Supreme Court Strikes Down Obama’s NLRB Appointments Invalidating Hundreds of Decisions

Diana Uhimov, July 16, 2014.

The U.S. Supreme Court unanimously invalidated three of President Obama’s recess appointments to the National Labor Relations Board (NLRB) as unconstitutional in its June 26, 2014 decision in National Labor Relations Board v. Noel Canning. Despite the fact that these Board members’ positions were filled by valid Senate-confirmed members in August 2013, this decision voids hundreds of NLRB decisions issued between January 2012 and August 2013, because the Board did not have a quorum.  The current Board is now obligated to revisit those decisions and either reject or reissue them.  Employers largely recognize this as a victory, since many of the NLRB decisions called into question by Noel Canning interpreted the National Labor Relations Act to advance employee and union rights.

The Recess Appointments Clause in Article II of the Constitution is an exception to the requirement that the President obtain Senate approval before appointing officers of the United States.  The clause states that the President has the authority to fill vacancies that may happen during the recess of the Senate by granting commissions that expire at the end of their next session. Although the Court interpreted the clause as giving the President the power to make appointments during a recess, it cautioned that the clause does not offer “the authority routinely to avoid the need for Senate confirmation.”

Noel Canning arose out of President Obama’s recess appointments of Members Block, Griffin and Flynn to the NLRB Board.  Although the majority opinion broadly interpreted the President’s power under the Recess Appointments Clause, it found the three-day recess during which the President made the appointments to the NLRB was too short.  President Obama made the appointments on January 4, 2012 after the five-seat Board was left with only two members following Member Craig Becker’s departure from office the day before.  Since a three-member quorum is needed to issue decisions, Obama sought to prevent an effective shut-down of the NLRB for an extended period of time.  A prolonged Senate confirmation process was likely because of an anticipated filibuster of the President’s appointments.

The validity of the recess appointments was challenged by Noel Canning, a soda bottler and distributor.  Noel Canning appealed an NLRB decision that the business engaged in unfair labor practices to the United States Circuit Court for the District of Columbia. The Supreme Court had previously held in New Process Steel that the NLRB must have a valid quorum of board members before it can take action.  Thus, Noel Canning argued that the NLRB lacked a quorum because President Obama’s appointment of three recess board members was unconstitutional, and without the requisite quorum the Board did not have the power to issue decisions or prosecute cases.  It is estimated that between 400 and 800 NLRB decisions from January 2012 to August 2013 involved the recess-appointed members, more than 100 of which were appealed to federal courts.

The consequences of the decision remain to be seen.  The current NLRB has been pushing to expand its reach, increase union organization, and overturn NLRB precedent.  Thus, the current Board will likely adopt the majority of the invalidated NLRB decisions. Nonetheless, Noel Canning’s potential positive impact on employers is twofold: (1) review of the cases decided by the invalidated appointees may lead to better outcomes for the entities involved, and (2) the NLRB will be forced devote its resources to revisiting the invalidated decisions, which may delay or altogether halt divisive items on the Board’s agenda that included expanding its powers and implementing pro-union decisions.  Until more information is available, employers should continue to follow those decisions to avoid future unfair labor practice findings.