- Good evening.
I'm really glad to welcome you all
to this year's Frank
Guarini Government Lecture.
Congressman Guarini is
a distinguished graduate
of this law school, a
seven-term congressman,
a member of the New Jersey
State Senate before that,
and a very devoted
supporter of this school
in many respects, including
through this lecture series,
and so we are tremendously
grateful to Frank,
though he couldn't be
here with us tonight,
for his support of this lecture
and for so much else
here at the law school.
And we're thrilled that NYU
Law alumnus Kent Hirozawa
is this year's Guarini lecturer.
Kent has had a distinguished
career in government service,
having served on the National
Labor Relations Board
after being appointed to
that post by President Obama.
He previously was chief
counsel to the NLRB Chair,
and before that, had a very
long and distinguished career
in private practice
representing workers, unions,
and employee benefits funds
for more than 20 years.
As I say, he's a graduate
of this law school
and was most recently here
as a visiting scholar,
and we're thrilled to
have him here this evening
to present this year's Guarini lecture.
So without further ado, Kent Hirozawa.
(audience applauding)
- Thank you, Trevor for
the kind introduction
and for your generosity in
hosting me here this spring.
When my term as a board member expired
towards the end of August last year,
I'd been nominated by President
Obama for another term.
Naturally, the Senate hadn't
acted on the nomination,
which had been pending since
April, and it was clear
that nothing would happen
before the election.
So the idea was that I should lay low
and stay out of trouble and wait and see,
wait and see what happened.
Well by sometime on
Election Night, it was clear
that I should start thinking
about something else to do.
(audience chuckles)
And I had loved being a labor lawyer
before going to Washington,
but I wasn't quite ready
to jump back into the fray.
I felt like I needed a transition,
and Dean Morrison came to the rescue.
He was kind enough to
offer me a place here
as a visiting scholar.
Now for those of you who aren't
familiar with the law school
or haven't been here in a
while, there's a dizzying wealth
of intellectual activity going on here.
And this is in addition to
the world class teaching
and clinics and programs for students
outside the classroom.
So the opportunity to partake
of the intellectual life
of the law school was a tremendous gift,
as was the luxury of time
and library privileges
to read articles and books that
I hadn't been able to get to
when I was on the board,
and just to step back
and look at the big picture.
One NLRB-related topic I
thought would be interesting
to look at is the trajectory
of the board's cases
in the Supreme Court.
Now anyone who studies
or practices labor law
has a rough idea of it, but
there's much more there,
some of which has not yet been done.
Of course that would be a
substantial undertaking,
but a much smaller inquiry is
to just look at the numbers,
and so that's what I did.
Didn't seem to have been done already,
at least I couldn't find anything,
so I took a look at it one afternoon.
And the numbers alone tell an interesting
if unsurprising story.
So, this shows the number
of substantive decisions
issued by the court in cases
in which the board was a party
for five year periods, starting in 1935
when the National Labor
Relations Act became law,
and continuing through
2009, the year before I went
to the board as chief counsel.
A couple of footnotes.
The number for the first five-year period
is lower because of the startup lag time,
the time it took for the first
cases to get to the board.
So there weren't any
cases in 1935 and 1936,
the first of the court's decisions
in NLRB v. Jones & Laughlin Steel,
affirming the constitutionality
of the act, didn't issue until 1937.
And the pace after that
was basically the same
as in the 1940 period.
And then the other one,
I don't want to get too
geeky here is that for the last period
on the chart it's not that the printer
ran out of blue ink.
(audience chuckling)
It's that the number is zero.
In fact the last decision
in the preceding period
came down in June 2002.
That was B&K Construction
for the law professors
and labor lawyers in the room.
So you're looking at
over seven years of zero.
So, what's going on here?
Part of it is that the
act is over 80 years old,
and the last substantive
amendments were in 1959.
At this point the Court
has probably resolved
most of the major questions
concerning the act
for better or worse, and then there's also
the fact that the court is issuing fewer
decisions than it did
in the '30s and '40s.
Meant longer opinions, smaller case load.
There's that but perhaps
the biggest factor's
the dramatic decline in union density
in the last 60 years.
Union density is the proportion of members
of the workforce, who are
represented by a union.
This chart gives you a
little historical context
taking it back,
back to the late 19th century.
You see the explosive
growth in union membership
in the first 10 years after
the act went into effect
from 1935 to 1945, then
a continuous decline
starting in the late '50s and accelerating
in the late '70s and '80s.
A substantial part of the board's caseload
involves union organizing
and collective bargaining.
If you have fewer union
members, you're gonna have
fewer cases at the board and fewer
making their way to the court.
Of course, the decline in
the rate of union membership
has affected a lot more
than the Supreme Court's
NLRB caseload.
Perhaps the most significant development
has been the growth in
income and inequality.
Before a quarter century
leading up to 1973,
the compensation of
Rank-and-File workers rose
in lock step with the economy's
gains and productivity.
In other words, workers
got a proportionate share
of the productivity increase.
But starting around 1973,
productivity continued to rise
but hourly compensation flattened out.
Workers were no longer sharing in
the productivity gains of the economy.
This change coincided with the
drop in union density below 25%.
Here's another look at the correlation.
The middle class share
of aggregate income,
that's the blue line in this chart,
refers to the middle three
Quintiles of income earners.
In other words leaving out the
top 20% and the bottom 20%.
So, this is pretty striking, right?
We all know that correlation
does not prove causation,
and it's clear that a number
of different factors have
contributed to the growth
of income inequality,
but there are now some studies
that persuasively establish
a causal link, I would
single out sociologist
Jake Rosenfeld's recent book titled,
"What unions no longer do."
Here is a different
angle on the correlation.
Those productivity gains
that Rank-and-File workers
no longer share in are
going, are going somewhere.
And here is a more focused
view of some of the winners.
Okay, the board and the court.
So, since 2009, the last
year covered by the chart,
the court has issued
decisions in three NLRB cases.
Now that doesn't mean we
can say, "We're back!"
But, especially since none of
these decisions even addresses
a substantive labor law issue,
but they do shine a light on
the agency's current place
in American political life and
the changing reality of governing.
There were three cases,
New Process Steel v NLRB,
NLRB v Noel Canning, and
NLRB v Southwest General.
And I started out wanting
to talk about all three,
and then realized that was just too much.
Especially Noel Canning, which addresses
the President's Recess Appointment powers.
So, what I'm gonna do just not to
drive everyone out of the room,
is stick to the first
one, New Process Steel,
which I think is probably
the least known because
it's the narrowest in its application.
It involves the quorum provision of the
National Labor Relations act.
The story begins in September 2007.
That month the board,
with a Republican majority
appointed by President George W Bush,
issued over 60 decisions,
many of them controversial.
And that became known, at least to some,
as the September Massacre.
Senate Democrats who had
recently regained control of the
chamber after the 2006 midterm elections,
took a dim view of this
development and they resolved
not to permit President Bush
to fill any of vacancies that
would arise when the
term of chairman Batista
expired in mid-December, and
the two Recess Appointments
lapsed at the end of
that month, of December.
As constituted since the
1947 amendments to the act,
the board has five members.
Members are appointed
by the President with
the advice and consent of the Senate.
Three members are required
for a quorum, and the board
may and routinely does delegate
its authority to groups of
at least three members in
practice, three members.
In late December, after chairman
Batista's term had expired
but with the two Recess
Appointees still in office,
so with a total of four members,
the board delegated its
authority to a three-member group
that included one of
the Recess Appointees,
they had to have at least one of them,
with the expressed understanding
that following the end of
the Recess Appointments the
remaining two members could
exercise the board's authority as a
quorum of the three member group.
Got that?
This legal analysis was, or
the legal analysis supporting
this approach came from a 2003 opinion
of the Office of Legal Counsel.
And you know they're pretty,
they're pretty smart over there.
So they figured, "This, this oughta work."
With the end of the month the
board went down to two members.
Wilma Liebman, a Democrat who
was originally appointed by
President Clinton, and Peter
Schaumber, a Republican
who was appointed by President
Bush in his first term.
So in January 2008 the board
began issuing decisions
pursuant to the December delegation.
In September 2008, the two member board
issued two decisions upholding findings of
unfair labor practices
by New Process Steel.
The company petitioned the
seventh circuit for review
of the orders, arguing
among other things, that
the two member board lacked
authority to issue the orders.
Meanwhile, Barack Obama won
the 2008 election and in the
spring of 2009 nominated two
Democrats and one Republican to
fill the vacancies on the board
following the longstanding
tradition of including, on the board,
members from the party out of power.
One of the nominees, Craig
Becker, was in my opinion
the most qualified individual ever
nominated to serve on the board.
After practicing with a
labor law firm in Washington,
for a few years he had
been a law professor,
produced some significant
labor law scholarship,
and then returned to practice as
Associate General Counsel
of the AFL-CIO and of
the Service Employees International Union.
He combined a deep knowledge
of the law, its history
and the policy
considerations underlying it
with years of experience in
bargaining, arbitration and
practice before the board.
In addition he's a team
player and very deliberate and
cautious in his approach to any issue.
In short, the complete package.
In October 2009, the Senate
committee on health, labor,
health, education, labor and pensions,
affectionately known
as the HELP committee,
voted to send all three
nominations to the full Senate.
Two of the nominees were
approved unanimously,
and Becker by a bipartisan vote,
including two Republican senators,
one of them the ranking
member of the committee.
Immediately following the
committee vote, however,
Senator John McCain put a
hold on Becker's nomination.
That meant that cloture
would have to be invoked.
Cloture that cutting off of
debate, would have to be invoked
to get the nomination to the full Senate.
The cloture process involves
presenting a cloture petition,
waiting for a specified period
of time, then holding a vote.
At the time, 60 votes were required to
invoke cloture on nominations.
In late January 2010, Senate
Majority Leader Harry Reid
filed cloture petitions for
the nominations of Becker and
Patricia Smith, then the New
York Commissioner of Labor, and
the nominee for Solicitor of Labor.
So those were filed together,
and he scheduled the votes on
both of them for the following
Monday, February 1st.
Senator McCain immediately
demanded a hearing on Becker's
nomination, the first for
board member nomination
other than chairman for
over, or for about 30 years.
So, that Thursday afternoon,
January 28th, the hearing was
scheduled for the following
Tuesday, February 2nd,
with the committee vote to
be held the following week.
And as a result of that,
the cloture petition
had to be withdrawn.
What followed was a weekend
of preparation and then
an uneventful hearing on the Tuesday.
In the meantime the vote for
cloture on Patricia Smith's
nomination went forward on February 1st,
on Monday the day before the hearing
and passed with 60 votes.
In other words not a single vote to spare.
Now the preceding August,
senator Ted Kennedy had passed away.
His seat was to be filled
through a special election, and
Paul Kirk, a former Kennedy
aide and former DNC chairman,
was appointed to serve in the interim.
He was not a candidate in the
special election, he was just,
he was just filling the seat
during the election process.
One of the 60 votes for cloture,
for the cloture petition on
Patricia Smith, was cast by Paul Kirk.
In the meantime, a few weeks before,
more like a week and a half before,
Scott Brown had won the special election
but was taking his time
moving down to Washington.
So, the February 1st cloture vote was
a wake-up call for the Republicans.
We don't know exactly what
happened, but Brown immediately
flew down to Washington
and demanded to be seated.
So he was sworn in on February 4th,
two days after the,
after the Becker hearing.
The next week the committee
voted a second time
on the, on the Becker nomination.
And this time it was a
straight party line vote.
The two Republican votes in favor
from October had disappeared.
While all of this was going on,
the two member board
continued to decide cases
and issue decisions
pursuant to the delegation.
That period finally ended
after the President's
Recess Appointments of Becker and
the other Democratic nominee,
Mark Pierce, on March 27th.
So over the 27 months
of its existence, that
two member board issued
over 600 decisions.
In New Process Steel, the seventh circuit
rejected the companies quorum arguments
and enforced the board's order.
On the same day, however, the
DC circuit issued a decision
in a different case reaching
the opposite conclusion.
A number of other circuits
weighed in, most of them
upholding the board's authority.
The Supreme Court granted Sir
to resolve the conflict and
the case was argued just
four days before the,
before the Recess Appointments.
On June 17th, the court
handed down its decision
holding that the board's delegated
authority could no longer
be exercised once the board's
membership fell to two.
The New Process Steel
decision raised the stakes and
set the stage for for the next case.
Later that summer, member
Pierce and Republican nominee
who had not been Recess
Appointed, Brian Hayes,
were confirmed as part of
a large group of nominees
acted on together by the Senate.
The terms of members
Schaumber and Liebman,
and I apologize for not
providing a scorecard for this,
they expired in August of
2010 and 2011 respectively.
So that dropped the number
of members to three.
So when member Becker's service ended a
few minutes after noon
on January 3rd 2012,
the board was again without a quorum.
And this time, that was, that was clear
under, under New Process Steel.
The President had previously
nominated a Republican
and two Democrats for the
two pre-existing vacancies
and for member Becker's seat.
On January 4th, the day after the end of
member Becker's service,
Recess Appointments of
all three nominees were, were announced.
One of the first decisions issued by
the newly reconstituted board,
involved Noel Canning,
a Pepsi distributor in
the state of Washington.
With the support of the
US Chamber of Commerce,
the company petitioned for
review in the DC circuit
arguing that the appointments
exceeded the President's power
under the Recess Appointments
clause of the constitution.
The implications of this
case were far greater
than New Process Steel.
Hundreds of federal officials had received
Recess Appointments from
Presidents of both parties.
And you get boldface
names like Alan Greenspan,
down to unpaid members of advisory boards.
So this had been routine,
and at a certain time
uncontroversial but as
conflict between presidents
in the Senate over policy
and personnel grew,
confirmations of nominees became
more commonly and bitterly
contested, Recess Appointments
became more controversial.
Toward the end of the
last Bush administration,
Senate Democrats followed
the practice of holding
pro forma sessions every several days.
During a Senate recess a
designated senator would gavel to
send it into session,
then gavel it out with
no business having been transacted.
The purpose was to prevent a
recess from lasting long enough
to permit Recess Appointments
under the prevailing norms.
So this was the practice
that by making the
Recess Appointments to the
board and preventing the board
from losing a quorum,
President Obama challenged,
and as I promised, I'm not
going to get into all the,
all the in's and out's,
in's and out's of that case,
but the the end result
was that the Supreme Court
essentially set aside
over 100 years of practice
and precedent in holding that
the Recess Appointments
were, were invalid.
The third case NLRB v Southwest General
involved the appointment of
an acting general counsel
under the Federal Vacancies Act.
This was another, well this involved
a whole different area of controversy.
The acting general counsel, Lafe Solomon,
was a career board employee.
Should have been non-controversial,
but he had committed a cardinal sin.
There was a complaint,
a charge I should say,
that was filed in region 19 in Seattle
against the Boeing company.
The charge alleged that the
company had made certain threats
to move work out of Washington
and to South Carolina
into a new plant that it
was constructing there.
Because of union activity
in the State of Washington.
And the allegations of the charge and
the evidence that the
charging party presented
clearly made out a prima facie case,
but there was an outcry that
the board was trying to tell companies
where they could invest
and where they could,
where they could build and,
and one afternoon Lafe received a,
received a call from a
senator who told him that
if he approved issuing the
complaint in the Boeing case,
he would never be confirmed.
So that was a, a Profiles
in Courage moment.
He approved the complaint because
that was the right thing to
do, and he was never confirmed.
And he knew that he would
never be be confirmed, but he
couldn't continue as acting
acting general counsel but the,
at that point he was a lightning
rod for among other things
litigation, so there were a
series of challenges to his
appointment as acting under
the, under the Vacancies Act.
And a whole series of different
arguments were made and
finally, in Southwest General,
there was an argument,
which is a very technical argument,
based on the language
of Vacancies Act, that
I won't trouble you with but the,
the Supreme Court ultimately ruled that
he hadn't been can been
properly appointed.
So this is really an...
These three cases are part
of an extraordinary series
of events affecting a,
affecting a federal agency
and what they, what they highlight is that
the board and the act are
situated in the midst of
very strong crosscurrents in
American politics and society.
There's some sectors of
political opinion that have never
accepted the legitimacy
of the of the new deal.
There's some that may
have seen the act as a,
as a necessary evil to channel and
regulate worker militancy
at the time when it,
when it was enacted but,
is no longer needed.
There are some who simply see unions as
outmoded impediments to the efficient
functioning of a business.
On the other hand there
are those who see unions
as essential to fair distribution
of the rewards of the economy.
And there are those on
both ends of the spectrum
who see unions as the largest group of
nongovernmental organizations
that tend to support
progressive candidates and policies,
that see them as a force either to be
contented with or to work with.
All of them see the board and the act
as supportive of the unions.
This isn't surprising
given that the act protects
employee union activity and
has the express purpose,
among others, of encouraging
collective bargaining.
Among the results of this
situation are the determined and
passionate attacks on the agency,
and equally passionate support.
Where it will all come out
I don't pretend to know.
I was wrong on so many of my predictions
when, when I was in Washington.
But I think it's safe to
say that it's far from over.
Thanks for listening.
(audience applause)
Any questions?
Amelia.
- [Amelia] Thank you.
I think you mention how
many cases were predominated
as a result of New Process Steel,
but in terms of the aggregate
total of the cases that
were largely, sort of,
the findings of which were
eviscerated, which has
between New Process Steel
and Noel Canning, do you
have a total number of,
basically how much work
had to either be redone
or re-examined by the board?
- You know, the numbers weren't
weren't that different, but the,
but Noel Canning ended
up being, being more work
to redo all those cases,
because basically the effect of
those rulings that was that
each of the decisions issued
by the improperly constituted
board was a nullity, and so the case
was still waiting for a decision.
So, so we had to redo all of them.
The ones in New Process
Steel were relatively easy,
because those were all
decided by two members
with very different views of the act,
and of the issues and
so for the two of them
to agree on a result and a rationale the,
the right answer had to be pretty obvious.
So, so those were disposed
of, of pretty quickly.
Noel Canning took, those
cases took a lot longer.
I mean some of them were very
routine, but there were also
some, some hard cases
there, and hard issues
and some of which weren't
addressed until the,
until the very end of my
term three years later.
One example is the, the Alan Ritchey case,
which was that, that the
actual Alan Ritchey case was
settled in the interim, but
the issue ended up being
addressed in total security.
So Philly.
- [Philly] So you showed
us the statistics about the
union density or class unaffected.
And I was, I'd be curious as to your views
as to what extent was that due to
macroeconomic forces and
changes in the labor market,
that would be explanation number one.
Explanation number two would be the
woefully weak punishments,
and the federal labor laws
were unfair labor practices and
other aspects of federal
labor law, that total union
policymakers have complained
about over the years.
- There's, I think it's
clear that there's no,
that there's no single cause.
And that, you know, those
are those are both factors.
And I don't know that it's
ever been quantified like the, the,
the relative responsibility for,
for this trend of different,
of different causes
has ever been quantified.
I think there are at least a
couple people in the room who
are better informed than I am on,
on this particular subject.
If either or any of you would
like to take a stab at it?
- [Cindy] Well, union
density has fallen in all,
the whole industrialized world.
It's fallen much faster in the so-called
Anglo American systems,
which tends, were more
enterprise based, for obvious reasons.
Competition between
enterprises has contributed.
But, I think it's fallen
worst of all in the US.
And then I think the contribution
of unfair labor practices
that are under inadequately deterred
and inadequately remedied
surely play a role.
- Thank you.
- [Steve] I can think of a few reasons.
The client manufactures
a percentage of the work
and a workplace with
5000 workers in one place
in ways, it's easier to unionize.
And now, workplace is
getting inherently smaller.
(background noise drowns out other sounds)
Of course, far, far, far,
far into unionization,
23, 24.
That said, we found a lack
of confidence relating to...
David Waddle...
(background noise drowns out other sounds)
The rules of unionizing
are very complex and,
imposing on the rights of Uber,
and throughout the kind of jobs
(background noise drowns out other sounds)
Many, many reasons, not just that
the companies are inadequate.
I think Cindy's right that
in the United States, fight
harder against unions than any
other industrialized nation.
- I apologize for not asking
our friends to introduce themselves.
Cindy Esselen, Professor
of Law here at NYU,
and I think the, the
scholar who's done the most
interesting and thoughtful
work in the area of labor law
in the last several
decades, Steve Greenhouse,
long time labor reporter
for the New York Times
and still very busy reporting while he,
while he finishes his second book.
The first one, The Big
Squeeze, was a terrific account
of the challenges that
American workers face and
and definitely worth, worth reading,
and, we're all looking
forward to the next one.
Miles.
- [Miles] So, I have a couple questions
that are kinda related.
You have this graph here,
the falling of the cases.
What are the characteristics
of, like the Noel Canning case
that makes it to Supreme Court.
Is that a question that
hasn't been resolved yet?
What drives that, and
how is that related to
the unionization in question.
And does it mean that they are no longer
getting questions that are being brought
forward for review.
- There are...
The question of what gets a
case to the Supreme Court,
there are lots of articles
and even books written,
written about that.
But there has to be a question
that needs to be resolved,
usually split among
different courts of appeals,
the next layer, the layer below
the Supreme Court in the federal system
of the judicial system,
and a significant enough question to
warrant the court's time
'cause they only issue, I mean,
at this point I think
barely 100 decisions a year.
Nancy.
- [Nancy] It seems like
these recent cases are really
all about whether the NLRB
gets to function at all.
And I wonder if, you know, like
you mentioned the first case
is about sort of the legality of the act.
But, over those years, were
there other cases that were
of this type, or is this
just a new thing within a
polarized political situation,
cases all about whether
the NLRB keeps to do it's
work because of, you know,
gridlocked and stopped appointments.
- Well, I mean that's
definitely what was going on.
How new it is,
you know when the,
when the act first went into effect,
there was massive resistance
in American industry.
There was a widespread belief in
at least some parts of the
business community that the
act was unconstitutional and
that it would be gone
within, within a matter of,
of years or months and
it took, and it took
a few years of enforcement
to get past that,
and there are ways in which,
in which we've never
really gotten past it.
The, the plan, you know
just, just as there was a
there was a plan, an
articulated plan, to prevent
President Obama from
achieving anything at all
there, there was a, I think
a plan among at least,
at least some people to keep
the board from functioning
and that, that was reflected
in what you see in these cases
and more directly ever since the, the,
the Republicans took control of the house
after the 2010 midterm elections,
there, there has been introduced I think
in most or all of the
sessions a bill too um
set the agency's budget at zero,
there have been writers
to, budget writers,
to, to prohibit the
agency from spending money
to enforce the National
Labor Relations Act.
So, so. so yes.
It has been that kind of thing
I think there's just been
because of the changes in,
in politics which we see reflected
in many different ways, there've been
more opportunities to to do that.
Steve.
- [Steve] I just think
that if a union throughout
the Noel Canning case
tried to strike overtime,
a three-person quorum, the union brought
in New Process Skill case, saying the
appointments were improper,
or a union has said that the
council was inappropriately appointed,
do you think the board would
(background noise drowns out other sounds)
- What do you think?
(laughter)
(audience laughing drowns out speaker)
- Anything else?
Is time for refreshments and reception?
All right, well thank you all for coming.
(audience applause)
