United States: Unanimous Supreme Court Invalidates President Obama’s NLRB Recess Appointments

With its June 26, 2014 decision in N.L.R.B. v. Noel Canning, a unanimous United States Supreme Court held that President Obama's 2012 recess appointments to the National Labor Relations Board (NLRB) were unconstitutional. In so doing, the Supreme Court's decision invalidated potentially hundreds of decisions issued by the NLRB between January 2012 and August 2013. As a result, the current NLRB will be forced to revisit those decisions, likely slowing the NLRB's current, aggressive campaign to expand its powers and implement pro-union decisions.

Noel Canning arose out of President Obama's January 2012 recess appointments of three NLRB board members. Normally, the president can appoint officials only with the "advice and consent" of the Senate. The Recess Appointments Clause of the Constitution, however, allows the president "to fill up all Vacancies that may happen during the Recess of the Senate...." In January 2012, the Senate left for break but continued to hold pro forma sessions, where the Senate reconvened every three days during its scheduled break but actually did not conduct any business.

At that time, the NLRB had only one member approved by the United States Senate and was two short of the statutory quorum of three members required for the NLRB to operate. Republican Senators were expected to filibuster the NLRB members President Obama offered in late December 2011 as the Senators were leaving for their holiday break. Although the Senate technically remained in session, President Obama nevertheless appointed three members to recess appointments. Absent these recess appointments, the NLRB lacked the required quorum until August 2013, when the Senate later approved a full slate of NLRB members.

In 2012, Noel Canning, a soda bottler and distributor, appealed an NLRB decision that the company engaged in unfair labor practices to the United States Circuit Court for the District of Columbia. Relying on the Supreme Court's decision in New Process Steel (which held that the NLRB must have a valid quorum of board members before it can take action), Noel Canning argued that the NLRB lacked a quorum because President Obama's appointment of three recess board members was unconstitutional. The D.C. Circuit agreed and ruled not only that the 2012 recess appointments violated the Constitution, but that other recess appointments made by President Obama and his predecessors likewise were improper. Therefore, the D.C. Circuit's decision could have invalidated not only the decisions issued by the NLRB between 2012 and August 2013, but also earlier decisions issued by other recess-appointed NLRB members.

In its June 26, 2014 decision, a unanimous Supreme Court agreed with the D.C. Circuit that the 2012 NLRB recess appointments were improper. A majority of the Supreme Court, however, refused to adopt the D.C. Circuit's reasoning that earlier recess appointments were improper as well. Thus, the Noel Canning ruling invalidates NLRB decisions issued between January 2012 and August 2013.

The full impact of the Supreme Court's decision remains to be seen. However, employers should consider the following issues when determining the effect of Noel Canning on the NLRB and its interaction with employers:

  • The decision invalidates potentially hundreds of NLRB decisions issued between January 2012 and August 2013. During that time, the NLRB issued over 400 decisions, more than 100 of which were challenged in federal court.
  • The current NLRB (which now has the required quorum) must revisit any such decisions that have not otherwise been settled. The properly constituted NLRB must either reject or reissue the previous decisions.
  • The current NLRB has a Democratic majority and has been aggressively attempting to expand its reach and make it easier for unions to organize, even if that entails overturning long-established NLRB precedent. Thus, the current NLRB likely will adopt or reissue the overwhelming majority (if not all) of the invalidated NLRB decisions.
  • Given the likelihood that the current NLRB will adopt the rulings, employers should continue to follow those decisions to avoid future unfair labor practice findings.
  • The review of these decisions nevertheless will take time. As a result, it should slow the NLRB's ongoing and unprecedented aggressive push to expand its reach, increase union organization and alter precedent to make it more likely that employers will be found to violate the National Labor Relations Act (NLRA).

We have issued numerous client alerts concerning the NLRB's recent expansive decisions. Although the Noel Canning decision likely will slow the pace of these developments, we expect the NLRB to continue issuing anti-employer, pro-union decisions. Therefore, employers should continue to monitor developments from the NLRB.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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