Senate Confirms 5 Members Of NLRB, Leaving It With A Quorum

For the first time since January 2012, the National Labor Relations Board (NLRB) unquestionably has a quorum to issue rulings.  This comes on the heels of the U.S. Senate’s votes yesterday to confirm a 5 members of the Board, three of whom are labor-friendly and two of whom have a management background.  They are: Mark Gaston Pearce, the current Board Chairman whose term was set to expire in August; Kent Hirozawa, Pearce’s chief counsel; Nancy Schiffer, a retired associate general counsel at the AFL-CIO; and Philip A. Miscimarra and Harry I. Johnson III, both partners at large law firms.  The votes for the Democratic nominees were along party lines.

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NLRB Turns Its Focus To Employer E-Mail Policies

According to the National Labor Relations Board, employers are free to have policies limiting e-mail usage for business purposes only.  They are just not free to enforce it.

At a Weyerhauser plant in Washington state, e-mail use is limited for all employees to “business purposes only,” with limited exceptions with managerial consent.  The National Labor Relations Board ruled that Weyerhauser’s policy was “facially neutral,” meaning that it was lawful because it did not single out e-mails based on union content.

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NLRB Continues Its Assault On Confidential Investigations

Confidentiality is the hallmark to any meaningful attempt to investigate workplace misconduct.  Not only for the alleged victim of harassment or discrimination, but for the alleged perpetrator too.  Apparently, the National Labor Relations Board does not agree with that time-honored maxim, as it continues its assault on confidentiality in  workplace investigations.

Last year, in Banner Health Systems, the Board found that blanket confidentiality rules in workplace investigations violated an employee’s right to engage in protected, concerted activity.  Instead, an employer seeking to maintain confidentiality in an investigation “must show that it has a legitimate business justification that outweighs employees’ Section 7 rights” by proving that “witnesses need protection, evidence is in danger of being destroyed, testimony is in danger of being fabricated, or there is a need to prevent a cover up.”   This decision, like many others decided since January 2012 is in jeopardy of being overturned if the Supreme Court finds in Noel Canning that the Board is not properly constituted.

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Ninth Circuit Follows Concepcion and Allows the FAA to Preempt State Law and Permit Arbitration

That bastion of unpredictable decisions, the Ninth Circuit Court of Appeals, followed a somewhat predictable path and recently held that the Federal Arbitration Act preempted a state law that disfavored arbitration.  This is another decision that reinforces the power of Concepcion and the favored status of arbitration, while ruling against the consumer (in this case).

Mortensen v. Bresnan Communications involved a consumer class action brought against an Internet provider for violation of privacy rights due to ad placement, among other causes of action.  The District Court in Montana denied a motion to compel arbitration by Bresnan (under the Internet subscriber agreement) saying the contract of adhesion violated the reasonable expectations/fundamental rights rule in Montana.  The Ninth Circuit overturned the Montana District Court.  The Ninth Circuit looked to the U.S. Supreme Court decision in AT&T Mobility v. Concepcion and held that the Federal Arbitration Act preempted state law, specifically a state law that disproportionately applies to arbitration agreements.  In essence, the parties will be required to use arbitration.

Although this is a consumer class action and not an employment case, the Mortensen decision follows the trend to defer to arbitration and Concepcion.

- John Baum

Another Court Finds NLRB Recess Appointments Unconsitutional

Just one day after the National Labor Relations Board (NLRB) got some good news, the Fourth Circuit Court of Appeals delivered some bad news in NLRB v. Enterprise Leasing Company Southeast, LLC.  Like the D.C. Circuit and Third Circuit, the Fourth Circuit found that President Obama’s recess appointments to the NLRB were unconstitutional, as there was no recess when the appointments were made.  The constitutionality of those appointments will be decided by the U.S. Supreme Court in the fall and it is widely expected that the high court will find those appointments to be unconstitutional.

Just two days ago, the Senate resolved its impasse as to the President’s appointments to the NLRB and it is expected that the NLRB will have a full panel of members within a few weeks.  But, if the U.S. Supreme Court finds the recess appointments to be unconstitutional, then it will also likely invalidate dozens of decisions reached by the NLRB since January 2012 — including controversial decisions on social media, arbitration agreements, internal investigations, and employee handbooks.

- Dan Handman

Senate To Vote On Full Panel For NLRB

As part of the Senate’s recent compromise on filibusters, Republicans and Democrats agreed to give an up or down vote on a full slate of members for the National Labor Relations Board.  In exchange, President Obama agreed to withdraw two previously nominated labor-friendly members who had been the subject of a heated battle over the President’s power to make recess appointments under the Constitution.  Instead, President Obama intends to nominate Nancy Schiffer, a retired associate general counsel at the AFL-CIO, and Kent Hirozawa, who currently serves as chief counsel to NLRB Chairman Mark Gaston Pearce – both labor-friendly nominees.  If the Senate confirms their nominations, as expected, the NLRB will have a majority of labor-friendly members.  Pearce’s term expires on August 27, 2013, and he too is expected to be confirmed.    

This compromise does not affect the validity of the Board’s decision dating back to when the recess appointments were made.  If the U.S. Supreme Court were to find that the recess appointments were improper, then all Board decisions dating back to January 2012 – including important decisions on social media, arbitration agreements, internal investigations and employee handbooks — would likely be deemed invalid for lack of a quorum.

- Dan Handman

President Obama Postpones ACA “Shared Responsibility” Obligations

The goals of the Affordable Care Act are lofty, but the implementation of them has proven difficult.  Which is why President Obama announced that the so-called “shared responsibility” obligations under the ACA – which require certain employers to provide health care coverage to employees or pay a penalty — would be postponed by a year. 

Additionally, on July 5, the Administration changed the requirements regarding the process by which state online insurance marketplaces will verify income and eligible health coverage status for those applying for subsidized coverage.

What Is A “Shared Responsibility” Payment?

Under ACA’s “shared responsibility” section, employers with 50 or more full-time employees must offer health care coverage to all employees who work an average of 30 hours per week or more in a month, or pay penalties. This employer mandate was to go into effect on January 1, 2014.

The concept is simple enough, but the implementation proved far more difficult than the Obama Administration expected.  Ultimately, the government decided that it did not have the appropriate structures in place to handle the reporting requirements attendant to the mandate, so it postponed the requirement by a year until January 1, 2015.  The government also cited its interest in simplifying the obligations on employers, though it remains to be seen just how “simple” those obligations will be. 

- Dan Handman