NLRBInsight INSIDE WELCOME TO NLRB INSIGHT NLRB DECISION OF THE MONTH

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1 NLRBInsight A publication of the Labor, Immigration, and Employee Benefits Division ISSUE 1 JULY 2010 WELCOME TO NLRB INSIGHT In recent years, American labor policy has again become a hot topic of discussion, as demonstrated by the debate over the Employee Free Choice Act. However, the National Labor Relations Board (NLRB) has not been a significant player in the labor policy debate as, until recently, it has been deadlocked with one Republican and one Democratic member for more than two years. As of this writing, the Board is again at full strength with five sitting Members and it is anticipated that the Board will retain a functional quorum for the foreseeable future. We fully anticipate that the Board will now enter a very active period with numerous decisions and policy changes that will be of keen interest to all stakeholders. Many employers, trade associations, and others have expressed an interest in a periodic publication to assist them in identifying important developments at the NLRB with policy implications. We hope that this publication will help fill that need. As we move forward with this project, we encourage you to contact us with comments or suggestions about how this publication can be improved. NLRB DECISION OF THE MONTH Craig Becker is the first Board Member to have worked for a labor union immediately prior to service on the Board. Many cases involving his former employer, the Service Employees International Union, and its local affiliates are likely to come before the Board while he is a member. Consequently, many have wondered which cases he will recuse himself from and what criteria he will use to make the determination. This issue was among the more contentious during Member Becker s Senate confirmation hearing. Pomona Valley Hospital Medical Center, 355 NLRB No. 40 (June 8, 2010), presented the first opportunity for Mr. Becker to address this important matter as a Board Member and he used this case to rule on motions that he recuse himself in 13 cases pending before the Board. He denied all but one of the motions. In his opinion, Member Becker distinguished the recusal rules that apply to Board Members and the rules for federal judges, who by statute (28 U.S.C. 455) must recuse themselves in any proceeding in which their impartiality might reasonably be questioned. Instead, Becker relies on two sets of ethical standards he agreed to uphold as an employee of the Executive Branch of government, the Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR Part 2635) and Executive Order ( Ethics Commitments by Executive Branch Personnel ). As applied to Member Becker, these standards include significant restrictions on deciding cases involving clients or employers that he represented in the two years prior to his swearing in on April 5, Member Becker applied these standards to numerous arguments made in favor of recusal, three of which are especially noteworthy. With respect to the question of whether he would recuse himself from cases involving local unions affiliated with the SEIU, Member Becker announced a general rule that he will not recuse himself in such cases, a position that relies heavily on the argument that the SEIU is a separate legal entity INSIDE WELCOME TO NLRB INSIGHT... 1 NLRB DECISION OF THE MONTH... 1 THE NLRB IN CYBERSPACE... 2 SUPEME COURT RULES... 3 SETTING THE STAGE FOR REVERSING BROWN UNIVERSITY... 4 NLRB NOMINEES CONFIRMED... 5 ACTING GENERAL COUNSEL NAMED... 6

2 PAGE 2 NLRB Insight ISSUE 1 JULY 2010 from its local affiliates. However, Member Becker did indicate that there may be times when it would be appropriate to recuse himself in a case involving a local union, for example, if he had acted as counsel to a local union in the preceding two years. With respect to the argument that he had pre-judged issues, such as by taking public positions in law review articles, Member Becker stated that a reasonable person appearing before the Board will distinguish between the roles I played as an advocate and a scholar in the past and the position I now hold as a Member of the NLRB. I take this opportunity to assure the Moving Parties [seeking his recusal] in these cases, as well as all other parties to cases that may come before me, that I too understand that difference and can and will, in the words of the oath I took upon assuming this position, well and faithfully discharge the duties of the office on which I am about to enter. Member Becker did, however, agree to recuse himself from one case pending before the Board, Dana Corp., Case 7-CA-46965, et al. In that case, Becker was coauthor of a joint brief filed by the UAW and the amicus curiae AFL-CIO, for whom he served as counsel. The Dana case is significant because it challenges the authority of employers and unions to negotiate contractual language before the union is voluntarily recognized based on a card showing of support without a secret ballot election among the employees concerned. Under long-established Board precedent in Majestic Weaving, 147 NLRB 859 (1964), such prerecognition bargaining is deemed to be unlawful. The new Obama Board is expected to overturn Majestic Weaving and significantly narrow the scope of prohibited pre-recognition bargaining. Apparently, however, it will do so without the participation of Member Becker. For that reason, Pomona Valley Hospital Medical Center is the NLRB decision of the month. THE NLRB IN CYBERSPACE: ELECTRONIC POSTING, ELECTRONIC SOLICITATION, ELECTRONIC BALLOTING There are numerous issues before the Board that relate to the use of technology in union organizing and in other contexts, and the Board has taken the first steps toward making significant changes in these areas. On June 9, 2010, the Board published a request for information related to procuring and implementing secure electronic voting services both for remote and on-site union elections. The potential for remote electronic balloting that is employees voting in a union representation election by telephone, or internet as opposed to traditional secret ballot elections supervised by an NLRB agent to prevent misconduct or voting fraud. Many who are familiar with coercion in the signing of authorization cards are especially troubled by the potential for coercion in remote electronic voting and wonder how secrecy and a non-coercive environment be guaranteed without the presence of a Board agent. Some speculate that this proposal may tie in with a broader push to significantly reduce the time frame for elections. The Board s current goal is 42 days, and the average was 38 days last year, but some would like to see that time period reduced to as little as one or two weeks. Such a significant shortening of the campaign period would prevent employers from effectively communicating their perspective about unionization and would prevent employees from being fully informed prior to a vote. Remote electronic voting could exacerbate this problem, especially if the free speech restrictions that apply during mailballot elections are extended to electronic voting (for example, the ban on speeches to massed employees articulated in Oregon Wash. Tel. Co., 123 NLRB 339 (1959)). The Board is expected to reverse many existing case precedents, as well. One very significant decision which is expected to be reversed is The Register Guard which deals with electronic solicitation by employees at work. Currently, Board law allows employers to maintain policies prohibiting the use of the company s intranet and system for nonbusiness purposes, including union solicitation. In dissenting from the majority s opinion, Chair Wilma Liebman described that decision as making the NLRB the Rip Van Winkle of federal agencies. It is a safe bet that the Board will be looking to overturn this decision giving employees significantly greater opportunity to campaign for a union and solicit

3 PAGE 3 NLRB Insight ISSUE 1 JULY 2010 support from other employees via the company s own electronic equipment. The Board has also turned to cyberspace with respect to remedies. On May 14, 2010 the Board requested amicus briefs on a requirement for electronic posting of remedial Board Orders in unfair labor practice cases and settlements, where the employer would be compelled to send out the Board s Order via and intranet to its employees rather than, or perhaps in addition to, the traditional posting on company bulletin boards. The Chamber wrote an amicus brief in urging that the electronic posting requirement should only be required, if at all, in certain egregious cases, but added that whatever the Board does with respect to Orders announcing unfair labor practices committed by employers it should also do with regard to union unfair labor practices. Unions should be compelled to send the Board s Orders to their members via and on the union s website if employers are compelled to post Orders electronically. Finally, the NLRB has announced a new Twitter account. You can follow the NLRB at Twitter.com/NLRB. Welcome to the brave new world of union organizing and voting in cyberspace. SUPREME COURT RULES THAT 2-MEMBER BOARD COULD NOT ISSUE ORDERS In a stunning rebuke to the National Labor Relations Board, Justice John Paul Stevens authored a 5-4 ruling that the two-member Board, which had operated for more than two years and issued hundreds of decisions, lacked the statutory authority to decide cases in the absence of a quorum. In New Process Steel, 560 U.S. (June 17, 2010), the Court held that Section 3(b) of the National Labor Relations Act, the so-called delegation clause, authorizes the Board to delegate its powers only to a group of three or more members, and that the group must maintain a membership of three in order for the delegation to remain valid. Justice Stevens was joined by Chief Justice Roberts and Justices Scalia, Thomas and Alito. Justice Kennedy filed a dissenting opinion. As 2007 came to a close, the Board found itself with four members and one vacancy, and anticipated that when Congress adjourned the recess appointments of two of the four Members would expire which would leave the Board with only two Members. Since Senate Majority Leader Harry Reid decided not to recess or adjourn the Senate, thereby denying then-president Bush the opportunity to make recess appointments to fill the vacancies, the Board devised a plan to keep the Agency running with only two Members by having three Members delegate authority to the remaining two Members. To be fair, this is not the first time the Board has operated in such a manner. In fact, a 2003 opinion letter by the Justice Department s Office of Legal Counsel was relied upon by the Board to provide the legal basis for its plan. However, the Board has never operated in this manner for such an extended period of time. To the contrary, in this instance the Board operated with only two Members for 27 months. During this time the two remaining Board Members, one a Democrat and the other a Republican, agreed to issue decisions for those cases in which they both agreed on controlling Board precedent and deferred consideration when they could not. They issued decisions in more than 600 cases during this time, while deferring consideration in over 100 cases. As Justice Stevens wrote: The Rube Goldberg-style delegation mechanism employed by the Board in 2007 delegating to a group of three, allowing a term to expire, and then continuing with a two-member quorum of a phantom delegee group is surely a bizarre way for the Board to achieve the authority to decide cases with only two members. In fact, he stated: We are not insensitive to the Board s understandable desire to keep its doors open despite vacancies. Nor are we unaware of their costs that delay imposes on the litigants. If Congress wishes to allow the Board to decide cases with only two members, it can easily do so. But until it does, Congress decision

4 PAGE 4 NLRB Insight ISSUE 1 JULY 2010 to require that the Board s full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than swept aside in the face of admittedly difficult circumstances. He concluded with what will become a memorable line: Section 3(b), as it currently exists, does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag after the dog died. The impact of the Court s decision on the 600 cases decided by the Board is now unclear. According to the Board, at the time of the Court s decision, 96 of the decisions were on appeal. On July 1, 2010, the Board announced that it would seek to have each of these decisions remanded. It also announced that Chair Liebman and Member Schaumber would participate in all of the panels considering these cases with at least one additional Member. Complicating the Board s plan, however, is the fact that some federal appellate courts have already begun acting on these cases. While some courts have remanded the cases, others have not. For example, the Eight Circuit has denied the Board s application for enforcement of its decisions in at least two cases, NLRB v. Whitesell Corp., (Jun. 10, 2010) and NLRB v. American Directional Boring, Inc., (Jun. 24, 2010). Furthermore, the impact on the approximately 500 cases not under appeal is unknown. While we expect that many of the issues raised in these cases will now be moot, many novel issues may yet arise stemming from these decisions. SETTING THE STAGE FOR REVERSING BROWN UNIVERSITY UAW MOVES QUICKLY TO PURSUE GRADUATE TEACHING ASSISTANTS The United Auto Workers obviously anticipates that the new majority at the Obama NLRB will vote to overturn Board precedent in Brown University, 342 NLRB 483 (2004), which held that teaching and research assistants are students with a predominantly academic relationship with their schools rather than employees. Under the Brown University decision graduate teaching assistants and researchers are not covered by the National Labor Relations Act and do not have the right under federal law to compel their employer to enter into collective bargaining. On May 3, 2010 Local 2110 of the Graduate Students Organizing Committee (GSOC)/UAW, filed a petition with the National Labor Relations Board seeking a representation election for some 1,800 graduate teaching and research assistants at New York University (NYU). The petition alleged that more than 50 percent of the teaching and graduate assistants had signed union authorization cards and that on April 26 the union had demanded that NYU President John Sexton voluntarily recognize the union but that he had refused. In a prepared statement, the UAW stated that it was counting on the two new Democratic members on the NLRB, Members Craig Becker and Mark Pearce, to reverse the 2004 Brown University decision. According to the UAW, such a decision would then lead to the unionization of tens of thousands of research and teaching assistants in the private sector. A statement by NYU officials, on the other hand, said the matter was now largely moot as most assistantships have been eliminated and replaced by fellowships without teaching responsibilities. Ironically, the Brown University ruling overturned an earlier 2000 Board decision involving NYU. The Board s earlier NYU decision had found that graduate assistants at NYU are employees within the meaning of the National Labor Relations Act and therefore had the protected right to organize and bargain collectively. New York University, 332 NLRB 1205 (2000). Thereafter, NYU graduate assistants voted for representation by GSOC/UAW and negotiated a first contract. However, when their first contract expired, NYU refused to negotiate a new contract based on the Board s intervening Brown University decision. The graduate assistants then struck the university for seven months. The new NYU case which might be dubbed NYU II could be the test case for challenging, and possibly

5 PAGE 5 NLRB Insight ISSUE 1 JULY 2010 overturning, the Brown University decision. In her dissent in Brown, current Chair Wilma Liebman described the decision as being woefully out of touch with contemporary academic reality noting as if there is no room in the ivory tower for a sweatshop. At that time, she predicted that the developments that brought graduate students to the Board will not go away. 342 NLRB at Go away it did not. The union representing those graduate assistants is, indeed, back. Member Becker has also expressed his views on this issue, albeit before he was sworn in as a Board Member. In 2005 Becker co-authored an article with AFL-CIO General Counsel Jonathan Hiatt, strongly criticizing, among other things, the NLRB s drastic limitation of the coverage of the Act specifically referencing graduate [school] assistants being paid to teach classes or perform research as deserving coverage. At Age 70, Should the Wagner Act be Retired? 26 Berkeley Journal of Emp. & Lab. L. 293 (2005). Thus, when the issue of the Act s coverage of graduate teaching assistants reaches the Board later this year, perhaps as NYU II, we think it is a safe bet that Brown University will be overturned. NLRB NOMINEES PEARCE AND HAYES CONFIRMED BY THE SENATE On June 22, 2010, Mark Gaston Pearce and Brian Hayes were confirmed by unanimous consent in the Senate as Members of the National Labor Relations Board. Both had been nominated by President Obama in July, The nomination of former AFL-CIO and SEIU Assistant General Counsel Craig Becker was not acted upon, although he will continue to serve a recess appointment that is valid until Congress adjourns at the end of The term of Mr. Pearce, who was recess-appointed to the Board by the President prior to his Senate confirmation, will expire in August He was a founding partner of the Buffalo, New York law firm of Creighton, Pearce, Johnsen & Giroux, where he practiced union-side labor and employment law before state and federal courts and agencies. From 1979 to 1994, he was an attorney and District Trial Specialist for the NLRB in Buffalo, NY. Pearce received his law degree from State University of New York, and his undergraduate degree from Cornell University. Mr. Hayes, who served as the Republican Labor Policy Director for the U.S. Senate Committee on Health, Education, Labor and Pensions prior to being confirmed, will fill a term expiring in December Previously Mr. Hayes was in private practice for 25 years representing management clients in labor and employment law. He began his legal career as a clerk for the NLRB s Chief Administrative Law Judge, and later served as counsel to the Board Chairman. Mr. Hayes earned his undergraduate degree from Boston College and his law degree from Georgetown University Law Center. With the confirmation of Messrs. Pearce and Hayes, the NLRB is at full five-member strength for the first time since December However, that will be short-lived because the term of Republican Member Peter C. Schaumber expires in late August of this year. Chairman Wilma Liebman s term will expire in August of 2011, and the recess appointment of Member Craig Becker is due to expire at the end of CAREER BOARD-SIDE LAWYER NAMED ACTING GENERAL COUNSEL Effective Monday, June 21, veteran NLRB attorney Lafe Solomon was appointed by President Obama to serve as Acting General Counsel, the top investigative and prosecutorial position in the agency. Ronald Meisburg, the previous General Counsel, resigned effective June 20 to join the law firm of Proskauer Rose. His term was due to expire in August, Mr. Solomon was appointed to the position under the Federal Vacancies Reform Act of Mr. Solomon began his career at the NLRB as a field examiner in Seattle in For the past decade he directed the NLRB s Office of Representation

6 PAGE 6 NLRB Insight ISSUE 1 JULY 2010 Appeals on the Board-side of the Agency. Before that he served in various positions on the Board side of the agency, including as staff attorney to 10 Board members: Members Don Zimmerman, Donald Dotson, Robert Hunter, John Higgins, James Stephens, Mary Cracraft, John Raudabaugh, William Gould, Sarah Fox and Wilma Liebman. He earned a B.A. degree in Economics from Brown University and a J.D. from Tulane University. When Board Member Peter Schaumber s term expires in August, many expect a political package consisting of Schaumber s Republican replacement and a candidate for the General Counsel position most likely a union-side lawyer. NLRB Insight is a publication of the Labor, Immigration, and Employee Benefits Division of the U.S. Chamber of Commerce. The U.S. Chamber of Commerce is the world s largest business federation, representing the interests of more than three million businesses and organizations of every size, sector, and region. For more information, please contact the Chamber s Labor, Immigration, and Employee Benefits Division at or laborpolicy@uschamber.com. Editor: Michael J. Eastman, Executive Director, Labor Law Policy, U.S. Chamber of Commerce Contributing Editors: Harold P. Coxson, Jr., Ogletree Deakins, Washington, DC Christopher R. Coxson, Ogletree Deakins, Morristown, NJ