January 28, 2013
On January 25, 2013, the D.C. Circuit Court of Appeals rejected President Obama’s January 2012 recess appointments of Board Members Griffin and Block (and former Board Member Flynn, who resigned last year) to the National Labor Relations Board (NLRB) as “constitutionally invalid” in Noel Canning v. NLRB. Noel Canning is the first appellate ruling to decide the validity of the President’s recess appointments, although similar challenges are currently pending in several other Circuit Courts of Appeal.
Noel Canning Decision
The D.C. Circuit’s decision hinged on the interpretation of the term “recess” in the recess appointments clause in the United States Constitution, which permits the President to fill vacancies that arise “during the Recess of the Senate.”
The D.C. Circuit agreed with the employer and held that the recess appointments clause applies to “the Recess” (i.e., the break between annual Senate sessions), and not simply “a recess.” In so doing, the Court reasoned that the practical effect of the NLRB’s interpretation would be to “giv[e] the President free rein” to decide what constituted a “recess,” allowing him to appoint his preferred nominees whenever he saw fit, which “cannot be the law.” In addition, the D.C. Circuit found merit in the employer’s secondary argument that the vacancies the President purported to fill did not in fact occur “during the Recess.”
Impact on Employers
As a result of its rejection of the recess appointments, the Court ruled that the Board did not have a valid quorum of three Board Members. The United States Supreme Court recently held in its 2010 New Process Steel opinion that the Board must have such a quorum before it can take actions, such as issuing decisions. Therefore, the D.C. Circuit vacated the adverse NLRB decision issued against Noel Canning in February 2012.
Importantly, the Court’s ruling only invalidated the one NLRB decision before it. As a matter of course, the NLRB views such appellate decisions as the “law of the case” and not as a larger rebuke that applies to the Board in general. Indeed, NLRB Chairman Mark Gaston Pearce responded to the Noel Canning decision by stating that the current three-member Board, two of whom are recess appointees, will continue with “business as usual.” In short, the NLRB has stated its intention to continue to enforce precedent from its decisions issued during the past year even though the propriety of those decisions has been called into doubt by the Noel Canning decision.
We expect this issue ultimately will reach the United States Supreme Court. If the Supreme Court affirms the D.C. Circuit, that decision will effectively invalidate all of the Board decisions issued following President Obama’s recess appointments. However, until the Supreme Court issues such a decision, the NLRB remains able to continue applying the standards stated in opinions issued during the past year and to continue hearing new cases. Accordingly, employers should not rush to disregard recent NLRB decisions, including those reversing longstanding Board precedent. We recommend instead that employers continue to adhere to these standards or risk unfair labor practice proceedings. Nevertheless, employers involved in litigation before the NLRB should raise the constitutional invalidity of the recess appointees as a defense in Board proceedings.
We will inform you of any further developments as soon as they occur. In the interim, please contact the authors or other members of the McGuireWoods LLP’s Labor and Employment team for further information and guidance.