After Court Ruling, Challenges Expected to Regulations Implemented by NLRB - Modern Distribution Management

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After Court Ruling, Challenges Expected to Regulations Implemented by NLRB

Court rules that the President's National Labor Relations Board recess appointments were 'unconstitutional.'

A federal appeals court ruled today that the recess appointments to the National Labor Relations Board in January 2012 were unconstitutional, a move that could call into question several new regulations that have been introduced in the past 12 months. The reason? The Court says Congress wasn't really in recess when the appointments were made.

While this ruling officially only applies to this specific case, brought by bottler and distributor Noel Canning, it establishes a precedent for additional and broader challenges to regulations implemented by the NLRB since the board lost its quorum at the end of 2011.

In response to the ruling, the Justice Department released a statement saying: "We disagree with the court’s ruling and believe that the President’s recess appointments are constitutionally sound." And the White House says that for now, things will be business as usual with the NLRB.

The aggressive regulatory agenda by government agencies such as the NLRB has been one of the top concerns for distributors this past year (see Top Election Concerns for Distributors). And several industry associations, including the National Association of Wholesaler-Distributors, have been keeping a close eye on this case – and will continue to do so with a probable appeal on the horizon.

In response to the ruling, NLRB Chairman Mark Gaston Pearce issued this statement:

"The Board respectfully disagrees with today’s decision and believes that the President’s position in the matter will ultimately be upheld. It should be noted that this order applies to only one specific case, Noel Canning, and that similar questions have been raised in more than a dozen cases pending in other courts of appeals.

"In the meantime, the Board has important work to do. The parties who come to us seek and expect careful consideration and resolution of their cases, and for that reason, we will continue to perform our statutory duties and issue decisions."

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