As you may have heard, the District of Columbia Circuit Court of Appeals recently sent shockwaves through the labor relations world by holding that President Obama’s "recess" appointments to the National Labor Relations Board were invalid. The court concluded that, as a result, the Board was acting without a quorum and did not have the power to render binding decisions. The question has now become, how many Board actions will go down?
The decision, Noel Canning v. Nat’l Labor Relations Bd. (pdf), addressed the President’s ability to make "recess" appointments, that is, appointments to executive branch positions without the confirmation of the Senate. The court concluded that the "recess" appointment power is available, not surprisingly, only when the Senate is actually in recess. The three Board appointments at issue were declared invalid because the Senate was not in recess at the time the appointments were made. The court concluded that, since the appointments were invalid, the Board has been operating without a quorum since January 4, 2012. As such, in accordance with the Supreme Court of the United States’ holding in New Process Steel v. Nat’l Labor Relations Bd. (pdf), the Board’s decision was null and void.
The wave of challenges to the Board’s actions rendered since January 4, 2012, (and some even prior to that date) has begun to crest. Interestingly the Noel Canning court, anticipating the likely impact of its decision, noted that it was not concerned about the repercussions of its holding on the Board. The Board, on the other hand, seems to have taken the position (in a January 25, 2013 press release) that the impact of Noel Canning is limited to only that case and therefore, its other decisions remain valid.
Despite the Board’s position, one key decision that could be washed away is the Board’s holding in D.R. Horton, Inc. (pdf). In that groundbreaking case, the Board held that mandatory arbitration clauses in employment agreements that prohibit class-based claims violate the National Labor Relations Act. Although rendered before the January 4, 2012 appointments at issue in Noel Canning, the D.R. Horton decision was rendered by a Board that also included at least one recess appointment. This decision was already on appeal, but the attorneys for D.R. Horton have the appeals court to consider the impact of Noel Canning.
Also, HealthBridge Management LLC asked the Supreme Court to make a splash by requesting that the Court issue an emergency stay of an injunction issued by the Board due to the uncertainty surrounding the Board appointments. Last week, however, the Court denied the petition. The impact of the decision may also be felt in other areas outside of labor law. For example, there has been a challenge to the "recess" appointment of the director of the relatively new federal Consumer Financial Protection Bureau that could undermine the actions of that agency.
For now, it appears that chaos reigns. Prudent employers, both union and non-union alike, are wise to proceed with caution in assessing the damage. President Obama has almost four years left in office, and it may be safe to assume that the Board, when properly constituted, will return to its pre-Noel Canning agenda.