court ruling that voided President Barack Obama's three recess appointments to the five-slot labor board.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that an NLRB decision against soda bottler and distributor Noel Canning was invalid because the three board appointees were made outside of the recess window the court believes is stipulated in the Constitution.

That invalidates the Noel Canning decision, the court found, because the board in effect lacked a quorum of at least three members when it issued the decision.

The chamber and labor lawyers this week are telling other parties that they, too, may be able to use the ruling to reverse NLRB decisions they don't like. The board supervises union elections and referees disputes in private-sector workplaces.

On Thursday, the board filed a motion asking a different court to postpone a Feb. 5 hearing in a separate case against it filed by D.R. Horton Inc., DHI +1.80% citing a need to submit a briefing addressing the implications of the canning decision. and a need to consult with the Department of Justice and other agencies. The motion said the government is trying to determine whether to appeal the recess decision directly to the Supreme Court or the full D.C. Circuit Court.

"The resolution of these issues may have consequences that reach far beyond any individual case," the filing said. Extra time could allow the board to lay out why it believes the recess appointments were valid.

In play are more than 200 labor-board rulings since President Obama made the appointments on Jan. 4, 2012. He named Democratic union lawyer Richard Griffin, Democratic Labor Department official Sharon Block and Republican NLRB lawyer Terence Flynn to the panel. Mr. Flynn stepped down from the board later in the year.

Decisions in the past 13 months included one that protected workers from being fired for complaining about workplace conditions on websites such as Facebook, FB -2.81% and another that gave greater rights to unions seeking information in employee-discipline cases.

"Many Chamber members have NLRB matters pending, impending, or recently decided. We want these members to be aware that the Noel Canning decision may have immediate effects on these matters," said Lily Fu Claffee, the chamber's general counsel, in a letter attached to the memo. Ms. Claffee said that in some cases, employers "must act fast to benefit from the decision."

"We've been hearing from members asking what this means for them," she said in an interview Thursday.

Labor board Chairman Mark Gaston Pearce has said the NLRB would keep conducting its business after the decision. He said he believes the recess appointments ultimately will be upheld.

But lawyers believe the ruling could have a ripple effect on other cases and agencies where recess appointments have been made by presidents for at least 90 years.

Nonprofit group Hispanics United of Buffalo, which is the employer that the board ruled had unlawfully fired five workers for critical Facebook postings, plans to raise the recess-appointment decision in a coming appeal, said a lawyer for the Buffalo, N.Y., group. The group already had intended to appeal on the merits of the case.

"We will be raising the issues about the recess appointments being improper," said lawyer Rafael Gomez of law firm Lo Tempio & Brown in Buffalo. He said he and his client are still deciding whether to appeal in the District of Columbia Circuit, where the Noel Canning case was decided, or in New York.

The chamber and law firms including Littler Mendelson and Jones Day have distributed or posted guidance on their websites telling clients that any decision of the board can be appealed to the D.C. Circuit.

But in its memo, the chamber said that the labor board could try to seek enforcement of a ruling in any circuit court where an alleged unfair labor practice occurred or where a company is based or does business. Because other circuits could decide to uphold the recess appointments, "it may benefit you to act as quickly as possible to ensure that you file your petition in the D.C. Circuit first," the memo said.

Employers with cases pending in other circuits should ask that court to hold the case in a state of inactivity until the recess-appointment issue is resolved nationwide, the chamber said, which many expect to happen at the Supreme Court.

Lawyers also are questioning whether some of the board's rulings made before the latest recess appointments could be challenged because former board member Craig Becker had been installed by Mr. Obama in March 2010 using a recess appointment.

Pressure is also mounting against the board in Congress. Several Republican senators introduced a bill Thursday that would prohibit the NLRB from enforcing decisions and regulations without a confirmed quorum. Another bill by Senate Republicans would prevent the recess appointees from being paid.

Unions and workers also could try to undo unfavorable board rulings against them, though such outcomes have been rarer under this administration.

 

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