Obama's NLRB Paralyzed: D.C. Circuit Court of Appeals Overturns the President's NLRB "Recess Appointments"

In a scathing rejection of Executive overreach, the United States Court of Appeals for the District of Columbia Circuit ruled in a January 25, 2013 decision that President Obama’s January 2012 recess appointments to the National Labor Relations Board (“the Board”) were unconstitutional. This ruling, at least according to the District of Columbia Appeals Court, means that the Board has been and remains without a quorum, and therefore without authority to issue rules or decisions on unfair labor practice claims. The D.C. Circuit’s special status in review of Government decisions and its unique national jurisdiction for review of NLRB decisions gives unusual authority to this decision.

In Noel Canning v. National Labor Relations Board (Case No. 12-115), the Court set aside the Board’s February 8, 2012 decision that Noel Canning (the employer) had committed an unfair labor practice by refusing to sign a negotiated contract with the Teamsters Union. A three-member panel of the Board, consisting of Members Brian Hayes, Terrance Flynn and Sharon Block, issued the decision. Slightly more than a month before, on January 4, 2012, President Obama, using his claimed “recess appointment” authority, appointed Members Block, and Flynn to fill vacancies on the five-member Board. At that time he also “recess appointed” Richard Griffin to the Board. The Senate had previously confirmed the appointments of Chairman Mark Pearce and Member Hayes on June 22, 2010.
In a prior case, New Process Steel, L.P. v. NLRB, 130 S.Ct. 2635 (2010), the United States Supreme Court held that the Board lacked decision-making authority when it was without a quorum of at least three members. Noel Canning challenged the Board’s unfair labor practice finding, in part, by alleging that President Obama’s January 2012 “recess appointments” were not valid, and that the Board, therefore, lacked a legal quorum under New Process Steel to issue the February 8 decision without the participation of the recess appointees.

The Court of Appeals agreed with the employer, relying largely on the explicit language of the “Recess Appointments Clause” of the Constitution, which states:

. . . 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 Court found that the term “the Recess” means “intersession recesses,” or those that occur at times the Senate is not in session, rather than short breaks or adjournments during a session. Because the President made the appointments on January 4, after Congress had begun a session on January 3, the Court held that the “recess appointments” were not valid, and that the Board therefore lacked a quorum.

The Court also found that the Recess Appointments Clause only provided the President with the authority to make recess appoints when vacancies “happen” during a recess, meaning that the vacancy and the appointment must both occur during the recess. However the President’s January 4, 2012 appointments were to fill vacancies which first occurred on August 27, 2010, August 27, 2011, and January 3, 2012 – times, in fact, when the Senate was still in session. Given the timing, the President lacked recess appointment authority for that reason as well.

The Court further explained that the Constitution required the Senate’s advice and consent for such appointments, with the narrow exception for “recess appointments.” Therefore, the advice and consent method of appointment was the normal and preferred method for filling Board vacancies. To allow the President to make “recess appointments” based on a broader interpretation of “recess” would allow the President to consistently avoid the Senate process, and thereby allow the appointment “exception” to swallow the “rule.” The Court found this was not a permissible interpretation of the constitutional language.

The Court’s decisions, if sustained by the Supreme Court, would likely invalidate almost 1,000 published and non-published decisions of the NLRB which, almost uniformly, favored unions over employers and non-union employees. The overturning of these decisions will return the law to the prior status quo under the Clinton and Bush NLRBs and is a very favorable result for employers and non-union employees (more than 93% of the private sector workforce).

It is likely that this case will be reviewed by the Supreme Court. Until then, employers should be aware that the Board is without authority to enforce decisions for cases before the Court of Appeals in the District of Columbia Circuit. Importantly, the federal National Labor Relations Act allows employers to initiate challenges to Board decisions either in their home appeals circuit, or alternatively in the D.C. Circuit, no matter where the case arose. In view of this decision, it will be advantageous for employers to have their cases heard before the Court of Appeals for the D.C. Circuit.

Feel free to contact Jon Olson, or any other attorney at Peters, Revnew, Kappenman & Anderson, P.A., with any questions you may have about this new case, and how it may affect your business.

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