On January 25, 2013, the United States Court of Appeals for the D.C. Circuit published an opinion in Noel Canning v. National Relations Board, Case No. 12-1115. The case arose out of a dispute between employer Noel Canning, a soft drink bottler, and International Brotherhood of Teamsters Local 760, (the Union) the union representing employees, concerning whether there was an agreement on the terms of a collective bargaining agreement, or labor contract, and whether Noel Canning committed an unfair labor practice under the National Labor Relations Act in refusing to execute the collective bargaining agreement.

The case was initially the subject of an unfair labor practice proceeding filed by the Union before the NLRB. A hearing was held, after which the NLRB Administrative Law Judge ruled in favor of the Union, finding a violation of §8(a)(1) and (5) of the National Labor Relations Act. Noel Canning filed exceptions to the ALJ’s decision with the NLRB, which affirmed the ALJ’s decision. Noel Canning filed a timely action for review of the NLRB’s decision, and the NLRB petitioned for enforcement of its decision and order.

The D.C. Circuit Court of Appeals first disposed of the factual and non-constitutional issues, however, found that there were “extraordinary circumstances” under §10(e) of the NLRA, justifying consideration of the jurisdictional issue of whether the Court could entertain consideration of the underlying constitutional issues, which had not been raised before the NLRB. With this finding, the Court proceeded to analyze the issue of the authority of the NLRB to act, and to issue orders, without a quorum. The issue of the quorum arose from the status of three of the five NLRB members as recess appointees by the President, not having been confirmed by the Senate. With only two confirmed members, the NLRB would have no quorum to act.

After engaging in an extensive analysis of the definition of “the Recess”, including a review of the Federalist Papers No. 67, the language of the U.S. Constitution, similar language in the North Carolina Constitution which existed at the time of the implementation of the U.S. Constitution, and the historical infrequency of recess appointments, none having occurred in the first 80 years after the adoption of the Constitution and only 3 prior to 1947, the Court concluded that “the Recess” referred to in the Recess Appointment Clause did not support the propriety of intrasession recess or adjournment appointments. To the contrary, the requirement that appointments occur with the advise and consent of the Senate was viewed as of paramount importance, the avoid defeating the careful separation of powers structure in the Appointments Clause of the Constitution. “Adjournment”, under the Adjournments Clause, was viewed as referring to legislative breaks, not “a recess”, and distinctly different than “the Recess”, with intention, by constitutional drafters and the Court. Recess appointments were found to be appropriate only when the Senate was in “the Recess” between congressional sessions, which would last for months at the time the drafters of the Constitution wrote, and not for breaks within a session.

The Court went on to interpret whether the vacancies happened during “the Recess”, an additional requirement for valid recess appointments. The Court found that the vacancies did not “happen” during an intersession recess, but happened before that time, and that a President could not simply wait for a recess to fill pre-existing vacancies. The Court likened “happen” to “arise” rather than “exist”.

The Court determined that the appointment of three members of the NLRB on January 4, 2012, were not made in an intersession recess of Congress, but after a new session of Congress had commenced on January 3, 2012. As such, they were invalid from their inception, and the NLRB lacked a quorum to conduct business when the decision in the underlying case was made on February 8, 2012.  The NLRB decision on that date was vacated.

What does this mean?
It is likely that this case will be the subject of a petition for certiorari to the United States Supreme Court, and the issue of recess appointments, and the interpretation of the Recess Appointments Clause of the U.S. Constitution, will be the subject of further review and decision. However, until that time, the NLRB has been determined to have no ability to act and issue orders without at least a quorum of three validly appointed members. Pending cases may not be resolved, and orders of the Board since January 4, 2012, may be subject to challenge.