On January 25, 2013, the United States Court of Appeals for the District of Columbia Circuit held that three of President Obama’s “recess appointments” to the National Labor Relations Board (“NLRB”) were unconstitutional in its Opinion in Noel Canning v. National Labor Relations Board. This decision follows an appeal by a bottling company, Noel Canning, of a specific NLRB ruling but has far-reaching implications.

On January 4, 2012, President Obama appointed three members to vacant seats on the NLRB. At the time of President Obama’s three recess appointments, the Senate was meeting in pro forma sessions, during which no business was conducted. Noel Canning challenged the constitutionality of these appointments.

The D.C. Circuit held that the President’s appointments were invalid. Specifically, the Court held that the President’s power to fill vacancies during a Senate recess applied only to recesses between sessions of Congress, and not during recesses of a given session of Congress. Because the Senate had reconvened on January 3, 2012, the Court held that the January 4 appointments required the Senate’s advice and consent. The Court also held that the President could only fill vacancies during a recess to the extent the vacancies arose during that recess. None of the vacancies occurred during a recess.

Under a 2010 U.S. Supreme Court decision, New Process Steel, L.P. v. NLRB, 130 S. Ct. 2635 (2010), the NLRB cannot act with fewer than three members, as it does not have the requisite quorum. On December 16, 2012, NLRB Member Brian Hayes’ term expired, and in May 2012, NLRB member Terence Flynn stepped down from his position with the agency. As of January 2013, only Chairman Mark Gaston Pearce and members Sharon Block and Richard F. Griffin Jr. sit on the NLRB. However, the D.C. Circuit’s ruling found that Block and Griffin’s appointments were invalid. Thus, the Noel Canning decision ostensibly deprives the NLRB of its authority to act.

The Noel Canning decision also invalidated Member Flynn’s power to act, and calls into question decisions dating back to January 2012. Many of the decisions issued by the NLRB between January 2012 and January 2013 have far-reaching implications and are heavily pro-Union. Thus, it will be a welcome news for employers if these decisions are abrogated.

Upon hearing news of the decision, Chairman Pearce stated that the NLRB “will continue to perform [its] statutory duties and issue decisions,” despite the adverse ruling. Several similar appeals are pending in different circuits, and it is expected that the NLRB will appeal this decision to the United States Supreme Court.