Today, the United States Court of Appeals for the District of Columbia struck down a National Labor Relations Board ("Board") decision on the basis that the Board issuing the decision could not act lawfully, as it did not have the required quorum. If upheld, it could invalidate over a hundred Board decisions. In addition, it could prevent the Board from issuing other decisions until it has a properly appointed quorum. The decision would also call into question other recess appointments, including that of Richard Cordray to the Consumer Financial Protection Bureau.
At the heart of the Court's decision is its determination that the recess appointments of three members of the five-member Board were unconstitutional and therefore invalid. Petitioner v. National Labor Relations Board, 2013 U.S. App. LEXIS 1659 (January 25, 2013)
On March 20, 2012, the Board ruled that Noel Canning, the employer in this case, violated sections 8(a)(1) and (5) of the National Labor Relations Act ("Act") by refusing to execute an agreed upon collective bargaining agreement. As of March 20, 2012, the Board purportedly had five members. The Senate confirmed two Board members in 2010, while the other three members were appointed by the President on January 4, 2012. He asserted that he was able to make these appointments pursuant to the recess appointments clause of the U.S. Constitution. At the time the U.S. Senate was operating under the agreement that provided it would meet in pro forma sessions from December 20, 2011 through January 20, 2012.
Ordinarily, appointments to the Board must be made with the "advice and consent" of the Senate. However, the Constitution vests the President with authority to make recess appointments during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session. The Court of Appeals construed "the Recess" to mean something different than a generic break in the Senate's proceedings, and concluded that the President lacked the authority under the Constitution to make intrasession recess appointments. The Court noted that to allow such intrasession recess appointments would vitiate the Senate's role of advice and consent. Further, the Court rejected the notion that the President could determine when the Senate is unavailable to perform this role and exercise his power to make recess appointments.
The Court also ruled that the President's appointment of the three Board members was void because the vacancies did not "happen" during the Recess of the Senate, as required by the Recess Appointment Clause. The Court's decision is subject to further review by the Court itself or by the U.S. Supreme Court.
As events unfold, Polsinelli Shughart will provide further updates and will outline implications that may impact your business.