The "second look" mandated by NLRB v. Noel Canning could produce a more realistic balancing of employers' legitimate interests

By David P. Hiller

Under the U.S. Constitution, the President must ordinarily obtain Senate consent to appoint top federal officials. However, the "recess appointments" clause permits the President to fill vacancies that "happen during" a recess of the Senate. In early January 2012, the Senate was operating under a resolution that provided for sessions every third day.

During a brief hiatus between such sessions, President Barack Obama purported to grant "recess" appointments to three candidates for the National Labor Relations Board (NLRB) whose prior nominations had yet to garner Senate consent. In NLRB v. Noel Canning, the Supreme Court invalidated the appointments, holding on June 26, 2014, that:

The president's power to make "recess" appointments without the consent of the Senate applies to any vacancy (not just vacancies which "happen during" a recess). The Senate will be considered in "recess" if it takes a break of 10 or more days during any annual session. Any day when the Senate deems itself to be in session and "retains the capacity to transact business" restarts the 10-day clock.

In Noel Canning there was no 10-day break when President Obama purported to make the NLRB appointments. The three members whose 2012 appointments were invalidated in Noel Canning no longer serve on the NLRB. However, they participated in deciding more than 100 cases during the 18 months following their appointments. Those cases will have to be reheard and many of them are important for non-union employers or facilities.

The traditional focus of the NLRB has been conducting union elections and enforcing bargaining and other rights of unionized employees. Recently, however, the board has taken a hard line against provisions common in non-union employee handbooks and non-union employers' efforts to curb improper use of email and social media. Some of the key cases are among those that will have to be reheard.

For example, when an employer is investigating a complaint of misconduct, potential witnesses are typically asked to keep their interviews confidential lest the investigation be corrupted. In a case called Banner Health, a three-member panel of the NLRB (two of whose appointments were invalid) held that an employer's "generalized concern with protecting the integrity of its investigations" must yield to the rather vague right of employees to act in concert for their "mutual aid or protection" unless the employer can prove that confidentiality was needed because specific "witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, or there [was] a need to prevent cover up." That's a demanding standard.

Clearly, an employer's trade secrets and proprietary information must be confidential. Yet the NLRB demands that confidentiality provisions in non-union employee handbooks must be narrowly tailored lest employees interpret them as a ban on criticizing management or working conditions. Several such decisions will also have to be reheard.

The NLRB's intrusive foray into the non-union sector is still in its infancy. The "second look" mandated by Noel Canning could produce a more realistic balancing of employers' legitimate interests. Stay tuned.

David P. Hiller is a partner in the Columbus office of Fisher & Phillips LLP, a nationwide labor and employment law firm, and a former chief counsel to the Attorney General of Ohio.