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Federal Court Strikes Down NLRB’s New Election Rules

Employer groups scored another last-minute victory Monday afternoon when a federal district court struck down the National Labor Relations Board’s new election rules. The election rules, which became effective on April 30, 2012, would have significantly impaired employers’ ability to contest union organizing campaigns and lawfully inform employees of the drawbacks of unionization. Although the rules were implemented approximately two weeks ago, they were not effective long enough to significantly impact employers.

In striking down the rules, the court reasoned that the board committed a procedural violation when it implemented them. Under the National Labor Relations Act, the board may only implement rules or issue decisions when it has a quorum, i.e., when at least three members of the board participate in the action. At the time the board voted to adopt the new election rules, it had only three members, and Republican Brian Hayes did not participate in the vote. The court held that, because Hayes failed to respond when the rule was circulated electronically for a final vote, the board lacked a quorum; thus, the rules were not implemented properly.

Although the board almost certainly will appeal the court’s decision or attempt to reissue the rules, this decision will have far-reaching consequences. First, for the time being, employers will have more time and flexibility to challenge union organizing campaigns and conduct their own lawful information campaigns. Second, the court’s decision could make it more difficult for the board to act in the future. Although the board now has five members, it often operates with only three or four members. In such circumstances, if future courts follow this court’s decision or expand upon it, the political party with fewer board members could potentially block board action by refusing to participate. 

Employers should note that the board could take other steps to implement the rules. The court’s decision does not suggest that the board lacks authority to issue the rules when it has a quorum; thus, now that the board has five members, it could attempt to reissue them without much difficulty. For now, employers should monitor the status of the rules, in order to fully understand their rights with respect to combating union organizing campaigns.

In the interim, if you have any questions about this decision or your rights under federal labor law, please contact William J. Kishman  or any other member of Bingham Greenebaum Doll LLP’s Labor and Employment Practice Group.

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