Court of Appeals Strikes Down NLRB Recess Appointments – What Does this Mean Going Forward?

On January 25, 2013, the Court of Appeals for the District of Columbia ruled in Noel Canning v. NLRB, 2013 WL 276024 (D.C. Cir. 2013) that President Obama's three "Recess" appointments to the National Labor Relations Board ("Board) in early 2012 violated the United States Constitution and that, as a result, the Board has not had a quorum since January 2, 2012 and could not lawfully issue the Noel Canning decision.

In Noel Canning, the employer challenged a Board decision holding that it had bargained in bad faith in violation of the National Labor Relations Act. Although the court ruled that the Board's decision was supported by substantial evidence, the court nonetheless refused to enforce the Board's decision on the grounds that, when the Board issued the decision, it did not have the required quorum because three of the Board's five members had been invalidly appointed to the Board as "Recess" appointments.

Under the Constitution, the President must obtain the advice and consent of the Senate to fill certain positions; however, the Constitution permits the President to temporarily appoint people to fill those positions when the Senate is in "Recess." The practice of making "Recess" appointments has been used by many Presidents for over 150 years. Indeed, President Clinton made approximately 139 such appointments, President George W. Bush made approximately 179 such appointments, and President Obama has made approximately 32 such appointments to date. Recently, however, Presidents have used the power to temporarily fill positions that have been blocked by procedural maneuvering within the Senate.

Here, President Obama filled three positions on the Board during the period of January 3 through February 4, 2012, claiming that the Senate was in Recess during this period. The court, however, found that none of the three appointments fell within the President's Recess appointment power under the Constitution.

First, the court ruled that the term "Recess" has a special meaning under the Constitution and encompasses only those periods between the Senate's formal two or three sessions and that it does not encompass other times when the Senate technically is in session but may not be actively conducting business. Therefore, the court concluded that, because the Senate commenced a new session on January 3, 2012, the Board appointments that occurred between January 3 and February 4, 2012 exceeded the President's powers under the Constitution.

Second, the court ruled that, to make a "Recess" appointment, the vacancy must arise during the "Recess" and the appointment must be made during the same "Recess." Therefore, the court concluded that, because none of the appointments met both of these requirements, they exceeded the President's powers for these reasons, as well.

Third, because the Board cannot act without a quorum of at least three members, the court concluded that the decision in the Noel Canning case was void.

The court's decision reflects a novel interpretation of the President's power to make "Recess" appointments that almost certainly will be appealed the Supreme Court. Moreover, similar issues are pending in other courts of appeal. Therefore, at this point, the import of the Noel Canning decision is hard to predict.

A similar issue arose two years ago when the Supreme Court ruled in New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635 (2010) that the Board cannot act without at least three members. Following that decision, the Board secured a quorum and then reissued many of the decisions that had been issued without a quorum. Notably, however, the Board only issued new decisions with respect to cases that had been on appeal or were in some phase of compliance; the Board did not reissue decisions in cases that had been closed.

Accordingly, while it is impossible to predict how this issue will be resolved, it certainly raises considerable doubts regarding the validity of Board decisions that have been released since January 3, 2012, some of which overturned long-standing precedents and many of which reflected a substantial expansion of employee rights, especially in union-free environments. Moreover, because the Board has stated that it will continue to decide active cases pending an appeal of the Noel Canning decision, the uncertainty will continue. In the meantime, however, employers should raise the Noel Canning arguments in any proceedings before the Board.