The U.S. Supreme Court has affirmed a lower court's decision to vacate a National Labor Relations Board (NLRB) complaint issued by the Board's Acting General Counsel, who at the time was ineligible to serve based on the requirements of the Federal Vacancies Reform Act of 1998 (FVRA). As a result of yesterday's Court decision, a number of NLRB complaints issued from January 2011 to November 2013 may be voidable.

NLRB v. SW General, Inc. originated with an unfair labor practice complaint filed by the NLRB against an Arizona ambulance company, alleging that the company had failed to make longevity payments to union employees after a collective bargaining agreement had expired. The ambulance company defended by arguing that the Acting General Counsel who issued the complaint was serving in violation of the FVRA. Section 3345 of the FVRA details the requirements for serving in an acting capacity in positions that require presidential appointment and Senate confirmation. Subsection (b)(1) prohibits a person from serving as an acting officer following nomination for the position on a permanent basis. The Board rejected the defense, but the U.S. Court of Appeals for the D.C. Circuit vacated the Board's order under FVRA, and the NLRB appealed to the Supreme Court.

Based on a careful reading of the statutory text, the Court agreed with the company and upheld the D.C. Circuit's decision. Notably, the Court did not address the consequences of its opinion for other complaints filed during the period of the challenged tenure. Perhaps mindful of the potential fallout, the D.C. Circuit limited its decision by dictating two specific requirements for parties who wish to challenge NLRB actions under FVRA. First, the party must have presented the issue as a separate claim or defense "at or around" the time of the government action. Second, the government agency must have had "reasonable notice" of the claimed defect in the official's title to office. Therefore, the practical effect of NLRB v. SW General, Inc. may be limited.

Members of Ballard Spahr's Labor and Employment Group regularly counsel employers on labor and employment laws, including NLRB developments.


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