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Supreme Court takes on NLRB case involving Obama board appointments

Hundreds of prior rulings could be invalidated

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Supreme Court takes on NLRB case involving Obama board appointments

The U.S. Supreme Court is expected to consider a case affecting hundreds of National Labor Relations Board decisions that were called into question when an appeals court invalidated the appointments of three of five board members.

Legal experts say employers are watching the case closely. Many employers consider NLRB decisions — particularly those on social media and employee handbook language — to be overly broad and aggressive.

Even if the ruling by the U.S. Court of Appeals for the District of Columbia is upheld and the NLRB's rulings since at least January 2012 are invalidated, experts say a reconstituted NLRB likely would reinstate many if not all of the decisions. There are several rulings that are arguably against limiting employees' right of free speech.

Meanwhile, attorneys are advising their clients to continue following existing NLRB guidelines until a ruling is made (see related story).

In January, the appeals court held in Noel Canning, a division of the Noel Corp. v. National Labor Relations Board that President Barack Obama's Jan. 4, 2012, appointment of three of the five NLRB members was invalid. Although portrayed as putative recess appointments, the Senate was not in recess when they were made, the appeals court ruled. It also held that the President can make recess appointments only for vacancies that occurred during a recess.

Earlier this month, the administration decided to appeal directly to the nation's highest court rather than first seeking an en banc hearing by the appeals court.

The administration's petition is due by April 25.

As a result of the appeals court ruling, “the 600 decisions that the board has rendered since the recess appointments occurred are all in jeopardy,” said James F. Hendricks Jr., a partner with law firm Lewis, Brisbois, Bisgaard & Smith L.L.P. in Chicago.

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The ruling “effectively renders the NLRB powerless, so it's an important issue to employers,” said Phillip K. Miles III, an associate with law firm McQuaide Blasko Fleming & Faulkner Inc. in State College, Pa.

Legal experts say they expect the Supreme Court to accept the case because it presents a significant constitutional issue over which appeals courts have split.

“It does involve a unique and important interpretation of the Constitution with regard to the power of the chief executive,” said Mark A. Carter, a partner with Dinsmore & Shohl L.L.P. in Charleston, W. Va.

Meanwhile, the NLRB “is proceeding as though it's business as usual,” said John T. Merrell, an associate with Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Greenville, S.C.

Some experts say the Supreme Court is likely to rule in favor of Noel Canning over the timing of the President's appointment of the board members. However, the high court's decision also could be less sweeping, such as a ruling that the president is not confined to only fill vacancies that occur during a recess.

“There's a wide stream of possibilities,” said Mark Theodore, a partner at Proskauer Rose L.L.P. in Los Angeles.

Should the Supreme Court uphold the entire appeals court ruling, that “would be a pretty narrow interpretation of the president's authority,” Mr. Theodore said.

A Supreme Court ruling in favor of the NLRB would maintain the status quo, while a ruling against it “would require a lot of sorting out by the parties to the various matters,” said Charles S. Einsiedler Jr., a partner at Pierce Atwood L.L.P. in Portland, Maine.

However, “At the end of the day, even if all of these cases are overturned, the board will eventually essentially rubber stamp the overwhelming majority of cases once a full quorum is properly installed,” said Joel S. Barras, counsel at Reed Smith L.L.P. in Philadelphia.

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    Employers should continue to follow National Labor Relations Board rulings, while awaiting a possible U.S. Supreme Court decision on the validity of appointments of three NLRB members, legal experts say.