Labor & Employment Law Blog

On June 26, 2014, the United States Supreme Court, in a 9-0 decision, ruled that three recess appointments President Obama made in 2012 to the National Labor Relations Board (“NLRB”) were invalid.  The Court affirmed the decision of the District of Columbia Circuit Court of Appeals, focusing on the language of the Recess Appointment Clause of the Constitution, which it weighed against the historical practice of the government.  Justice Breyer penned the Opinion, concluding that since the President made his recess appointments during a three-day recess, which did not satisfy the definition of a “recess” in the Clause, the President lacked authority to make those appointments.  NLRB v. Noel Canning.

 Background

The case arose in Washington State, and involved disputed labor negotiations of unionized beverage distributor Noel Canning. The NLRB prosecuted Noel Canning for unfair labor practices under the National Labor Relation Act (“NLRA”).

The case eventually moved to a Board panel in Washington, D.C., which consisted of three Board members: Brian Hayes, Terence Flynn, and Sharon Block.  The Chairman of the Board, Mark Pearce, and Board Member, Richard Griffin, did not participate on the panel.  The three-member panel ruled that Noel Canning acted unlawfully as alleged.

Noel Canning appealed the Board’s ruling to the District of Columbia Circuit Court of Appeals. Noel Canning argued that the Board panel lacked jurisdiction to rule because of defects in the appointments of three Board members. Block, Flynn, and Griffin had not been appointed by the U.S. Senate, but were recess appointments.  Hayes and Pearce had been confirmed by the U.S. Senate.  The court ruled in late January 2013 that the recess appointments were not validly appointed under the standards of the U.S. Constitution.  With a three-member Board panel required under a 2011 U.S. Supreme Court ruling (New Process Steel), the Board lacked a valid quorum to rule.  The NLRB appealed the case to the Supreme Court.

The Supreme Court agreed to review Noel Canning on June 24, 2013, and issued its ruling a little over a year later.  The recess appointment analysis from the Noel Canning ruling will invalidate hundreds of other NLRB rulings issued by Board panels that lacked quorum, as when the U.S. Supreme Court invalidated over 600 NLRB rulings in New Process Steel.

What action the Board will now take is to be determined with regard to all the invalidated decisions.  The Board currently has a full quorum of five members who were confirmed by the Senate, so it is possible that the Board will reconsider the decisions before a new panel.  However, due to the sheer number of cases at issue, individual treatment for each and every invalidated decision may be impracticable.  Employers with issues before the Board, or on appeal, will want to stay tuned to developments from the NLRB and consult with counsel as to strategy going forward.