A New Arrow in the Quiver of Employers: AGC’s Appointment Ruled Invalid

By Nelson Cary and James Patrick

Thanks to a recent ruling, employers have a new arrow in their quiver—the ability to challenge actions because the NLRB’s current Acting General Counsel (“AGC”) was invalidly appointed. In Hooks v. Kitsap Tenant Support Services, Inc. (pdf), a federal district court judge determined that the NLRB’s AGC Lafe Solomon was improperly appointed, further undermining the NLRB’s authority. The ruling comes on the heels of the Noel Canning and New Vista Nursing Rehabilitation decisions, which declared President Obama’s recess appointments to the NLRB unconstitutional.

In the recent decision, the court dismissed the NLRB Regional Director’s petition for preliminary injunction. Adopting the New Vista analysis, the judge declared President Obama’s recess appointments unconstitutional. The court reasoned that this deprived the NLRB of authority to issue complaints, as described in the NLRA. Without a valid complaint, the Regional Director was precluded from filing a petition for preliminary relief in the district court.

The court also rejected the Regional Director’s alternative argument that authority to initiate legal action had been delegated to him by the AGC. The court determined that the AGC’s appointment was invalid because it did not comply with the Federal Vacancies Reform Act (“FVRA”). In particular, the FVRA only permits appointments under specific circumstances, none of which the court found applicable to the AGC’s appointment. The court rejected the only potential applicable circumstance—the appointment of a person who in the last 365 days had served as a personal assistant to the departing officer—because the AGC never served as a first assistant. The invalidity of the AGC’s appointment precluded him from lawfully delegating his authority to the Regional Director.

The Hooks decision has the potential to be even more significant for the labor professional than the decision in Noel Canning:

• The AGC is responsible for the day-to-day enforcement and administration of the NLRA. In light of Hooks, employers confronted with an action of an NLRB regional office in the future (or any time since the AGC’s appointment in 2010) should consult qualified labor counsel to determine how this ruling might apply to their circumstances. 
• With a court decision declaring the AGC’s appointment invalid, the uncertainty that appeared to go away with Senate action on the NLRB members, will return until the Senate acts upon the appointment of a General Counsel to replace the AGC. 
• The NLRB is very likely to appeal this ruling. Until then, do not expect the NLRB or its regional offices to alter the way the NLRA is enforced.