NLRB “Quickie Election” Rule Still Invalid for Lack of Board Quorum, Federal Court Says

A federal district court in Washington, D.C., again has ruled, in response to the NLRB’s motion to alter or amend the judgment, allegedly based on new evidence, that the National Labor Relations Board “quickie election” rule that went into effect on April 30, 2012, is invalid because only two members of the Board, instead of the three needed to make up a quorum, participated in the final vote to pass it. Chamber of Commerce v. NLRB, No. 11-2262 (D. D.C. July 27, 2012).  The rule, which the Board rushed to finalize at the end of 2011 (before losing one of its then-three remaining members), eliminates certain pre-election rights of employees and employers, potentially shortening the time before a representation election takes place.  The NLRB suspended the rule’s implementation, after the court’s initial adverse determination, on May 15, 2012.

The U.S. Supreme Court decided in New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635 (2010), that a three-member quorum of the Board “must participate for the valid transaction of business.”  Moreover, the Supreme Court cautioned, a member may not be counted toward a quorum simply because he or she holds office.

On May 14, 2012, the District Court determined that when the election rule was adopted on December 16, 2011, only two members (Chairman Mark G. Pearce and former Member Craig Becker) participated, voting electronically through the agency’s Judicial Case Management System to adopt the rule.  District Court Judge James E. Boasberg found that one member (Member Brian Hayes) did not respond to the Board’s electronic invitation.  Hayes explained in an affidavit that he thought nothing further was required of him; he had already signaled at an earlier meeting his disagreement with the rulemaking and his intention to issue a dissenting opinion to the final rule at a later date.

Arguing the district court erred in its May 14, 2012, finding that Hayes could not be counted toward a quorum of the Board in adopting the “quickie election” rule, the Board filed a motion to alter or amend the judgment allegedly based on new evidence.  The new evidence was detailed information about the agency’s Judicial Case Management System and the activities in the “virtual space” during December 13-16, 2011, with respect to the challenged rule.  It showed that all three members were actively voting on various matters on those days, and Hayes had directed 18 votes to be cast on December 16.  At 12:24 p.m. on December 16, after the Chairman and Member Becker voted on the final rule, the Chairman electronically circulated the document to Member Hayes, creating a “voting task” that “asked Hayes to cast his vote.”  At 12:37 p.m., Hayes’s deputy chief counsel electronically “opened” this task.

Judge Boasberg chided the Board for not presenting this evidence for consideration before his May 14 decision, as it was available at the time, and commented that the new evidence strengthened the agency’s position that a quorum was present when the rule was adopted.  However, the judge decided that even if he were to consider the new evidence, it did not plainly show Member Hayes was present at or participated in the voting on the final rule and the Board had not shown there was “clear error” or “manifest injustice” in the May decision. “In the end, the NLRB has offered too little too late,” Judge Boasberg concluded.  He again found the rule could not stand as it was promulgated without the required quorum.  He reiterated that this would not bar the Board from re-issuing the rule by voting on it now.

It is likely that the NLRB will appeal the District Court’s decision.  For now, the new election rule has been held to be invalid and its implementation by the Board remains suspended.