On January 25, 2013, the U.S. Court of Appeals for the District of Columbia Circuit declared that President Barack Obama’s three recess appointments to the five-member National Labor Relations Board (NLRB) were unconstitutional. Noel Canning v. Nat’l Labor Relations Board, No. 12-1115. In its decision, prompted by a canning company’s lawsuit challenging an NLRB ruling, the court of appeals held that President Obama’s appointments of Sharon Block, Terence Flynn, and Richard Griffin were “invalid from their inception,” because they were not made during the “the Recess” of the Senate and did not “happen” during such a recess, as the Constitution requires. Because the NLRB lacked a proper quorum, the opinion’s author Chief Judge David Sentelle explained, the NLRB lacked the authority to issue any order. 

The three-judge panel, which also included Judges Karen LeCraft Henderson and Thomas Griffith, rejected several proffered interpretations of the meaning of “the Recess,” including whether the phrase refers to “some substantial passages of time” within an intra-session break, as the NLRB had argued. The panel also rejected the government’s contention that the President has discretion to determine whether the Senate is in recess. Ultimately, the court held that “the Recess” must be limited only to inter-session recesses, as any other interpretation would ignore the Framers’ specific choice of words in the Constitution. The January 4, 2012, appointments of Block, Flynn, and Griffin, which were made without Senate consideration, took place while the Senate was meeting in “pro forma” sessions every three business days, rather than during the intersession recess. 

Although observing that the first constitutional ruling—on the meaning of “recess” — resolved petitioner’s case, two judges on the panel went on to address and resolve a separate basis for petitioner’s challenge, holding that the vacancies which these three NLRB Board Members purportedly filled did not “happen during the Recess of the Senate” because the vacancies did not “arise” during an intersession recess. In reaching and deciding that issue, as the concurring judge observed, the panel rejected interpretations of that passage dating back to the early 1800’s. (Judge Griffith, concurring in the judgment, would not have reached this independent constitutional issue.)

Based on the court’s conclusion that there was no lawfully constituted Board, the court held there was no order to enforce, invalidating the NLRB’s order that gave rise to the Noel Canning litigation.

Broader NLRB implications

The Noel Canning decision has major potential implications for other federal agencies — and perhaps even for the judiciary itself. President Obama appointed Richard Cordray, the head of the Consumer Financial Protection Bureau, during the same “pro forma session.” In addition, Judges William H. Pryor, Jr. and Charles W. Pickering were both recess appointments by President Bush. But the impact on the NLRB may be particularly significant. More than 200 NLRB decisions were issued in 2012, after the three appointments now called into constitutional question by the D.C. Circuit. And many of those decisions established important legal precedents favorable to union interests and unfavorable to employer positions. For example:

  • Banner Estrella Medical Center, 358 NLRB No. 93 (July 30, 2012) – The Board found that the employer’s generalized concern with protecting the integrity of an investigation was insufficient to outweigh the employee’s § 7 rights. Accordingly, the Board determined it was a violation of § 8(a)(1) of the National Labor Relations Act (NLRA) for an employer to ask employees making a complaint not to discuss the matter with their coworkers while the employer’s investigation was ongoing, because such an instruction could be coercive.
  • Iron Tiger Logistics, Inc. 359 NLRB No. 13 (October 23, 2012) – The Board held that if an employer fails to respond in a timely manner to a union’s request for presumptively relevant information — i.e., anything relating to the bargaining unit — such action will be an unfair labor practice in violation of the NLRA, even if the request is later determined to be irrelevant.
  • Hispanics United of Buffalo Inc., 359 NLRB No. 37 (December 14, 2012) – The Board found that the employer acted unlawfully by discharging five employees for Facebook comments they wrote in response to a coworker’s criticisms of their job performance. The Facebook conversation was found to be protected, concerted activity for the purpose of “mutual aid” in mobilizing other employees into mounting a group action in response to criticism of their performance.
  • Alan Ritchey Inc., 359 NLRB No. 40 (December 14, 2012) – The Board overturned its 2002 decision in Fresno Bee, 337 NLRB 1161, by holding that discretionary discipline, like other terms and conditions of employment, is a mandatory subject of bargaining and that employers may not impose certain types of discipline unilaterally. Therefore, when employees are represented by a union and there is no collectively bargained grievance-arbitration system in place, an employer must provide the union notice and opportunity to bargain before imposing discretionary discipline such as a discharge or suspension on unit employees, even when it does not alter broad, pre-existing standards of conduct.
  • WYKC-TV Inc., 359 NLRB No. 30 (December 15, 2012) – The Board abandoned a 50-year-old precedent established by Bethlehem Steel, 136 NLRB 1500 (1962), when it held that an employer’s obligation to collect union dues continues after expiration of a collective-bargaining agreement (CBA). Under the Bethlehem Steel rule, the Board had held that a dues-checkoff arrangement was a contractual term and therefore expired with the CBA.
  • Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012) – The Board held that employers may now be required to provide a union representing the employees at issue with witness statements obtained by an employer during an investigation of employee misconduct. This decision abandoned the categorical exemption for witness statements established in 1978 by Anheuser-Bush Inc., 237 NLRB 982, in favor of a balancing test where an employer’s confidentiality interests must be weighed against the union’s interest in obtaining relevant information. 

Uncertain future

The Obama administration has not yet announced whether it will seek an en banc review by the full D.C. Circuit of the three-judge panel’s ruling, or whether it will seek immediate review of the decision to the U.S. Supreme Court. The administration’s initial public position is that it disagrees with the D.C. Circuit’s decision and will continue to defend the constitutionality of the Board’s actions in other cases and federal circuits. The NLRB’s Chairman similarly issued a statement on Friday indicating that the Board will continue to perform its statutory duties and issue decisions. Based upon these reactions, the NLRB’s General Counsel is likely to continue to pursue enforcement actions consistent with the 2012 NLRB decisions. Final resolution of the controversy is not likely to occur until the Supreme Court addresses the issue, either in Noel Canning or in another case involving the same constitutional challenge.