U.S. SUPREME COURT INVALIDATES OBAMA’S NLRB RECESS APPOINTMENTS

On Thursday, June 26, 2014, the U.S. Supreme Court issued its long-awaited ruling in NLRB v. Noel Canning, a case where a soda bottler and distributor challenged an NLRB enforcement Order and claimed that the Board did not have a requisite quorum of members to issue the Order because three of its members, at the time,  had been unconstitutionally appointed.  After the District of Columbia Circuit Court sided with Noel Canning, the Supreme Court affirmed, and ruled on the Board’s appeal that the three recess appointments President Obama made to the NLRB in January 2012 were indeed unconstitutional. 042313_nlrb_600

The Noel Canning opinion is immensely long (108 pages), and detailing every constitutional aspect of the decision is beyond the scope of this piece.  Understanding the thrust of it is not complicated, though, and it starts with the Board’s composition.  The NLRB is typically comprised of five members, thus requiring a quorum of three members to act.  According to the Supreme Court’s 2010 Decision in New Process Steel, the Board cannot lawfully issue decisions or take action without a proper quorum.  On January 9, 2012, during a recess of the Senate, President Obama appointed three members to this five-member Board — Terence Flynn, Richard Griffin, and Sharon Block.  That’s where Noel Canning comes in.

The Supreme Court concluded in Noel Canning that these three appointments were unconstitutional since they were made during a 3-day “pro-forma” recess which was too short to evoke the President’s power under the Recess Appointment Clause to appoint someone to fill a government vacancy without the “advice and consent” of the Senate.  Thus, the NLRB essentially had only two properly appointed members at the time of its enforcement Order against Noel Canning, making that Order invalid.

So what does this mean for employers? To begin with, it’s likely that hundreds of Board decisions made between January 9, 2012 and August 5, 2013 – when the Senate properly confirmed new nominees for these three positions – are legally invalid.  The Board, now fully constituted at least until December of this year when Member Schiffer’s term ends, will have to re-issue all of these decisions, including but not limited to some controversial ones we have talked about here in the past on social media, employer investigations, and confidentiality.  While nobody can predict with certainty whether the current Board will reverse any of the decisions made during this time or will simply ‘rubber stamp’ the decisions already made, the odds are that many of them will end up the same, since the Board has the same pro-Democratic member composition it had at the time the decisions were first issued.

Additionally, employers can also expect to encounter delays in obtaining rulings on any cases currently pending before the Board because of all the decisions the NLRB must re-issue.  This delay could be particularly important in cases where back pay is an issue.  Further, because the need to re-issue all the invalid Board decisions will likely take time, it will be worth watching whether that slows the Board’s agenda for the remainder of this year.  As many employers know, the Board was expected to issue sometime in the fall a decision in Purple Communications, Inc., where the issue is whether employees should have access to an employer’s e-mail system for organization purposes.  The Board was also supposed to finalize its “quickie election” rules, which are expected to change the union election landscape negatively for employers.  Our regular readers are very familiar with these rules, as we have discussed them in this forum on many prior occasions.

Be sure to check our Employment Essentials blog often in the second half of this calendar year for all your NLRB updates in these areas and more.  Undoubtedly, this will not be the last time we talk about the Board during the remainder of 2014.

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