Obama’s Labor-Board Picks Don’t Derail Lawsuit, Judge Rules

A court petition seeking to halt a lockout of Brooklyn, New York, workers was valid, a federal judge ruled, rejecting claims that it wasn’t because the National Labor Relations Board that voted to file it didn’t have a quorum to do so.

The landlord in a dispute with 70 workers at the Brooklyn apartment complex said the lawsuit wasn’t legal because it was voted on by a board with three so-called recess appointments President Barack Obama made in January when the Senate wasn’t in session. U.S. District Judge Brian M. Cogan refused to dismiss the petition, saying the NLRB’s general counsel had the power to authorize the suit.

“This court will not make any pronouncements on the constitutionality of President Obama’s recess appointments to the NLRB,” Cogan wrote in his ruling today.

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.

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

Cogan ordered the landlord, Brooklyn-based Renaissance Equity Holdings LLC, to reinstate the workers.

‘Carefully Considered’

“Judge Cogan’s opinion is a carefully considered one, and the reinstatement terms set by the court are similar to the terms Renaissance previously offered to the union,” James M. McGuire, a lawyer for the landlord at Dechert LLP in Manhattan, said in a phone interview.

Nancy Cleeland, an NLRB spokeswoman, didn’t have an immediate comment.

The NLRB said the lawsuit was validly filed because last year it gave Lafe Solomon, its acting general counsel, authority to approve such court actions. Cogan disagreed with the landlord’s contention that the general counsel’s power ended when the board lost its quorum.

Cogan said at least three times during a March 1 hearing that the appointments were made to avoid the Senate’s role in consenting to nominations.

The labor board started this year with two members, which isn’t enough to make decisions such as whether to file the Brooklyn case. Obama then appointed Sharon Block, Richard Griffin and Terence Flynn.

‘Pro Forma Sessions’

On Jan. 6, the U.S. Justice Department issued a memo that “the convening of periodic pro forma sessions in which no business is to be conducted” doesn’t preclude the president from making recess appointments.

The issue of the appointments has come up in other cases.

Trade groups including the National Association of Manufacturers on March 3 lost a bid to have the appointments declared invalid in a federal lawsuit in Washington. The groups appealed that decision by U.S. District Judge Amy Berman Jackson, who said they “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.

On March 15, U.S. District Judge George B. Daniels in Manhattan also ruled that a petition authorized by Solomon was valid. In that case, the NLRB accuses a New York supermarket of firing five workers for seeking to unionize.

Higher Wages

Renaissance, which owns Flatbush Gardens, a 59-building, 2,500-unit complex in the Flatbush neighborhood, said the Senate never adjourned and that the president can’t make recess appointments when the legislative body holds “pro forma” sessions, which it said it did.

The Flatbush porters and handymen were frozen out of their jobs in November 2010 after they refused to accept a pay cut of at least 30 percent. The Service Employees International Union Local 32BJ is seeking to have them returned to work at the higher wages they were making while the dispute is resolved.

The labor board filed the court case on Jan. 25 saying there was “reasonable cause to believe” that Renaissance engaged in unfair labor practices and the lockout should end.

The union said in court papers that Renaissance is trying to eliminate organized workers from the complex.

Cogan granted an injunction forcing Renaissance to bargain in good faith with the union and reinstate the locked-out employees, finding the NLRB made a reasonable showing that the landlord engaged in unfair labor violations, including failing to provide its complete financial information.

Previous Conditions

He ordered the workers back on the job under previous conditions except for a 20 percent cut in pay. Cogan said that it would be improper “to force Renaissance to resume paying the wages that Renaissance has persistently contended it cannot afford” and that the union showed indifference toward its need to reduce costs.

“The judge’s decision to end a 16-month lockout and order Renaissance Equity Holdings back to the bargaining table is vindication for 70-plus workers in a David and Goliath type of battle,” Hector Figueroa, secretary-treasurer of the union, said in an e-mailed statement.

The case is Paulsen v. Renaissance Equity Holdings LLC, 12- cv-350, U.S. District Court for the Eastern District of New York (Brooklyn).

To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.

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

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