Third Circuit Joins DC Circuit in Striking Down NLRB Recess Appointments

In NLRB v. New Vista Nursing & Rehabilitation, 2013 WL 2099742 (3d Cir., May 16, 2013), the Court of Appeals for the Third Circuit ruled that the NLRB lacked the required quorum to act because President Obama did not properly appoint Member Craig Becker as required by the Constitution’s “Recess” clause. This is the second circuit court to have concluded that the NLRB lacked a quorum because President Obama did not properly appoint one or more members under the “Recess” clause. See Noel Canning v. NLRB, 703 F.3d 490 (D.C. Cir. 2013), petition for cert. filed, 81 USLW 3629 (Apr 25, 2013)(NO. 12-1281). Read our advisory about Noel Canning here (“Court of Appeals Strikes Down NLRB Recess Appointments – What Does this Mean Going Forward?” – January 1, 2013).

In both New Vista and Noel Canning, the courts ruled that the Constitution’s “Recess” appointments clause permitted the President to appoint NLRB members only under certain very limited conditions, that President Obama had not properly appointed the NLRB members who had decided the subject cases and that, as a result, the NLRB lacked a quorum and could not lawfully decide either of the subject cases. The NLRB has asked the Supreme Court to hear the Noel Canning case, but the Court has not yet ruled on that request.

The practical import of the Noel Canning decision is that, since January 3, 2012, the NLRB has lacked a quorum, and, therefore, the decisions it has issued since that date were invalid. The practical import of the New Vista case is that it effectively expands the scope of NLRB’s lack of a quorum dating back to March 27, 2010, when President Obama first appointed Member Becker under the “Recess” clause.

Nonetheless, pending a decision by the Supreme Court, the NLRB and its regional offices are proceeding forward as if all of its members were validly appointed and fully authorized to act. Therefore, while employers should raise the lack of a quorum issue as a defense in any pending cases, employers should not expect to the NLRB or its regional offices to stop processing cases while awaiting a final decision on this issue.