To say the National Labor Relations Board (NLRB) has been on a roller coaster ride over the past few months may be an understatement.

The summer started with the Supreme Court granting cert to an administration request for review of Noel Canning, the first of several appeals court decisions that effectively put the NLRB out of business by declaring the President’s recess appointments of board members invalid. The high court’s action put on hold, pending a ruling next spring, a number of board actions invalidated by the circuit courts.

Then the Obama administration managed to maneuver the Senate into confirming a full board—the first time in a decade the board has been at its full complement of three members of the President’s party and two members of the opposing party. That means it is no longer is under the cloud of recess appointments and does not face the prospect of lacking a quorum, which had stalled action in the past. It is free to move ahead with sidetracked initiatives such as the so-called quickie election rules, which advance the union agenda.

In mid-August, the NLRB got another boost when the 6th Circuit affirmed the previous board’s highly controversial decision in Specialty Healthcare, which creates a new standard for determining appropriate bargaining units. It would allow unions to gain recognition for small bargaining units, known as micro units, which are easier for unions to organize but harder for employers to manage.

But any sense that everything was going the NLRB’s way came to an abrupt end that same week, when a federal district judge in Washingtonstate found that NLRB Acting General Counsel Lafe Solomon’s appointment was invalid, and therefore he could not delegate authority to a regional director. Because the general counsel has wide ranging powers, the district court decision in Hooks v. Kitsap Tenant Support Services, Inc., if upheld, throws into doubt a number of controversial actions by Solomon during the past three years. It also may create new grounds for employer appeals of regional directors’ actions.

“The labor board felt after Specialty Healthcare came out in the 6th Circuit that they were on a roll,” says Littler Mendelson Shareholder Michael Lotito. “They thought they were out of the woods. But this [Hooks decision] is a real curve ball. Now you will have all kinds of briefings that say ‘This is why the case should not be decided against the employer—because the NLRB had no legitimacy to do it.’”

Surprise Decision

In Hooks, U.S. District Judge Benjamin Settle of the Western District of Washington dismissed the NLRB regional director’s petition for a preliminary injunction. Settle rejected the regional director’s argument that Solomon had delegated to him the authority to initiate legal action, finding that Solomon himself had no authority because his appointment was invalid. The court said his appointment did not comply with the Federal Vacancies Reform Act (FVRA)—an obscure statute some attorneys who follow the board were not even aware of. The FVRA only permits appointments under specific circumstances, specifically the appointment of a person who in the last 365 days had served as a personal assistant to the departing officer—and Solomon never served as a first assistant.

“To the extent that position could be sustained, it obviously is yet another serious problem in terms of the last several years of decision making, especially when you consider the considerable authority the GC’s office exercises,” explains Brian Hayes, a former Republican NLRB board member and current Ogletree Deakins shareholder.

The decision came as a surprise, since other attempts to challenge Solomon’s authority had been rejected, according to Fisher & Phillips Partner Steve Bernstein. “This is a departure from the norm and it goes without saying it will be met with a vigorous appeal from the agency,” Bernstein says. He thinks the decision is unlikely to with stand an appeal, Bernstein adds: “I would not read this as a bellwether of things to come. A more prudent approach is to treat it as an anomaly that may or may not survive.”

Regardless, Bernstein agrees that the decision will fuel efforts by employers to dismiss actions brought by regional directors during Solomon’s tenure. He and Lotito also believe it will spur the administration to expedite the confirmation of Solomon’s successor, former NLRB board member Richard Griffin Jr., which was pending before the Senate at press time (see “Solomon’s Successor”).Going Forward

The new board—comprised of Democrats Mark Pearce, who was confirmed for another term as chairman; Nancy Schiffer and Kent Hirozawa; and Republicans Phil Miscimarra and Harry Johnson, III—is expected to mobilize quickly to continue the pattern of decisions favoring unions because of the strong pro-union ideology of the majority board members.

“These people have an agenda, and they have a fairly short window of opportunity,” Lotito says.

Specifically, Pearce is likely to make good on his earlier promise to pass a series of rules that would shorten the union election process and give unions more contact information for employees, including email addresses.

“It’s always a hazard to guess how board members are going to view things,” Hayes says, “but my guess is there is a majority that views many of the statutory concepts in the same way the prior majority did.”

Hayes cites as an example the prior board majority’s expansive view of what is protected by Section 7 of the National Labor Relations Act. Under Section 7, employees in both union and non-union workplaces have the right to communicate or work together in “concerted activities” for the purpose of collective bargaining or to improve working conditions and terms of employment. Hayes says the prior board extended this protection to cover situations where no one had been harmed, but where there may be potential for harm from something like wording in an employee handbook.

“The prior board had a broad view of the applicability of Section 7, and my guess is the majority going forward would share that view,” he says.