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eLABORate: U.S. District Court Invalidates NLRB's Controversial Final Rule Adopted Without Required Quorum

May 15, 2012

On May 14, 2012, the U.S. District Court for the District of Columbia set aside a controversial final rule of the National Labor Relations Board ("NLRB") that was designed to make it easier for unions to hold organizing elections. Chamber of Commerce of the United States of America, et al. v. NLRB, Case No. 11-02262 (D.D.C. May 14, 2012). The District Court invalidated the rule "because no quorum ever existed for the pivotal vote in question." The final rule would "amend[] the procedures for determining whether a majority of employees wish to be represented by a labor organization for purposes of collective bargaining." The plaintiffs sought to enjoin the NLRB from enforcing the final rule that was purportedly adopted electronically on December 16, 2011 by a quorum, asserting in relevant part that the signatures of two members did not constitute a quorum necessary to promulgate a final rule.

Three NLRB members must be "present" to constitute a quorum necessary to adopt a final rule. See 29 U.S.C. § 153(b) ("three members of the Board shall, at all times, constitute a quorum"); see also New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635, 2638 (2010). The District Court noted that "showing up … is the only thing that matters—even when the quorum is constituted electronically."
On December 16, 2011, the final version of the rule was circulated via email to the three Board members—Chairman Pearce, Member Becker, and Member Hayes—for voting. Pearce and Becker voted in favor of adopting the final rule; however, Hayes did not cast a vote, and failed to even acknowledge receipt of the email. Nevertheless, within a few hours of circulation, the rule was sent for publication in the Federal Register, and published on December 22, 2011. The controversy centered on the issue of whether Hayes was "present" for the relevant agency action on December 16, 2011 that promulgated the final rule, in order to constitute the statutory quorum necessary for a lawful rule. The NLRB argued that Hayes was present because of his participation in two earlier decisions relating to the publication of the final rule— (1) November 30, 2011 decision to adopt a resolution providing that the final rule should be prepared, and (2) December 15, 2011 decision to issue a procedural order providing that the final rule should be published upon a majority vote to adopt it.
The District Court concluded that Hayes "[could] not be counted toward the quorum merely because he held office, and his participation in earlier decisions relating to the drafting of the rule [did] not suffice." Although a member need not vote in order to form part of the quorum, the abstaining voter must be present. Here, had Hayes affirmatively expressed his intent to abstain from voting or even acknowledge receipt of the email notification, he may have been legally present for the vote, and thus, counted in the quorum. Moreover, had someone reached out to Hayes to ask for a response, which was the NLRB's usual practice under these circumstances, or had a substantial amount of time passed following the circulation of the final version of the rule, the District Court concluded that it may have been a closer case for the NLRB.
The NLRB did not immediately indicate whether it plans to appeal the ruling and it could even seek to issue the rule with a new vote. The District Court made clear that its ruling only dealt with the quorum issue, and that "nothing appears to prevent a properly constituted quorum of the Board from voting to adopt the rule if it has the desire to do so." According to the District Court, however, unless or until the Board votes on the rule with a proper quorum, "representation elections will have to continue under the old procedures."