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Chamber of Commerce of the United States of America, and v. National Labor Relations Board

May 14, 2012

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA, AND COALITION FOR A DEMOCRATIC WORKPLACE,
PLAINTIFFS,
v.
NATIONAL LABOR RELATIONS BOARD, DEFENDANT.



The opinion of the court was delivered by: James E. Boasberg United States District Judge

MEMORANDUM OPINION

According to Woody Allen, eighty percent of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that. Indeed, it is the only thing that matters -- even when the quorum is constituted electronically. In this case, because no quorum ever existed for the pivotal vote in question, the Court must hold that the challenged rule is invalid.

On December 22, 2011, the National Labor Relations Board published a rule that amended the procedures for determining whether a majority of employees wish to be represented by a labor organization for purposes of collective bargaining. Two of the Board's three members voted in favor of adopting the final rule. The third member of the Board, Brian Hayes, did not cast a vote. Because Hayes had previously voted against initiating the rulemaking and against proceeding with the drafting and publication of the final rule, the Board nevertheless determined that he had "effectively indicated his opposition."

In this suit, Plaintiffs -- the Chamber of Commerce of the United States of America and the Coalition for a Democratic Workforce -- challenge the final rule on myriad grounds. The Court, however, reaches only their first contention: that the rule was adopted without the statutorily required quorum. Absent limited circumstances not present here, the Board must muster a quorum of three members in order to act. Because Member Hayes did not participate in the decision to adopt the final rule, Plaintiffs argue, the other two members of the Board lacked the authority to effect its promulgation. The NLRB, on the other hand, maintains that all three members participated in the rulemaking in the relevant sense and, accordingly, that the quorum requirement was satisfied. The agency has now filed a Motion for Summary Judgment and an Alternative Partial Motion to Dismiss, and Plaintiffs have filed a Motion for Summary Judgment.

Plaintiffs are correct. Two members of the Board participated in the decision to adopt the final rule, and two is simply not enough. Member Hayes cannot be counted toward the quorum merely because he held office, and his participation in earlier decisions relating to the drafting of the rule does not suffice. He need not necessarily have voted, but he had to at least show up. At the end of the day, while the Court's decision may seem unduly technical, the quorum requirement, as the Supreme Court has made clear, is no trifle. Regardless of whether the final rule otherwise complies with the Constitution and the governing statute -- let alone whether the amendments it contains are desirable from a policy perspective -- the Board lacked the authority to issue it, and, therefore, it cannot stand. The Court, consequently, will grant Plaintiffs' Motion and deny Defendant's.

I.Background

The National Labor Relations Act, codified at 29 U.S.C. § 151 et seq., governs, inter alia, the formation of collective-bargaining relationships between employers and employees in the private sector, and the NLRB is the federal agency charged with administering the statute. See generally id. §§ 151-57. At the time of the agency's creation, the NLRA provided that the Board would consist of three members and that two of those members would constitute a quorum. See Act of July 5, 1935 ("Wagner Act"), ch. 372, §§ 3(a)-(b), Pub. L. No. 74-198, 49 Stat. 449, 451. With the enaction of the Taft-Hartley Act in 1947, however, the Board's membership was increased from three to five. See 29 U.S.C. § 153(a); see also New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635, 2638 (2010). Taft-Hartley concurrently altered the quorum requirement, providing that, except in limited circumstances not present here, "three members of the Board shall, at all times, constitute a quorum." See 29 U.S.C. § 153(b); see also New Process Steel, 130 S. Ct. at 2638. It now takes three Board members, in other words, for the Board to do business.

The five-member Board is endowed with the "authority from time to time to make, amend, and rescind, in the manner prescribed by [the Act], such rules and regulations as may be necessary to carry out the provisions of this [Act]." 29 U.S.C. § 156. One area in which the Board has exercised this authority relates to Section 7 of the NLRA, 29 U.S.C. § 157, which guarantees the right of employees "to bargain collectively through representatives of their own choosing . . . and to refrain from . . . such activities." Id. When employees and their employer are unable to agree whether the employees should be represented by a union for purposes of collective bargaining, it falls to the Board to resolve the question of representation. See 29 U.S.C. § 159.

Although Congress set out the basic steps by which such a question is to be settled, it left it to the Board to fill in the gaps. See NLRB v. A.J. Tower Co., 329 U.S. 324, 330 (1946) ("Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees."). "The Board has exercised this discretion through two mechanisms. First, the Board has promulgated binding rules of procedure, most of which are found in 29 C.F.R. part 102, subpart C. Second, the Board has interpreted and occasionally altered or created its representation case procedures through adjudication." Final Rule, 76 Fed. Reg. 80,138, 80,138 (Dec. 22, 2011) (footnote omitted).

On June 22, 2011, the Board formally proposed to amend its procedures for resolving disputes about union representation in a Notice of Proposed Rulemaking (NPRM), which was issued by a 3-1 vote of the four members then holding office. NPRM, 76 Fed. Reg. 36,812, 36,812 (June 22, 2011); see also Separate Concurring Statement by Chairman Pearce, 77 Fed. Reg. 25,548, 25,548 (Apr. 30, 2012). Then-Chairman Wilma Liebman, Member Craig Becker, and Member Mark Pearce voted in favor of publishing the NPRM; Member Brian Hayes dissented. See NPRM, 76 Fed. Reg. at 36,829-33. The proposed rule, the NPRM advised, would "remove unnecessary barriers to the fair and expeditious resolution of questions concerning representation." Id. at 36,812.

More than 65,000 written comments were received in response. See Final Rule, 76 Fed. Reg. at 80,140. In July 2011, the Board held two full days of hearings on the proposed rule. See id. at 80,142. All four Board members participated, and 66 individuals and organizations testified. See id. In the midst of the Board's subsequent deliberations, however, then-Chairman Liebman's term expired, leaving the Board with only three members. See Separate Concurring Statement by Chairman Pearce, 77 Fed. Reg. at 25,548. In addition, "the Board . . . faced the imminent end of the recess appointment of Member Becker and with it, the indefinite loss of a quorum." Id. (footnote omitted).

At a public meeting held on November 30, 2011, the remaining three members of the Board considered a resolution to "[p]repare a final rule to be published in the Federal Register containing" eight of the amendments proposed in the NPRM and to "[c]ontinue to deliberate on the remainder" of the proposed amendments. See Def.'s Mot., Exh. 2 (NLRB Resolution No. 2011-1). This proposal was intended to allow for those eight amendments to be published in a final rule before the expiration of Member Becker's appointment. See Separate Concurring Statement by Chairman Pearce, 77 Fed. Reg. at 25,548. The resolution was passed by a vote of 2-1, with Member Hayes again dissenting. See Final Rule, 76 Fed. Reg. at 80,147 ("Member Hayes attended [the November 30th meeting], participated fully, and voted against proceeding."); Separate Concurring Statement by Chairman Pearce, 77 Fed. Reg. at 25,548.

Consistent with that resolution, the final rule that is the subject of this case was prepared. The Chairman circulated a draft via email on December 9, 2011, and another draft was circulated via email on December 12. See Def.'s Opp., Exh. 1 (Decl. of Brian Hayes), ¶¶ 4-5.*fn1 The next day, December 13, another draft was circulated in the Board's internal Judicial Case Management System (JCMS). See id., ¶ 6.

JCMS is the ordinary procedure for circulating and revising draft decisions, rules, and other documents, and for voting -- generally either "approved" or "noted" with an attached dissent or concurrence. The case or rule is moved to issuance when votes are recorded for all Board Members as to the final versions of all circulated documents.

Id., ΒΆ 6. "In situations where a particular Board Member has not voted and immediate action is desired, the Executive Secretary or Solicitor may convey, by phone ...


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