The 52-33 vote to move forward with the nomination of Craig Becker fell short of the 60 needed to overcome a GOP filibuster.
Republicans have held up Becker's confirmation for months. They say Becker would push an aggressive union agenda at the agency that referees labor disputes between unions and management.
Business groups, lead by the U.S. Chamber of Commerce, lobbied hard against Becker, who has argued that "employers should be stripped of any legally cognizable interest in their employees' election of representatives."
"By any objective or reasonable standard, Craig Becker is a labor radical who would force unionization on Americans," wrote Katie Packer of the business-backed Workforce Fairness institute, which opposes the Employee Free Choice Act or "card check" legislation that would make it easier for workers to form unions.
Democrats leaders argued the nominee is qualified, but their task turned more difficult when at least two Democrats joined Republicans in opposing the lawyer.