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Washington Labor & Employment Wire » The Obama Administration

Interested Parties Invited to Submit Amici to NLRB Concerning Witness Statements

On March 2, 2011, in Stephens Media LLC d/b/a Hawaii Tribune Herald (“Stephens Media”), No. 37-CA-7043, the NLRB invited interested parties to submit amici concerning employee witness statements.

In the first phase of Stephens Media, the Board ruled against the employer, a Hawaii newspaper, finding that it violated Section 8(a)(1) of the NLRA in refusing to provide union representatives to employees in disciplinary meetings and engaging in related unfair labor practices. 356 N.L.R.B. No. 63 (Feb. 14, 2011). The Board delayed ruling on a second issue – whether the employer was obligated to provide witness statements collected in the course of investigating the employee under Sections 8(a)(1) and 8(a)(5), setting aside the question for later determination.

In previous decisions in Fleming Cos., 332 N.L.R.B. 1086 (2000), and Anheuser-Busch Inc., 237 N.L.R.B. 982 (1978), the NLRB ruled that the employer’s obligation to furnish information “does not encompass the duty to furnish witness statements themselves.” In the February 14, Stephens Media decision, however, the Board questioned the scope and applicability of these decisions to the instant case. The request for amici for a second phase of Stephens Media, seeks clarification on (1) the definition of “witness statements” under Fleming Cos. And Anheuser-Busch, Inc., and (2) whether other types of investigatory documents are included in the employer’s duty to provide information.

Interested parties have until April 1, 2011 to file amicus briefs, which may be no more than 25 pages in length. The Board has also provided two additional weeks, until April 15, for response briefs.


President Obama Proposes Overall Budget Cut for Department of Labor in FY2012, Increase for OSHA


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On February 14, the Obama administration unveiled a $108.5 billion proposed budget for the Department of Labor for fiscal year 2012. The proposed budget would reduce DOL’s total budget by $40 million from the fiscal year 2011 budget, which is currently being funded by a recently enacted continuing resolution that will expire early next month.

The administration’s FY2012 budget calls for a significant increase for worker protection programs, including $240 million for the Wage and Hour Division (WHD), up from its current budget of $227.6 million. The budget allocates almost $50 million to a new multi-agency misclassification initiative aimed at coordinating federal and state efforts to combat the misclassification of employees as independent contractors. WHD’s budget includes $15 million for such misclassification investigations.

Notably, the budget requests $583.4 million for the Occupational Safety and Health Administration, an increase of a $24.8 million, or 4.4 percent, from fiscal year 2011. OSHA’s standard-setting directorate would receive $26 million, an increase of $36.8 percent from current funding levels. This $7 million increase includes $2.4 million to continue developing OSHA’s Injury and Illness Prevention Program rule, which aims to assist employers reduce workplace injuries by increasing their responsibilities for proactively identifying and fixing hazards in their workplaces.

In addition, the President’s budget requests $227 million for OSHA’s federal enforcement activities, an increase of 5.8 percent. The proposal would allocate $21 million for whistleblower protections, which would be separated out from enforcement, a change which OSHA claims would enable it to more easily track and report the resources used in the whistleblower program. According to OSHA, the funding would provide resources for 45 whistleblower investigators and 25 new inspectors.

Additional information concerning the President’s proposed FY2012 budget for the Department of Labor is available on the DOL’s website.


Second District Court Finds Health Care Legislation’s Individual Mandate Unconstitutional


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On January 31, 2011, federal Judge Roger Vinson of the Northern District of Florida issued his widely anticipated ruling in the litigation brought by the attorneys general or governors of 26 states, along with other plaintiffs, challenging the 2010 health care reform legislation.  Judge Vinson held unconstitutional the individual mandate provision.  That provision, section 1501 of the Patient Protection and Affordable Care Act, requires everyone (with limited exceptions) to purchase federally approved health insurance, or pay a monetary penalty, beginning in 2014.

Judge Vinson’s ruling brings to two the number of district courts that have held the individual mandate unconstitutional.  (Two other district courts have held the law constitutional).  Unlike Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia, however, whose decision invalidating the individual mandate was issued on December 13, 2010, Judge Vinson found that the individual mandate could not be severed from the Act’s remaining provisions and, thus, declared the entire health care reform law unconstitutional.  Judge Vinson reasoned that there are “simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate … for me to try and dissect out the proper from the improper, and the able-to-stand-alone from the unable-to-stand-alone.”  To attempt such a task would be “tantamount to rewriting a statute in an attempt to salvage it;” better to leave to “the watchmaker” the task of redesigning and reconstructing the “defectively designed watch.”  Thus, although Judge Vinson upheld the Act’s expansions of the Medicaid program against constitutional challenge by the states, in the end his opinion holds that those provisions must fall-along with the entire Act-because, in the court’s view, they are not severable from the individual mandate.

In holding the individual mandate unconstitutional, the district court made two subsidiary holdings.  First, Congress’s power under the Commerce Clause extends only to regulating activity, not inactivity.  Judge Vinson reasoned it would be a “radical departure” from existing case law to hold that Congress can regulate inactivity; every Supreme Court case addressing the Commerce Clause, even the expansive ones, has involved “clear and inarguable activity.”  Second, the district court held that the failure to purchase health insurance is not “activity.”  Judge Vinson in particular rejected the argument, accepted by both district courts that have upheld the law, that an uninsured’s economic decision to forgo health insurance constitutes activity, because that rationale “would essentially have unlimited application.”  In discussing whether the failure to buy health insurance is activity, Judge Vinson reasoned that “the status of being uninsured” has “absolutely no impact whatsoever” on interstate commerce.  But if the uninsured took the steps that the government argued amounted to an impact on interstate commerce-getting sick, seeking medical care, being unable to pay and, thereby, shifting costs onto others-then Congress “plainly has the power to regulate them … even at the time that they initially seek medical care.”  Until then, however, Congress may not act.

The immediate impact of Judge Vinson’s ruling is being hotly debated.  Judge Vinson denied the plaintiffs’ request for an injunction in one paragraph and, thus, did not issue an order commanding the federal government to halt enforcement or implementation of the statute.  Judge Vinson reasoned, however, that a declaratory judgment directed toward the federal government was the functional equivalent of an injunction because federal officials are presumed to adhere to the law as declared by the court.  Judge Hudson applied the same kind of reasoning in denying an injunction in the Eastern District of Virginia case, but his ruling struck down only the individual mandate, which does not take effect until 2014.  Because Judge Vinson’s ruling held the entire Act to be unconstitutional, his opinion suggests that the government should halt enforcement of those provisions that are currently in effect.

The result of the decision has been dueling assertions by the state plaintiffs-many of which have said they no longer believe the law to be enforceable in any respect and that they are entitled to halt compliance-and the federal government, which has made clear its intent to continue enforcement of the law pending appellate review.

In that regard, Judge Vinson’s supposition that a declaratory judgment is the same as a nationwide injunction is quite debatable.  They, in fact, are different procedurally and require different legal showings to be made.  Indeed, the whole point of a declaratory judgment is that it can provide anticipatory relief without the plaintiff demonstrating the exceptional need for immediate, equitable relief that an injunction requires.  This case illustrates the point.  To obtain a declaratory judgment against the entire statute, the plaintiffs persuaded the court only that their constitutional argument with respect to one provision-the individual mandate-was correct and that the entirety of the law should then fall on severability grounds. 

Injunctive relief, however, requires a quite different showing.  A party’s proof that it is correct on the merits is just one prong of the injunctive relief analysis.  Even then, courts “must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief.”   ”In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction.”  That same test applies to permanent injunctions at the end of a case.  Furthermore, if a district court intends that its declaratory judgment be the functional equivalent of an injunction, the very cases relied upon by Judge Vinson indicate that the court must then make the same findings needed to issue an injunction.  A declaratory judgment, in other words, is not a “get out of the heightened showing for injunctive relief free” card.

Yet, in obtaining a declaratory judgment, the plaintiffs in Florida did not have to show that immediate relief was needed nationwide, that other legal remedies would not suffice or that the competing public interests favored a nationwide injunction notwithstanding contrary rulings in other jurisdictions.  Because the individual mandate provision does not take effect until 2014, it would appear hard to show that an immediate nationwide injunction against that provision is needed.  Furthermore, it must be remembered that the enforceability of the balance of the Act turned, in Judge Vinson’s opinion, not on constitutional injury, but on statutory severability analysis.  A constitutional injury is one thing when arguing for an injunction; a hotly debated severability analysis that no other court in the country has joined is something else altogether.  That is because severability is just an issue of statutory construction and discerning congressional intent; it does not identify or redress constitutional injury.  That type of interest is unlikely to support the immediate issuance of nationwide injunctive relief.  Beyond that, when, as here, there are conflicting district court judgments, there is no sound reason why the federal government would be compelled to comply nationwide with the one adverse declaratory judgment, rather than adhere nationwide to the two favorable declaratory judgments upholding the law.

The Justice Department has already announced plans to appeal Judge Vinson’s ruling to the 11th Circuit and, if necessary, to seek a stay.  The enforceability of the Act, thus, may be clarified in very short order.  Currently pending at the 4th Circuit is an appeal of Judge Hudson’s ruling striking down the mandate and the decision out of the U.S. District Court for the Western District of Virginia upholding the law.  That case is slated for oral argument in early May 2011.  A decision by the U.S. District Court for the Eastern District of Michigan upholding the law is on appeal in the 6th Circuit and being briefed.


Republican Senators Urge Obama to Withdraw Becker Appointment to NLRB

On February 3, 2011, in response to President Obama re-nominating Craig Becker to a full five-year term as a member of the National Labor Relations Board, all 47 Republican Senators have co-signed a letter calling upon the White House to rescind his nomination.  Becker, who has served on the Board via recess appointment since March 2010, had previously been nominated by President Obama on multiple occasions in 2009 and 2010, but each time failed to overcome Republican-led filibusters. The Senators allege that Becker has polarized the Board since receiving his recess appointment and criticized the Board’s case decisions and rulemaking since Becker began sitting on the panel. The Senators also reiterated their intent to continue filibustering his nomination.

Becker, the former associate general counsel for the Service Employees International Union (SEIU), has drawn fire from business groups and Senate Republicans since first being nominated by President Obama in July 2009. After the Senate returned his nomination without acting upon it at the end of the 2009 session, was re-nominated him in January 2010. In February 2010, in a rare NLRB nomination hearing before the Senate HELP Committee, Becker was aggressively questioned about his prior pro-labor writings, alleged conflicts of interest relating to his previous employment with the SEIU and the AFL-CIO, and allegations that he would administratively implement pro-labor regulations while serving on the board, including elements of the proposed Employee Free Choice Act (”EFCA”). Becker’s testimony did not assuage Senate Republicans and a cloture vote on his nomination failed on February 9, 2010.

With the Board down to two members, President Obama on March 27, 2010 provided recess appointments to Becker and Democratic labor lawyer Mark Pearce, who has since been confirmed to a full term. As a Board member, Becker has been a consistent pro-labor vote, but has not pursued sweeping EFCA-style policy changes via rule-making, as some critics alleged he would. Becker also has recused himself from a number of cases involving SEIU, its locals, and the AFL-CIO, but his critics have urged recusals from more cases involving SEIU and AFL-CIO affiliates.

The NLRB currently has a 3-1 Democratic majority, including Becker. As a recess appointee, Becker will leave the Board at the end of 2011. Senate confirmation to a full term would extend his term through the end of 2014.  In January, President Obama nominated Republican NLRB lawyer Terence F. Flynn to the fill the Board’s final vacancy. Flynn’s nomination awaits Senate action.


NLRB Acting General Counsel Solomon to Delay Lawsuits Over State Card-Check Bans

In a February 2, 2011 letter, NLRB Acting General Counsel Lafe Solomon appeared to back down from a previous threat to bring suit against four states that recently passed state constitutional amendments banning the use of the card check process and requiring secret ballot elections for union recognition. In his letter, he expressed an interest resolving apparent conflicts between the state amendments and federal law without “the necessity of costly litigation.”

Previously, on January 13, Solomon had sent the state attorneys general a letter threatening legal action to halt implementation of the amendments. He warned the attorneys general of those states that such amendments were contrary to federal labor law and preempted under the U.S. Constitution. Solomon also warned that the amendments would pressure employers who previously agreed to voluntary recognition agreements to withdraw recognition from labor organizations representing their work forces and could lead to unnecessary litigation by workers challenging unions with majority support. Solomon asked the four state attorneys general to voluntarily halt the amendments from becoming law or to prevent reliance on those amendments, warning that the NLRB would be filing suit to overturn or otherwise void the amendments.

The response of Attorneys General Tom Horne of Arizona, Alan Wilson of South Carolina, Marty J. Jackley of South Dakota, and Mark L. Shurtleff of Utah in a joint letter on January 27 claimed that the amendments could be reconciled with federal law, and pledged to defend them. In urging resolution of the matter, Solomon’s February 2 letter agreed that he hoped that the amendments could be reconciled with the NLRA.

In November, voters Arizona, South Carolina, South Dakota, and Utah passed constitutional amendments requiring secret ballot elections in all union elections. Currently, Section 7 of the NLRA permits workers to choose a union through two pathways: NLRB-conducted secret ballot elections and voluntary recognition after a showing of majority support through the use of the card check process. The state amendments are an outgrowth of the defeat of the Democratic-sponsored Employee Free Choice Act in the 111th Congress, which would have permitted the use of the card check process for union selection even outside the context of voluntary recognition.


NLRB Upholds Practice of “Bannering”

By a 3-1 margin, the NLRB upheld the tactic of “bannering,” in which unions display large banners at construction sites of neutral employers proclaiming the existence of a labor dispute with a primary employer. Southwest Reg’l Council of Carpenters (New Star Gen. Contractors Inc.), 356 N.L.R.B. No. 88 (February 3, 2011). This tactic is intended to pressure or shame neutral, secondary employers engaging in business with the primary employer.

The three Democratic appointees constituting the majority, Chairwoman Wilma Liebman and Members Craig Becker and Mark Pearce, concluded that bannering did not constitute an unlawful secondary boycott. The majority held that the tactic 1) did not amount to signal picketing (urging employees of the neutral employer to stop work) in violation NLRA Sec. 8(b)(4)(i)(B), and 2) was not a prohibited threat, restraint or coercion of a neutral employer under NLRA Sec. 8(b)(4)(ii)(B). The Board based its decision on Carpenters & Joiners of America (Eliason & Knuth of Arizona Inc.), 355 N.L.R.B. No. 159 (2010), in which the same majority held that bannering did constitute unlawful secondary picketing because, unlike unlawful secondary picketing, the practice was not confrontational. The majority noted that the banners and related handbills at the construction sites did not call for a strike or job action, with the handbills explicitly clarifying that the union was not urging work stoppages or slow downs at the job sites of the neutral employer.

In dissent, Member Brian Hayes, the lone Republican on the Board, argued that bannering amounted to a secondary boycott and could not be distinguished from confrontational picketing. He said the majority applied an overly narrow reading of NLRA Sec. 8(b)(4) and was contrary to Board precedent and NLRA principles.


President Obama Re-Nominates Craig Becker to NLRB

On January 26, 2011, President Obama re-nominated Craig Becker to a full five-year term as a member of the National Labor Relations Board. Becker, who has served on the Board via recess appointment since March 2010, has previously been nominated by President Obama on multiple occasions in 2009 and 2010, but each time failed to overcome Republican-led filibusters. As a recess appointee, Becker will leave the Board at the end of 2011. Senate confirmation to a full term, unlikely in light of recent gains by Senate Republicans in the 2010 election, would extend his term through the end of 2014.

Becker, the former associate general counsel for the Service Employees International Union (SEIU), has drawn fire from business groups and Senate Republicans since first being nominated by President Obama in July 2009. After the Senate returned his nomination without acting upon it at the end of the 2009 session, was re-nominated him in January 2010. In February 2010, in a rare NLRB nomination hearing before the Senate HELP Committee, Becker was aggressively questioned about his prior pro-labor writings, alleged conflicts of interest relating to his previous employment with the SEIU and the AFL-CIO, and allegations that he would administratively implement pro-labor regulations while serving on the board, including elements of the proposed Employee Free Choice Act (”EFCA”). Becker’s testimony did not assuage Senate Republicans and a cloture vote on his nomination failed on February 9, 2010.

With the Board down to two members, President Obama on March 27, 2010 provided recess appointments to Becker and Democratic labor lawyer Mark Pearce, who has since been confirmed to a full term. As a Board member, Becker has been a consistent pro-labor vote, but has not pursued sweeping EFCA-style policy changes via rule-making, as some critics alleged he would. Becker also has recused himself from a number of cases involving SEIU, its locals, and the AFL-CIO, but his critics have urged recusals from more cases involving SEIU and AFL-CIO affiliates.

The NLRB currently has a 3-1 Democratic majority, including Becker. Earlier this month, President Obama nominated Republican NLRB lawyer Terence F. Flynn to the fill the Board’s final vacancy. Flynn’s nomination awaits Senate action.


Obama Resubmits Two Labor Nominations to Senate

President Obama resubmitted two nominations to the Senate for labor posts after the Senate failed to act upon the nominations before the close of the 111th Congress. On January 5, Obama resubmitted the nominations of Leon Rodriguez to be Administrator of the Department of Labor’s Wage and Hour Division (WHD) and Thomas M. Beck to be a member of the National Mediation Board (NMB).

Rodriguez was originally nominated to be WHD Administrator on December 3. Currently, Rodriguez serves as Deputy Assistant Attorney General and Chief of Staff in the Civil Rights Division at the Department of Justice.  Rodriguez is Obama’s second nominee for the position of WHD Administrator after his first nominee, Lorlei Boylan, withdrew herself from consideration in October 2009. 

Beck was originally nominated to serve on the NMB in September. He is slated to replace fellow Republican Elizabeth Dougherty, whose term on the NMB ended in June. Dougherty continues to serve pending her replacement. Currently, Beck serves as a member of the Federal Labor Relations Authority (FLRA), to which he was nominated by President Bush in October 2008.


Obama Announces Nominations for NLRB Member, General Counsel

On January 5, 2011, President Obama announced plans to nominate Terence F. Flynn to a vacancy on the National Labor Relations Board (”NLRB”) and Lafe E. Solomon to serve as NLRB general counsel.

Flynn, the current chief counsel to NLRB member Brian Hayes and former chief counsel to former NLRB member Peter Schaumber, has a depth of experience in cases arising under the National Labor Relations Act. A graduate of  Washington and Lee University School of Law and the University of Maryland, College Park, Flynn was previously a counsel in Crowell & Moring LLP’s labor and employment group from 1996 to 2003, with earlier stints at the law firms David Hagner Kuney & Krupin and Reid & Priest. Flynn would take Schaumber’s former seat, which was vacated upon the expiration of Schaumber’s term in August 2010.

Solomon, a long-time NLRB attorney, has served as acting general counsel since June 2010, when his predecessor, Ronald Meisburg, stepped down for a private sector position. Solomon has worked continuously for the NLRB for almost four decades, excepting a short break to attend law school at Tulane University in the mid-1970s. Starting as a field examiner in 1972, Solomon has served in a number of NLRB positions, including, most recently, head of the NLRB’s Office of Representation Appeals. In his time at the NLRB, he has worked for ten Board members, including current NLRB chairperson Wilma Liebman. General counsel is the Board’s highest-ranking legal position, with important investigative and prosecutorial functions, including supervising the NLRB’s regional offices, directing policy concerning the issuance of complaints, and enforcing Board decisions.


NLRB Proposes Posting Requirements Through Rarely-Used Rulemaking


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Utilizing its rarely-used rule-making authority, the National Labor Relations Board on December 21, 2010 announced a proposed rule that would require all private employers under its jurisdiction to post workplace notices of statutorily-protected employee rights. The proposed rule is intended to inform employees - both unionized and non-unionized - of their rights under the NLRA and is patterned after similar posting requirements under the Fair Labor Standards Act, the Family and Medical Leave Act, and a recent Department of Labor rule requiring posting of NLRA rights by federal contractors. Non-NLRA employers, including employers of railroad, airline, and agricultural workers, would not be affected by the proposed rule.

The proposed rule would require employers to post an 11-by-17 inch poster in the workplace and, where the employer regularly communicates electronically with its employees, distribute an electronic version of the poster. The poster would be provided for download on the NLRB website, as well as in hard copy form at NLRB regional offices. Under the proposed rule, failure to adhere to the posting requirements would be considered an unfair labor practice under NLRA Sec. 8(a)(1) and, in cases of knowing violations, could be considered evidence of unlawful anti-union sentiment in NLRB proceedings in which employer motive is at issue. The NLRB has clarified that, at least during a transition period, non-compliant employers unaware of the posting requirement would usually not face penalties if they promptly rectified the non-compliance.

The Board approved the proposed rule over the dissent of the Board’s lone Republican, Brian E. Hayes, who argued that the posting requirement is beyond the scope of the Board’s NLRA Sec. 6 power to issue “such rules and regulations as may be necessary to carry out the provisions” of the NLRA. 

The NLRB will be accepting comments on the proposed rule for 60 days following its publication in the Federal Register.  More information can be found here.