April 5, 2010

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Labor Law Alert: Obama Delivers Change to the NLRB

Dramatic change is coming to U.S. labor law. The precise timing and the exact nature of the changes are uncertain, but what is certain is that significant changes to federal labor law are on the near horizon.

Over intense Republican objection, on March 27, 2010, President Obama announced his decision to bypass the Senate and appoint two of the three pending nominees to the National Labor Relations Board ("NLRB" or the "Board") via recess appointments. The NLRB recess appointees are controversial SEIU and AFL-CIO attorney, Craig Becker, and union labor lawyer, Mark Pearce, both Democrats.

Becker was first nominated in July of 2009 as part of a three-person package to fill the five-member NLRB. The business community vigorously opposed Becker's nomination from the very beginning, questioning his neutrality and ability to fairly administer and enforce labor laws given his radical views on employer rights and how labor law changes can be implemented. Nonetheless, on October 21, 2009, the Senate's Health Education Labor and Pensions ("HELP") Committee approved the nominees by a vote of 15 to 8 as to Becker, and unanimously as to Obama's other two nominees, Brian Hayes and Mark Pearce. After the committee vote, Senator John McCain (R-AZ) placed a hold on Becker's nomination.

Because the Senate adjourned at the end of 2009 before confirming or rejecting Becker's nomination, Obama renominated Becker on January 20, 2010. The HELP Committee held a hearing on Becker's nomination on February 2, 2010, and approved the nomination in a 13-10 party-line vote on February 4, 2010. That same day, however, Senator Brown (R-MA) was sworn into the Senate, eliminating the Democrats' 60 vote majority. On February 9, 2010, Becker failed to win the necessary 60 votes to overcome a filibuster of his nomination.

Obama warned of recess appointments if the Senate did not act on his nominations. All 41 GOP senators wrote to Obama days before his announcement urging him not to appoint Becker over the Senate's Easter break. "We oppose Mr. Becker's recess appointment because of his extensive, highly controversial writings, and his entire legal and scholarly career, all of which indicate that he could not be viewed as impartial, unbiased, or objective in deciding cases before this quasi-judicial agency," the GOP letter said. "Instead, his writings clearly indicate that he would use his position on the NLRB to institute far-reaching changes in labor law far exceeding the Board's authority and bypassing the role of Congress."

In addition to representing the SEIU and AFL-CIO, Becker has written articles expressing starkly pro-union, anti-business views. His views regarding federal law are considered extreme, even by some Democrats in the Senate. In particular, Becker has argued that traditional notions of democracy should not apply in union elections and employers should be stripped of any legally cognizable interest in their employees' election of representatives. In fact, Becker would like to bar employers from many NLRB proceedings, and has argued that employers should have no right to be heard in either a representation case or an unfair labor practice case involving union organizing. Even more extraordinary is Becker's suggestion that employees should be compelled to join labor unions: ". . . it could be argued that industrial democracy should be made more like political democracy by altering the nature of the choice presented to workers in union elections. Such a reform would mandate employee representation, and the question posed on the ballot would simply be which representative."

The U.S. Chamber of Commerce issued a statement denouncing the recess appointment of Becker and warning that "[t]he business community should be on red alert for radical changes that could significantly impair the ability of America's job creators to compete." As a member of the NLRB, Becker is now in a position to make his radical views national policy, particularly given his view that changes in the law can be implemented without Congressional approval.

To understand exactly what is at stake, it is necessary to understand the potential power of an Obama Board, which can make policy for all employers, not just those with unionized workforces. The composition of the NLRB can have a tremendous effect on how business is done in America. For example, many fear, with good reason, that an Obama Board will overturn a number of key decisions, including the Dana Corporation ruling (2007) which modified existing card check provisions to permit decertification of a union within 45 days of recognition; the Register Guard decision (2007) in which the Board held that an e-mail system is employer property from which union organizing activities may be excluded; and the Oakwood Health Care decision (2006) which confirmed that those who "assign" work and "responsibly direct" employees are supervisors and excluded from union representation.

The NLRB, which establishes and enforces federal labor law, has been operating with only two members for more than two years, Wilma Liebman (D), whose term is set to expire in August 2011, and Peter Schaumber (R), whose term is set to expire in August 2010. With the addition of Craig Becker and Mark Pearce, whose terms are set to expire at the end of 2011 when the Senate finishes its term, the Board's composition shifts to three Democrats and one Republican. Absent further action, the traditionally bipartisan Board will be entirely Democratic in August of this year when the sole Republican's term expires.

Interestingly, Obama did not use a recess appointment for the Republican nominee, Brian Hayes. This was presumably a tactical maneuver to encourage the Senate to confirm his original package of Becker, Pearce, and Hayes, whose appointments are all still pending in the Senate. A recess appointment ends at the completion of the next Senate session or when a person is nominated and confirmed to the job, whichever comes first. Accordingly, the Senate could still confirm the original three-person package in order to get Hayes on the Board. If confirmed, his term would expire in December 2012. However, confirming the package would extend Becker's term until December 2014 and Pearce's term until December 2013, giving Obama's nominees more time to make a substantial imprint on federal labor law.


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