On January 25, 2013, the D.C. Circuit Court of Appeals handed down its decision in the case of Noel Canning v. National Labor Relations Board. While the facts of the case itself involve an unfair labor practice charge against Noel Canning for allegedly refusing to reduce to writing and then execute a collective bargaining agreement, the key issue on appeal became whether President Barack Obama’s recent appointments to the National Labor Relations Board (“NLRB”) were legal. Specifically, Noel Canning questioned the NLRB’s authority to issue its order on the basis that (1) the NLRB lacked authority to act because there was not quorum, as three members of the five-member NLRB were never validly appointed because they took office under recess appointments which were made when the Senate was not in recess, and (2) that the vacancies the three members filled did not occur during the recess of the senate, as required by the United States Constitution.
Flash back to one year ago in early 2012. An administrative law judge had concluded that Noel Canning had violated the NLRA. Thereafter, a three-member panel of the Board affirmed the findings in February of 2012. At that time, the NLRB ostensibly had five members, two of which had been confirmed by the Senate in June of 2010, while the other three were all appointed by President Obama on January 4, 2012, purportedly pursuant to the recess appointments clause of the Constitution. At the time of these appointments, the Senate was operating pursuant to a unanimous consent agreement which stated that the Senate would meet every three business days from December 20, 2011 through January 23, 2012. During one of the sessions, the Senate acted to convene the second session of the 112th Congress and to fulfill its constitutional duty to meet on January 3rd as set forth in the 20th Amendment.
The long and the short of it is that the NLRB is not allowed to issue decisions unless it has three or more members. President Obama invoked his recess appointment powers to appoint three members to the Board while Congress was on break. By doing so, the appointees did not have to be approved by the Senate. Under the Recess Appointments Clause, an appointment made during a recess expires upon conclusion of the following congressional session.
Based on this, Noel Canning asserted that the Board did not have a quorum for the conduct of business on February 8, 2012, that being the date that the NLRB issued its decision. Noel Canning argued that the NLRB cannot act without a quorum of three members and that the NLRB lacked a quorum on that date because the recess appointments of the last three members of the Board were invalid under the Recess Appointments Clause of the Constitution – namely because there was not an actual recess and the vacancies to be filled did not arise during an actual recess (i.e. the vacancies occurred during a congressional session). The D.C. Circuit Court agreed that the appointments were constitutionally invalid and the NLRB therefore lacked a quorum.
The outcome of this case is significant…at least for the time being. With this decision, the NLRB now lacks authority to act since it only has two valid members. Likewise, every decision that has been issued since the “recess appointments” on January 4, 2012 is subject to attack and/or challenge based upon the same arguments made by Noel Canning. This includes a large number of cases where the NLRB has expanded its focus to areas beyond the traditional labor context, including non-unionized employers. The aforementioned caveat “at least for the time being” is made because the Noel Canning decision will likely be appealed to the United States Supreme Court, who could overturn the D.C. Circuit. And, even if the Supreme Court upholds it, President Obama will have an opportunity during his second term to appoint new members to the NLRB, either through the senate or via valid recess appointments that could continue the same policies pursued by the 2012 Board. In the meantime, the NLRB is expected to move forward with issuing decisions and orders, notwithstanding the possibility that those decisions risk being declared void and unenforceable.