Client Bulletin #536
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The U.S. Supreme Court unanimously ruled yesterday that President Obama's three "recess appointments" to the National Labor Relations Board made on January 4, 2012, were invalid because they were not in accord with the Recess Appointments Clause of the U.S. Constitution. Although the Justices were in agreement on the result, they were sharply divided on the rationale.
Finding the three appointments invalid probably means that all of the Board's decisions between January 4, 2012, and July 30, 2013, when President Obama's replacement nominees to the Board were confirmed, are void for lack of a quorum. The Board's decisions are not self-executing but instead require court enforcement, so the still-pending cases with decisions from that time period (more than 800) will need to be reconsidered by the Board if not resolved.
The Appointments
The "recess appointees" were Sharon Block and Richard Griffin, both Democrats, and Terence Flynn, a Republican, who resigned in 2012. All three were appointed by President Obama on January 4, 2012, when the Senate was holding short "pro forma" sessions at least once every three days between December 20, 2011, and January 23, 2012, to avoid being in an extended recess. The Obama Administration contended that the President had the power to determine when the Senate was in recess. According to the Administration, the Senate was effectively in recess beginning December 20, 2011, the pro forma sessions legally meant nothing, and President had the power to make recess appointments during the break on January 4, 2012. The Administration held to this position despite the fact that the Senate took some substantive actions during the pro forma sessions, which included votes approving a temporary extension of a payroll tax provision on December 23, 2011, and commencing a second session of the 112th Congress on January 3, 2012.
The Court's Decision
The Constitution's "Recess Appointments Clause" gives the President the power "to fill up all Vacancies that may happen during the Recess." The employer in Noel Canning had argued to the U.S. Court of Appeals for the District of Columbia Circuit that the President had recess appointment power only when the Senate is in an "inter-session" recess (between two different sessions). The employer contended that the "break" on January 4, 2012, was instead an "intra-session" recess (in the midst of a single session). The employer also argued that the recess appointment power was good only for vacancies that occurred during the recess, as opposed to vacancies that already existed when the recess began. The D.C. Circuit agreed with the employer on all of these points.
However, the Supreme Court majority (in an opinion by Justice Breyer, joined by Justices Ginsburg, Kagan, Kennedy, and Sotomayor) disagreed with the D.C. Circuit, holding that either an inter-session or intra-session recess permitted a recess appointment. The majority also held that any vacancy existing during the recess could be filled, not just one that occurred during the recess. On the other hand, the majority with concurring Justice Scalia (joined by Chief Justice Roberts, and Justices Alito and Thomas) unanimously held that the Senate had the power to decide when it was in recess, that the President could not simply "decide" that there was no recess and appoint, and that the Senate was not in recess on January 4, 2012. Accordingly, the Court affirmed the D. C. Circuit's decision, ruling that the three recess appointments were invalid.
Justice Breyer's opinion examined the historical application of the recess appointments clause, and found that three days or less was not a long enough recess to permit the exercise of recess appointment power. More than 10 days would be, he said, and four to 10 days might be.
Justice Scalia attacked this analysis and said that the Court should have applied the plain language of the Recess Appointments Clause. He also would have affirmed the D.C. Circuit opinion in all respects.
Analysis
As a result of Noel Canning, all decisions issued by the Board between January 4, 2012, and July 30, 2013, are presumably void for lack of the three-member quorum required under New Process Steel v. NLRB, a 2010 Supreme Court decision. Most of these now-void Board decisions had a negative impact on employers, and some overruled decades of Board precedent. The pending cases from that period (more than 800) that are not resolved will have to be "re-decided" by a properly-constituted Board with a quorum, as happened after the Supreme Court's New Process Steel decision.
That having been said, it is likely that the Board's "re-decided" decisions will be substantively very much like the void decisions because of the makeup of the current, validly-appointed Board.
Perhaps a more significant result of Noel Canning will be the impact on the rule of law. For years before this situation arose, Senates under majority control of both parties have kept the Senate in session to avoid recesses and the recess appointments that might come. It appears that never before had a President so encroached upon Senate power to put forward recess appointees simply by unilaterally declaring a recess when no recess was taken by the Senate itself. Thus, Noel Canning strengthens an important principle of the Separation of Powers, together with the checks and balances system of the federal government. The President, too, is subject to the Constitution and laws and cannot define terms simply as he wants.
In response to the Court's decision, the Board wasted little time, issuing the following statement:
The Supreme Court has today decided the Noel Canning case. We are analyzing the impact that the Court's decision has on Board cases in which the January 2012 recess appointees participated. Today, the National Labor Relations Board has a full contingent of five Senate-confirmed members who are prepared to fulfill our responsibility to enforce the National Labor Relations Act. The Agency is committed to resolving any cases affected by today's decision as expeditiously as possible.
Many issues are still unclear. Serious questions exist regarding whether NLRB Regional Directors and ALJs appointed when the Board lacked a quorum of validly serving Members are themselves are invalidly appointed. Likewise, the General Counsel of the Board, Richard Griffin, is now in a position with at least the appearance of a conflict of interest, where he as "prosecutor" would be handling cases in which his own decisions, as "Member Richard Griffin," were invalid.
So it seems that this may just be getting interesting.
About Constangy, Brooks & Smith, LLP
Constangy, Brooks & Smith, LLP has counseled employers on labor and employment law matters, exclusively, since 1946. A "Go To" Law Firm in Corporate Counsel and Fortune Magazine, it represents Fortune 500 corporations and small companies across the country. Its attorneys are consistently rated as top lawyers in their practice areas by sources such as Chambers USA, Martindale-Hubbell, and Top One Hundred Labor Attorneys in the United States, and the firm is top-ranked by the U.S. News & World Report/Best Lawyers Best Law Firms survey. More than 140 lawyers partner with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Alabama, California, Florida, Georgia, Illinois, Massachusetts, Missouri, New Jersey, North Carolina, South Carolina, Tennessee, Texas, Virginia and Wisconsin. For more information, visit www.constangy.com.