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Supreme Court case highlights U.S. labor agency political divide

News microphones wait to capture reactions from U.S. Supreme Court rulings outside the court building in Washington, June 25, 2013. REUTERS/
News microphones wait to capture reactions from U.S. Supreme Court rulings outside the court building in Washington, June 25, 2013. REUTERS/

By Amanda Becker and Carlyn Kolker

WASHINGTON/NEW YORK (Reuters) - When the U.S. Supreme Court hears arguments on Monday in a case involving soda bottler Noel Canning Corp., presidential appointment power will be the main dispute, but the case will also put on display one of Washington's most politically polarizing agencies - the National Labor Relations Board.

Created nearly 80 years ago to supervise union elections and protect workers' rights to organize, the NLRB is a battleground for pro-labor Democrats and pro-management Republicans.

Deep disagreement between the two sides over the NLRB's role - and over organized labor itself - makes disputes involving the board uncommonly bitter and subjects its agenda to constant reshaping, depending on which party controls the White House.

"It's no accident ... that this major constitutional showdown is occurring over appointments to the board," said AFL-CIO General Counsel Craig Becker, a former board member.

Monday's case began as a labor dispute. The NLRB found in February 2012 that Noel Canning, a Pepsi bottler in Yakima, Washington, had reneged on a verbal contract during union negotiations. The company appealed to the courts, attracting the support of the U.S. Chamber of Commerce, conservative interest groups and Republican leaders in Congress. The case evolved into a constitutional challenge to the president's power to make appointments to key posts without Senate confirmation.

At issue are "recess appointments" made in January 2012 by Democratic President Barack Obama to the NLRB. Two of these appointees presided over the board's Noel Canning deliberations, which the company and its supporters are contending was invalid.

An NLRB spokesman declined to discuss the case.

WOBBLY ENFORCEMENT

Since its Great Depression origins, discord over the NLRB and the labor law it enforces have led to policy flip-flops and vacillating oversight as political power shifts in Washington.

One measure of this is agency data on how often the board seeks court injunctions. In cases where it suspects a labor law violation, the five-member NLRB board can authorize seeking a court order, or injunction, telling an employer to halt a questionable practice while a case moves forward.

Agency data for 1976-2011 show that when Democrats are in the White House, injunction authorizations rise, but when Republicans take over, authorizations decline, reflecting deep differences between the two parties about to what extent the board should intervene in labor disputes.

Another indicator is sometimes startling flip-flops on labor law issues, experts said. Unlike courts, the NLRB is not bound by its prior case precedent and can alter past positions.

For instance, the board has reversed course on whether graduate students at private universities can join labor unions. In 2000, under Democratic President Bill Clinton, the NLRB said New York University graduate students could unionize.

In 2004, under Republican President George W. Bush, the board reversed that decision. Then under Obama, it said in 2012 that it would reconsider the Bush-era determination, though the union withdrew its case in a deal with the university.

"It's not good for the constituency the NLRB serves - whether it's employees, employers or unions - to have rules always in flux," said Marshall Babson, an NLRB member during the Republican administration of President Ronald Reagan.

'G-- D--- LABOR BOARD'

"This agency has been controversial from Day One," said former NLRB Chair Wilma Liebman in an interview.

An October 1938 article in Fortune, a business magazine, was headlined, "The G-- D--- Labor Board," and called the law it was supposed to enforce a "patently one-sided" pro-union statute that was the most "bitterly contested" of all Democratic President Franklin Roosevelt's New Deal legislation.

A Republican-backed effort led to management-friendly amendments to the law in 1947. Liebman said modern-day board members still debate whether the agency's primary mission is enforcing the original statute or the amendments.

"That's one of the things that has created the flip flopping, the dissenting opinions, so much controversy," Liebman said. "It's a statute that was never fully accepted."

QUORUM CALL

The five-member board, picked by the president and subject to U.S. Senate confirmation, decides hundreds of cases each year. Three members are needed to decide a case. Members' five-year terms are staggered, with one expiring each year. Some board vacancies have gone unfilled in recent years.

Before Obama installed the recess appointees contested by Noel Canning, the board had only two members and could not take official action. If the soda bottler prevails, the practical fallout for the NLRB will be limited. The Senate cut a deal in July that led to the confirmation of five NLRB members, marking the first time in a decade the board had all its seats filled.

If Noel Canning wins, those members will likely have to re-decide more than 100 cases pending before U.S. appeals courts that challenge decisions made in part by recess appointees, Liebman said.

But the larger question is whether the case could hobble efforts by Obama - and future presidents - to overcome political gridlock and fill key posts across the government.

One NLRB member's term expires in December. So the turbulent agency's next vacancy - and another potential confirmation fight - is less than a year away.

(Editing by Kevin Drawbaugh and Ken Wills)

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