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Obama Recess Appointments Can’t Be Challenged in Labor Rule Suit

President Barack Obama’s recess appointments to the National Labor Relations Board can’t be challenged as part of a lawsuit over requirements for businesses to inform employees of their rights, a judge ruled.

U.S. District Judge Amy Berman Jackson in Washington yesterday said the National Federation of Independent Business and other trade groups “attempted to shoehorn a challenge” to the recess appointments into a case over a rule mandating that companies notify workers of their rights to form a union.

“The court declines this invitation to take up a political dispute that is not before it,” Jackson said in her six-page ruling. She didn’t rule on whether the appointments were legal.

In a separate ruling, the judge found the board has the authority to require companies to post union-rights notifications. She ruled the board lacked the authority to enforce the so-called poster rule as an unfair labor practice.

“We are concerned that this decision will encourage frivolous lawsuits by unions against small-business owners who refuse to comply,” Karen Harned, executive director of NFIB’s Small Business Legal Center, said in an e-mailed statement.

She said the group will appeal the rulings.

Obama appointed three members to the board on Jan. 4, bypassing the Senate by asserting lawmakers were in recess and unable to act on nominations. A president is permitted to make appointments without Senate confirmation during a recess. Republicans dispute that was the case at the time.

Four Labor Cases

The Washington lawsuit is one of at least four labor cases in which parties have argued that the recess appointments were unconstitutional, thus leaving the board without a quorum to transact business or enforce regulations.

On March 1 in a federal court in New York, Paul Clement, a lawyer for a landlord, asked a judge to throw out a court petition seeking to halt a lockout of 70 workers at a Brooklyn apartment complex. He said the petition isn’t valid because the board that filed it lacked a quorum.

“We’ve never had an attempted recess appointment like this,” said Clement, who was solicitor general and acting attorney general under President George W. Bush.

Obama has since sent the Senate the nominations of the three candidates.

In January, some of the trade groups in the poster-rule case sought to add the recess appointment challenge to their lawsuit.

‘Widespread Confusion’

The groups urged the judge to rule on the legality of the appointments to avoid “widespread confusion” and forestall challenges to the NLRB’s authority in multiple cases.

“Millions of employers are faced with immediate confusion and uncertainty as to their notice posting obligations due to the widely publicized questions regarding the constitutional legitimacy of the current board,” the trade groups said in a Feb. 3 filing.

Eric Moskowitz, an NLRB lawyer, said in a Jan. 30 filing that the trade groups shouldn’t be able to revise their complaint to question the board’s authority to enforce the new rule. He called the request “futile and prejudicial.”

On Feb. 13, the quorum argument was cited in a motion to dismiss a petition in which the NLRB accused a New York supermarket of firing five workers for seeking to unionize. On Feb. 23, an Illinois lighting-equipment maker raised the argument in its response to a petition in which the labor board accused it of moving work from the U.S. to Mexico because its employees went on strike.

The case is National Association of Manufacturers v. National Labor Relations Board, 11-cv-01629, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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