On June 26 2014 the Supreme Court unanimously limited the president's power to make recess appointments under Article 2(2)(3) of the recess appointments clause of the Constitution. While the decision involved 2012 presidential appointments made to the National Labour Relations Board (NLRB), the ramifications of the decision extend far beyond labour law appointments.
The NLRB is a five-member board which hears complaints about union and non-union employers regarding unfair labour practice charges. A 2010 Supreme Court decision held that in order to constitute a quorum and issue valid decisions, the board must have at least three members.
In February 2012 the NLRB issued a decision finding that Noel Canning had committed an unfair labour practice. When the NLRB issued this decision, it had five members – but President Obama had appointed three of them under the recess appointments clause, during a three-day recess of the Senate, on January 4 2012. Canning appealed the NLRB decision and argued, first before the District of Columbia Circuit and then before the Supreme Court, that the NLRB decision was void because three of the five NLRB members had been invalidly appointed by the president, leaving the NLRB without the requisite three members necessary to act.
The recess appointments clause authorises the president "to fill up all Vacancies that may happen during the Recess of the Senate" without first obtaining the "Advice and Consent" of the Senate. The company argued that:
- the clause applies only to intersession recesses of Congress – that is, recesses between congressional sessions – and not merely "brief breaks" that the Senate may take during a session; and
- the president's power is limited to filling vacancies that first come into existence during a recess period (ie, that may happen during a recess).
Neither condition existed at the time when the appointments were made. The District of Columbia Circuit agreed and overturned the NLRB decision.
The Supreme Court was unanimous in affirming, but the majority affirmed on narrower grounds. The court concluded that when the president appointed Terence Flynn, Richard Griffin and Sharon Block to the NLRB on January 4 2012, the appointments were invalid because they took place when the Senate was in the middle of a three-day recess "and three days is too short a time to bring a recess within the scope of the Clause". Thus, the NLRB decision was invalid. The court suggested that a 10-day recess would generally be sufficient, as historically recess appointments have been made during Senate recesses of 10 days or more.
Under Supreme Court precedent, decisions issued when the NLRB does not have a quorum are void ab initio (New Process Steel v NLRB, 130 SCt 2635, 2640-41 (2010)). The NLRB has not announced how it will deal with the cases in which one of the three January 4 2012 appointees participated. NLRB records show that 436 contested cases were decided by the NLRB in which the NLRB did not have a quorum in light of the court's decision. Some of those cases involved significant and controversial changes from NLRB precedent, such as:
- confirming that an employer can issue reasonable work rules concerning employee behaviour;
- requiring employees to keep matters confidential during investigations by an employer; and
- requiring employers to disclose to a union the witness statements from the employer's internal investigation.
In addition, NLRB administrative decisions between January 4 2012 and August 5 2013 are likely to be challenged, including the appointment of administrative law judges and regional directors, and potentially also the decisions they made.
The significance of the court's decision will likely be limited by the recent amendment to the Senate filibuster rules, which no longer require a 60-person vote to approve a presidential appointment. Because of the change in those rules, it is more likely now that the president will get the advice and consent necessary to make appointments. However, mid-term elections in Autumn 2914 could change that calculation and sometimes the confirmation process can drag on, leading the president to consider a recess appointment.
The court's decision in Canning will have repercussions for both unionised employers and those that are union free.
For further information on this topic please contact Timothy Ryan at Morrison & Foerster LLP's Los Angeles office by telephone (+1 213 892 5200), fax (+1 213 892 5454) or email (firstname.lastname@example.org). Alternatively, please contact Aurora Kaiser at Morrison & Foerster LLP's Palo Alto office by telephone (+1 650 813 5600), fax (+1 650 494 0792) or email (email@example.com). The Morrison & Foerster website can be accessed at www.mofo.com.