CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
521 Fifth Avenue
New York, NY 10175
Tel: (212) 682-0020

 

May 15, 2012

NLRB Rule Struck Down for Failing to Satisfy Quorum Requirement

As we previously advised, on December 22, 2011 the National Labor Relations Board (the “NLRB” or the “Board”) published a rule amending the Board’s current rules and regulations on representation elections.  Our Client Alerts regarding the adoption of, and challenges to, the NLRB’s rule are available at http://www.putneylaw.com/clients_updates.html.  Two of the three Board’s members voted in favor of adopting the final rule.  The third member of the Board, Brian Hayes, did not cast a vote.  The rule took effect on April 30, 2012. 

On December 20, 2011 the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace (“Plaintiffs”) filed a complaint in the U.S. District Court for the District of Columbia seeking to block implementation of the new rules.  Plaintiffs challenged the final rule on a number of grounds, including failure to obtain final approval by the required three-member quorum.  In opposition, the Board claimed that all three Board members participated in the rulemaking in the relevant sense and, accordingly, the quorum requirement was satisfied.

On May 14, 2012, the Court ruled in favor of Plaintiffs and held that the Board failed to assemble a quorum for its final vote and that the Rule was invalid and unenforceable. (See Chamber of Commerce v. NLRB, D.D.C., No. 11-cv-2262, 5/14/12).  The Court determined that because Member Hayes did not participate in the decision to adopt the final rule, the other two members of the Board lacked the authority to effect its promulgation. The Court found that Member Hayes could not be counted toward the quorum merely because he held office, and his participation in earlier decisions relating to the drafting of the rule did not suffice for quorum purposes. 

In response to the decision, the Board has temporarily suspended the implementation of the changes to its representation case process and has advised its regional directors to revert to their previous practices for election petitions.   As of now, the U.S. District Court for the District of Columbia is the only federal court to rule on this issue.  The Court’s ruling will likely be appealed.  We will keep you apprised of developments.  Please do not hesitate to contact us with any questions.