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Court Decision Could Cripple NLRB and Consumer Bureau




Atop the list of landmark laws that conservatives have never particularly warmed to are two that established fundamental rights for workers and consumers: the 1935 National Labor Relations Act, which provided employees a legal path to form unions, and the 2010 Dodd-Frank financial reform, which established a Consumer Financial Protection Bureau to rein in banks’ abusive treatment of depositors and mortgage holders. Conservatives have never had the votes or the gumption to repeal these statutes. But now they can essentially neuter these laws.

[Last] Friday, three judges on the U.S. Court of Appeals for the District of Columbia Circuit — all nominated by Republican presidents — ruled that President Obama lacked the authority for three appointments he had made to the National Labor Relations Board (NLRB) during the break between Congress’s 2011 and 2012 sessions. Invoking the president’s power to make one- or two-year appointments while Congress is in recess — a power that presidents have exercised as far back as James Madison — Obama appointed two Democrats and one Republican in the face of continued Republican opposition to his previous NLRB picks. Those appointees had commanded majority support in the Senate, but Republicans had refused to allow an up-or-down vote for confirmation unless Democrats could muster a 60-vote supermajority.

Republican senators were not merely opposing particular individuals. They were also stripping the NLRB of its power. In 2010, the Supreme Court ruled that unless the five-member board had a quorum of three members, it had no adjudicatory or rule-making authority. The board was down to two members when Obama made his recess appointments, so all of the panel’s rulings since January 2012, including allowing employees to comment on their workplaces on Facebook without fear of being fired, are now subject to challenge — at least until the Supreme Court decides whether to affirm or reverse the D.C. Circuit ruling, which runs counter to earlier appellate-court decisions that upheld the rights of Presidents Dwight D. Eisenhower and George W. Bush to make recess appointments.

The NLRB’s reduction to a cipher looks just fine to congressional Republicans. Rep. John Kline (R-Minn.), who heads the House committee with jurisdiction over labor matters, called for the board to “cease all activity until qualified nominees have been constitutionally appointed.” Sen. Lamar Alexander (R-Tenn.) demanded that the recess appointees step down. The NLRB said Friday that the members would stay, in expectation that the administration would appeal last week’s ruling to the Supreme Court.

What Republicans really seek is a board without a quorum. Such a board would have no power, for instance, to intervene on behalf of workers illegally fired for union activity — 17,000 of whom brought complaints to the board in fiscal 2010 alone.

Last week’s ruling also imperils Obama’s recess appointment of former Ohio attorney general Richard Cordray as director of the Consumer Financial Protection Bureau. Republicans had filibustered Cordray, but many said that they weren’t objecting to Cordray so much as the bureau itself. They vowed not to confirm a director until the agency, whose structure had been laid out in the Dodd-Frank legislation, is placed under bipartisan control. Some lawmakers were troubled that the bureau would have as its sole charge the welfare of consumers, rather than balancing consumers’ interests and those of banks. In essence, they sought a house divided against itself — in the hope that over time, it could not stand.

By the terms of Dodd-Frank, the agency cannot promulgate rules unless it has a director. Should Friday’s ruling on recess appointments be allowed to stand, and to strike down Cordray’s appointment, the bureau’s rulings will be rendered moot. The agency will become as impotent as a two-member NLRB.

It’s critical to understand what has happened and how. By filibustering Obama’s appointees to these two agencies and by denying the president the long-established right to make recess appointments, a minority of senators and the three D.C. Circuit judges, respectively, have effectively removed the guts of the two landmark laws granting rights to employees in the workplace and to mortgage holders, small businesses and depositors in their dealings with their banks. The Supreme Court could still restore those rights by overturning the D.C. Circuit. The Senate could have kept this from happening had it abolished the filibuster procedures that give a minority the power to thwart majority rule — a long-overdue task from which it shrank, again, last week. In consequence, a Republican minority has managed to strip workers and consumers of fundamental legal rights.

(This post first appeared in the Washington Post and  is republished with permission.)

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