Companies challenging 2012 NLRB rulings should be cautious

On Tuesday, the National Labor Relations Board announced it will appeal to the Supreme Court a decision by the D.C. Circuit Court of Appeals that invalidated appointments to the NLRB made by President Barack Obama last year while lawmakers were on break. The validity of all board decisions made since the so-called recess appointments hangs on legal wrangling, but in the meantime, at least two healthcare providers are actively opposing decisions made by the board in 2012.

Prime Health Services, which owns 21 hospitals in California and three other states, said last year it would not follow an NLRB ruling that mandated the collection of union dues even after a collective bargain agreement with one of its employee unions had expired or a ruling that requires employers to provide certain materials to unions during internal investigations.

Likewise, HealthBridge Management LLC, a company that operates nursing homes in Connecticut, is fighting an injunction sought by the NLRB and granted by the Connecticut Circuit Court requiring HealthBridge to reinstate striking workers. Nearly 700 HealthBridge workers went on strike in July, citing unfair labor practices by the employer.

[See also: HealthBridge Management appeals injunction.]

Both of these moves could be a risky strategy, according to some attorneys, who expect that at the end of this political hardball game a sitting board will look similar to the one being challenged now.

“My advice to clients is that you need to expect at some time that there will be a solution to this gridlock,” said Seth Borden, a partner at international law firm McKenna Long & Aldridge, and a member of the firm’s Employer Services Group. “Maybe it won’t happen right away, but something has to change. We need to get seated members to this agency. Once we do, they will probably make decisions more closely aligned to the 2012 rulings than not.”

At issue in all of this was the D.C. Circuit Court’s decision in January 2013 that the president improperly made appointments to the National Labor Relations Board without the consent of Congress. The appointments of Sharon Block, Terence Flynn and Richard Griffin were made in January 2012, at a time when the president insisted Congress was in recess. Obama said he was exercising his recess appointment power at the time. The court, however, ruled that Congress was not in formal recess, and the appointments were therefore unconstitutional due to the lack of normal confirmation proceedings.

With the circuit court’s ruling, the five-seat board was left with only one actual member during 2012, Chairman Mark Pearce, meaning there board lacked a quorum and therefore was not authorized to make rulings on labor matters, the court said. Nevertheless, the board continued to meet and act throughout the year. Pearce, whose term expires in August, has said the board will continue meet until the matter is resolved once and for all.

That the NLRB matter may be headed to the Supreme Court is no surprise to those in legal circles.

Borden calls the NLRB dispute a classic example of the political deadlock that is gripping Washington. Sharon Block is a former labor counsel to Sen. Edward Kennedy, and Richard Griffin is a former general counsel for the International Union of Operating Engineers. Both Democrats had been nominated to the board previously, but their appointments had been blocked by Republicans.

Following the circuit court ruling, 40 Republican senators issued a letter asking Block and Griffin to immediately step down. Instead, in February, the presdient resubmitted them for appointment.

G. Roger King, an attorney with Jones King, said it could be fall before the matter is taken up by the Supreme Court, if it goes that far. In the meantime, he cautions employers planning to ignore or who are ignoring the decisions made by the board last year.

“My council would be that you cannot, you should not, ignore the decisions of the board,” King said. “I would suggest a middle-of-the-road approach.”

Still, it remains anyone’s guess what the end game will be, King said. He noted that 18 of the 28 Labor Relations Board offices around the country have new directors that were appointed by this “quorum-less” board.

“There have been challenges lodged against one regional director, and we expect more,” King said. “The board is being challenged at just about every level. This has become a major issue.”