U.S. District Court Invalidates NLRB Election Rule Amendments Due to Lack of Quorum; Board Temporality Suspends Election Rule Amendments

In a highly-anticipated decision, Chamber of Commerce v. NLRB , D.D.C., No. 11-cv-2262, 5/14/12, the U.S. District Court for the District of Columbia held that the National Labor Relations Board's election rule amendments were invalid due to a lack of quorum. On May 15, 2012, in light of the District Court decision, the Board announced that it would suspend the election rule amendments and revert back to the previous election procedures.

Background of Election Rule Amendments

On June 22, 2011, then-Chairman Liebman and Members Pearce and Becker proposed amendments to the representation election procedures. Member Hayes dissented. A two-day public hearing ensued, followed by a public comment period in which 65,000 comments were received. During the Board's deliberations on the proposed amendments, Chairman Liebman's term expired. On Dec. 16, 2011, Members Pearce and Becker voted to approve a Final Rule that was subsequently published on Dec. 22, 2011. Member Hayes did not cast a vote. The Final Rule, with an effective date of April 20, 2012, expedited the time in which a representation election proceeds, limited the scope of pre-election hearings and granted hearing officers greater discretion over post-hearing matters.

District Court Decision

The Final Rule was challenged by the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace on the grounds that it exceeded the Board's statutory authority and that it was technically deficient due to a lack of quorum. Ignoring the constitutional challenges, Judge James E. Boasberg of the U.S. District Court for the District of Columbia, ruled that the Board lacked a quorum when it approved the new election procedures. Citing the U.S. Supreme Court decision of New Process Steel LP v. NLRB , 130 S. Ct. 2635 (2010), the Court held that there must be a three-member vote to constitute a quorum, and although Member Hayes had previously voted to veto the election amendments, he did not participate in the Dec. 16, 2011, vote. Thus, his failure to vote, or to attend a vote, effectively eliminated the three-member quorum that has been deemed necessary by New Process Steel.

The Court noted in its decision, however, that, "nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if it has the desire to do so." With President Obama's three January 2012, recess appointments to the Board, the Board now sits with the full Board of five members. Thus, this matter will likely once again go before the Board.

In response to the District Court decision, and the Board's suspension of the election rule amendments, Member Pearce stated, "we continue to believe that the amendments represent a significant improvement in our process and serve the public interest by eliminating unnecessary litigation. We are determined to move forward." As such, it is expected that the Court's decision will be appealed to the Court of Appeals for the D.C. Circuit.

If you have any questions about the decision, please contact Nicole Paterson at (616) 608-1139 or npaterson@clarkhill.com , or your Clark Hill labor and employment attorney.