By: Adam C. Abrahms, Kara M. Maciel, Steven M. Swirsky, and Mark M. Trapp

The U.S. Supreme Court today held that the US Senate was not in recess on January 4, 2012, when President Obama made three “recess” appointments to the National Labor Relations Board under the Constitution’s Recess Appointment Clause. In simple terms that means that the recess appointments were not proper and decisions in which the recess appointees participated were not valid.

What this now means is that hundreds of cases decided by the NLRB following the January 4, 2012 recess appointments to the Board from January 4, 2012 until the Senate confirmed the current Board members who joined the NLRB as of August 12, 2013, were unconstitutionally decided because the Board lacked a quorum and could not decide cases or issue orders. Additionally, while Noel Canning concerned the January 2012 recess appointments, there is also doubt as to earlier decisions in which previous recess appointees participated going back to August 2011.

The Court’s decision upheld the January 2013 decision of the US Court of Appeals for the District of Columbia Circuit which found that the panel of the NLRB that had previously decided an unfair labor practice case against Noel Canning, a Pepsi bottler, was unconstitutionally constituted and therefore the decision was invalid. There the DC Circuit held that because the Senate, whose advice and consent is required for appointments to the NLRB had not been in recess when the President made his appointments, the company’s “understanding of the constitutional provision is correct, and the Board’s is wrong. The Board had no quorum, and its order is void.” The Court of Appeals for the Third Circuit had also reached a similar conclusion concerning the lack of a quorum due to the Senate not having been in recess when the January 2012 appointments were made.

This decision now casts into doubt and makes suspect more than 1,300 NLRB decisions, including both published and unpublished, issued by the NLRB. An excellent summary of the cases that are implicated by the Court’s decision, and the issues involved in each has been prepared by the US Chamber of Commerce Litigation Center.

The Court’s holding, which found that the Senate was not in recess while it was conducting pro forma sessions during December 2012, arose in the context of a challenge to a Board Order in which recess appointees participated; the implications however are far greater and may implicate a wide range of other Board actions such as the appointment of Regional Directors, the consolidation of Regional offices and other administrative and personnel actions requiring Board approval or authorization. Notably, in a case decided by a District Court in the Eastern District of Washington last August an employer successfully challenged not only the Board’s authority to authorize a Regional Director to pursue an injunction under Section 10 (j) of the National Labor Relations Act, but the appointment of then Acting NLRB General Counsel Lafe Solomon, who was then a recess appointee. That case turned on other provisions of the Pay Act, a federal law authorizing the payment of salary to properly appointed recess appointees.

In a relatively understated press release following the Court’s decision, Board Chair Mark Gaston Pearce emphasized the fact that “the National Labor Relations Board has a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act.”

What this means to Employers, Unions and Others With Cases Before the NLRB

If the Board’s actions following the Supreme Court’s decision concerning an earlier attempt by the NLRB to delegate its decision making authority to a two member panel in the face of earlier disputes between the President and the Senate is any precedent, it is likely that at least three members of the current five member Senate confirmed Board will try to essentially adopt and approve as many as possible of the Board Orders and actions that would be invalid under Noel Canning. As shown in the Chamber’s chart, there are a large number of cases that are essentially on hold in Courts of Appeal across the country that have been waiting for the Court’s ruling today. It is likely that the courts will dismiss these matters or that the NLRB will seek to withdraw those in which it is seeking enforcement of Board Orders.

However, as we and others have pointed out since the issue of the 2012 and earlier recess appointments were placed in doubt, employers and others with matters before the Board, the most prudent course of action would have been to make sure that in addition to any other defenses or grounds for appeal, that parties specifically raise the issue that the Board lacked a quorum and the authority to act when it made decisions, issued orders and took other action. However even in those cases that were decided by the Board during the period that it lacked a proper quorum, parties may be able to raise the lack of quorum argument in light of today’s decision. Each matter will require an analysis based on its own individual facts and issues.

Additionally, today’s ruling has broad impact even in cases which are currently being investigated at the Regional level or are currently pending before the Board. Not only can we expect even further delay in Board action (including at the Regional level) as the agency attempts to deal with the backlog created by having to address hundreds cases directly impacted by the Decision. Specifically, there are thousands of cases which are currently being prosecuted or advanced at various stages which explicitly or tangentially rely on theories or precedents relying on a now invalid Board decision. Specifically, cases involving at-will employment agreements, arbitration agreements, employee investigations, employee access, dues deductions post-contract expiration, and bargaining over employee discipline have all now been stripped of much of the precedence on which a Region, a union or an employee may be relying. Again each matter will require an analysis based on its own individual facts and issues.

Management Missives

  • If the “invalid” Board issued a decision impacting an employer it should promptly analyze its options;
  • If an employer has a case in abeyance or pending based on Noel Canning it should obviously expect action in the coming weeks;
  • Employers should look for settlement opportunities with Regions, unions and individuals which may be present as these adverse parties may be more amendable to now that the theory of the case now lacks valid authority or based on their increased workloads;
  • Employers should explore filing supplemental position statements or other filings in any case where a Region, union or employee is relying on an “invalid” decision;
  • Employers should still remain cautious as while many decisions have been put into question, the current composition of the Board provides absolutely no reason for employers to rejoice or be less vigilant, as the current, lawfully confirmed, Board is unlikely to view most issues any differently.

For 2 days, the National Labor Relations Board (NLRB) heard from speakers on its proposed rules to accelerate the processing of union representation petitions and quicken the timing of elections. The speakers ranged from several labor unions, including the UFCW, SEIU, CWA and AFL-CIO as well as a number of trade associations, including National Federation of Independent Businesses, Coalition for a Democratic Workplace, National Association of Manufacturers, U.S. Chamber of Commerce, and EBG client, National Grocers Association (NGA). The positions of the parties were largely split between the labor unions applauding the NLRB’s proposed rule on making elections faster; whereas, the trade associations and management attorneys emphasizing that the NLRB’s proposed rule was unnecessary and a solution in search of a problem.

EBG attorney, Kara M. Maciel, represented the voice of NGA on three separate panels. First, she argued that the NLRB’s proposed rule requiring employers – for the first time – to submit a written position statement within 7 days of the union’s petition setting forth the employer’s entire legal argument, or risk waiver later, is unduly burdensome and risks that the process leading to a pre-election hearing will become more adversarial and less focused on reaching a negotiated pre-election stipulation. Under current procedures, over 90% of petitions are stipulated to without a pre-election hearing, but under the NLRB’s proposed rule, employers could feel pressured to go to a hearing in light of the written position statement requirement.

Second, Maciel testified that the election date should not be accelerated from the current 34 day median to 10-21 days contemplated by the rule. “Hasty decisions are not good decisions” and she noted that “common sense dictates that the greater the time an individual has to inform himself, and to reflect upon and consider all aspects of a decision, the more likely the decision will be a true reflection of the individual’s interests.” NGA is concerned about the due process rights impairing an employer’s protected 8(c) rights under the National Labor Relations Act if there is not sufficient time to communicate with employees about a union petition for representation.

Finally, Maciel expressed concern over the proposed rules compulsory disclosure of employee’s personal and confidential e-mail accounts and phone numbers on voter lists. The non-consensual disclosure constitutes a gross invasion of employees’ privacy and opens employees up to potential use and abuse of their personal information.

The NLRB will now consider all the written and oral comments submitted by the public on the proposed rules; however, it is widely expected that the NLRB will adopt the rules as proposed. Following the rule-making process, it is likely that trade associations could seek to enjoin implementation of the rule through a court challenge. In the meantime, all employers should brace themselves for the rule and implement training and education for their management team on how to respond to union organizing.

For more information on NLRB’s two-day public meeting, please click here.

Our colleague Kara Maciel will speak on behalf of EBG client, National Grocers Association (“NGA”), at the National Labor Relations Board’s public meeting, scheduled for April 10-11, 2014 regarding the Notice of Proposed Rulemaking (“NPRM”) on the “ambush election” representation procedures.

The panels will address the following topics:

  • Panel B.2: Requirement for written statement of position
    Address issues related to the proposed requirement for a written statement of position.
  • Panel E.1 & E.3: Election date
    Please describe the standard to be applied for scheduling an election. The proposed rules state that the regional director should select an election date which is “as soon as practicable.” If you disagree with this standard, please describe the standard you would apply. Specify whether you think the rules should include a minimum or maximum time between the filing of the petition and the election, and, if so, how long this time should be. Also address whether the proposed rules adequately protect free speech interests; if you believe they do not, please state specifically how the proposal can be adapted to adequately address the matter.
  • Panel C: Voter lists
    Address whether or how the rules should address voter lists.

During the open meeting, April 10 and 11, catch the live stream at

By Steven M. Swirsky, Adam C. Abrahms, Kara M. Maciel and Casey M. Cosentino

As previously predicted by the Management Memo on August 1, 2013 and October 30, 2013, the National Labor Relations Board (the “Board”) issued a second Notice of Proposed Rulemaking (“NPRM”) to amend its existing rules and regulations governing union elections procedures. If they look familiar when you see them, there is a good reason for that: you have seen them before.

As readers of the Management Memo are well aware, the NPRM is the latest development in the long saga of organized labor’s attempts to “fix” the representation election process in its favor. Most significantly, the Board’s current attempt only comes after having its more modest 2011 attempt struck down by a federal judge.

The present proposal is identical “in substance” to the Board’s original proposals first contemplated on June 22, 2011, and as such are more aggressive than the Rules ultimately adopted on December 21, 2011, and later struck down. The Board claims the proposed amendments are necessary to, among other things, facilitate the swift resolutions of questions concerning representation, simplify representation-case procedures, eliminate needless litigation, and consolidate all requests for review of regional directors’ determinations into one post-election request. However, if adopted as written, the proposed rules will radically up-end 75 years of Board practice and make it considerably easier for unions to organize employees and win elections.

History of Proposed Rule

The Board first contemplated the proposed amendments in a notice of proposed rulemaking on June 22, 2011. Following a period of public comment, the Board issued a final rule on December 22, 2011, that adopted some of the proposed amendments but deferred other more controversial aspects of the proposed amendments for further consideration. The final rule was immediately challenged in federal court. See Chamber of Commerce of the U.S. v. NLRB, 879 F. Supp. 2d 18, 21, 24 (D.D.C. 2012). In May 2012, the D.C. District Court struck down the final rule on procedural grounds. In response, the Board suspended the implementation of changes to its election representation case process.

Proposed Amendments to the Election Procedure

To the favor of unions, the proposed amendments announced this week would significantly change the existing procedures for union elections in the following ways:

  • Permit electronic filing of election petitions.
  • Require pre-election hearings to be held within 7 days after a hearing notice is served, shortening the time period between the petition and election.
  • Require employers to file a detailed statement of position on any and all issues involved in the petition before the hearing commences (i.e., within 7 days of first receiving notice of the petition). Failure to present an issue in the statement would constitute waiver of the issue in all future proceedings.
  • Grant hearing officers the authority to limit the issues to be heard at the hearing, depriving employers of their ability to litigate valid legal/factual positions prior to an election.
  • Defer resolution of voter-eligibility issues to post-election challenges until after an election, replacing the longstanding practice of having a pre-election hearing to determine such issues. This will allow unions to claim that some supervisors should be included in the bargaining unit, which could prevent an employer from utilizing them in the campaign to communicate its own position to the employees they supervise.
  • Grant hearing officers the authority to deny an employer the ability to file a post-hearing brief.
  • Eliminate an employer’s ability to seek Board review of a Regional Director’s rulings, which would also reduce the time between the petition and election.
  • Shorten the time for holding an election to as early as 10 days after the Regional Director’s direction of election (down from the typical 25 to 30 day minimum that now exists)
  • Require an employer to provide the NLRB with the list of voters’ names and addresses within 2 days after the Regional Director’s direction of an election instead of 7 days.
  • Require employers to provide the phone numbers and email addresses of all eligible voters as well as specifying each employee’s work location, shift, and classification. Currently, employers must only provide name and mailing address to the NLRB, which it then provides to the union. Since unions will use be able to use this information during the days before the election, it is feared that instances of organizers harassing and coercing employees will significantly increase.
  • Grant the Board discretion to deny review of post-election rulings. Currently, the Board is required to decide post-election disputes.

The Board’s False Pretenses and True Intended Harm of “Ambush” Elections

The Board asserts these election “fixes” are necessary to address alleged long delays in the representation process; however, such delays are rare. To the extent that the NPRM seeks to address election delays, objective data of NLRB elections conducted between 2008 and 2010 shows that such delays occurred less than 10 percent of the time. In fact, currently median time between petition and election is only 38 days and almost all elections occur within 56 days. The Board’s current proposal, however, could shorten that period to 10 to 21 days, which essentially eliminates the ability for employers to make a full and meaningful presentation of their position or employees to make a truly informed choice.

Typically, union organizers campaign under the radar for months before a petition is filed and unions wait until they believe that they have the support of the majority of the employees in a unit before they file a petition. Shortening the election period so drastically will erode an employer’s ability to respond to the union’s propaganda and communicate its position on union representation. Employees will vote without having the benefit of hearing the employer’s position. This contravenes the express purpose of the Act, which is to protect employee rights— not union rights and would gut the right that employers are granted by the Act to communicate their positions to employees. This one-sided campaign will almost certainly result in more election victories for unions and less real choice for employees.

Management Missives

It is with intention that the Board’s proposed rules will significantly alter the entire union representation election process in favor of unions. Although it is a proposed rule at this point, and the Board will be accepting public comment through April 7, 2014, with a public hearing that same week, it is likely that the final rule will be issued not long thereafter. To prepare for the Board’s “ambush” election rules, employers should promptly adopt any or all of the following strategies:

  • Examine your workforce for potential vulnerability to union organizing, including wage and hour violations or uncompetitive wages or benefits.
  • Review and update workplace policies that become relevant during union organizing such as solicitation/distribution, electronic communications, and social media.
  • Assess your workforce for potential bargaining unit issues like identifying who are supervisors and which employees share a “community of interest.”
  • Train your managers and supervisors on recognizing early warning signs of union organizing and responding lawfully to union campaigns.
  • Contact legal counsel with any questions or for any assistance with ensuring you are prepared to respond to an organizing campaign consistent with the proposed rules.


Our colleagues Kara Maciel and Adam Solander have a new Law360 article, “Where ERISA and the Affordable Care Act Collide,” that serves as an important wake-up call on staffing decisions that employers have to face.

Following is an excerpt:

In July 2013, the Obama administration announced a delay of the employer mandate provision of the Affordable Care Act for one year (i.e., the employer mandate). While back in July a one-year delay seemed like an eternity, the reality is that given the way in which most employers will determine whether an employee is classified as full-time, and therefore is eligible for coverage, as a practical matter, in very short order employers may be forced to make staffing decisions that could expose them to liability. This article will examine some of the risks associated with employer staffing decisions and how those risks maybe mitigated.

Download a PDF of the full article here.

We’d like to recommend an upcoming complimentary webinar, “Addressing and Responding to Workplace Violence and Active Shooter Scenarios to Protect Your Employees” (Oct. 2, 2:00 p.m. EDT), by our Epstein Becker Green colleagues Kara M. Maciel, Susan Gross Sholinsky, and Christopher M. Locke, with Daniel Hess and Lynne Cripe of The KonTerra Group, an employee assistance program provider that regularly counsels employees undergoing stressful life events that can lead to violence.

Below is their description of the event:

Violence in the workplace can range from bullying and harassment to physical attacks to fatal mass shootings. Workplace violence has unfortunately become one of the most common forms of violence that people are likely to encounter during their lives.

This informative webinar will:

  • Discuss ways of identifying the warning signs and recognizing behaviors that are precursors;
  • Summarize strategies to assist with hiring, managing and firing employees;
  • Present guidance on how to survive in the event their workplace is the scene of an active shooter scenario; and
  • Review legal consequences of failing to take appropriate steps to avoid an incident.

To learn more about it, visit Epstein Becker Green or click here for complimentary registration.

Bloomberg BNA’s Daily Labor Report recently published an article coauthored our Epstein Becker Green colleagues Kara M. Maciel and Adam C. Solander: “For Employers with High Turnover and Large Numbers of Seasonal Workers, the ACA Creates Unique Compliance Issues.” (Click to download the article in PDF format.)

Following is an excerpt:

The Affordable Care Act provides unique compliance obligations for employers in certain industries, such as the retail, lodging, restaurant, and grocery sectors, many of which employ large numbers of part-time and seasonal employees, and may comprise multiple smaller employers.

Of paramount concern for these employers, as for all employers, is the impending application of the shared responsibility rules. The guidance to date has been very much a mixed bag for these high-turnover industries. Some of the shared responsibility provisions will have a greater impact on these industries because of their size and employee mix, while others provide useful interpretations that will lessen some of the negative impacts of these rules.

This article will briefly examine the four major steps required under the shared responsibility rules in the context of these industries. These include: (1) determining whether the business is subject to the shared responsibility rules; (2) identifying the number of full-time employees a particular employer may have; (3) examining the way the shared responsibility rules relate to high-turnover industries; and (4) identifying strategies for compliance.

As background, the employer shared responsibility rules provide that ‘‘applicable large employers” with 50 or more full-time employees (including full-time equivalent employees) will be subject to a tax penalty if any full-time employee receives a premium tax credit or cost-sharing reduction to purchase health coverage through a health insurance exchange.

Generally, an employee is eligible for a cost-sharing subsidy if: (1) an employer does not offer the majority of its full-time employees (and their dependents) the opportunity to enroll in coverage; or (2) an employer offers its full-time employees the opportunity to enroll in coverage, but the coverage is ‘‘unaffordable” or does not provide ‘‘minimum value.”

Conceptually, the shared responsibility rules are not difficult to understand. However, as with all things ACA, the devil is in the details and the details are what complicate shared responsibility compliance for high- turnover industries.

Our colleagues Kara Maciel, Frank C. Morris Jr., Elizabeth Bradley, and Adam Solander have posted a client advisory on the recent ACA employer mandate delay, exploring the ramifications and unresolved issues that employers should consider. Following is an excerpt:

In reaction to employers’ concerns about the many difficulties posed in efforts to comply with the Employer Mandate provisions of the Affordable Care Act (“ACA”), the Obama administration (“Administration”) announced late yesterday that it is delaying the implementation of the penalty provisions and other aspects of the shared responsibility regulations until 2015. While the delay may have been to accommodate stakeholder requests, the delay also may have accommodated the Administration in connection with its readiness to implement the Employer Mandate. This delay could be a precursor to other implementation delays as the Administration seeks to make the ACA’s implementation successful, especially in light of intense scrutiny as to implementation and an inability to amend the law in Congress.

Read the full advisory: Employer Mandate Delayed—Employers Get Welcome Relief from Penalties Until 2015, but Many Questions Remain.

by: Adam C. Abrahms, James S. Frank, Kara M. Maciel, and Steven M. Swirsky

President Obama has taken action designed to bolster the National Labor Relations Board’s continuing move to bolster unions and take the National Labor Relations Act further into non-union workplaces. On April 9, 2013, President Obama announced his plan to submit three more nominees to serve the National Labor Relations Board (“NLRB”). If these and the two other pending nominations are confirmed this would bring the NLRB to its full complement of five Members.

These new nominations – who must be confirmed by the U.S. Senate – were announced against the backdrop of the NLRB v. Noel Canning decision in which the U.S. Court of Appeals for the D.C. Circuit ruled that the NLRB now lacks constitutional authority to act because the recess appointments previously made by President Obama in January 2012 were not valid. The NLRB plans to appeal the D.C. Circuit’s decision to the U.S. Supreme Court by April 25, 2013.

The three new nominations include the current NLRB Chairman, Mark Gaston Pearce, and two Republicans, Harry I. Johnson, III, and Philip A. Miscimarra, both lawyers in private practice. While Mr. Johnson and Mr. Miscimarra both have represented management over their careers, Chairman Pearce came to the NLRB from a practice representing unions.

Mr. Pearce has served as NLRB Chairman since August 2011, and has been a Board Member since March 2010. Previously, Mr. Pearce, who started his career at the Board’s Buffalo, New York Regional Office in 1979, was a founding partner of Creighton, Pearce, Johnsen & Giroux from 2002 to 2010. Before founding the Creighton, Pearce firm, Mr. Pearce worked as an associate and junior partner at Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria LLP from 1994 to 2002.

Harry I. Johnson, III is a partner with Arent Fox LLP. Previously, Mr. Johnson worked at Jones Day from 1994 to 2010. Mr. Johnson received a B.A. from Johns Hopkins University, an M.A.L.D. from Tufts University’s Fletcher School of Law and Diplomacy, and a J.D. from Harvard Law School.

Philip A. Miscimarra is a partner with Morgan Lewis & Bockius LLP, a position he has held since 2005. Since 1997, Mr. Miscimarra has also been a senior fellow at the University of Pennsylvania’s Wharton Business School. Mr. Miscimarra received a B.A. from Duquesne University, an M.B.A. from the University of Pennsylvania’s Wharton School of Business, and a J.D. from the University of Pennsylvania Law School.

President Obama previously submitted the nominations of Richard F. Griffin, Jr. and Sharon Block, who are currently serving as Board Members but whose recess appointments were struck down as invalid by the D.C. Circuit in Noel Canning. Member Block came to the NLRB from the US Department of Labor. Both of those nominations are before the Senate.


Considering that all five nominations must now be confirmed by the Senate, where the Republican minority has frequently blocked the President’s nominations, it is unclear how and when the Senate will respond, and whether the NLRB will enjoy a full complement of Members in order to conduct lawful business any time soon. Merely announcing the nominations will not pave the way immediately for a full, validly appointed NLRB. Indeed, it may not be until the next Congress, following the 2014 mid-term elections that the Senate even considers a package deal with the White House.

If a compromise could be achieved and all five Members were sworn-in this year or next, the Board would continue with a liberal, union-friendly majority with Chairman Pearce and Members Griffin and Block. They could be expected to continue a pro-union agenda, which would certainly bring continued aggressive enforcement and further broadening of the Board’s view of protected, concerted activity and the Act’s application in non-union workplaces. Moreover, there will be many questions about whether a new NLRB will be able to cure prior decisions that were put into doubt by Noel Canning.

For now, our advice and recommendations to employers remains the same as following the ground-breaking decision of Noel Canning. Employers should closely monitor how courts in their jurisdictions decide similar cases challenging the recess appointments, and watch how the Supreme Court will address it next term, should it take the NLRB’s petition for certiorari, while watching to see what happens in the Senate.