On June 26, 2014, in a unanimous decision, the U.S. Supreme Court invalidated President Obama's 2012 recess appointments to the National Labor Relations Board (NLRB) in Noel Canning v. NLRB. The Court held that the President's unilateral appointments were unconstitutional because the Senate had not entered into a recess at the time of the appointments. Instead, the Senate's brief pro forma sessions every three days, which were held for the express purpose of preventing recess appointments, were sufficient to preclude a valid Senate recess. Under the Supreme Court's decision in New Process Steel, the NLRB requires a three-member quorum to have the authority to operate. With the President's 2012 appointments invalidated, the NLRB only had two validly appointed members from January 2012 until July 2013. Accordingly, all of its decisions during that time period are negated.
The Court's decision not only has large-scale implications for the balance of governmental power, it impacts the immediate future of the NLRB. The following are likely consequences of the decision:
- No change to current cases - The current NLRB members have all been appropriately confirmed by the Senate. Thus, the decision does not impact current cases. Pending matters, however, may be delayed due to the increased workload on the Board resulting from the decision.
- Review of past cases - The recess-appointed Board decided hundreds of cases that will all now be subject to review. The current Board has a similar political makeup to the recess-appointed Board, however, so it is expected that the majority of decisions will be approved as initially decided. Employers involved with cases that were decided during the affected time period should consider whether it is worth the expense of seeking review of their cases if compliance with the decision has already occurred. The National Labor Relations Act does not contain a time limit to file a request for review of NLRB cases, so adopting a "wait and see" approach at this time may be prudent.
- NLRB agenda - The current NLRB has set an aggressive agenda, including increased use of Section 10(j) injunctive relief and amendment to election procedures to create shorter campaign periods. While this decision is unlikely to upset the overall agenda, the undeniable administrative delay caused by reevaluating decisions may slow down the Agency's progress.
- The future - Perhaps the most important consequence of the decision is the potential for future gridlock in federal administrative agencies, in particular the NLRB. In a situation where one party controls the Presidency and the other has a majority or filibuster-proof minority in the Senate, the potential for the political process to shut down an agency such as the NLRB for a significant time period is high.
For most employers, Noel Canning will not have a drastic, immediate impact. With the current polarization in the political process, however, the decision will almost certainly cause future administrative delays arising from the political appointment and confirmation process - perhaps as early as November 2014, when 36 Senate seats are up for election.