THIRD CIRCUIT AGREES WITH NOEL CANNING; IS THE 2ND COURT TO INVALIDATE NLRB RECESS APPOINTMENTS

If you are a regular reader of this blog, you know that the National Labor Relations Board (“NLRB”) has been the subject of a great deal of court attention during the Obama Administration.  Halfway through 2013, that train is still rolling and shows no sign of slowing down anytime soon.

Of course, the highest-profile issue which some courts have confronted in this area recently is whether recess appointments made by President Obama to the NLRB are constitutional.  As a refresher, the National Labor Relations Act (“NLRA”) provides the NLRB is to be composed of up to five members appointed by the President and confirmed with the “advice and consent” of the Senate.   The NLRA also allows the NLRB to delegate to any group of three or more members any or all of its powers.  Thus, if properly appointed, the NLRB can function with three members, and that’s important because, given the current gridlock in Washington, the President has found it difficult to appoint members to the NLRB who the Senate is willing to confirm.

In the midst of this gridlock, President Obama has made several appointments to the NLRB without the traditional “advice and consent” of the Senate.  The Constitution provides a mechanism for such appointments when the Senate is “in recess.”  However, whether the Senate is in recess is a constitutional issue, and that question first hit the appellate courts in the context of President Obama’s appointments to the NLRB in January of this year when the U.S. Court of Appeals for the D.C. Circuit held in Noel Canning v. NLRB that three appointments made by President Obama to the NLRB in January 2012 were not valid because they were made after Congress had already started a new session.  Thus, those appointments could not be made without approval of the Senate. 

On May 16, 2013, the Court of Appeals for the Third Circuit took its turn on the issue, rendering its decision in NLRB v. New Vista Nursing & Rehabilitation and reaching a similar result as the D.C. Circuit.  The Third Circuit concluded that an appointment by President Obama in 2010 of Craig Becker – almost two years before the appointments at-issue in the D.C. case – was invalid.  President Obama appointed Member Becker to the NLRB one day after the Senate then adjourned for two weeks.   

To determine whether the appointment was valid, the Third Circuit first looked to define the phrase “the Recess of the Senate” found in the Recess Appointments Clause of the Constitution.  The Recess Appointments Clause provides that “[t]he President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” 

Three definitions of this phrase were considered by the Third Circuit.  The first would mean only the “period between sessions of the Senate when the Senate is by definition not in session and therefore unavailable.”  This is typically called an intersession break. 

The second definition included intercession breaks and some intrasession breaks.  Intrasession breaks are breaks in Senate business during a session.  However, this second definition would only include those intrasession breaks which last for a significant duration – historically ten days or more. 

The third definition, which was presented by the NLRB/Obama Administration, was anytime the Senate wasn’t available to provide their “advice and consent,” including pro forma sessions.  Pro forma sessions are formal meetings of the Senate in which usually only a single senator is present to convene the body before immediately adjourning it.  Typically, no business is conducted during pro forma sessions. 

After interpreting the text of the Constitution, the historical use of “recess,” and the purpose of the Recess Appointments Clause as a way of continuing the operation of the government, the Third Circuit concluded that “the Recess of the Senate” means only intercession breaks.  In reaching this conclusion, the court stressed that the text and structure of the Recess Appointments Clause is a secondary method of appointing government officers.  According to the Third Circuit, the primary method is provided in the Appointments Clause of the Constitution, which contemplates the appointment being made by the President with Senate approval.  The text, therefore, reveals a constitutional preference for divided power between the executive and legislative branches. 

The court reasoned that if it adopted the NLRB’s definition, then the President would have the power to make unilateral, recess appointments each time members of the Senate went home for the evening or took a lunch break.  Such a definition would “eviscerate the divided-powers framework” provided by the Constitution, according to the Third Circuit.  The Court also rejected the Board’s argument that the intercession definition provides too much of an opportunity for abuse by the Senate, stating that the possibility of abuse was present under any definition, including the Board’s.  In the end, Member Becker’s appointment was held to be unconstitutional under the intercession definition the Court adopted, making the underlying certification orders from the Board in the case invalid.

Since it has already petitioned the United States Supreme Court for review of the earlier decision by the D.C. Circuit in Noel Canning, the NLRB will likely appeal the New Vista decision to the Supreme Court, as well.  However, until the Supreme Court either accepts or rejects any appeal, the D.C. Circuit and Third Circuit opinions remain, and they cast doubt on the validity of a great number of recent decisions from the NLRB that were issued without a quorum.  Mr. Becker’s invalid appointment alone covers the period from March, 2010 to January, 2012.  Future decisions by the Board will continue to have the same scrutiny.

While the uncertainty which now exists about the ongoing validity of Board action doesn’t necessarily help employers, the other side of the equation is that at least two Circuit Courts of Appeals have provided some check on the authority of the NLRB and Obama Administration, which was missing before the cases went up to a level of the court system that high.  Until at least one of them goes to the highest level, though, nothing is certain in this area, and caution in acting is advised

Joseph Leonoro concentrates his practice in matters involving labor and employment law.
 
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