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 & the National Labor Relations Board

- January 2014

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, no labor-friendly legislation has been considered in the 113th Congress.

Although labor has had few legislative victories, the pro-labor assault on the American workplace continues to manifest itself aggressively in the regulatory arena. Both the National Labor Relations Board (NLRB) and the Department of Labor (DOL) 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 the NLRB:

Nominations for membership on the five-member NLRB are made by the president subject to the advice and consent of the Senate, and the Supreme Court ruled in 2010 in New Process Steel that the NLRB must have a quorum – at least three members – properly seated in order for the Board to rule on cases. On a number of occasions the Senate has refused to confirm controversial nominations to the Board, leaving the Board without a functioning quorum.

That was the situation at the end of 2011, when the Board was reduced to two sitting members and lacked the quorum necessary for it to act.

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 flagrantly defied the Senate’s constitutional right of advice and consent by making these recess appointments when the Senate was NOT in recess, claiming that he, and not the Senate, had the authority to decide when the Senate was in session or in recess. An immediate court challenge to the recess-appointed board was filed, with additional challenges filed throughout 2012 as the constitutionally-challenged Board continued to vote on new rules and cases.

The Coalition for a Democratic Workplace (CDW), which NAW helps manage, participated in one of the early court challenges, Noel Canning. In January, 2013, in a unanimous 3-0 decision, the D.C. Circuit court held in the Noel Canning case that President Obama’s recess appointments were unconstitutional.

The Board appealed the D.C. Circuit Court decision to the Supreme Court, the high Court granted certiorari and agreed to hear the case, and it will be argued this month. CDW filed amicus briefs in both the petition for certiorari and in the appeal.

In the interim, the 3rd Circuit Court of Appeals similarly ruled in another case, New Vista, that the NLRB recess appointments were unconstitutional. The Third Circuit further specifically held that a previous recess appointment, as well as the two subsequent appointments, was unconstitutional. As a result of this decision, the NLRB lost its quorum, and its right to act, in August 2011.

The impact of the Noel Canning decision:

Despite the court ruling that the recess appointments were unconstitutional and invalid, the tainted Board continued to act as if the court had never ruled. And despite the court decision, the President subsequently sent to the Senate for confirmation the names of five nominees for the NLRB, including the two recess appointees who continued to serve on the Board after their appointments were declared unconstitutional. Senate Republicans responded angrily, and notified the President that under no circumstances would they allow the confirmation those individuals.

A stalemate resulted, but the Senate Republicans had an advantage. Chairman Pearce’s term on the Board would expire in August, 2013, and with that expiration, the board would be reduced to only the two unconstitutional and invalid recess appointees – in other words, there would be no properly-seated members.

The President finally withdrew the nominations of the controversial recess appointees and nominated new individuals to the Board, properly subjecting them to the advice and consent of the Senate. The recess appointees resigned from the Board, the Senate confirmed the new nominees, and in July, 2013, the Board had a legal quorum for the first time in two years.

While the Board can now legally function, the actions it took in the years in which it lacked a quorum continue to have an impact on court actions across the country. They issued many hundreds of rulings and decisions, 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, there are now more than 120 cases in the circuit courts of appeal in which the recess appointment issue has been raised, and some companies have announced that they will no longer comply with Board orders issued by the recess-appointed Board.

Now that the Board has a legally-seated quorum we can expect, and NAW and our allies in CDW are preparing for, increased pro-union case decisions and rule-making from the Board.

Finally, the Supreme Court decision in the Noel Canning case could have a profound impact on the entire process of Presidential recess appointments. If the Supreme Court upholds the far-reaching decisions of both the 3rd and D.C. Circuits, President Obama’s abuse of power in defying the Senate’s constitutional right to advice and consent on executive branch nominations could well limit the power of all future presidents by severely limiting their recess appointment power.