After NLRB v. Canning: A Practical Guide for Employers

The Supreme Court's decision last week in NLRB v. Canning left many employers scratching their heads—and with good reason.

Sure, the unanimous ruling served as a rebuke to the Obama Administration, and hundreds of National Labor Relations Board (NLRB) rulings expanding employee rights and protections have been wiped off the books.  But what exactly is the current state of the law?  And how should you, as an employer, proceed in terms of creating and implementing employment-related policies?

This post will endeavor to provide some practical insights.

In Canning, the Court ruled that President Obama overreached his executive authority by unilaterally appointing a voting majority to the NLRB in January 2012 when the Senate was still technically in session. It's an arcane issue with weighty implications.

In a nutshell, the U.S. Constitution allows Presidents to appoint federal officers when Congress is in recess. Senate Republicans expected President Obama to appoint members to the NLRB during the traditional winter break in the 2011-12 session. To block the appointments, the Senate avoided going into recess, entering instead into a series of "pro forma" sessions during which no real business was conducted.

President Obama took the position that the Senate had, in fact, entered into a "recess," and he stacked the board with union-friendly members who never otherwise would have been approved by the Senate. The Canning decision invalidated those appointments — but not before the controversial recess appointees issued hundreds of decisions and orders that directly impact employers.

Important NLRB cases decided by the recess appointees include:

• Banner Health Systems, where the NLRB held that an employer may not ask an employee who was subject to an investigation to refrain from discussing the matter during the investigation.
• The issue of off-duty employee access rights came up several times, culminating in Marriott International, Inc., where the board severely restricted employers' ability to control off-duty employees' access to the workplace.
• The board also issued numerous rulings relating to employees' use of social media, including Karl Knauz Motors, Inc., where the board held unlawful an employer handbook rule relating to social media postings that prohibited "disrespectful language" or "any other language which injures the image or reputation of the Dealership."

So how to proceed from here?

The aforementioned rulings and many others are no longer the law of the land, but for exactly how long remains unclear.  As Canning percolated through the lower courts, President Obama put an end to the NLRB uncertainty prospectively by nominating five candidates considered to be politically moderate, including two Republicans, all of whom were confirmed by the Senate in August of  2013.

The bottom line is that the Democrat appointees still control the NLRB. The current majority is thus likely to rule the same way as the improperly constituted board when and if the voided cases are heard again. Herein lies the challenge for employers.

Over the past few days, some commentators have opined that the NLRB will move swiftly to re-hear those cases and affirm the prior rulings. Others believe that the NLRB already has a full plate and will not be able to accommodate additional work. No one knows for sure.

We believe that the most prudent approach for employers is to proceed with caution. If you are making a real-world employment decision involving an issue addressed in a voided NLRB ruling, keep in mind that:

1. the current state of the law is as it existed prior to January 1, 2012; and
2. that could change quickly — even between the time you make a decision and implement it. If you already doing so, we recommend that you start monitoring NLRB decisions to stay abreast of any developments.

Also, you might consider refraining from updating your employee handbook for now, particularly with regard to areas where the law is in flux, such as policies relating to social media, employee discipline, and employee access to the workplace. The NLRB positions on these issues will likely become clearer in the coming months.

The impact of Canning will vary depending on your business's particular needs and employment goals.