WHOLESALE DISTRIBUTION BEST PRACTICES

Leading wholesaler-distributors depend on NAW Institute for Distribution Excellence groundbreaking research studies because they help solve real-world business challenges.

 

YOUR 5-YEAR GROWTH ROADMAP


 

Order copies of Facing the Forces of Change®: Navigating the Seas of Disruption for everyone on your team!

 

NAW News

Labor Issues

- May 2013

Overview:

With the election in 2010 of a Republican majority in the House and significant GOP gains in the Senate, organized labor’s legislative agenda ground to a halt in the 112th Congress. Pro-labor legislation was not taken up in either house of Congress. Despite the defeat of business-friendly Republicans in both houses of Congress in 2012, many of them replaced by aggressively pro-labor Democrats, the threat of union-backed legislation passing either house remains very low in the 113th Congress.

Although labor has had few legislative victories, the pro-labor assault on the American workplace will continue to manifest itself aggressively in the regulatory arena. With the re-election of President Obama, both the National Labor Relations Board and the Department of Labor are expected to increase their activity and begin moving on regulations that have been in the queue in both agencies. (See separate Staff Report on the Regulatory Agenda.)

Recess appointments and convoluted status of the NLRB:

With the expiration on December 31, 2011, of the term of recess-appointed Board Member Craig Becker, the Board was reduced to two sitting members, Chairman Mark Pearce (D) and Member Brian Hayes (R). Because of the Supreme Court ruling in 2010 in New Process Steel that the Board must have at least three of five sitting members in order to rule on cases, the end of Becker’s term meant that the Board would not have been able to take action on any significant measures.

It was hoped that a two-member Board unable to act would provide an incentive to the Administration and Senate to make a real effort to find acceptable compromise nominees – no more radical labor advocates like Craig Becker – so the Board could continue to function.

Unfortunately, finding common ground with the Senate was not in the Administration’s political game plan. In December, 2011, President Obama nominated pro-labor advocates to fill two of the Board vacancies (a Republican had been nominated for the GOP seat on the Board a year earlier, but the Democrat-controlled Senate refused to act on that nomination). And in January 2012, before the Senate could take any action at all on these nominees, President Obama recess-appointed all three nominees to the Board.

The President conspicuously ignored the Senate’s constitutional right to provide “advice and consent” on nominations by making these controversial recess appointments before the Senate had any opportunity to review the nominations. As a result, an immediate court challenge to the recess-appointed board was filed, with additional challenges filed throughout 2012 as the constitutionally-challenged Board voted on new rules and cases. The Coalition for a Democratic Workplace (CDW), which NAW helps manage, was granted the right to file a brief as an intervener in one of those cases, Noel Canning. Briefs in that case were submitted in September, and the court heard oral arguments in the case on December 5th.

In January, in a sweeping, unambiguous, and unanimous 3-0 decision, the D.C. Circuit court held that President Obama’s recess appointments were unconstitutional. The court wrote: "Because we agree that the appointments were constitutionally invalid and the Board therefore lacked a quorum, we grant the petition for review and vacate the Board's order."

The Court specifically rejected the Obama Administration's Justice Department Office of Legal Counsel argument that the President has the authority to determine when the Senate is or is not in "recess" for the purpose of making recess appointments, writing:  "This will not do.  Allowing the President to define the scope of his own appointments power would eviscerate the Constitution’s separation of powers … An interpretation of 'the Recess' that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and consent requirement …"

Not only does the Noel Canning decision affect the current two recess appointees, it also calls into question the 2010 recess appointment of Craig Becker, who was also named while the Senate was not in a recess as defined by the Court.

In March the Board announced its intention to appeal the Noel Canning decision to the U.S. Supreme Court; their petition to the Supreme Court is due by April 25.

NAW and The Coalition for a Democratic Workplace (CDW) have been involved in this case from the beginning, and will file an amicus brief in the Supreme Court appeal.

The impact of the Noel Canning decision: Despite the court ruling that the recess appointments were unconstitutional and invalid, the now-tainted Board has continued to act as if the court had never ruled. They have issued hundreds of rulings and decisions – and hundreds more during recess-appointee Becker’s tenure – all of which are now subject to challenge. Multiple court challenges to these decisions are expected, the recess appointment issue has now been raised in a number of cases already pending before the Board, and some companies have announced that they will no longer comply with Board orders issued by the recess-appointed Board.

Despite the clear court decision in Noel Canning, the President has sent to the Senate for confirmation the names of five nominees for the NLRB, including the two recess appointees who continue to serve on the Board despite their appointments being found unconstitutional. Senate Republicans have made it clear that they will not allow the confirmation of any nominees until the recess appointment issue is finally resolved and as long as the two challenged appointees remain on the Board.

At present, Chairman Pearce is the only properly-nominated and confirmed member of the NLRB, and his term expires on August 27, 2013. Unless the Senate Republicans agree to confirm nominees in the next few months – action no one believes likely – when Chairman Pearce’s term expires, only the two unconstitutional recess appointees will remain on the Board, leaving them without the 3-vote quorum necessary for them to act.

Unless, of course, the President defies the court, in the middle of a Supreme Court appeal, and recess-appoints additional Board members …