July 2014 SCOTUS Roundup


How Do The Court’s Landmark Labor & Employment Decisions Impact Your Business?


All eyes have been on the Supreme Court this summer as the justices handed down decisions in several  high-profile cases involving labor and employment disputes.  While the debate over the issues addressed by the Court this term will certainly continue in the political arena, employers and EPLI carriers may be left wondering how these decisions will impact their businesses from a practical standpoint.  In part one of this two-part series, we’ll focus on the Court’s ruling in NLRB v. Canning.

Fighting at Recess:  The NLRB Appointments
Some may recall the House of Cards-esque political showdown that occurred between President Obama and the Senate in late 2011 and early 2012 that eventually gave rise to the Canning case.  Under Article II of the United States Constitution, the President has the ability to nominate and appoint Officers of the United States with the “Advice and Consent” of the Senate.  Through his Article II power, the President sought to nominate members of the NLRB.  Knowing that the Senate would not likely approve his pro-union nominees, the President’s administration expressed its belief that he could still make the NLRB appointments through another, related Article II power:

the power to “fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”

To prevent these “recess appointments,” the Senate began holding pro forma sessions every Tuesday and Friday in December 2011.  During pro forma sessions, the Senate is gaveled to order and then promptly adjourned, and Legislators typically do not conduct business.  From January 3-6, 2012, between pro forma sessions, President Obama appointed three democratic members to the five-person Board, effectively stacking the Board with a majority to support a pro-union agenda.  Between January 2012 and July 2013, the Board issued more than 300 decisions involving labor disputes.

No Quorum = No Valid Decision
house-of-cards-3In Canning, the Court addressed the constitutionality of President Obama’s NLRB recess appointments, effectively determining the validity of all of the Board’s decisions over a year and half period.  While some of the Court’s most newsworthy cases in recent years have been vigorously contested 5-4 decisions, Canning was a rare unanimous decision for the polarized Court.  The justices determined that the three-day period between the pro forma sessions was not long enough to trigger the President’s recess appointment power, holding that the NLRB recess appointments were unconstitutional and invalid. The result?  Because the NLRB cannot issue a decision without a quorum (three sitting members) – and only two valid members sat between January 2012 and July 2013 – it appears that the decisions made by the Board during that period are now invalid.

Employer Victory, or Technical Hurdle?
Regarding cases that the NLRB decided while the unconstitutionally-appointed members were seated, it is up to the Board itself to decide what should be done now.  So far, the NLRB has officially issued only one response to the decision – a brief statement from the Chairman that reads:

“We are analyzing the impact that the Court’s decision has on Board cases in which the January 2012 recess appointees participated.  Today, The National Labor Relations Board has a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act.  The Agency is committed to resolving any cases affected by today’s decision as expeditiously as possible.”

As it stands now, because the Court struck down the Board’s order to enforce a collective bargaining agreement in Canning, it appears that none of the Board’s decisions from January 2012 – July 2013 can be enforced. One possibility for the current Board could be to review and reaffirm the decisions in question.  Ultimately, the current Board has the power to decide what to do.  President Obama, in the meantime, announced on July 10 that he would re-nominate Sharon Block, one of the recess appointees, to the NLRB at the end of member Nancy Schiffer’s term, which could ensure a democratic majority on the Board for at least several more years.

Stay tuned for part 2 of our SCOTUS roundup discussing the court’s now infamous Hobby Lobby decision.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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