The unanimous decision on presidential recess appointment powers strikes down three National Labor Relations Board recess appointments and effectively invalidates hundreds of Board decisions issued between January 2012 and August 2013.

The U.S. Supreme Court in its June 26 decision in National Labor Relations Board v. Noel Canning^[1] unanimously invalidated three of President Obama’s recess appointments to the National Labor Relations Board (NLRB or Board). In doing so, the Court voided potentially hundreds of Board decisions, dating as far back as January 4, 2012, and provided what is widely viewed as a significant victory to the employer community. Many of those Board decisions were extremely controversial, interpreting the National Labor Relations Act and promoting employee and union rights in unprecedented ways. The Court was, however, divided on the scope of the president’s recess appointment power, with the majority opinion broadly interpreting that power.

Background

The issue before the U.S. Supreme Court arose after President Obama used his recess appointment power to fill several vacancies on the NLRB. Article II, Section 2, of the U.S. Constitution, referred to as the “Recess Appointments 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 Recess Appointments Clause provides an exception to the ordinary “advice and consent” role for the Senate and permits appointments absent Senate confirmation. On January 4, 2012, President Obama made three recess appointments to the NLRB. Those appointments were made one day after Member Craig Becker left office, leaving the five-seat Board with only two confirmed members and without the three-member quorum necessary to issue decisions. In an effort to avoid effectively shuttering the agency during what likely would have been an extended Senate confirmation process for new appointees, President Obama appointed Sharon Block, Richard Griffin, and Terence Flynn to the Board as recess appointments.

Parties subject to NLRB actions or decisions involving Members Block, Griffin, and Flynn thereafter challenged the validity of the recess appointments, arguing that the Board lacked the authority to either prosecute cases or issue decisions where part of the necessary three-member quorum was composed of a recess appointee.

Court of Appeals Rulings

On January 25, 2013, the U.S. Court of Appeals for the D.C. Circuit held that President Obama had improperly exercised his recess appointment power and invalidated his attempted recess appointments to the NLRB. In Noel Canning v. National Labor Relations Board^,[2] the D.C. Circuit held that President Obama’s three January 4, 2012 recess appointments to the NLRB were unconstitutional. The D.C. Circuit reasoned that the term “the Recess” in the Recess Appointments Clause refers only to intersession breaks between formal sessions of Congress and that it does not refer to mere intrasession breaks or adjournments. The court also held that the Recess Appointments Clause only covers vacancies that actually arise during “the Recess,” and not to vacancies that simply “happen to exist” when that recess begins.

Four months later, on May 16, 2013, the U.S. Court of Appeals for the Third Circuit in National Labor Relations Board v. New Vista Nursing and Rehabilitation^[3] concluded that President Obama’s March 27, 2010 recess appointment of Member Becker was also constitutionally invalid. The Third Circuit agreed with the D.C. Circuit’s analysis of the Recess Appointments Clause’s scope. The U.S. Court of Appeals for the Fourth Circuit reached a similar conclusion several months later in NLRB v. Enterprise Leasing Company Southeast, LLC.^[4] The Obama administration eventually sought and was granted certiorari from the U.S. Supreme Court for the D.C. Circuit’s Noel Canning decision.

Supreme Court Opinion

The Supreme Court unanimously affirmed the D.C. Circuit’s decision invalidating the three January 4, 2012 appointments to the Board. The Court, in a 5–4 decision, disagreed, however, with the D.C. Circuit’s rationale. The Court majority—with Justice Breyer writing for Justices Kennedy, Ginsburg, Sotomayor, and Kagan—held as follows:

• The Recess Appointments Clause applies to both intersession and intrasession breaks, provided the intrasession break is of “substantial length.” The majority explained that intrasession breaks and adjournments lasting only 3–10 days are “presumptively too short” to satisfy the requirements of the Recess Appointments Clause.

• The Recess Appointments Clause applies with respect to vacancies that occur both during and prior to the recess in question.

• For purposes of the Recess Appointments Clause, the Senate is in session when it says it is, provided it retains the capacity to conduct Senate business.

In examining the three January 2012 NLRB appointments at issue in the case, the Court concluded that the Senate was not actually in recess between January 3 and 6, 2012 because the short break was not of substantial length. The Court also explained that the pro forma sessions of the Senate that were occurring during the relevant period prevented a longer recess from occurring. As such, the Court held that the Recess Appointments Clause did not give the president the authority to make the three appointments.

Justice Scalia’s opinion concurring in the judgment—joined by the Chief Justice and Justices Thomas and Alito—sharply disagreed with the majority’s resolution of the other two questions presented. Although Justice Scalia agreed that the three January 2012 recess appointments were unconstitutional, he criticized the majority opinion as “transform[ing] the recess-appointment power from a tool carefully designed to fill a narrow and specific need into a weapon to be wielded by future Presidents against future Senates.^”[5] In addition, he argued that “[t]he majority replaces the Constitution’s text with a new set of judge-made rules to govern recess appointments.”^[6]

Although the Court did not apply its decision to Member Becker’s March 2010 recess appointment, applying the majority’s rationale indicates that Becker’s appointment was constitutional for the following reasons:

• The Senate entered a two-week recess in late March 2010, without conducting pro forma sessions, and Member Becker was appointed by President Obama on the second day of that recess.

• The recess exceeded the 10-day threshold established by the Court for determining whether a break is of substantial length for purposes of the Recess Appointments Clause.

• Whether or not Becker’s vacancy “arose” before or during this recess period is irrelevant to the validity of his appointment.

Implications

The Supreme Court’s decision effectively invalidates hundreds of Board decisions and actions issued with the involvement of Members Block, Flynn, or Griffin. The Board recently highlighted the following statistics:

• More than 800 NLRB decisions between January 2012 and August 2013 involved Members Block, Flynn, or Griffin (317 published and 520 unpublished decisions).

• 108 pending appellate cases in 12 federal circuit courts are related to NLRB decisions involving Members Block, Flynn, or Griffin.

These decisions involve many of the controversial issues addressed by the Board in recent years, including social media activities, employee off-duty access rights, confidentiality of workplace investigations, employee honesty in workplace investigations, dues check-off, the duty to provide unions with confidential witness statements, employer status quo obligations, and mandatory alternative dispute resolution agreements. The NLRB will likely issue specific guidance in the near term explaining how it intends to respond, operationally and legally, to the Supreme Court’s decision. Regardless of the results of its reconsideration of the impacted cases, we expect that the current Board will undertake a thorough review of the merits in each instance. That reconsideration will, however, take time—perhaps several years—and could delay processing of more recent cases. In addition, the expiration of current Board Member Nancy Schiffer’s term in December 2014 will leave the Board with only four confirmed members and could further delay the process. For those employers with pending appellate cases, the processing of those cases will likely resume in the near term.

Employers that have been subjected to adverse Board decisions or actions over the last few years should consider whether the Supreme Court’s decision provides a basis to bring challenge. For example, all of the following decisions or actions could be subject to potential challenge under the Court’s holding:

• Issuance of complaints by Regional Directors appointed by invalid Board members

• Authorization of section 10(j) petitions by invalid Board members

• Representation or unfair labor practice case decisions issued by invalid Board members

There is no statutory deadline for seeking court of appeals review of Board actions, although the Board may raise waiver defenses.

_{[1]. No. 12-1281 (U.S. June 26, 2014), available here.}

_{[2]. 705 F.3d 490 (D.C. Cir. Jan. 25, 2013), available here.}

_{[3]. 719 F.3d 203 (3d Cir. May 16, 2013), available here.}

_{[4]. 722 F.3d 609 (4th Cir. 2013). For more information, view our May 17, 2013 LawFlash “Third Circuit Holds Craig Becker’s NLRB Recess Appointment Unconstitutional,” available here; 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.}

_{[5]. Noel Canning, No. 12-1281, slip op. at 2 (Scalia, J., concurring).}

_{[6]. Id. at 28. Note: Morgan Lewis represented an amicus party in the case, whose brief was cited by Justice Scalia.}