On Friday, January 25, 2013, a unanimous panel of the D.C. Circuit Court of Appeals held in Noel Canning v. NLRB that three recess appointments made by President Obama to the National Labor Relations Board (NLRB or “the Board”) were unconstitutional. If the decision stands, it would mean that hundreds of decisions made by the NLRB would be invalidated.

Typically, the NLRB has five members, although only three members are required for a quorum. As of December 2011, the Board had three members that had been confirmed by the Senate. One of the member’s terms was set to expire on January 3, 2012, leaving the Board without a quorum and thus without authority to act. Senate Republicans were blocking President Obama’s attempts to appoint new members to the Board, but the Senate was scheduled to take a holiday break. Fearing that the President would attempt to bypass the Senate confirmation process by making recess appointments, Senate Republicans held “pro forma” sessions every few days, technically keeping the Senate in session. Nevertheless, on January 4, 2012, President Obama invoked his constitutionally granted power to make recess appointments and named three additional members to the Board. In doing so, the President argued that the pro forma sessions, some of which lasted less than a minute, were a sham, and the Senate was in recess.

In Noel Canning, a three-judge panel of the D.C. Circuit unanimously held that the three recess appointments to the NLRB were unconstitutional because the Senate was in session and not in recess as defined by the Recess Appointments Clause of the Constitution. Although the Noel Canning decision only directly vacates the NLRB’s holding in the specific case that was challenged, the implications of the case could be far-reaching. Assuming the court’s decision stands and is not overturned on rehearing, en banc review or an appeal to the Supreme Court, all decisions issued by the Board and all NLRB rulemaking that occurred from January 3, 2012, to present would be vacated and rendered unenforceable, as the Board did not have enough validly appointed members to constitute a quorum during that period. The Board’s decisions that would be invalidated include a decision holding that a waiver of class action lawsuits in arbitration agreements violated the NLRA, and a decision holding that employer social media policies cannot broadly prohibit employees from making damaging or disparaging statements about the company. To become enforceable, the invalidated decisions would have to be sent for reconsideration to a properly constituted Board, which given the current political climate in Washington, might not come to exist for a period of months or even years.

The court’s decision also left several unanswered questions regarding the impact of the Noel Canning decision, such as the status of administrative law judge decisions that were overturned by the Board, and the weight that should be given to positions taken by the NLRB Acting General Counsel’s Office during the period in which the Board has lacked a quorum. For now, however, the impact of the decision will be limited, as the government may seek rehearing on the matter by the three-judge panel or by the full D.C. Circuit. Moreover, there are more than a dozen similar cases currently pending before other U.S. Courts of Appeals, and the Noel Canning decision is already in conflict with a 2004 decision from the Eleventh Circuit upholding an intra-session appointment by President Bush. Thus, given the developing split of authority and the important constitutional issues in play, it appears likely that the Supreme Court will eventually take up the matter.

In the meantime, NLRB Chairman Mark Gaston Pearce has issued a press release indicating that the Board disagrees with the D.C. Circuit’s opinion and believes that President Obama’s position will ultimately prevail. As a result, Pearce said that the Board will continue to perform its statutory duties and issue opinions.

The Noel Canning v. NLRB decision is available at http://www.cadc.uscourts.gov/internet/opinions.nsf/D13E4C2A7 B33B57A85257AFE00556B29/$file/12-1115-1417096.pdf.