Congress could potentially paralyze the National Labor Relations Board (“NLRB”) by refusing to permit President Obama to appoint new NLRB members. This action would prevent the NLRB from issuing decisions or pursuing its regulatory agenda (unless the NLRB tries to finalize its pending regulations very quickly which it may be planning to do).
When fully staffed, the NLRB has five members. By longstanding tradition, three members come from the President’s party and two from the other party. A quorum of the NLRB requires three members. NLRB members serve staggered, five-year terms and must be confirmed by the Senate. The President can fill NLRB vacancies temporarily by making recess appointments while the Senate is in recess. Recess appointments expire at the end of the Senate’s next session.
At the beginning of 2011, the NLRB had four members. One member’s term expired in August 2011. Another member received a recess appointment from President Obama in 2010 (when Democrats controlled both the House and Senate). The recess appointment will expire at the end of 2011, which would reduce the NLRB to only two members. President Obama has nominated two individuals to fill NLRB vacancies. These nominations are pending in the Senate.
Since President Obama’s election, the NLRB has pursued a controversial, pro-union policy agenda, including: (1) issuing new regulations requiring employers for the first time ever to post notices explaining employees’ rights under the National Labor Relations Act even when the employers have not violated the law; (2) issuing new regulations making significant changes favoring unions to how union elections are conducted; and (3) issuing pro-union decisions that overrule existing law.
The NLRB’s Acting General Counsel has also been controversial. Most notably, the Acting General Counsel is currently prosecuting Boeing for allegedly unlawfully choosing to build a new assembly plant in Charleston, South Carolina instead of expanding production in Boeing’s unionized operation in Puget Sound, Washington. This prosecution has drawn widespread publicity and Congressional scrutiny.
Members of Congress unhappy with the NLRB’s actions have few options. Although Congress can and has blocked President Obama’s NLRB nominees, Congress cannot compel President Obama to nominate NLRB members it finds acceptable. President Obama can make recess appointments if his nominees are not confirmed by the Senate. Congress cannot prevent the pro-union NLRB majority from pursuing its policy agenda unless Congress can pass legislation that is signed by the President, which is highly unlikely.
Despite these obstacles, Congress can prevent the NLRB from taking further actions Congress finds undesirable. In its 2010 New Process Steel decision, the Supreme Court found that the NLRB could not issue decisions unless a quorum of at least three members existed. After the 2010 elections, Republicans took control of the House of Representatives. Although Democrats retained control of the Senate, the House can prevent Congress from recessing, which prevents President Obama from making recess appointments.
So by the end of 2011, the NLRB could lack a quorum unless at least one new NLRB member is in place (either confirmed by the Senate or through a recess appointment). This would have significant implications. The Acting General Counsel could continue to issue and prosecute complaints and administrative trials would continue, but the NLRB could not affirm or reverse recommended decisions from administrative law judges. All cases pending before the NLRB would be in limbo. The NLRB’s back log of cases awaiting decision would grow.
The NLRB also could not issue regulations absent a quorum. And there could be disputes (and litigation) over a variety of administrative actions which require NLRB approval.
Anticipating a lack of a quorum, the NLRB released an order on November 8, 2011 delegating authority on a “contingent basis” to the Acting General Counsel when the Board has less than three members. This order purports to provide the Acting General Counsel “full authority on all court litigation matters that would otherwise require Board authorization, and full authority to certify the results of any secret ballot election conducted under the National Emergency provisions of the Labor Management Relations Act.” The NLRB specifically authorized the Acting General Counsel to initiate emergency injunction proceedings. The effectiveness of this attempt to delegate the NLRB’s authority to the Acting General Counsel could be subject to legal challenges.
We will be monitoring this situation closely going forward.