In January of this year, the D.C. Circuit issued its widely publicized decision in Noel Canning v. National Labor Relations Board, holding that three of President Obama’s pro-union recess appointments to the National Labor Relations Board (“NLRB”) were unconstitutional. The Constitution provides that the Senate must consent to the president’s nominees to federal offices such as the NLRB but gives the president the authority to fill vacancies that “may happen” during the Senate’s recess. In its decision, the appeals court held that the Senate was not in recess when President Obama made his appointments to the NLRB and found that the vacancies did not “happen” during the recess.

Without these three appointees, the NLRB lacks its required quorum of three members to act. As a result, the Noel Canning decision raises questions about the legitimacy of all of the board’s decisions from the past year. Many of those decisions were noteworthy and controversial reversing long-held precedent or breaking new ground:

  • Reversed precedent which allowed employers to instruct employees to keep ongoing internal investigations confidential.
  • Reversed 34-year-old decision exempting witness statements given as part of an internal investigation from disclosure to the union.
  • Reversed 50-year-old precedent regarding “dues check-off” provisions.
  • Held that an employers conduct policy requiring employees “to be courteous, polite and friendly” violated employees Section 7 rights.
  • Held that an employer’s mandatory dispute resolution policy violated Section 7 because employees could “reasonably interpret” the policy as preventing them from filing unfair labor practice complaints.

So what is the real impact of the Noel Canning decision? At this point, it remains an open question as to just how far reaching this decision will be.

On the one hand, even if the Supreme Court ultimately upholds Noel Canning, President Obama may be able to reappoint a Democratic majority on the Board, which would be unlikely to reach different results in the overwhelming majority of affected decisions. Such was the case earlier when the Supreme Court held in Process Steel that a Board lacking a three member quorum could not issue decisions, and approximately 600 prior decisions had to be reconsidered after a proper quorum was reestablished.

On the other hand, Noel Canning does call into question all Board decisions issued after January 4, 2012. President Obama made a similar recess appointment of member Craig Becker in March 2010, and if this recess appointment is also found invalid, decisions issued after August 31, 2011 could be vulnerable to challenge under Noel Canning’s rationale as well. Among the notable decisions in this group are the “quickie election” rules issued in December 2011 and the Board’s DR Horton decision about mandatory arbitration and class action waiver clauses. Ultimately, if the Supreme Court upholds Noel Canning and President Obama can no longer utilize his power to make recess appointments, he may have to submit bipartisan appointments for Senate approval, and the reconstituted NLRB could reconsider a number of the NLRB’s recent landmark decisions.

Given the conflict in the various circuit courts concerning the critical legal issues controlling Noel Canning, it seems a virtual certainty that the Supreme Court will ultimately have to consider and rule on these issues.  Speaking of the Supreme Court, the NLRB decided not to seek an en banc rehearing of Noel Canning before the DC Circuit. Instead, the NLRB announced intends to file a petition for certiorari with the United States Supreme Court for review of that decision. The petition for certiorari is due on April 25, 2013.  For now, LeClairRyan labor attorney Mark Goodwin suggests that,

…as the constitutionality of the recess appointees issue is sorted out in the courts, there is no reason to think that the acting NLRB general counsel will issue guidance or prosecute complaints differently than he has for the last two years, or that the administrative law judges will not decide the facts within the framework of decision-making established by the current board.

Law 360, Feb. 06, 2013

No matter what, one thing is certain — both employers and unions alike will be watching closely to see where this case goes.