Who imagined that the hottest topic in labor law for over six months would actually be a question of constitutional law? Yet that remains the case after the Fourth Circuit’s recent 2-1 decision in NLRB v. Enterprise Leasing Co. Southeast, LLC, No. 12-1514, July 17, 2013.
In Noel Canning v. NLRB (covered here), the Court of Appeals for the D.C. Circuit invalidated the appointments of three Obama appointees to the Board. That court held that the appointments were unconstitutional because they did not occur during a “recess” as that term is defined under the U.S. constitution. The decision sent the labor world (and the blogosphere) into a frenzy. The Third Circuit has since added fuel to the fire invalidating the appointment of Craig Becker in NLRB v. Vista Nursing and Rehabilitation (here). To quell this uproar, the Supreme Court recently agreed to hear the Noel Canning decision. If the high court upholds the D.C. Circuit, the implications could be enormous. A finding that the appointments were in fact unconstitutional would mean that the Board issued hundreds of decisions and orders without a properly constituted quorum. Those could all be vacated and untold numbers of cases pending in federal Courts of Appeal could be mooted.
In the meantime, the Fourth Circuit last week issued the Enterprise Leasing decision. The court dealt with two consolidated cases that challenged Board actions. Before reaching the constitutional question, the court first upheld the Board decisions–findings of NLRA violations by two employers for refusing to bargain. Judge Clyde H. Hamilton, writing for the 2-1 majority, then applied the reasoning of the Noel Canning and Vista Nursing courts, holding that because the “recess” appointments of the Board members occurred during intrasession Senate recesses, they could not survive constitutional challenge. Accordingly, he vacated both of the orders against the employers. Judge Albert Diaz dissented, stating that he would stop at finding the Board’s orders enforceable. He advocated for a “functional interpretation” of the constitutional provisions on recess appointments. In his view, the “textualist” reading espoused by the majority is unsupported by the test, which “is anything but clear.”
Unfortunately for employers, this decision probably does not signal the beginning of the end, but the end of the beginning. The Supreme Court’s ruling in Noel Canning will provide some clarity, but that decision could be nearly a year away. And even then, the dust-settling will likely take even longer. For those hoping the Court upholds Noel Canning, the decision may provide a tiny measure of good news. One more Court of Appeals has delivered a favorable outcome. Judge Diaz, however, provided a reasoned dissent that may appeal to some on the Supreme Court. As for now, employers should stay the course and seek legal advice should the Board come calling.