Supreme Court Invalidates NLRB Appointments

In a highly anticipated decision, the U.S. Supreme Court unanimously invalidated three recess appointments to the National Labor Relations Board (NLRB) that President Barack Obama made in January 2012. NLRB v. Noel Canning, et al., 2014 WL 2882090 (June 26, 2014). The decision invalidates hundreds of NLRB decisions made while these three members constituted a quorum of the NLRB, and the NLRB will now have to reconsider and reissue all of those decisions. The practical effect for employers, however, is that the current NLRB likely will confirm most if not all of the invalidated decisions.

Background

The U.S. Constitution provides the executive branch of the government with two ways to fill vacancies to agency posts; the President can submit a nominee's name to the U.S. Senate for its "advice and consent" or make a "recess appointment."

In Noel Canning, the NLRB had issued an unfair labor practice decision holding that the company unlawfully refused to execute a collective bargaining agreement. When the NLRB decided the case, it had two confirmed members and three recess appointees. The company appealed the NLRB decision to the U.S. Court of Appeals for the D.C. Circuit and raised the constitutionality of the three recess appointments. The company argued that the Senate was not in recess at the time the President appointed three of the members to the NLRB; therefore, the appointments were invalid and no quorum existed (a prior Supreme Court decision holds that the NLRB needs at least three members for a quorum).

The court of appeals reversed the NLRB's decision, finding in favor of the company on the recess appointments issue and the Supreme Court agreed to hear the case. The Supreme Court ruled in favor of the company, but used a more narrow and different rationale than the one the court of appeals had used.

Decision

In Noel Canning, the Supreme Court had to decide the scope of the executive branch's ability to make recess appointments. The Supreme Court ruled the that the President has the right to make recess appointments, during both inter-session recesses, where the Senate is between regular sessions, and intra-session recesses, where the Senate is briefly recessed during a regular session. The Court also held that the President has the right to fill vacancies through recess appointments for vacancies that occur both before and during the time that the recess occurred. However, the Court ruled that when the President made the three recess appointments to the NLRB, the recess in question (three days) was too short for the appointments to be valid.

President Obama appointed the three NLRB members in early 2012. At that time, the Senate was in recess pursuant to a December 17, 2013 resolution that provided for a series of brief pro formal sessions every Tuesday and Friday through January 20, 2012. The Court determined that "it is the Senate that decides when it is in session by retaining the power to conduct business pursuant to its own rules," and as a result, the Court could not ignore the pro forma sessions. Thus, the Court had to decide whether a recess appointment could be made during the three-day recess between two pro forma sessions. The Court concluded that, "[t]hree days is too short a time to bring a recess within the scope of the [recess appointments] clause. Thus, we conclude that the President lacked the power to make the recess appointments here at issue." According to the Court, Senate breaks of three days or less are not recesses covered by the clause; Senate breaks of four days to less than 10 days are presumptively not covered, but that presumption can be rebutted in unusual circumstances.

Practical Effect

The NLRB currently includes a full complement of confirmed members. Therefore, the NLRB is poised to re-decide all of the decisions that were invalidated by the Noel Canning decision and most experts expect the NLRB to confirm most if not all of them. NLRB Chairman, Mark Gaston Pearce, issued a statement regarding Noel Canning saying, "[The NLRB is] committed to resolving any cases affected by today's decision as expeditiously as possible. The composition of the NLRB today is not very different from its composition when the invalidated recess appointees decided the subject cases. However, there are hundreds of decisions that need to be reissued."

A more practical effect of the Noel Canning decision is that a number of NLRB initiatives may be delayed while the Board is reissuing decisions. In particular, the accelerated election rules, cases involving the use of employer e-mail for union activity and the Northwestern University athletes-as-employees case may all be delayed somewhat as a result of work the NLRB will need to do to reissue the decisions.