It's Unanimous: Recent NLRB Appointments Ruled Unconstitutional

by LeClairRyan

In a unanimous opinion released on June 25, 2014 the United States Supreme Court held in NLRB v. Noel Canning et al. that President Obama's recess appointments to the National Labor Relations Board (NLRB) in January 2012 were an unconstitutional exercise of presidential power under the Recess Appointments Clause.

The Canning case originated as a labor dispute between Pepsi-Cola distributor Noel Canning and a local union. The matter was heard by the NLRB, which decided that the distributor had unlawfully refused to execute a collective bargaining agreement with the union. The Board ordered Noel Canning to execute the agreement and make employees whole for any losses.

Noel Canning appealed the decision to the D.C. Circuit Court of Appeals. The employer argued that 3 out of 5 NLRB members had been invalidly appointed by President Obama in early 2012, and therefore the Board lacked a quorum when issuing its order. The appeals court agreed and vacated the Board's order against Noel Canning. The case was appealed to the U.S. Supreme Court.

Article II of the United States Constitution grants a number of specific powers to the President of the United States. The ability to nominate and appoint Officers of the United States, with the "Advice and Consent" of the Senate, is one of those powers. A second, related power is 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 Recess Appointments Clause thus creates an exception to the Advice and Consent Clause, under which the President can appoint Officers without having first obtained Senate approval.

In early January 2012, President Obama appointed 3 members to the NLRB while the Senate was on a 3-day intrasessional recess. The recess occurred between pro-forma sessions that the Senate had been convening every Tuesday and Friday since mid-December. When a pro forma session is held, the Senate is gaveled to order and then promptly adjourned. Legislators typically do not conduct any actual business during the session. The use of pro forma sessions increased during George H.W. Bush's presidency, and continued under President Obama.

It is generally understood that primary purpose of holding pro forma sessions is to block the President from making recess appointments that would not otherwise meet with Senate approval. That was certainly the case with the 3 Democratic Board members that President Obama appointed in January 2012. The NLRB sits with 5 members, so Obama's 3 recess appointments effectively stacked the Board with a majority likely to support the President's pro-union agenda.

The Supreme Court Interprets the Recess Appointments Clause
U.S. Presidents have used their recess appointment power during both intersessional and intrasessional recesses throughout history-- a history that is documented in great detail in the Canning decision. Despite its frequent use, however, this is the first time that the Supreme Court has had an opportunity to parse and interpret the language of the Recess Appointments Clause.

In Canning, both sides agreed that the 3-day recess period between January 3-6 alone was too short to trigger the president's recess appointments power. But the U.S. Solicitor General argued that President Obama's recess appointments to the Board were nonetheless valid because the Senate's pro forma sessions should be considered periods of recess. Because no actual business was conducted during the pro forma sessions, they were "sessions" in name only, and the Senate therefore had technically been in "recess" since mid-December when the Tuesday and Friday pro forma sessions began.

The Supreme Court disagreed with the Solicitor General's argument, finding that the Senate's pro forma sessions were not the equivalent of being in recess. To the contrary, the Court held that the Senate is in session "when it says it is, provided that, under its own rules, it retains the capacity to transact Senate business." In other words, for purposes of determining whether the Senate is in session, it doesn't matter whether or not the Senate actually conducts business; what matters is that it could conduct business if it so chose.

Applying this analysis, the Court found that the Senate was only adjourned for 3 days when President Obama made his recess appointments to the NLRB, and the appointments were therefore unconstitutional and invalid. The Court then established a 10-day minimum for defining a recess -- whether intersessional or intrasessional -- based on historical practice.

What Happens Next?
The long-term implications of Canning could be significant, but the Supreme Court's opinion left many practical questions unanswered. For example, what happens to all of those decisions made by the NLRB when the 3 invalidly-appointed members were seated? Will those cases be reheard? Or will they simply be ratified? If so, when? And what happens to other recess appointments that were made by President Obama at the same time, and in the same unconstitutional manner, as the NLRB members (such as the appointment of the Director of the Consumer Financial Protection Bureau)? How will decisions related to those appointments be handled?

With many questions, but few answers, employers and businesses are largely stuck in limbo for the time being. Regarding cases that the NLRB decided while the unconstitutionally-appointed Board 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." In other words, they don't know what they'll do yet, but they're working on it.

Since the Board technically did not have a quorum for any of the decisions rendered between January 2012 and July 2013, it appears that none of those decisions could be enforced as they stand today, just as the NLRB’s order in the Canning case could not be enforced.

If the Board does choose to rehear decisions made from January 2012 to July 2013, the process could take a long time. Practically speaking, though, employers shouldn't expect very many changes to those decisions: the Board is still controlled by Democratic appointees, so the current majority is likely to rule on the voided cases in the same way that the invalidly-appointed Board did during the 19-month period.



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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