Third Circuit Holds Craig Becker’s NLRB Recess Appointment Unconstitutional

by Morgan Lewis
Contact

A second federal appellate court holds that President Obama's NLRB recess appointments were invalid and potentially calls into question every Board decision since March 2010.

On May 16, in National Labor Relations Board v. New Vista Nursing and Rehabilitation,[1] the U.S. Court of Appeals for the Third Circuit became the second federal appellate court to rule that President Barack Obama's recess appointments to the National Labor Relations Board (NLRB or Board) were unconstitutional.[2] In a split decision, the Third Circuit concluded that President Obama's March 27, 2010 recess appointment of Craig Becker was constitutionally invalid.

The New Vista ruling comes on the heels of the D.C. Circuit's January 25 decision in Noel Canning v. National Labor Relations Board,[3] in which the court ruled that President Obama's three January 4, 2012 recess appointments to the NLRB were unconstitutional. Both decisions limit the president's recess appointment power to breaks between sessions of Congress, rather than breaks during sessions. While the Third Circuit's decision closely mirrors the D.C. Circuit's decision in Noel Canning, it may have much farther-reaching effects, potentially calling into question every Board decision since March 2010.

Background

On March 27, 2010, after the full Senate failed to consider the controversial nomination of Craig Becker to the Board, President Obama recess appointed him to the Board during a two-week break in Senate proceedings during the second session of the 111th Congress. The president made the nomination under the auspices of his recess appointment power contained in Article II, Section 2, of the U.S. Constitution, referred to as the Recess Appointments Clause. Becker served on the Board until December 2011, the end of the Senate's next session.

The Third Circuit's decision in New Vista involved the review of a Board order against employer New Vista Nursing and Rehabilitation. A three-member panel that included Member Becker issued the order on August 26, 2011. New Vista appealed the Board's decision to the Third Circuit, arguing—among other things—that the panel only had two validly appointed members because Member Becker was invalidly appointed under the Recess Appointments Clause. In effect, New Vista argued that the panel lacked jurisdiction to issue decisions and that the adverse order against it was invalid. The Third Circuit agreed.

Third Circuit Opinion

In a lengthy opinion, the Third Circuit rejected the Board's claims that the Senate was in recess on March 27, 2010 and instead adopted a narrow version of "recess" for purposes of interpreting the Recess Appointments Clause. The clause provides as follows:

The President shall have 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.

The Third Circuit agreed with the D.C. Circuit's Noel Canning holding that the term "recess" refers only to "intersession breaks" between formal sessions of the Senate and not mere breaks within a session (i.e., "intrasession breaks") or other breaks during which the Senate is unable to provide advice and consent. The court reasoned that the Recess Appointments Clause's specification that recess-appointed officers' terms "shall expire at the End of [the Senate's] next Session" implies that their appointments are intended to be made during a period between sessions.[4] This ruling effectively limits the president's recess appointment power to just two breaks—and, in some cases, one or no break at all—during each two-year, two-session "Congress."

The court narrowly interpreted the Recess Appointments Clause based on historical practice dating back to ratification and the importance of balancing the president's unilateral appointment power with the Senate's advice and consent function. Beyond that, the court evaluated the purpose of the Recess Appointments Clause in relation to the Appointments Clause, writing that the former is "a secondary, or exceptional, method of appointing officers, while the Appointments Clause provides the primary, or general, method of appointment."[5]

Implications

The Third Circuit's decision, particularly when paired with Noel Canning, is far-reaching and critically important, particularly for employers involved in Board proceedings since March 2010. The invalidation of Member Becker's appointment also affects a number of Board actions during that time, including the "quickie" election rules (providing for a much faster election process) and the decision in D.R. Horton (invalidating class and collective action waivers in employment arbitration agreements). The Third Circuit and the D.C. Circuit have drawn a roadmap for challenging the validity of three years' worth of Board decisions and are now the likely forums of choice for such challenges.

Last month, the NLRB filed a petition for certiorari, asking the U.S. Supreme Court to review the D.C. Circuit's Noel Canning decision. The administration argues that Noel Canning would "dramatically curtail the scope of the President's authority under the Recess Appointments Clause" and acknowledges that the effects of the decision can be expected to impact a wide array of federal agencies.[6] If, as expected, the Supreme Court accepts Noel Canning, it may also accept New Vista and consolidate the cases. It is unlikely, however, that the Court would issue a decision before the end of the year, meaning that at least until then, nearly everything the NLRB has done for the last three years—and any decision it might make in the period up until the issue is decided by the Supreme Court (or a valid Board is confirmed by the Senate)—is of highly questionable validity.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis attorneys:

Washington, D.C.
Charles I. Cohen
Joseph E. Santucci, Jr.
Jonathan C. Fritts
John F. Ring

Chicago
Philip A. Miscimarra
Ross H. Friedman

Houston
A. John Harper II

Los Angeles
Clifford D. Sethness

New York
David A. McManus

Philadelphia
Steven R. Wall
Joseph C. Ragaglia

Boston
Lisa Stephanian Burton


[1]. NLRB v. New Vista, No. 11-3440 (3d Cir. May 16, 2013), available here.

[2]. For more information, view our January 28, 2013 LawFlash, "D.C. Circuit Rules NLRB Recess Appointments Unconstitutional," available here, and our January 22, 2013 LawFlash, "The Second Obama Term: NLRB Outlook," available here.

[3]. Noel Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013), available here.

[4]. Id. at 75.

[5]. Id. at 58.

[6]. Petition for Writ of Certiorari, Noel Canning v. NLRB, No. 12-1115 (D.C. Cir. Jan. 25, 2013), available here.

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.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis
Contact
more
less

Morgan Lewis on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!