GM 13-016

Court Rules Obama NLRB Appointments Invalid

On January 25, 2013, the U.S. Court of Appeals for the D.C. Circuit ruled in Canning v. NLRB that President Obama’s recess appointments of three members of the National Labor Relations Board (NLRB) were invalid because the U.S. Senate was not in recess at the time of the appointments.

The court’s ruling almost certainly means that, unless reversed by an en banc court or by the U.S. Supreme Court, every NLRB decision issued since January 4, 2012, is invalid and must be reheard after a quorum is properly appointed. It must be noted that the effect of the decision has been called into question by the NLRB. In a statement posted on the NLRB Website, the NLRB Chairman takes the position that the ruling only affects the Canning case and that the NLRB will go on “to perform our statutory duties and issue decisions.”

On February 13, 2013, President Obama re-nominated two of the three members of the NLRB whose appointments the D.C. Circuit Court found invalid. Both nominees are Democrats. There are no Republicans serving on the Board at this time. The re-nomination will now give the Senate the opportunity to provide advice and consent on the nominees. House Republicans sent a letter to the President the same day asking that he work with the Senate by nominating a full board that can be constitutionally confirmed. It is unlikely, though, that such confirmations will occur quickly.

For Indian tribes, the lack of a quorum on the NLRB means that three pending cases involving tribal casinos are now in limbo. The three cases involve the Little River Band of Ottawa Indians which operates the Little River Casino Resort in Michigan, the Saginaw Chippewa Indian Tribe which operates the Soaring Eagle Casino and Resort in Michigan, and the Chickasaw Nation which operates the WinStar World Casino in Oklahoma. In each of the cases, the Tribes are challenging the jurisdiction of the NLRB over them and argue that the NLRB’s 2004 San Manuel ruling was incorrect.

In the Saginaw Chippewa case, an administrative law judge (ALJ) ruled in 2012 that the National Labor Relations Act (NLRA) applied to the Tribe and that the Tribe’s no-solicitation policy violated the NLRA. The ALJ also ruled that the Tribe engaged in unfair labor practices and retaliation by firing an organizer. The Tribe took its case to the full Board.

In the Little River Band case, the Tribe enacted its own preemptive labor relations ordinance. The NLRB charged that the ordinance, which restricts organizing and bans strikes, is an unfair labor practice. In 2010, a federal district court dismissed the Tribe’s suit for an injunction against the Board. The case proceeded administratively and is now before the full Board. No decision has been made.

In the Chickasaw Nation case, the Teamsters union brought an unfair labor practices charge against the casino in 2010. In 2011, a federal district court issued an injunction against the NLRB from proceeding with the case. While the NLRB appealed to the Tenth Circuit Court of Appeals the case was remanded to the NLRB for further proceeding under a settlement agreement between the Chickasaw Nation, the Teamsters Union and the NLRB. In those proceedings the NLRB is to determine whether the Nation’s assertion that the NLRB lacks jurisdiction is an unfair labor practice. The status of those remanded proceedings is now uncertain. While the two NLRB cases remain in limbo, that effectively precludes the NLRB from reversing its current position in San Manuel that it may exercise jurisdiction over Indian tribes in certain cases.

The Board’s lack of a quorum also affects a number of decisions it issued in 2012. Those cases involved the use of “at will” language in employee contracts, restrictions on Facebook and Twitter to organize, confidentiality of internal investigations, forced arbitration, off-duty workers’ access to parking lots, micro-unit organizing, and the new quickie elections rule which was promulgated because the courts found the old rule was done without a quorum back in 2011.

We understand that the NLRB will first ask for review by an en banc court and then, if that is not successful, by the U.S. Supreme Court.

Please let us know if we may provide additional information on this issue.