The Wall Street Journal reports that dozens of companies, including Starbucks, Time Warner, Dominos and McDonalds, are challenging actions by the National Labor Relations Board by citing a recent an Appeals Court ruling that determined the current board lacks a constitutionally-appointed quorum.
The court found that President Obama exceeded his power to make recess appointments last year when he put three people on the board. Presidents have the power to make such appointments only when the Senate isn’t available to confirm them. The Senate wasn’t even technically in recess at the time. The White House rushed the appointees through so quickly the Senate never even had the time to hold a hearing on them.
The ruling meant that only one member, Chairman Mark Pearce, was constitutionally appointed. Since the five-member NLRB needs at least three board members to provide a quorum to act, that also meant that every ruling it had made since the recess appointees was invalid.
The NLRB disputed the court’s ruling, which is likely to be appealed to the Supreme Court. In the meantime it is trying to conduct as if the ruling didn’t happen. That is proving difficult, the Journal found:
Since the January ruling by the Washington, D.C., appeals court, at least 87 companies and three unions have cited the decision in cases at varying stages within the agency, including cases the board has yet to decide. Many companies are telling the agency that actions against them should be voided or blocked since the board or its appointed regional officers made decisions while the NLRB lacked authority. Dozens more companies are citing the recess appointments in appeals they’ve filed against the agency in federal appellate courts.
The companies are attempting to do a variety of things, including overturn or block union elections, undo penalties they were ordered to pay to fired workers and halt subpoenas. Employers also argue that at least 10 NLRB regional directors are illegitimate because they were installed by invalid Obama labor-board appointees, and say regional decisions should be voided, too.
The surge of challenges tied to the court ruling is overwhelming the NLRB, a federal agency that referees disputes between companies and employees. Working through them is delaying resolution of cases alleging unfair labor practices, including whether workers can fairly hold union elections, said Lafe Solomon, the agency’s acting general counsel.
“It’s already having a huge impact,” Mr. Solomon said. “At every stage…we’re seeing attacks” citing the appeals court decision.”
If the court ruling is upheld, pretty much everything the board has done over the last year would have to be re-heard by a new, constitutionally appointed NLRB. That would be a bureaucratic nightmare by the administration:
“This is the most significant crisis that the board has been in since the [National Labor Relations Act] was passed and found constitutional,” said [Chuck Cohen, a Washington attorney and a former Republican NLRB member] , citing the 1937 Supreme Court decision that upheld the act establishing modern labor law.
The NLRB has issued about 600 decisions and orders since January 2012. But a total of 1,400 cases could be challenged using the Canning decision if a court decides a 2010 labor board recess appointment Mr. Obama made is also invalid, said John Raudabaugh, also a former Republican labor-board member.
“Other courts have ruled differently on the recess appointment question, and the case is certainly going to be appealed,” said Lynn Rhinehart, co-general counsel of the AFL-CIO. “Nevertheless, employers are treating it as gospel and exploiting it to challenge all sorts of actions by the NLRB.”