The National Labor Relations Board Goes Rogue

By: Bernie Marcus

Appeared in Wall Street Journal on February 21, 2013


A federal court last month ruled that three members of the National Labor Relations Board (NLRB) were unlawfully appointed by President Obama. The board lacks a quorum yet will carry on as if nothing happened; Chairman Mark Pearce announced that he “disagrees” with the court’s decision. After making hundreds of decisions that killed jobs and increased economic uncertainty, the board is set to decide a hundred more.

For small business owners, this is par for the course. A survey last month of 600 small businesses with 100 or fewer employees revealed that 70% of their owners feel Washington is hostile to their efforts to create jobs. Conducted by the nonprofit Job Creators Alliance, the survey revealed that this feeling crosses party, gender and race lines. Democratic small business owners and women and minority small business owners are almost as pessimistic as their white male Republican peers.

There are many reasons for their pessimism. Leading the list were political concerns. Six of 10 small business owners believe that ObamaCare will hurt their business in 2013. Half are worried about the lack of spending cuts in the recent fiscal-cliff deal. Such concerns help explain minuscule economic growth and the recent uptick in unemployment. Worried business owners don’t invest, expand and create jobs. They hunker down and try to survive.

And why would they hope for change when they see a job-killing machine like the NLRB ignore a unanimous court ruling and continue to attack job creators?

On Jan. 25, a panel of the D.C. Circuit Court of Appeals ruled in Noel Canning v. NLRB that the president’s appointment of three members to the five-member board in 2012 exceeded his constitutional authority to make recess appointments–since the Senate said it was not in recess. The court overturned the NLRB decision against a family-owned bottling company in a dispute with the Teamsters. Without a legal quorum, every NLRB decision in the past 12 months is at risk.

This came about because of the board’s outrageous action in an earlier dispute. In 2009, Boeing BA +1.64% decided to assemble airplanes in South Carolina with 1,000 well-paid but nonunion employees. The machinist’s union complained. The NLRB sued Boeing to stop the new nonunion plant. The labor board dropped the case in late 2011 after the union and Boeing compromised. But Sen. Lindsey Graham (R., S.C.) pledged to block future appointments to the NLRB, and Mr. Obama appointed new board members during a January 2012 break in Senate action.

These unconstitutional appointees have lived up to Sen. Graham’s fears: They continue to inhibit job creation by fostering workplace uncertainty. In May, the board used its power to determine what constitutes an “appropriate bargaining unit” to impose so-called micro-unions on employers–like organizing only the shoe department at Bergdorf Goodman in New York City–that fragment the workforce and can disrupt businesses.

A month later, the board’s decision to continue pursuing “quickie” elections virtually assured that unions will win more organizing elections by forcing workers to vote a mere eight to 10 days after a union petition is filed. This makes it harder for employers to present their point of view and for employees to make an informed choice.

The board even overturned a 50-year-old precedent with a ruling in December requiring employers to collect union dues after a collective-bargaining agreement has expired. This severely limits employers’ negotiation leverage. In another case, the NLRB ordered a Connecticut nursing home to reinstate striking workers who had engaged in acts of sabotage that would make it more difficult to provide care for Alzheimer’s patients. They had mixed up patient name tags and removed photos from medical records.

Sen. Mike Johanns (R., Neb.) has introduced a bill to bar the NLRB from enforcing any decisions without a Senate-confirmed board. And on Feb. 13, Rep. John Kline (R., Minn.) and the House leadership wrote a letter insisting that the NLRB board “cease all activity” until there is a legal quorum.

Today, many job creators are being punished for doing business. Confiscatory taxes. Suffocating regulations. Stifling energy costs. Businesses that have joined the Job Creators Alliance face these challenges every day. Now they must also endure a rogue agency thumbing its nose at an unambiguous and unanimous court ruling. How are they supposed to have the confidence to invest and create jobs?

Mr. Marcus, co-founder and former chairman and CEO of Home Depot, is co-founder of the Job Creators Alliance.