President Barack Obama’s 2012 recess appointments to the National Labor Relations Board were invalid, and therefore, the NLRB did not have a quorum when it issued decisions, the Fourth Circuit Court of Appeals in Richmond has held, joining the federal appellate courts for the D.C. and Third Circuits. Huntington Ingalls Inc. v. National Labor Relations Board and National Labor Relations Board v. Enterprise Leasing Co. SE, LLC, 2013 U.S. App. LEXIS 14444 (4th Cir. July 17, 2013).

In the two consolidated cases before the Fourth Circuit, both employers sought review of the NLRB’s decision and order finding that the employer violated the National Labor Relations Act by refusing to bargain with the union after the NLRB certified the union as the bargaining representative of a unit of the employer’s employees. Both employers raised arguments based on the NLRA and the U.S. Constitution.

After attempting unsuccessfully to resolve the cases on non-constitutional grounds, the Court proceeded to the constitutional question: did the NLRB have a quorum of sitting members when it rendered these decisions? Ultimately, the question was whether the President’s three appointments to the NLRB on January 4, 2012, were valid under the Recess Appointments Clause of the Constitution. If the appointments were not valid, the NLRB lacked a quorum when it decided the cases under review, and the NLRB’s decisions were invalid. 

At the time the NLRB decided the cases, in 2012, it had only two properly seated members – Mark Gaston Pearce and Brian Hayes – both of whom were confirmed by the Senate on June 22, 2010. The third member, Craig Becker, had been appointed by the President to a recess term that ended on January 3, 2012. According to the Court, as of that date, the Board lost its quorum. Sharon Block, Richard Griffin, Jr., and Terence Flynn (who later resigned) received recess appointments to the NLRB the next day, January 4, 2012. The NLRB asserted that the President validly exercised his delegated authority. 

The Supreme Court decided in New Process Steel v. NLRB that, following a delegation of the NLRB’s powers to a three-member group, two members may not continue to exercise that authority. 130 S. Ct. 2635 (2010). (It is common for the five-member NLRB to assign cases to a panel of three members to move cases more quickly. However, in the facts leading to New Process Steel, the NLRB had only three members – one of whom was leaving imminently. The Board delegated future cases to a panel of two members.) Thus, pursuant to New Process Steel, if the NLRB had only two validly appointed members at the time the Board decided the cases before the Fourth Circuit, those decisions were constitutionally infirm because the Board would have lacked a quorum. 

The D.C. Circuit Court in Noel Canning v. NLRB held that the relevant vacancies did not arise during the intersession break of the Senate. 705 F.3d 490 (D.C. Cir. 2012), cert. granted, 2013 U.S. LEXIS 4876 (U.S. June 24, 2013). The three Board seats that the President filled on January 4, 2012, had become vacant on August 27, 2010, August 27, 2011, and January 3, 2012, respectively. On August 27, 2010, the Senate was in the midst of an intrasession break, so the vacancy was not filled during an intersession break, and (according to two judges) neither did it open up during “the Recess,” as required for purposes of the Recess Appointments Clause. Similarly, the Senate was in an intrasession break on August 27, 2011, so the vacancy that arose on that date also did not qualify for a recess appointment. The seat formerly occupied by Craig Becker became vacant at the end of the Senate’s session on January 3, 2012, which, according to the Court, did not happen during the Recess of the Senate because the Senate did not officially take an intersession recess between the first and second sessions of the 112th Congress.

The Third Circuit in NLRB v. New Vista Nursing and Rehabilitation, LLC, addressed only whether the President’s March 27, 2010, appointment of Becker to the Board was valid under the Recess Appointments Clause. 2013 U.S. App. LEXIS 9860 (3d Cir. May 16, 2013). On March 26, 2012, the Senate “adjourned” for two weeks. New Vista held Becker’s appointment was invalid under the Recess Appointments Clause because the clause applies only to “intersession” breaks, not a mere, brief “adjournment.” Because Becker was invalidly appointed during the March 2010 intrasession break, the court in New Vista concluded that the Board did not have the authority to issue its decision.

The Fourth Circuit found the interpretation adopted by the Noel Canning and New Vista courts of “the Recess” in the Recess Appointments Clause most compelling. They held the term refers to intersession breaks of the Senate, that is, the time between an adjournment sine die (a formal close of a legislative session “without day,” meaning, without any further scheduled dates in the session) and the start of the Senate’s next session.

The Court noted the growing animosity between the executive and legislative branches over Presidential nominees is an obvious concern, and such animosity explains the NLRB’s reliance on Presidential discretion to determine when the Senate is in recess. It responded, however, “We simply cannot rely on political gridlock to embrace the Board’s interpretation of the term ‘the Recess.’”

The history of recess appointments was significant, according to the Court. It noted that in the country’s first 132 years, there were numerous opportunities to make intrasession recess appointments, but none were made, with the possible exception of one by President Andrew Johnson. The Court said, “[W]e find this historical understanding of the recess appointments procedure telling.”

In this case, the President’s three January 4, 2012, appointments to the Board were not made during an intersession recess because Congress began a new session on January 3, 2012. Consequently, according to the Court, “these appointments were invalid from their inception.” Because the Board lacked a quorum of three members when it issued its 2012 orders in the cases before it, the Fourth Circuit vacated the NLRB’s decisions.

The NLRB’s position on its recess appointments has been rejected now by three appeals courts. But since the Supreme Court has accepted review of Noel Canning (and may do so with the others), the final word will have to await its decision. The Board appears on the verge of having at last an undisputed quorum. This should remove a cloud on future NLRB decisions, but may still leave in question the validity of many decisions that were dependent on the votes of disputed appointments, especially if not preserved for judicial review.