On March 21, 2017, the United States Supreme Court ruled that the National Labor Relations Board’s former Acting General Counsel Lafe Solomon served in violation of the Federal Vacancies Reform Act, 5 U.S.C. §§ 3345, et seq. (“FVRA”) when he continued in that position after President Barack Obama nominated him for a full term as General Counsel.

By a 6 to 2 vote, the Justices affirmed an August 2015 decision by the D.C. Circuit, which found that Solomon improperly served as Acting General Counsel during the almost three-year period between January 2011 and late 2013 while his nomination for confirmation as  the Board’s General Counsel languished in the Republican-controlled Senate.  Ultimately, Obama withdrew Solomon’s nomination and put forward Richard F. Griffin, Jr., who was eventually confirmed on October 29, 2013.

Background

As we explained in our prior post, the position of NLRB General Counsel is just one of approximately 1,200 senior level positions within the federal government (including Cabinet secretaries and deputies, heads of most independent agencies, and ambassadors) that may only be filled by an individual nominated by the President and confirmed by the Senate (so-called “PAS” positions).  The FVRA, enacted in 1998, gives the President authority to appoint acting officers to serve in these positions until the President’s nominee completes the sometimes lengthy Senate confirmation process.

Pursuant to the FVRA, therefore, when former NLRB General Counsel Ronald Meisburg vacated that position on June 20, 2010, Obama appointed Solomon, then a 10-year agency veteran who was serving as Director of the NLRB’s Office of Representation Appeals, to become the agency’s Acting General Counsel.  Six months later, Obama sent Solomon’s name to the Senate, when he nominated Solomon to fill the General Counsel position.  The Senate, however, did not take action on Solomon’s nomination and returned it to the President at the expiration of the Congressional term.  Although Obama resubmitted Solomon’s nomination in May 2013, he later withdrew it and nominated Richard F. Griffin, Jr., whom the Senate confirmed as General Counsel in November 2013.

After one of the Board’s Regional Directors, acting as an agent of the General Counsel, issued as  a complaint alleging Southwest General had committed unfair labor practices, the company argued that Solomon lacked authority to issue and litigate that complaint because his service as Acting General Counsel during the pendency of his nomination to the General Counsel position violated the FVRA.  While the Administrative Law Judge who heard the case and the Board, when it reviewed the ALJ’s decision, rejected that argument, the D.C. Circuit agreed with the employer, and interpreted the FVRA to prohibit any individual (subject to certain limited statutory exceptions that did not apply to Solomon) from serving as an acting officer for a PAS position while he or she was also a nominee to fill that same position for a full term.

The Supreme Court’s Decision

Writing for the majority in NLRB v. SW General, Inc., Chief Justice Roberts wrote “[a]pplying the FVRA to this case is straightforward,” and concluded that once Obama submitted Solomon’s nomination to fill the General Counsel position for a full term, the FVRA prohibited Solomon from continuing in the Acting General Counsel role.  Chief Justice Roberts noted that Obama could have appointed any one of the approximately 250 senior NLRB employees or hundreds of other individuals in PAS positions throughout the federal government to serve as Acting General Counsel during the pendency of Solomon’s nomination.  Because the President did not do so, and Solomon continued to serve as Acting General Counsel, Chief Justice Roberts concluded, Solomon’s continued service as Acting General Counsel after his nomination was submitted to the Senate violated the FVRA.

Chief Justice Roberts also rejected the Board’s argument that, in the past, three different presidents have submitted the nominations of 112 persons for Senate confirmation while they simultaneously served as acting officers under FVRA.  As Chief Justice Roberts pointed out, the FVRA was enacted in 1998, and those 112 nominations made up a small percentage of the total number of nominations for PAS positions that the Senate considered during that time.

Impact of the Court’s Decision

The Court’s ruling will most certainly have an impact on the administration of President Donald Trump, who faces the daunting task of filling the multitude of PAS positions that are either already vacant or will become vacant shortly, as Obama’s appointees transition out.  The decision in SW General will likely have a more limited impact on employers.  When the D.C. Circuit issued SW General, it made clear that it considered the holding to be a narrow one:  Acting General Counsel Solomon served in violation of the FVRA as of the date the President nominated him to be General Counsel.  Moreover, the D.C. Circuit held that any FVRA defect in Acting General Counsel Solomon’s authority to take action could be readily cured if a subsequent, properly-serving General Counsel were to ratify his actions.  Finally, the Circuit made clear that it addressed the FVRA issue only because the employer in Southwest General had timely preserved and raised that objection early in the proceedings.  The Court did not expand the effects of the D.C. Circuit’s ruling with this decision.  The real benefit from the ruling to employers, unions, and others with business before the NLRB may become apparent after Griffin’s four-year term expires in November 2017, when President Trump or any other future President will not be able to designate his or her choice to fill a future vacancy in the position of General Counsel (or in any other PAS position) to serve in such role on an acting basis while their nomination works its way through the Senate confirmation process.

By Adam C. Abrahms, Steven M. Swirsky, and D. Martin Stanberry

On Tuesday, August 20th, in an opinion that follows in the wake of Noel Canning, United States District Judge Benjamin H. Settle dismissed an injunction petition filed by Ronald Hooks, a Regional Director  of the National Labor Relations Board, on the grounds that he was “without power” to issue the underlying unfair labor practice complaint.

The Regional Director had initially filed the petition with the District Court in June in an effort to obtain a temporary injunction that would, among other things, have prevented Kitsap Tenant Support Services, a home healthcare provider, from disciplining or terminating employees pending the resolution of complaint alleging a host of unfair labor practices.

The Court however, dismissed the Regional Director’s petition, ruling that the NLRB had no legal power to issue the underlying complaint alleging violations of the NLRA.  Not only did the Judge follow Noel Canning and its progeny by ruling the Board (as constituted at the time) lacked a properly constituted quorum but Judge Settle went even further by ruling the Board lacked a properly authorized General Counsel.

In a ruling which could potentially paralyze the NLRB, Judge Settle held that Acting General Counsel Lafe Solomon’s appointment to the post had been invalid, and consequently, that he could not have lawfully delegated the authority to request a temporary injunction to the Regional Director.  Specifically, Solomon was never confirmed by the Senate but was serving in the “Acting” capacity pursuant to President Obama’s appointment under the Federal Vacancies Reform Act (FVRA).  The Judge ruled, however, that this appointment was invalid because Solomon failed to meet the very specific requirements which would permit an appointment under the FVRA – namely he was not a first assistant to the departing General Counsel.

The decision is an exciting one because it raises interesting procedural questions affecting the operations of the Board. It remains to be seen what the administrative law judge tasked with adjudicating the dispute will do. Will he or she acknowledge that Regional Director Hooks lacked authority to issue the Complaint as dismiss it on such grounds? Or will the adjudication proceed as though Judge Settle’s decision does not affect agency operations? This issue is further complicated by the fact that the Board had already denied a motion to dismiss filed by Kitsap earlier this year on grounds similar to those relied upon by Judge Settle. If the administrative law judge refuses to proceed however, then it would seem that he or she would have no choice but to refuse to hear any complaints issued by the Regional Director during the period in which the Board lacked a valid quorum let alone all complaints issued under the authority of Solomon who has served as the Acting General Counsel since June 2010.

Beyond this case, the theory advanced in Kitsap could have wide-ranging implications that render the recent compromise to confirm a five member Board virtually meaningless.  Without a properly appointed General Counsel can the Agency continue to issue complaints?  Are the complaints issued under Solomon all invalid?  What about appeals authorized or being responded to under the direction of Solomon?  What about the appointment of Regional Directors – were those appointed under Solomon invalid and are the actions of such Regional Director’s similarly without authority?

Likewise, where does these leave the General Counsel’s office?  As noted here the President has appointed Robert Griffin to replace Solomon but Griffin likely would face stiff opposition in the Senate.  The prior conventional wisdom was Obama could use the FVRA to make Griffin the Acting General Counsel but under Kitsap Griffin also would not be qualified for such an interim appointment.  This could leave the Agency without “authority to act” until the Senate confirms a new General Counsel or the President appoints an Acting General Counsel that meets the FVRA criteria.

Certainly, this groundbreaking decision leaves many more questions than it provides answers.

And lest we forget, like every other decision which has relied upon Noel Canning, the impact of Judge Settle’s ruling may hang in the balance until the Supreme Court hears Noel Canning next term. Until that time however, rest assured that attorneys will be citing Kitsap at Board hearings and in court rooms across the country.

Management Missives

  • Employers facing unfair labor practice charges should consider preserving the issue that the NLRB is without authority to issue a complaint (seek an injunction or take other action which requires the General Counsel’s approval).
  • Stay tuned!