Hunton Employment & Labor Perspectives

Those employers hoping for an appellate court decision on President Obama’s controversial “recess” appointments to the National Labor Relations Board will have to wait a while longer.  In Richards v. NLRB, 7th Cir. No. 12-1973 (decision issued December 26, 2012), the Seventh Circuit sidestepped a ruling on the “recess” appointment question by denying the employer’s petition for review on standing grounds.

The petitioners in the case were employees of various employers whose workforces were represented alternatively by the IBEW and USW Unions.  The Unions’ collective bargaining agreements allowed employees to object to union membership pursuant to the Supreme Court’s ruling in CWA v. Beck, 487 U.S. 735 (1988) prohibiting unions from collecting fees from nonmembers for activities unrelated to collective bargaining, contract administration, or grievance adjustment.  The petitioners, so-called “Beck objectors,” filed unfair labor practice charges challenging the Unions’ requirement that non-members lodge annual objections to continue opting out of paying full Union dues.  They also requested refunds on behalf of all Beck objectors who had once objected to paying full dues in the past, but who failed to renew their objections annually.  The Board ruled that the Unions’ annual renewal policies violated the Act, but did not address the employees’ requests for refunds.  After an unsuccessful motion for reconsideration, the employees petitioned the Seventh Circuit for review of the Board’s decision.

On review, the petitioners claimed that the Board erred in denying their request for fee refunds.  They also claimed that the Board’s decision was void at any rate because it was issued without a valid quorum of three members.  Their argument sounded a similar refrain to one being made in federal courts across the country. They contended that because the Senate was not in “recess” on January 4, 2012 – the date the President purported to “recess” appoint Board members Griffin, Block and Flynn (who has since resigned) – the President’s appointments fail.  Accordingly, any Board decision issued since that date is void because the Board does not have three validly seated members, rendering it incapable of doing business. The Seventh Circuit in Richards was the first federal appellate court in the United States to hear oral argument on the issue.

The Court chose to avoid taking up the thorny issue of the President’s recess appointment power, and decided the case on different grounds.  It ruled that the employees had no standing to bring the case because they failed to demonstrate they were “aggrieved” by the Board’s decision, a requirement to challenge a Board order in federal appellate court.  The Court noted that the petitioners themselves did not allege they paid higher fees to the Union because of its annual renewal requirement, therefore the only “injury” they suffered “was the burden or threat of having to renew their objections year after year.”  Since the Board remedied that issue by ordering the Union to discontinue the annual renewal requirement, the Court noted that the petitioners alleged no injury sufficient to confer standing, regardless whether the Board issuing the underlying decision was, or was not, properly constituted.

It is unfortunate the Richards case was the first “recess appointment” case to reach an appellate court for review.  The petitioners’ potential lack of standing was always considered a significant issue in the case, and most observers are not surprised the Court ruled as it did.  Challenges to the President’s “recess” appointments are pending in several other Circuits, and the D.C. Circuit just last month heard oral argument in the “lead” case raising the issue, Noel Canning v. NLRB, D.C. Nos. 12-1115; 1153.  It is likely that at least a few of these Courts will issue decisions this spring or summer.  As such, the waiting game on the question of the President’s controversial “recess” appointments may soon come to an end.