D.C. Circuit Finds President’s NLRB “Recess” Appointments Unconstitutional
The United States Court of Appeals for the District of Columbia recently held that President Obama’s “Recess” Appointments to the National Labor Relations Board are unconstitutional.
Facts of the case: In Noel Canning v. NLRB, the Union charged that the employer violated Section 8(a)(1) and 8(a)(5) of the NLRA by refusing to honor a collective bargaining agreement. The Company contended that the two parties never agreed on the CBA. The ALJ sided with the Union. A three-member panel of the NLRB—consisting of Members Hayes, Flynn, and Block—affirmed the ALJ decision on February 8, 2012.
Despite having not raised the issue before the NLRB, on appeal to the D.C. Circuit, the Company argued that the Board was acting without proper authority. In order to conduct business, the NLRB must have a quorum of three members. On the date the case was decided, the Board purportedly had five members—Chairman Pearce and Member Hayes who had been confirmed by the Senate on June 22, 2010, and Members Griffin, Flynn, and Block, all of whom were recess appointments by the President on January 4, 2012. On that day, it was undisputed that the Senate was not in an “intersession” recess and was, instead, operating and meeting every three business days. The Company argued that these recess appointments were unconstitutional because the Senate was not truly in recess during this time period. Thus, the only members of the Board at the time of the decision were two members, Chairman Pearce and Member Hayes. These two members are not enough to constitute a quorum and, as a result, the Board’s decision was invalid.
The NLRB argued that the appointments were constitutional because the Senate was in an “intrasession” recess. The Labor Board also rested part of its defense on practical grounds, arguing that, because of the President’s difficulty in confirming NLRB appointments in the Senate, the agency’s ability to function was in jeopardy and the President could not fulfill his own obligation to ensure that laws are faithfully executed.
The Court's Ruling: In a unanimous decision, the D.C. Circuit ruled in favor of the employer, finding that the appointments are unconstitutional, the Board did not have a proper quorum to conduct business, and the Board’s decision should be vacated.
As a preliminary matter, the Court found that it would consider the constitutional issue even though the Company never raised it before the NLRB because of the “extraordinary circumstances” involved in the case.
Turning to the merits, the Court engaged in a thorough analysis of the clause of the Constitution permitting recess appointments which states that the “President shall have Power to fill up all Vacancies that happen during the Recess . . . .” The Court found that the article “the” and singular “Recess” meant that the President could make such appointments only during the “two or sometimes three sessions per Congress” when Congress is not in session—not during an “intrasession recess.” In support of its view, the Court cited to the rarity of such “intrasession recesses” historically. The Court noted that no president made such an “intrasession” appointment for 80 years after the Constitution was ratified and only three such appointments were made prior to 1947.
As for the NLRB’s practical argument, the Court was not persuaded. The Court cited to many federal agencies that Congress has empowered to appoint temporary and acting members in the name of staving off administrative inefficiencies. Congress has not given the NLRB this power. Beyond that, the Court found that even “if some administrative inefficiency results from our construction of the original meaning of the Constitution, that does not empower us to change what the Constitution commands.” The Court went on to say that the “power of a written constitution lies in its words” and that “when those words speak clearly, it is not up to us to depart from their meaning in favor of our own concept of efficiency, convenience, or facilitation of the functions of government.”
As a result, the three recess appointments were unconstitutional, the Board lacked a quorum to decide the merits of the case, and the order to enforce the Board’s decision was vacated.
In a press release from the NLRB after the D.C. Circuit ruling, the NLRB emphasized that the Labor Board disagreed with the decision and that the decision itself was limited to this case. It is likely that the NLRB will either appeal this ruling to the Supreme Court or ask the D.C. Circuit to rehear the case en banc.
Mere Risk of Drug Abuse Relapse Entitles Employee to Long-Term Disability Benefits
The United States Court of Appeals for the First Circuit has found that the mere risk of a drug abuse relapse is a current disability and entitled an employee to long-term disability payments under an employee benefit plan, even if the plan’s own administrative review process denied the benefit.
Facts of the Case: In Colby v. Union Security Insurance Co., a doctor was found to have tested positive for an opioid used in her medical practice. The doctor entered an inpatient substance abuse program and applied for long-term disability benefits through a group employee benefit plan. The plan approved the payments from the end of a 90-day waiting period till the time the doctor left the inpatient facility, but refused to pay benefits past that point because a “risk for relapse” was not a current disability. The doctor appealed through the administrative appeals process, but the appeal was denied.
The Court’s Ruling: While noting its review was deferential to the administrative appeals process, the First Circuit agreed with the District Court and found that the Company’s position was arbitrary and capricious and the benefits determination was not sustained. The Court noted that the plan found that substance abuse, dependence, and addiction were a “sickness” under the plan and that medical experts testified that the plaintiff remained “disabled” after her discharge from the inpatient treatment center. The Court criticized the Company for a “single-minded insistence” that a relapse could never constitute a disability and found that this insistence essentially resulted in an exclusion of the disability, which was found nowhere in the plan documents. As a practical matter, the Court also found that the benefits determination created a “perverse incentive” because, without disability benefits, the plaintiff would have been more likely to return to work and put herself and patients at risk. The Court noted that, in a similar case, the United States Court of Appeals for the Fourth Circuit had reached a contrary conclusion, but the First Circuit cited to a dissenting opinion in that case as having the better argument. The doctor was awarded benefits retroactively and attorneys’ fees.
Practical Impact: While providing long-term disability benefits for only the mere risk of a drug relapse might seem absurd, the Court’s ruling shows that employers must either evaluate the individual circumstances of each employee and determine if the employee is disabled according to the terms of the plan, or write a direct prohibition on providing this benefit into the plan documents.
FLSA Travel Time. The United States Court of Appeals for the Fifth Circuit recently ruled that travel time spent on mandatory employer buses was not compensable under the Fair Labor Standards Act. In Griffin v. S&B Engineers, the company’s laborers were required to park and ride company buses to a worksite approximately six to seven miles away. Before boarding the buses, the employees had to walk through turnstiles and scan identifying badges. While on the buses, the employees were required to follow the company’s Transportation Rules of Conduct, which prohibited using tobacco, alcohol, and cell phones. The Plaintiff’s argued that the time spent on the buses should be compensable since it was mandatory and “integral and indispensable” to work. The Fifth Circuit disagreed, holding that a mandatory transportation scheme does not make the travel time compensable per se. Instead, the Court looked at a number of other factors, such as that the Plaintiff did not perform any work prior to the beginning of shift, nor did he receive any work-related instructions prior to or during the bus rides. The Plaintiff was also free to engage in some personal activities on the bus rides such as sleeping and reading. The Court concluded that the Transportation Rules of Conduct were only “marginally restrictive” and not “integral and indispensable” to the Plaintiff’s work as an electrician. The Court also cited to the Department of Labor’s own interpretative statements on travel time, which previously found that travel time on buses was not compensable.
NLRB – Employee Handbooks. The National Labor Relations Board continues to scrutinize employee handbooks. In Direct TV, the employer promulgated a rule which stated, “If law enforcement wants to interview or obtain information regarding a DIRECTV employee, whether in person or by telephone/email, the employee should contact the security department in El Segundo, Calif., who will handle contact with law enforcement agencies and any needed coordination with DIRECTV departments.” While noting that employers sometimes have a legitimate purpose with such a rule – the desire to afford employees legal counsel during such interviews – the Labor Board still concluded that the rule was overly broad and could be read as interfering with a Labor Board investigation since Board agents function as “law enforcement.”
In another rule, the Company prohibited employees from releasing “company information” and further defined “company information” to also include “employee records.” The NLRB found that the rule was unlawful as well, holding that the prohibition against releasing “employee records would reasonably be understood by employees to restrict discussion of their wages and other terms and conditions of employment.”
As a reminder, the NLRB is bringing many of these employee handbook cases under the theory that the overly broad handbook language unlawfully infringes on an employees’ right to engage in protected concerted activity or that the rule interferes with an NLRB investigation. The right to engage in protected concerted activity and the NLRB’s right to investigate unfair labor practices extends to non-union workplaces.
FMLA. The Department of Labor recently released an administrative interpretation defining a “son or daughter” under the FMLA. The FMLA entitles an eligible employee to take up to 12 workweeks on unpaid, job-protected leave during a 12-month period to care for a son or daughter with a serious health condition. In order to meet the FMLA’s definition of a “son or daughter,” an adult child must have a mental or physical disability and be incapable of self-care because of that disability.
In its administrative interpretation, the Department first clarified that the benefit applies even if the disability begins when the son or daughter is an adult, e.g., begins for the first time to suffer from the disability at age 30. Next, in defining disability, the Department adopted the definition of disability found in the ADAAA, which states that an individual is disabled if an impairment limits one or more major life activities. The ADAAA significantly broadened the definition of “major life activities” and this same definition will now be used in determining if a “son or daughter” is disabled as well.
In discussing the “incapable of self-care” requirement, the Department stated that this is a fact-specific determination and that the determination must focus on whether the individual currently needs active assistance or supervision in performing three or more “adaptive activities” (such as grooming, bathing, dressing, eating) or “instrumental activities of daily living” (such as cooking, cleaning, shopping, etc.). The Department also noted that the parent must be “needed to care” for the son or daughter, but that “needed to care” would include “providing psychological comfort and reassurance that would be beneficial to a son or daughter with a serious health condition who is receiving inpatient or home care.”
Social Media Discovery. As noted in our November E-Update, courts continue to grapple with the challenges of what information on a plaintiff’s social media website should be subject to discovery in litigation. In Reid v. Smith, a plaintiff sought physical and emotional damages resulting from alleged sexual harassment. The defendant claimed that the postings and photographs from the plaintiff’s public portions of her Facebook account contained information that contradicted her claim of mental anguish, and that, as a result, the non-public portions of her social media accounts may also be relevant to her claims and subject to discovery. The Court held that based upon her public postings, the private postings may contain relevant information reflective of her emotional state. The Court found that the plaintiff had no expectation of privacy in her postings because the postings were available to her friends on Facebook. Still, the Court did not believe that “full disclosure of all materials” contained in the plaintiff’s social media accounts was necessary because not all postings were relevant to her claims. Instead, the plaintiff was ordered to produce only“ social media communications and photographs that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.” While many employers are justifiably concerned about employee social media use, in litigation, social media can provide useful evidence to limit emotional damages claims.
With Valentine’s Day around the corner, employers should remember to have policies in place regarding workplace romances. It is legally desirable for an employer to have a separate policy in its handbook stating that managers or supervisors are strictly prohibited from engaging in consensual romance or sexual relationships with any lower-level employees. This policy should supplement a preexisting Sexual Harassment policy.
For non-management co-workers, such romances can also present legal challenges. For instance, in a case in the United States Court of Appeals for the Ninth Circuit, a female co-worker continuously propositioned a male co-worker, including writing him love notes, giving him pictures of herself, and eventually making daily comments about her desire for him. At first, the male co-worker brushed off the advances, but eventually felt uncomfortable and brought his concerns to management. Management did not take his concerns seriously and failed to strictly enforce the Company’s sexual harassment policy.
The Ninth Circuit reversed summary judgment in favor of the Company. The Ninth Circuit recognized that not every romantic advance amongst non-supervisory co-workers is sexual harassment – if the offending employee had only asked the male co-worker to go on a date or see whether they had an interest in a romantic relationship, then the conduct would not have constituted sexual harassment. But the behavior was well-beyond that, a fact which a thorough HR investigation should have discovered.
The bottom line is that if an employee complains about sexual harassment from another co-worker, the complaint should be treated seriously and the Company can determine if the contact reflected only a romantic overture or rises to the level of sexual harassment.