On Thursday, June 26, 2014, the United States Supreme Court ruled the three recess appointments President Obama made to the National Labor Relations Board (“NLRB” or “Board”) in January 2012 were invalid and unconstitutional. In NLRB v. Noel Canning, the Supreme Court unanimously ruled that President Obama exceeded his powers when he by-passed Congress
As the D.C. District Court’s long-awaited decision in Noel Canning v. NLRB, invalidating President Obama’s January 2012 "recess" appointments, likely heads to the United States Supreme Court, here’s what employers need to know in the interim about the impact of that decision.
As we explained in our post, President Obama’s Move to Sidestep the Senate with Recess Appointments, when the National Labor Relations Board’s ("NLRB") normal five-person membership fell to two in late 2011 when Craig Becker’s (who had also been an Obama recess appointee) appointment expired and the agency, therefore, lost its statutory authority to issue rulings, President Obama made three appointments in early 2012 as the Senate was scheduled to leave on holiday break, which sparked a host of controversy.
The controversial appointments included the appointment of Democrat Sharon Black, a Labor Department Official; Democrat Richard Griffin, General Counsel for the International Union of Operating Engineers; and Republican Terrance Flynn, an NLRB attorney.
Setting the Stage for a One-To-Watch Decision
So why the controversy? Well, President Obama made the appointments while the Republican Senate was holding pro forma sessions over the holiday to technically avoid going into recess. While this tactic was certainly not a new one, as it had been used by other Congresses to avoid triggering the president’s recess appointment power, President Obama’s move was particularly aggressive because the Senate was meeting every three days with the specific purposes of staying in session and denying him the chance to make recess appointments. With the standoff, President Obama called the Senate’s bluff and seated all NLRB nominees.
The recess appointment issue is the focus of over a dozen lawsuits, many of which remain pending, but the lead case — the one to watch — has always been Noel Canning v NLRB pending in the D.C. District Court, which we first introduced you to back in March 2012 in A New Challenge to President Obama’s Recess Appointments in Federal Court Means a Decision on the Constitutionality of the Appointments is Getting Closer. The attention certainly is warranted, but not because of the underlying facts, which concern a run-of-the-mill, routine labor dispute. Where it gets interesting is that the decision was decided by three of the five NLRB members, two of whom were "recess" appointees. The case was appealed to the D.C. District Court and the issue to be decided was whether the three-person decision had the necessary quorum of at least three members to be valid. Because the three temporary appointees, were arguably, not legally appointed, the decision was subject to nullification.
The challenge was based on the United States Supreme Court’s 2010 case New Process Steel, L.P. v. NLRB where it held that the five-member NLRB could not delegate its authority to fewer than three members. Thus, a two-person board is not a quorum and is powerless to render decisions. Since Wilma Leibman’s term expired in August 2011, the NLRB had been functioning as a three-member unit. The NLRB lost that three-person quorum when Becker’s term expired at the end of 2011. When President Obama made the three "recess" appointments, the NLRB only had two members. Therefore, if the President’s three "recess" appointments were unconstitutional, arguably every decision made by the NLRB with the recess appointments sitting as quorum effectively would be moot.
The D.C. District Court’s Decision
The D.C. District Court issued a two-part decision and held that President Obama’s "recess" appointments in January 2012 were constitutionally impermissible.
Part One: The appointments were "made when the Senate was not in Recess" because the President’s recess appointment power does not apply to "intrasession" appointments, only "intersession" appointments.
The first part of the court’s ruling was unanimous and answered the question: "How long must the Senate be away to technically be on ‘recess’"? Article II, Section 2 of the Constitution gives the President the "[p]ower to fill up all vacancies that may happen during the recess of the Senate," and these recess appointments do not have to be filled by the Senate. The Constitution does not specify how long the Senate had to be in recess to trigger the President’s appointment power so the court answered it, and held that the constitutional authority to fill a vacancy can only be used when one Congress has ended and before a new Congress comes to town, and not during a break between two sessions of the same Congress. Therefore, the President’s recess appointment powers do not apply to "intrasession" appointments i.e., those made when Congress has left town for a few days or weeks.
The court’s opinion affirmed the "original meaning" mode of interpreting the Constitution, meaning the judges reviewed the constitutional issue by looking at what the framers meant by the words when they originally wrote them. The D.C. District Court reviewed the history of the Recess Appointment Clause, and concluded that "Recess" referred to intersession recesses and not the generally shorter intrasession ones and found:
We hold that "the Recess" is limited to intersession recesses. The Board conceded at oral argument that the appointments at issue were not made during the intersession recess: the President made his three appointments to the Board on January 4, 2012, after Congress began a new session on January 3 and while that new session continued. Considering the test, history and structure of the Constitution, these appointments were invalid from their inceptions. Because the Board lacked a quorum of three members when it issued its decision in this case on February 8, 2012, its decision must be vacated.
The court found that to interpret "the Recess" to include other breaks in Senate business would give the President "free rein" to make appointments "at any time he pleases, whether that time be a weekend, lunch or even when the Senate is in session and he is merely displeased with its inaction." Thus, the judges made a bright-line decision in holding that the Senate only recesses, for purposes of the President’s recess appointment power, at the end of the year.