A court just struck down Obama’s labor board. Here’s why it matters.

January 25, 2013

Big news: A federal appeals court has just ruled that President Obama exceeded his constitutional authority when he made three appointments to the National Labor Relations Board in January 2012 while the Senate was on break.


Not good news for Obama.

If the ruling stands — and that's still a question mark — it would mean two big things for the five-member labor board. First, the NLRB would have just one valid appointee left, which would prevent it from deciding any further labor cases. (At least three sitting members are needed for a quorum, though the board could still hold union elections and investigate unfair practices.)

Second, and just as significantly, hundreds of NLRB decisions that have been handed down since January 4, 2012 would suddenly become invalid. That includes rulings on everything from how workers can use social media to regulations on union dues-checkoffs.

Let's start with the first one: If the NLRB lost three of its members, labor experts warn that the agency would no longer be able to oversee union elections effectively. "Workers illegally fired for union organizing won’t be reinstated with back pay," explained former board chair William Gould. "Employers will be able to get away with interfering with union elections. Perhaps most importantly, employers won’t have to recognize unions despite a majority vote by workers. Without the board to enforce labor law, most companies will not voluntarily deal with unions.”

In theory, the Senate could solve this problem by confirming new appointees. Yet in recent years, Republicans have vowed to block all of Obama's NLRB appointees, particularly after the board filed a controversial lawsuit against Boeing in 2011. In response, the White House tried to recess-appoint three members to the board on Jan. 4, 2012 while the Senate was on break. (That's the move that the appeals court ruled unconstitutional.)

Since that time, the NLRB has handed down hundreds of decisions relating to various aspects of labor law. If the decision by the D.C. Circuit Court holds up, all rulings since Jan. 4 will vanish. Here's a sample of some decisions that could be invalidated:

— Protections for workers who use social media. Recently, the NLRB issued a series of rulings saying that employees have a right to discuss workplace issues without fear of retribution, even if those discussions take place on Facebook or Twitter. The NLRB forbade companies from banning "disrespectful" comments on social media as long as employees were engaged in conversation with each other. (There were some exceptions: Firms could step in to prevent lone workers from going on online "rants.")

— New rules on union dues-checkoffs. In a unionized workplace, the employer typically automatically withholds money from employee paychecks for union dues. But for 50 years, there was a key exception: Employers didn't have to do this if the collective bargaining agreement had expired. The unions had to collect dues on their own. In a December decision, however, the NLRB reversed this precedent, arguing that the employer needs to handle dues-checkoffs even during this period.

— Expanded powers for unions to get information from employers. Whenever unions are bargaining or filing grievances, they are allowed to ask their employers for "relevant" information — say, about health or safety conditions. But for a long time, employers had some leeway to resist these requests. Not any more: In a November decision involving two trucking companies, the NLRB ruled that "an employer must timely respond to a union request seeking relevant information even when the employer believes it has grounds for not providing the information.”

Over the past year, many companies and conservatives have criticized Obama's NLRB for issuing a slew of sweeping pro-labor rulings. But Kate Bronfenbrenner, a labor expert at Cornell, says the past year hasn't been particularly unusual. Labor boards appointed by Democratic presidents tend to look more favorably on workers and unions, while those appointed by Republican presidents tend to side with employers.

"It's always been a political agency," she says, "and it always swings back and forth."

Bronfenbrenner adds that if the D.C. Circuit Court's ruling is upheld and the NLRB does have to shut down — and if it sees a year's worth of work invalidated — that could make the agency even more dysfunctional in the years ahead. That's because all of those cases from 2012 will have to be reheard, and new cases will keep piling up. "If and when the Senate finally does confirm new appointees, the new board will have to confront a huge backlog."

It's still not clear, however, whether Friday's ruling will ultimately stand. The three-judge panel acknowledged that its ruling conflicted with other circuit court rulings on the subject of recess appointments, and the matter may ultimately end up before the Supreme Court.

In the meantime, the NLRB issued a statement saying that it disagrees with Friday's ruling and will continue operating normally until the legal issues are fully resolved. "The parties who come to us seek and expect careful consideration and resolution of their cases," said NLRB Chairman Mark Pearce, "and for that reason, we will continue to perform our statutory duties and issue decisions."

Further reading:

--Read the full text (pdf) of the decision.

--My colleague Robert Barnes explains the legal issues surrounding the case.

--Neil Irwin argues that the ruling, if it stands, could make the United States ungovernable.

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Neil Irwin · January 25, 2013