Noel Canning Aftermath: Perspectives For Employers Three Weeks After D.C. Circuit’s Important NLRB Decision

by Franczek Radelet P.C.

Three weeks after the D.C. Circuit invalidated President Barack Obama’s January 2012 recess appointments to the National Labor Relations Board (NLRB), we can provide some better perspective on what the decision means for employers, both those affected by recent NLRB decisions and those just monitoring developments going forward. As we discussed at the end of January, in Noel Canning, the D.C. Circuit ruled that the recess appointments of Members Richard Griffin, Terrence Flynn (who has since resigned), and Sharon Block to the NLRB were unconstitutional because they did not occur during an intersession recess of the Senate. Without those three members, the court held that the Board did not have a quorum and could not act lawfully.

Shortly after the court’s decision, the White House expressed its disagreement and NLRB Chairman Mark Pearce released a statement reasserting the Board’s position (expressed in an April 2012 unanimous decision) that courts will ultimately uphold the legality of the recess appointments. GOP Senators also reacted quickly, sending a letter to the NLRB demanding that Members Block and Griffin resign. Other Republican Senators have introduced essentially symbolic legislation that would limit the NLRB’s ability to continue working in the wake of Noel Canning. With Democrats in control of the Senate, and President Obama in the White House, none of the bills have any chance of passing.

Judicial challenges to the NLRB’s authority, and the vitality of its 2012 decisions, may have more practical effect in the near term. The NLRB has not yet filed any appeals in the Noel Canning case, and has declined to comment on whether one is forthcoming. Other challenges are proceeding, however, as we discuss below. While we do not yet know the full impact of Noel Canning, employers should keep these issues in mind as we move into the spring:

  1. Last week, President Obama formally re-nominated Members Griffin and Block, but did not nominate anyone for the Republican vacancies on the NLRB. It is too early to speculate on the chances of these nominees for ultimate confirmation. If and when the Board returns to a quorum, the NLRB’s composition makes any reconsideration of the 2012 cases potentially uneventful, as the Democratic majority on the Board would be unlikely to reach a different result in the overwhelming majority of the affected decisions.

  2. For employers with pending cases before the Board, Chairman Pearce affirmed that the Board would continue to issue decisions, notwithstanding Noel Canning. Although it has issued nothing of particular note, the Board has continued to hear, process, and decide election petitions and unfair labor practice charges. Importantly, the D.C. Circuit’s decision does not appear to affect the NLRB’s ability to consider matters that can be handled entirely by a regional office. Similarly, Noel Canning does not prevent administrative law judges from holding hearings and issuing recommended decisions.

  3. Although the D.C. Circuit’s decision calls them into question, the Board’s 2012 decisions, and any decisions it issues this year, remain Board law. The Noel Canning court did not address any other Board decisions, such as those involving “micro-units,” dues checkoff, and jurisdiction over charter schools. Employers can expect that the Board’s ALJs and Regions will continue to rely on and apply all of those decisions, and will continue to reject any Noel Canning-related challenges.

  4. Noel Canning does provide those aggrieved by Board decisions a route to overturn them by seeking review before the D.C. Circuit, but appellants should not expect quick action. The court has begun issuing orders holding in abeyance other pending cases that raise the recess appointment issue.

  5. Chairman Pearce’s statement indicated that more than a dozen cases were pending in the other appellate courts regarding the recess appointment issue. Cases on appeal for any reason, including enforcement, will likely continue to be heard by those circuits. As the D.C. Circuit explained in Noel Canning, other circuits may take a different view of the recess appointments.

  6. Noel Canning does not affect the NLRB’s Notice Posting rule, currently under review in federal court on other grounds, because the NLRB promulgated it when it had a lawful quorum in August 2011.

  7. Noel Canning could, however, be applied to other situations. For example, the court did not resolve the status of Member Becker’s tenure on the Board. President Obama made a recess appointment of Member Becker in March 2010. If this recess appointment is also found invalid, decisions issued after August 31, 2011 (when then-Chairman Liebman’s term expired) or that involved Member Becker casting the deciding vote in a 2-1 decision could be vulnerable to a challenge under Noel Canning’s rationale. Among the notable decisions in this group are the “Quickie Election” rules issued in December 2011 and the Board’s D.R. Horton decision about mandatory arbitration and class action waiver clauses.

We expect further developments in the Noel Canning case, and on Capitol Hill, and will continue to provide further guidance as appropriate. 

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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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