Executive Summary: The U.S. Supreme Court has held that Lafe Solomon did not validly serve as Acting General Counsel for the National Labor Relations Board (NLRB) after former President Barak Obama nominated him to permanently fill that position in January 2011. See National Labor Relations Board v. SW General Inc., No. 15–1251 (March 21, 2017) (6-2). According to the Court, the provisions of the Federal Vacancies Reform Act (FVRA) precluded Solomon from serving as acting General Counsel after his nomination.

Background of the FVRA

Certain federal offices, such as that of General Counsel of the NLRB, require a Presidential appointment and Senate confirmation (PAS offices). The FVRA permits the President to appoint an official to temporarily perform, in an acting capacity, the duties of a PAS office until that position is permanently filled. Generally, the first assistant to the vacant office becomes the acting officer, but the President can override this default rule by directing either a person serving in a different PAS office or a senior employee within the relevant agency to become the acting officer. The FVRA, however, prohibits certain persons from serving as acting officers if the President has nominated them to fill the vacant office permanently.

The Supreme Court was called upon to resolve whether that limitation applies only to first assistants who have automatically assumed acting duties, or whether it also applies to PAS officers and senior employees serving as acting officers at the President’s behest. The Court held that it applies to all three categories of acting officers.

Challenge to Solomon’s Appointment

When the NLRB General Counsel resigned in June 2010, Obama appointed Solomon to serve temporarily as the NLRB’s Acting General Counsel, citing the FVRA as the basis for the appointment. On January 5, 2011, Obama nominated Solomon to serve as the NLRB’s General Counsel on a permanent basis; however, the Senate did not act on Solomon’s nomination, which was returned to the President. Obama resubmitted Solomon’s name for General Counsel in 2013, but the Senate did not confirm his nomination, which was subsequently withdrawn. A different candidate was confirmed as General Counsel on October 29, 2013. Solomon served as Acting General Counsel during this entire process.

In January 2013, an NLRB Regional Director, exercising authority on Solomon’s behalf, issued an unfair labor practice complaint against SW General Inc. An administrative law judge concluded that the employer had committed an unfair labor practice, and the NLRB affirmed this decision. Subsequently, SW General sought review of the NLRB’s decision in the United States Court of Appeals for the District of Columbia. The company argued that the complaint was invalid because, under the FVRA, Solomon could not legally fulfill the duties of acting General Counsel after having been nominated to fill that position. The court of appeals agreed and vacated the Board’s order. The Supreme Court granted certiorari and affirmed the appeals court’s decision.

The Supreme Court held that the FVRA’s prohibition against anyone who has been nominated to fill a PAS office from serving as an acting officer in that position applies to anyone performing an acting service under the FVRA – whether they are serving because they were the first assistant to the vacant office or because the President directed someone else to be the acting officer as permitted by the FVRA. “Solomon was appointed as acting general counsel under subsection (a)(3). Once the President submitted his nomination to fill that position in a permanent capacity, subsection (b)(1) prohibited him from continuing his acting service.”

Employers’ Bottom Line: The impact of the Court’s ruling is much more limited than its 2014 decision in Noel Canning, in which the Court invalidated the recess appointments of certain Board members, requiring the Board to reconsider hundreds of decisions issued during the time those members served. The FVRA exempts the NLRB General Counsel from the general rule that actions taken in violation of that statute are void ab initio, meaning they cannot be ratified. Here, the D.C. Circuit assumed the actions of the improperly serving Acting General Counsel were voidable and rejected the Board’s argument against voiding Solomon’s actions. The Board did not seek certiorari on that issue, so the Supreme Court did not consider it. Employers with ongoing unfair labor practice litigation initiated by Solomon between January 2011 and October 2013 might be able to challenge complaints issued by Solomon during that period.

This decision upends more than two decades of practice by Republican and Democratic presidents in making appointments. Since the enactment of the FVRA, the Senate had received over 100 nominations of individuals who continued to serve in an acting capacity after their nomination without challenge.