The National Labor Relations Board (NLRB) has long allowed employers and unions to resolve cases arising from unfair labor practice charges without a full adjudication on the merits. The most common way in which this is accomplished is through a bilateral settlement agreement, in which the employer, the union, and the NLRB’s General Counsel all agree to the terms of settlement. A second, and more controversial, way in which complaints have been resolved (some might prefer the word “terminated” instead of resolved) without completing the litigation process is through consent orders.
A consent order comes about when the respondent (i.e., an employer) proposes terms by which to resolve a dispute that the administrative law judge (ALJ) presiding over the case accepts over the objections of the charging party and General Counsel. In other words, a consent order, despite its name, does not have to be consented to by all parties. If the ALJ approves the employer’s proposed terms, then she will enter a consent order effectively ending the case short of a full adjudication on the merits.
The long and winding road of consent orders
The NLRB’s existential struggle with consent orders started in Electrical Workers IUE Local 201, decided in 1971. (Only a year earlier the Beatles’ released their final number one hit, “The Long and Winding Road.” An apt title for the NLRB’s relationship with consent orders.). In Electrical Workers, the NLRB approved a consent order finding that doing so would “protect the public interest and effectuate the purposes and policies of the [NLRA].” In its decision, the NLRB noted that the employer’s proposed consent order provided a full remedy for the violations at issue. This means the consent order provided all the relief that the NLRB could possibly order if the case was fully adjudicated, so further litigation would have been pointless.
Subsequently to Electrical Workers, the NLRB altered course on the circumstances under which it would approve consent orders. Instead of limiting approval to consent orders that provided a full remedy, the NLRB began approving consent orders that only “substantially remedied” the alleged violations if the orders were “reasonable.” This approach was borrowed from the standard for approving bilateral settlement agreements agreed to by all parties.
In its 2016 Postal Service decision, the NLRB made a U-turn. It returned to the Electric Workers standard by which consent orders would only be approved if they provided a full remedy for the violations at issue. In doing so, the NLRB sought to distinguish settlement agreements from consent orders. Approving settlement agreements that afford less than full relief is acceptable, the NLRB reasoned, because it gives deference to the charging party’s judgment about her interests, and it furthers the well-established policy in favor of private dispute resolution. The NLRB felt that neither of those considerations were furthered in approving a consent order, over the objection of the charging party and General Counsel, that afforded something less than a full remedy.
In 2017, the NLRB reversed course again and overruled Postal Service. In UPMC and its subsidiary, UPMC Presbyterian Shadyside, the NLRB reasoned that if an ALJ and the NLRB deemed a consent order to be reasonable then there is good reason to continue litigation only because the consent order did not provide all possible remedy available. The NLRB believed this approach encouraged voluntary resolution (even though the resolution was not actually voluntary), promoted industrial peace, conserved the NLRB’s resources, and served the public interest.
NLRB’s latest decision ends consent orders
All of the above leads us to the NLRB’s August 22, 2024, decision in Metro Health, Inc. d/b/a Hospital Metropolitano Rio Piedras. In Metro Health, the employer operated a hospital in Puerto Rico. A union representing four different employee units filed two unfair labor practice charges alleging the employer violated the NLRA by refusing to provide requested payroll records and unilaterally subcontracting unit work and laying off unit employees. The two cases were consolidated.
During the hearing on these cases, the General Counsel and employer engaged in settlement negotiations that were unsuccessful. The employer then filed a motion to sever the cases and approve a consent order. The ALJ granted both requests. The ALJ approved the consent order because it substantially comported with the General Counsel’s earlier settlement offer. The General Counsel appealed and requested that the NLRB return to the standard set forth in Postal Service (i.e., only approve consent orders that provide full remedy). The employer urged the NLRB to reaffirm its holding in UPMC. The NLRB did neither.
Yep, you read that correctly. The NLRB refused to return to the Postal Service standard, and it refused to reaffirm UPMC. Instead, the NLRB held that it “should instead entirely end the practice of approving consent orders.” According to the NLRB, it doesn’t matter if the consent order provides a full remedy or partial remedy; the NLRB will no longer accept consent orders. The NLRB relied heavily on Section 102.35(a)(7) of the Board’s Rules and Regulations, which states that ALJs may “[h]old conferences for the settlement or simplification of issues by consent of the parties, but not to adjust cases.” According to the Board, a case is “adjust[ed]” if it is resolved short of final adjudication on the merits. A consent order is not a settlement because not all parties agree to its terms, so it must be an improper adjustment of the case, so reasons the NLRB.
The NLRB explained that even the Postal Service’s full remedy standard is too problematic because absent “delving deeply into a case,” it is too difficult in some cases to determine what remedy would be ordered if the alleged violations were fully litigated. In addition, approving consent orders improperly invades the prosecutorial discretion of the General Counsel. The NLRB opined that the General Counsel should be “free to pursue litigation because she sees a case ‘as a vehicle to push a broader item on her agenda.” In other words, the General Counsel should be allowed to reject a full-remedy resolution in order to further any agenda she might have by means of continuing to litigate a case. This broad view of the discretion held by the General Counsel could be an ominous sign for many employers.
What this decision means for employers
It remains to be seen if this is indeed the end of consent orders or just another turn in the long and winding road of this issue. Regardless, employers should prepare for the possibility that even if they offer to resolve a charge or complaint by offering all available remedy, the General Counsel can reject the offer leaving the employer with no recourse other than to fully litigate the alleged violations.
