Yesterday, in a 2-1 decision, the Third Circuit Court of Appeals became the second appellate court to issue a ruling that President Obama’s recess appointments to the National Labor Relations Board (the “Board”) were constitutionally invalid because they did not occur during an “intersession recess” of the United States Senate.  The case comes a few months after the D.C Circuit’s ruling in Noel Canning, which similarly held that the recess appointments were invalid.  The Third Circuit and D.C. Circuit decisions, taken together, call into question the validity of a considerable number of decisions and rules that the Board has issued over the past few years.

The case before the Third Circuit arose from a petition by the Service Employees International Union (“SEIU”) for certification as the bargaining representative of a unit of licensed practical nurses (“LPN”) employed by New Vista Nursing & Rehabilitation.  New Vista challenged the Union’s certification on the grounds that the LPN’s were supervisors and not eligible to organize under the National Labor Relations Act.   The Regional Director and the Board rejected New Vista’s argument, held the LPN’s were not supervisors and ordered an election to be held.  The Union received a majority of votes, but New Vista refused to bargain with the Union in order to challenge the Board’s conclusion.  As a result, the Union filed an unfair labor practice and a motion for summary judgment, which the Board granted.  The Board’s order granting summary judgment was issued by a three member panel that included Member Craig Becker, who was appointed by President Obama via the Recess Appointments clause of Article II of the U.S. Constitution.

New Vista argued that the Board’s three member panel was improperly constituted and without power to issue the order because of Member Becker’s appointment to the Board while the Senate was not actually in “recess.”  The U.S. Constitution grants the President power to fill vacancies without Senate confirmation during “the Recess of the Senate.”  The Third Circuit considered three possible definitions of the term “the Recess of the Senate:” (1) intersession breaks; (2) intersession and intrasession breaks that last at least ten days; and (3) any time in which the Senate is not open for business and is unavailable to provide its advice and consent.  In its decision, the Third Circuit concluded that the first definition was the correct interpretation, holding that “the Recess of the Senate” only refers to an intersession break.  For that reason it concluded that Craig Becker’s appointment was invalid because it occurred in March 2010 during an intrasession break.  Accordingly, the Third Circuit overturned the Board’s ruling against New Vista because the Board’s order had not been issues by a properly constituted, valid three-person panel.

This decision is significant because it casts further doubt on all of the decisions and rules that the Board has issued over the past three years.  As we have previously discussed, the Board under President Obama has been among the most activist in the agency’s history.  It has issued decisions and rules – many of which pertain to non-unionized companies – that touch on many aspects of the workplace, including for example, social media policies, confidentiality agreements, at-will employment, internal investigations, class action waivers, ambush election rules and notice posting requirements. But, in light of the Noel Canning decision and yesterday’s decision by the Third Circuit, employers have a strong argument that these decisions and rules were issued by an invalid Board and are thus without any legal effect.  Yesterday’s decision bolsters this argument because, unlike the Noel Canning decision, the Third Circuit’s focused on Member Becker, who was appointed in 2010 and is no longer on the Board.  This means that the breadth of Board decisions and rules that are invalid extends back to Becker’s appointment, which occurred in March 2010 when Chairperson Wilma Liebman’s term expired.

Last month the Board petitioned for certiorari seeking review of the Noel Canning decision by the Supreme Court.  The Supreme Court will have the final say on the issue, but in the meantime, President Obama’s recess appointments to the Board are also being challenged in cases brought before the Second, Fourth, Fifth, Seventh, Ninth and Eleventh Circuits.    This blog will provide an update when decisions in those circuits are issued.

Management Missives

  • In defending any unfair labor practice charge that relies on any of the NLRB Decisions after March 2010, Employers should contest any assertion that they are valid authority under with the investigation Region can rely and should cite to both Noel Canning and New Vista Nursing decisions.
  • Employers who have received any adverse ruling from the Board since March 2010 now have additional grounds to have the ruling vacated and should consider filing such an appeal in the D.C. Circuit or Third Circuit.