May 21, 2012Client Alert

NLRB Rulemaking Again Found Invalid by Federal Court

Last week, another federal court threw out another rule recently adopted by the National Labor Relations Board (NLRB). The challenged rule, which was effective April 30, involved the so-called “ambush” or “expedited” election procedure for determining whether a majority of employees wish to be represented by a labor organization for purposes of collective bargaining.  The court ruled that since a three-member quorum was required to engage in rulemaking under the National Labor Relations Act (NLRA), the challenged expedited election rule, approved by just two members of the NLRB, was invalid.  See Chamber of Commerce of the United States, et al v. NLRB, Case No. 11-2262 (D.C. May 14, 2012). Previously, the District of Columbia District Court and a South Carolina District Court had found another invalid NLRB rule, the rule on Notice of Rights Posting, and that rule is enjoined while on appeal.


This recent decision is not remarkable. The Court ruled that the final rule adopting the new election procedures was the NLRB’s action of December 16, 2011. At that critical vote, two members voted in favor of the rule, but the only other active member did not vote. Since a three-member quorum is required under the NLRA, the December 16 rule is invalid. The NLRB argued that the “no show” member, Brian Hayes, had participated in previous votes and made his objection to the rule known so either (1) his prior actions regarding the Rule as it proceeded constituted a quorum, or (2) even if the December 16 vote was the necessary final act, his failure to vote was not determinative but, rather, his status as an active member was enough to constitute a quorum. The District Court ruled otherwise finding a lack of quorum at the critical final stage of rulemaking. A complicating factor in this case arises since the critical vote here was not part of a typical in-person meeting but, rather, as part of an “electronic meeting” with members circulating the final draft rule and asking for action by electronic means. On appeal, there may be a different view by a reviewing court on what it means to be “present” to constitute a quorum. 


While the case will likely be appealed by the NLRB, they may also or alternatively decide to re-vote on the rule. Since December 16, the NLRB has added two new members.  However, since those members were added during a “recess” of the U.S. Senate, and whether the Senate was actually in “recess” is in itself disputed, the quorum challenge remains. 


While the Board has asserted itself with aggressive, pro-union rulemaking, the employer community is equally resolved to challenge these rules in court. So far, it’s been a stalemate.  For now, employer’s compliance obligations for union elections remain unchanged. However, prudent employers should be prepared to file a quick response should an election petition be filed in order to assert their rights over the election procedures. Also, once a petition is filed, one can anticipate that the election period will be expedited and the prudent employer not only needs to be prepared with its own message in an election, but also communicate with its employees pre-election (before card signing) about unions and what they can and cannot actually deliver. Michael Best will continue to monitor these issues and will provide updates in future alerts.
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