NLRB Directors Had Power to Act Without Board Quorum

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By Lawrence E. Dubé

Sept. 18 — National Labor Relations Board regional directors retained their authority to supervise union representation cases during a 19-month period when the board lacked a quorum, the U.S. Court of Appeals for the District of Columbia Circuit held Sept. 18.

Writing for the court in a 2-1 decision, Judge Thomas B. Griffith said a regional director had the authority to certify that employees of UC Health, a hospital operator, had voted for union representation. The court rejected the employer's claim that the regional director's authority was suspended during the period when the board lacked a three-member quorum of properly appointed members.

Another D.C. Circuit panel reached the same conclusion in a second case, rejecting a challenge to the authority of a regional director by nursing home operator SSC Mystic Operating Co. (SSC Mystic Operating Co. v. NLRB, 2015 BL 302561, D.C. Cir., No. 14-1045, 9/18/15). Griffith also wrote for the court in that case, which was decided by a 2-1 vote.

NLRB Quorum Loss Sparked Question About Directors

Between Aug. 27, 2010, and Jan. 3, 2012, three NLRB members' terms expired, leaving the five-seat board without a quorum of three members.

President Barack Obama named three lawyers to serve as recess appointees on the board, but the U.S. Supreme Court held in NLRB v. Noel Canning, 134 S. Ct. 2550, 199 LRRM 3685 (2014), that the appointments were unconstitutional.

UC Health and SSC Mystic, which does business as Pendleton Health and Rehabilitation Center, both argued that actions taken by regional directors during the absence of a board quorum were invalid.

Defers to Board on Delegated Authority

UC Health entered an agreement with the UC Health Public Safety Union allowing an NLRB regional director to conduct a representation election among the employer's security officers. However, when the NLRB official certified in April 2013 that the union won the election and became the bargaining agent for the employees, the company refused to bargain, contending the regional director acted without authority because the board lacked a quorum.

The board rejected the employer's challenge (360 N.L.R.B. No. 71, 198 LRRM 1936 (2014)), finding that regional directors “remain vested with the authority to conduct elections and certify their results” under a 1961 delegation of authority by the board.

Griffith wrote that the National Labor Relations Act's quorum requirement for action by the board “applies the quorum requirement to the Board's authority to act, not the Regional Directors' ability to wield delegated authority.”

Calling the statute ambiguous on the issue before the D.C. Circuit, he said “a court is obliged to defer to an agency's reasonable interpretation of its statutory jurisdiction.”

The appeals court said the board's interpretation is consistent with the language of the statute, finding that “allowing the Regional Director to continue to operate regardless of the Board's quorum is fully in line with the policy behind Congress's decision to allow for the delegation in the first place.”

Ruling on Board Delegation Distinguished

Griffith rejected UC Health's argument that enforcement of the NLRB order would be inconsistent with the D.C. Circuit's decision in Laurel Baye Healthcare of Lake Lanier Inc. v. NLRB, 564 F.3d 469, 186 LRRM 2417 (D.C. Cir. 2009). 

In Laurel Baye, the court held that a delegation of authority by the five-seat board to a three-member panel did not enable two members to continue exercising the board's authority when its membership dropped to two. The court concluded that the initial delegation to the three-member group lapsed with the loss of a quorum, citing common law principles.

However, Griffith said the 2009 decision was not controlling. “Laurel Baye,” he wrote, “addressed the lawfulness of the Board's effort to evade the quorum requirement imposed on its own activities, not the status of authority previously delegated to the Regional Directors once the Board loses a quorum.”

“[T]he Board's interpretation of its authority was reasonable, and we are bound to defer to the Board's reasonable interpretation of the statute it is charged to administer,” the appeals court said.

Judge Harry T. Edwards concurred in UC Health. Judge Laurence H. Silberman dissented from the ruling, saying the court's Laurel Baye precedent was controlling. He wrote that the majority attempted to distinguish Laurel Baye on the theory that a delegation to a regional director “somehow survives the disappearance of the principal” even though the court rejected that argument when the issue was delegation of authority to a “subgroup” of board members. Silberman said the argument was unconvincing.

Taft Stettinius & Hollister LLP represented UC Health. NLRB attorneys represented the board.

NLRB Backed in Second Court Ruling

In the SSC Mystic decision, the employer also raised the question of a regional director's authority after New England Health Care Employees Union, District 1199, SEIU, won a representation election that the nursing home operator had agreed to and the NLRB official supervised.

The employer refused to bargain with the certified union, and the board found an unfair labor practice (360 N.L.R.B. No. 68, 198 LRRM 1932 (2014)).

Writing for the court, Griffith said “just as in UC Health, we disagree with Mystic on the merits of its claim. The Regional Director had authority to conduct this election, even though the Board had no quorum.”

The appeals court was unpersuaded by the Connecticut employer's argument that the board lacked a quorum to approve a 2012 reorganization of regional offices that included appointing the regional director for Region 34 (covering Connecticut) as the director for a reconfigured Region 1 that included Massachusetts and Connecticut.

Griffith said that even if there was a question about the board's authority to expand the official's jurisdiction when it lacked a quorum, the reorganization “did not impair his preexisting authority” to conduct elections in Connecticut.

Judge Sri Srinivasan concurred in the court's ruling. Judge David B. Sentelle dissented. Stating Laurel Baye concluded the NLRA's quorum requirement “unambiguously requires the Board to have a quorum for a delegee to exercise its authority,” Sentelle said the board's interpretation of the act was unreasonable and not deserving of judicial deference.

Shawe & Rosenthal LLP represented SSC Mystic Operating Co. NLRB attorneys represented the board.

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

Text of the UC Health ruling is available at http://www.bloomberglaw.com/public/document/UC_HEALTH_PETITIONER_v_NATIONAL_LABOR_RELATIONS_BOARD_RESPONDENT_ and the SSC Mystic ruling at http://www.bloomberglaw.com/public/document/SSC_MYSTIC_OPERATING_COMPANY_LLC_DOING_BUSINESS_AS_PENDLETON_HEAL.