FEDERAL APPEALS COURT RULES OBAMA’S RECESS APPOINTMENTS TO NLRB INVALID

On January 25, 2013, the U.S. Court of Appeals for the District of Columbia Circuit released its decision in Noel Canning v. NLRB, which started as a seemingly routine review of an NLRB decision, but produced a result that was anything but typical. 

The NLRB decision being challenged on appeal in this case had to do with whether the employer violated the National Labor Relations Act by refusing to reduce to writing and sign a collective bargaining agreement which supposedly had been reached between the employer and union.  The Board’s decision concluding that the employer engaged in unfair labor practices was originally made on February 8, 2012, at a time when the Board had five members – Mark Pearce, Brian Hayes, Sharon Block, Terence Flynn, and Richard Griffin. 

The first two members of the Board at the time had been confirmed by the Senate and their validity is undisputed.  However, the latter three had been appointed by Obama through recess appointments on January 4, 2012, one day after Congress began a new session and while that continued by a “pro-forma” session, where the Senate convenes formally but no business is conducted.  The validity of the appointments – and therefore how many members the Board had – was the basis for the appeal and is significant because the NLRB is required to operate and make decisions with a three-member quorum, as the United States Supreme Court ruled in the New Process Steel opinion in 2010.

In its decision, the D. C. Circuit unanimously found that the recess Board appointments by President Obama were “invalid from their inception,” rendering the Board without a quorum to decide the merits of the case (and by extension, potentially all other cases since the three recess appointments in 2012).  According to the Court, a President’s ability to make recess appointments is limited to when the Senate is in “the recess” between congressional sessions, when it’s impractical for him to obtain the Senate’s advice and consent before making one.

Although the full impact of this decision remains to be seen, there is no denying that the opinion is very significant for employers everywhere.  This is true because of a likely further appeal to the U.S. Supreme Court by the Board, because the Board has said it will continue operating normally notwithstanding the fact that the validity of anything it does will certainly be subject to future attack on the same grounds, and because the Board issued a slew of significant rulings in 2012 covering everything from new wave social media discipline and policies to traditional employment practices like using at-will disclaimers and conducting employment investigations – which now all have questionable validity.

Moreover, this is not a situation likely to have a remedy anytime soon without a ruling from the nation’s highest court.  Several of the five Board members sitting at the time the Noel Canning case was heard have since had their own appointments expire, leaving the NLRB currently with only three members, two of which were recess appointments.  If the decision of the D.C. Circuit is upheld on appeal, it will have left the Board with only one sitting member.

Obviously, the NLRB continues to remain in the news, even if the spotlight isn’t kind.  Please check this blog often for future developments on these issues as they arise.

Lindsay Bouffard focuses her practice in the area of labor and employment law.
 
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