Justices to Weigh Designation of Acting NLRB Official

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By Lawrence E. Dubé

June 20 — The U.S. Supreme Court will consider whether a National Labor Relations Board lawyer lost his authority to serve as the agency’s acting general counsel once President Barack Obama nominated him to serve a full term as general counsel ( NLRB v. SW General, Inc., U.S., No. 15-1251, cert. granted 6/20/16 ).

The president designated Lafe E. Solomon in 2010 under the Federal Vacancies Reform Act. The U.S. Court of Appeals for the District of Columbia Circuit held that a limitation on presidential nominees functioning in an “acting capacity” made the designation improper after Obama sent Solomon's nomination to the Senate in 2011.

The D.C. Circuit ruling could affect other agencies and threatens to impair the president’s “core powers” to select qualified individuals for leadership positions in many federal agencies, the government told the high court in a petition for review.

Objection Raised in NLRB Proceeding

Solomon's authority was challenged in an unfair labor practice case against SW General, which does business as Southwest Ambulance. An International Association of Fire Fighters local that had a collective bargaining agreement with Southwest alleged the employer made unlawful unilateral changes in employees' longevity pay.

An NLRB regional office, acting on Solomon's authority, issued an administrative complaint, and an administrative law judge found the employer violated its statutory duty to bargain with the union. The ALJ ordered a back-pay remedy for the employees.

Southwest filed exceptions with the board and argued Solomon was serving as acting general counsel in violation of the Federal Vacancies Reform when he authorized the complaint. However, the board adopted the ALJ decision with no mention of the FVRA argument (360 N.L.R.B. No. 109, 200 LRRM 1217 (2014)).

Southwest petitioned for review in the D.C. Circuit. A three-judge panel granted the company's petition and vacated the NLRB order (796 F.3d 67, 203 LRRM 3577 (D.C. Cir. 2015)). The NLRB petitioned for a rehearing by the full D.C. Circuit, but the appeals court denied the request on a 7-3 vote.

Solomon Designated, Later Nominated

Solomon, a career attorney, was the director of the NLRB's office of representation case appeals in June 2010 when then-General Counsel Ronald Meisburg resigned from the agency to return to private practice.

On June 18, 2010, the president issued a memorandum directing Solomon “to perform the duties of the office of, General Counsel.”

On Jan. 5, 2011, Obama nominated Solomon to serve a four-year term as general counsel, but the Senate never acted on the nomination.

Solomon continued to serve as the NLRB's acting general counsel until November 2013, when Richard F. Griffin, a Senate-confirmed nominee, was sworn in.

Federal Vacancies Reform Act Cited by Court

In designating Solomon to be the agency's acting general counsel, the president cited the FVRA, 5 U.S.C. § 3345(a).

Section 3345(a)(3) allowed the president to appoint as acting general counsel an NLRB employee with more than 90 days of service and pay at or above the GS-15 level.

The D.C. Circuit said Solomon “easily met” the qualifications when he was designated acting general counsel, but another FVRA provision prevented him from continuing to serve in the position once the president nominated him for that office.

Section 3345(b)(1) prohibits an individual from being both the acting officer and the presidential nominee for the position unless he served as the “first assistant” to the officer in question for at least 90 of the last 365 days or he was confirmed by the Senate to be the first assistant.

Nomination Called Bar to Continued Acting Service

The NLRB argued in the D.C. Circuit that Subsection (b)(1) only applies to a limited category of “first assistants” who take over a position under another FVRA provision, Section 3345(a)(1). Subsection (b)(1) does not apply to federal employees like Solomon who received appointments under Section 3345(a)(3), it said. The D.C. Circuit rejected the contention.

“Because Solomon was never a first assistant and the President nominated him to be General Counsel on January 5, 2011, the FVRA prohibited him from serving as Acting General Counsel from that date forward,” the court said.

Finding Solomon could not authorize the January 2013 complaint against SW General, the court vacated the board order against the company.

Government Urged High Court to Review Case

In a petition for Supreme Court review, the government said that since the enactment of the FVRA in 1988, every president has made nominations based on an understanding that the Subsection (b)(1) limitation at issue in the SW General case does not apply to individuals who became acting officials under provisions other than the “first officer” provision.

The petition said that “the Executive Branch's interpretation has been … applied to numerous acting designations and nominations in the intervening years,” and “as far as the government is aware, that interpretation never prompted objection from the Senate” before the D.C. Circuit issued its decision.

The government told the high court that the D.C. Circuit decision “casts a cloud over the service” of “about half a dozen” acting high-level officials at the departments of Transportation and Health and Human Services and the Environmental Protection Agency and Office of Personnel Management.

Responding to the government's petition for Supreme Court review, Southwest argued the D.C. Circuit applied traditional principles of statutory interpretation “to give the FVRA its plain meaning.” The company said that “the only uncertainty is whether the Executive Branch will obey the law. It does not need this Court's assistance to do so.”

NLRB Avoided Flood of Challenges

Several factors have limited the impact of the SW General ruling on the NLRB.

The D.C. Circuit panel that issued the decision noted that the ambulance company's challenge to Solomon's authority reached the appeals court only because the company relied on the FVRA issue in its appeal to the board. The court said it didn't expect its ruling to “retroactively undermine a host of NLRB decisions” because many litigants failed to raise an FVRA argument before the board.

In fact, the board has rejected untimely attempts to raise the FVRA issue in NLRB proceedings, and Griffin, the current general counsel, has relied on a special provision of the FVRA to ratify actions that Solomon authorized after his 2011 nomination as general counsel.

Section 3348(d) of the FVRA generally provides that actions taken by individuals serving in violation of the statute have “no force and effect,” but Section 3348(e)(1) exempts the NLRB's general counsel from that section.

Griffin has reviewed cases based on complaints authorized by Solomon and issued notices of ratification finding that continued prosecution of such cases was appropriate under the National Labor Relations Act. In Securitas Security Services USA, Inc., 363 N.L.R.B. No. 182, 206 LRRM 1482 (2016), the board found that an employer had waived the right to challenge Solomon's authority, but it added “this ratification by the General Counsel would render moot any argument that the SW General holding … precludes further litigation in this matter.”

Governmentwide Concern Over D.C. Circuit Ruling

The government argued in its petition that most federal agencies are subject to the FVRA's “no force and effect” language and the “narrow exception” that applies to the NLRB and a few other agencies “in no way undermines the need for review of the question presented, which has Executive-Branch-wide significance.”

The petition cautions that the D.C. Circuit decision “casts a cloud over many past decisions by top government officials.”

Solicitor General Donald B. Verrilli is counsel of record for the NLRB. Shay Dvoretsky of Jones Day in Washington is counsel of record for SW General.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com