Court Ruling Rebukes NLRB & Obama Administration

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When the U.S. Court of Appeals for the District of Columbia overturned a 2012 National Labor Relations Board (NLRB) decision this past January, the Obama Administration found itself backpedaling not just on a labor decision, but also on recess appointments.

The Court’s decision in the Noel Canning v. National Labor Relations Board case wasn’t just a major victory for a small business in Washington State; it also called into question the long standing practice of “recess appointments.”

And the decision is bound to have major consequences on a number of controversial rulings made by the NLRB, an agency that has seen its fair share of controversies. By some counts, the Court’s decision may jeopardize more than 220 NLRB decisions made in the last three years.

More significantly, the Noel Canning case may also upend other appointments and change how recess appointments are made in the future.

Noel Canning v. National Labor Relations Board arises out of a negotiation between the Teamsters Local 760 and a Yakima, Wash., Pepsi bottling plant owned by the Noel Canning Corp. Following a failed collective bargaining session, the union fi led an unfair labor practice charge to the NLRB. An administrative law judge (ALJ) ruled in favor of the union, so the company appealed to the NLRB, which upheld the ALJ’s decision.

Seeking relief from the NLRB decision, Noel Canning then appealed its case to the U.S. Court of Appeals for the District of Columbia. The company argued that the NLRB did not have a quorum, and therefore could not rule on the case, since three of its members were improperly appointed without Senate confirmation. The NLRB is made up of five members appointed by the President and approved by the Senate.

When the NLRB ruled in the Noel Canning case on February 8, 2012, vacancies had reduced the Board to just three members, all of which were recent recess appointments.

In its ruling, the Court found that the Obama Administration violated the Constitution when appointing Sharon Block, Richard Griffin, and Terrence Flynn on January 4, 2012.

This is where the facts of the case get a little technical. The Court’s decision hinges on what constitutes a Senate recess. There are two types of recesses in Congress. The first type occurs when the House or Senate adjourns for a regularly scheduled break, usually around the holidays or the month of August. Each chamber will vote to adjourn with an announced date and time of reconvening.

The other recess, known as an “intersession recess” occurs between the two Sessions that make up a two year Congressional term with each session beginning on January 3 and ending with an official adjournment.

In late December 2011 and early January 2012, Democrats, who were in control of the Senate, continued to convene the Senate in “pro forma” sessions instead of adjourning to end the First Session of the 112th Congress. No committees met, nor were any floor votes held. And because the Senate did not adjourn, but continued to meet, the Court found this was not an “intersession” recess.

As a result, the Court determined that the appointments did not occur during a recess and therefore were unconstitutional. The ruling retroactively nullified the appointments and threw into question the status of any cases the NLRB ruled on since January 3, 2012, when the illegal recess appointments were made. Anyone or any company facing an adverse decision issued by the NLRB since that date would now have standing to appeal that ruling to the Court.

The Court found the recess appointment clause only allows intersession recess appointments. This is a significantly different interpretation of the President’s recess appointment authority than has been used for many Administrations dating back to the 1800s.

Some believe that challenges to recess appointments at the NLRB may go back to March 2010 when Craig Becker, a controversial nominee was appointed during a Senate recess. Under this reasoning, several controversial rules may be exposed to legal challenges, such as the August 2011 rule requiring employers to post notices of an employee’s right to join a union, and the December 2011 ambush election rule to expedite the organizing process.

Incidentally, the Noel Canning decision also impacts President Obama’s appointment of Richard Cordray to head up the Consumer Finance Protection Board, the independent watchdog agency within the Federal Reserve. Cordray was appointed the same day as the three NLRB appointments nullified by the Noel Canning ruling.

The government has 45 days to file for a rehearing of the Noel Canning case, but there’s some uncertainty about whether they have enough votes to overturn.

It’s likely the Obama Administration will appeal the Noel Canning decision to the Supreme Court, a final ruling may not come until the next Supreme Court session in October.

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Posted In: ACCA Now, Government