This post was contributed by Bruce D. Bagley, a Member in McNees Wallace & Nurick LLC’s Labor & Employment Practice Group in Harrisburg, Pennsylvania.
On June 26, 2014, the United States Supreme Court unanimously found that President Obama acted unconstitutionally when he made several recess appointments to the National Labor Relations Board ("NLRB") in 2012. The Court, in an Opinion authored by Justice Breyer, affirmed (albeit for differing reasons) the January 2013 judgment by the U.S. Court of Appeals for the District of Columbia Circuit. (Similar rulings holding the appointments to be unconstitutional had been made by the Fourth Circuit Court of Appeals and our own Third Circuit Court of Appeals.)
As we have reported previously, on January 4, 2012 the President appointed three individuals to be Board Members. He had previously been unable to procure sufficient support for his appointments from the United States Senate, which under the U.S. Constitution, must confirm such presidential appointments. The President thereafter made the appointments anyway, claiming that the Senate was in "recess" for its 2011-2012 winter holiday break, and that he had authority under the Constitution’s Recess Appointments Clause to make such appointments at that time. The Senate, however, did not consider itself to be in recess, as it had agreed to reconvene every three business days during the period from December 20, 2011 through January 23, 2012.
The Court split 5-4 on the rationale for confirming the Court of Appeals’ judgment. Justice Scalia and the three more conservative Justices would have more broadly limited the president’s recess appointment powers. Justice Breyer and the four more liberal Justices concluded that the Recess Appointments Clause does empower the president to fill vacancies during a recess of sufficient length, which Breyer opined should be a hiatus of at least 10 days. But here the Senate had been on only a three day break, according to Breyer, because it was meeting every three business days. All nine Justices agreed that a three day break in business was not of sufficient length to constitute an actual recess which would allow the President to make these unilateral appointments.
Turning more specifically to the Board’s findings in the case at issue, the Company’s argument in Noel Canning was simple and direct. It argued that the Board’s finding it had committed unfair labor practices must be overruled because the Board lacked a proper quorum, due to the fact that three of the Board’s five Members had been unlawfully appointed. The Supreme Court readily agreed with the Company’s position. And by doing so, the Court has implicitly invalidated literally hundreds of NLRB Decisions issued from January 4, 2012 to July 30, 2013, the date on which new Members were finally and lawfully confirmed by the Senate during its regular session.
Many of the Board’s Decisions issued during that January 2012 to July 2013 time period were quite significant. In Costco Wholesale Corp., 358 NLRB No. 106 (2012), the Board had invalidated a policy prohibiting employees from making defamatory statements about the company. In Banner Health System, 358 NLRB No. 93 (2012), the Board had found unlawful a blanket policy prohibiting employees from discussing ongoing investigations of misconduct with other employees. In D.R. Horton, 357 NLRB No. 184 (2012), the Board had concluded it was unlawful for employers to require employees to arbitrate claims rather than file civil actions. In WKYC-TV, Gannet Co., 359 NLRB No. 30 (2012), the Board had held it was unlawful to cease deducting union dues from employees’ pay checks after expiration of the collective bargaining agreement. All of these cases, and many others, will now be of no precedential value, given the lack of a proper quorum at the Board when the decisions were issued.
Many of you may recall what happened the last time the Supreme Court found that the Board lacked a proper quorum, in New Process Steel v. NLRB, 130 S.Ct. 2635 (2010). It took the Board several years to re-evaluate and reissue determinations on hundreds of cases, just as the Board must presumably do now as a result of Noel Canning. But in what must be of most import for those of us on the management side, the Board is currently at full strength (three Democrats and two Republicans). It is unlikely that the present Board will ultimately deviate from the harshly pro-union precedent established by the Obama-appointed recess Board Members. Long-term, Noel Canning may be remembered much more for its rebuke of President Obama’s usurpation of legislative authority than it will be for its impact on principles of substantive labor law.