Key Takeaways
- The dual firings of the NLRB’s General Counsel Jennifer Abruzzo and acting General Counsel Jessica Rutter clear the way for their replacement, acting General Counsel William B. Cowen, to rescind Joe Biden-era policy, although President Donald Trump’s permanent replacement is still up in the air.
- The removal of Board member Gwynne Wilcox has rendered the NLRB without a quorum to make decisions and sets the stage for Trump to have more influence over the labor agency during his term.
- The NLRB should be more favorable to management as the president changes the makeup of the agency, and its processes will be moving slower during this transitional period.
Background
President Donald Trump hit the ground running last week, showing he wants the National Labor Relations Board (NLRB or Board) in line with his administration’s goals. With that in mind, and as discussed by BakerHostetler’s labor team last week, he fired sitting Board member Gwynne Wilcox, General Counsel Jennifer Abruzzo and Abruzzo’s short-lived replacement, acting General Counsel Jessica Rutter. The NLRB currently sits without a quorum to make decisions and without a permanent general counsel. Employers should follow these developments because they will affect the president’s power over the Board, the Board’s ability to change current law and the Board’s ability to handle its caseload. As the dust begins to settle, the practical impacts of these moves come into sharper focus.
No General Counsel
Because of her hard-line prolabor policies, the unseating of Abruzzo has been anticipated since Trump won reelection. The only surprise to many observers is that it took a full week for the termination to take place. Her ouster signaled an immediate directional change for national labor policies. Rutter, Abruzzo’s deputy, became the acting general counsel pending selection of a new appointee. Rutter was also let go when it became apparent that she did not intend to stand down from the prior administration’s labor policy.
Abruzzo’s legal opinions and policy memos were described as “radical,” but she could not always find the right case to change the law, and where she did (e.g., Cemex organizing or a prohibition against captive audience meetings), her attempts could face challenge on appeal. This means that the new NLRB general counsel (whoever it will be) can rescind Abruzzo’s policy memos and make changes immediately.
Practically speaking, in the first 180 days of the new general counsel’s appointment, we expect a lower volume of unfair labor practice complaints, more favorable settlement agreement terms approved by the regional offices and a complete reversal of Abruzzo’s policy directives. William B. Cowen, a former Board member under President George W. Bush, was appointed as acting general counsel on Feb. 3, though it’s unclear whether he will be selected to permanently fill the role.
A No-Quorum Board
The president’s termination of Wilcox in the midst of her term is more controversial and more unexpected. Trump’s aggressive actions will almost assuredly propel the Board into a legal fight. In fact, Wilcox has already filed a lawsuit challenging her removal. While Abruzzo could be removed for any reason, current precedent provides that Board members are only removable before the expiration of their term for “neglect of duty or malfeasance in office.” Trump argues that the NLRB exercises executive powers, such as issuing regulations and pursuing enforcement actions, which gives him the authority as the chief executive to install in that position anyone he deems fit.
By removing Wilcox, the president has essentially shut down the federal labor relations policy-making board until he chooses to make his appointments. For employers, this development is a mixed bag. On the one hand, the NLRB lacking authority to issue decisions can delay rulings that could have been unfavorable to employers with pending cases. On the other hand, the Board will be unable to change employee-friendly precedent that came through over the past four years.
But Why?
When Trump entered office, even with Wilcox still in her role, he had a 2-1 Democratic majority NLRB with two empty Board seats. The White House could then have named two Republicans as Board members to secure a 3-2 Republican majority for his term. So why would Trump take these legally questionable actions to end Wilcox’s term and cripple the NLRB when his right to appoint would have provided a majority-Republican Board anyway?
The answer is leverage. NLRB watchers expect that the strong moves from the White House will lead to broader negotiations, including the resolution of constitutional questions raised about the NLRB in the past two years. The lack of a quorum also gives the president a play for a complete slate of Republican Board members, at least for the duration of his term. This gives him much more influence in his well-known outreach to union leadership, vying for an otherwise unheard-of partnership between organized labor and the Republican Party.
The Future Favors the Bold
In the coming four years, the NLRB is expected to be handicapped in any regulatory capacity because of a lack of staffing and funding and by the constitutional legal issues that the president has brought to the agency’s door. The recent buyout offers to federal employees may shrink the NLRB’s ranks even more, meaning it will take longer for cases to bubble up to the NLRB for a decision to change the direction of the law. That said, when the NLRB does operate, we expect its decisions will be viewed through a more favorable employer lens. Issues of bargaining impasses, management rights, wage increases during the critical period, employer free speech during union campaigns, ending card check neutrality agreements, and employee decertification will all move away from the union’s advantage on a case-by-case basis. As a result, employers may be rewarded for acting aggressively at the right time, knowing that the NLRB, at least for now, may act in their favor when decisions are challenged at the national level.
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