On Thursday, the U.S. Supreme Court invalidated President Obama’s prior appointments to the National Labor Relations Board, holding that the executive branch once again overstepped its authority to interpret the law.
The case, NLRB v. Noel Canning, arose after President Obama appointed three members to the NLRB during a brief adjournment. The President did this to prevent the Senate from blocking his appointments, whom many Senate members opposed. In Noel Canning, the Supreme Court invalidated these appointments, holding that President Obama needed the Senate to confirm them. All nine members of the Supreme Court agreed that he overstepped his authority, although they disagreed about how far his authority extended.
This decision will impact businesses more on a large scale than on a small scale. Although this decision effectively invalidated over 1,000 NLRB decisions, the newly comprised NLRB should reissue these decisions soon. On a larger scale, however, this decision will make it much more difficult for a President to appoint individuals whom the Senate opposes. Thus, it ultimately will become more difficult for the President to change laws through federal agencies, something President Obama has done frequently during his second term.
For businesses, the main takeaway is that they do have recourse when they believe the government has misinterpreted the law. Right now, the Obama Administration is regularly using agencies to change laws in ways it cannot accomplish through Congress. This is costing businesses tremendously, as it often forces them to defend actions that previous presidential administrations considered lawful. As this happens, businesses should remember that federal agencies do not always interpret the law correctly, and that they do have options when the government oversteps its authority. As this Noel Canning case shows, courts are willing to side with businesses and invalidate executive branch decisions that the law does not support.