Last week, a panel of the U.S. Court of Appeals for the Third Circuit held 2-1 in NLRB v. New Vista Nursing and Rehabilitation that President Obama’s purported “recess” appointment of former Member Craig Becker to the National Labor Relations Board on March 27, 2010, was an invalid “intrasession” recess appointment. Accordingly, the decision of a Board panel that included Becker was void because the panel did not have at least three members. The court ruled that the three-member minimum for a “delegee” panel of the Board was a jurisdictional issue – in other words, it went to the very power of the panel to act – and therefore could be raised by a party at any time, or by a court acting on its own.

The Third Circuit’s decision is essentially consistent with the Noel Canning decision issued this past January by the U.S. Court of Appeals for the District of Columbia Circuit on the validity of recess appointments, but it goes Noel Canning one better. Noel Canning dealt only with three “recess” appointments made in January 2012. By contrast, the New Vista decision calls into question a broader swath of Board decisions, including at least the following:

  • All decisions from the NLRB from March 27, 2010, through December 31, 2011, that were decided by a three-member “delegated” panel that included Becker;
  • All NLRB actions from August 27, 2011, through December 31, 2011, that were conducted by an apparent three-member Board “quorum” that included Becker; and
  • Consistent with Noel Canning, all NLRB actions from January 2012 through the present and beyond because of the recess appointments of Members Sharon Block and Richard Griffin.

The NLRB has petitioned for the Supreme Court to hear its appeal of the Noel Canning decision. It is possible that the Court will agree to review both the Noel Canning and the New Vista decisions.

New Vista – Just a Routine “R” Case?

In what seemed to be a routine representation case, a union sought to represent Licensed Practical Nurses, and the employer argued the LPNs were “supervisors” within the meaning of the National Labor Relations Act. The Board’s regional offi ce handling the case rejected the employer’s argument and conducted an election in which the majority of LPN voters selected a local of the Service Employees International Union* as their representative. The employer refused to bargain, and an Administrative Law Judge of the Board granted the Board General Counsel’s motion for summary judgment, recommending that the Board fi nd a violation of Section 8(a)(5) of the Act and that the employer be ordered to bargain.

  • Interestingly, Member Becker came to the NLRB from the position of Associate General Counsel of the SEIU and failed to recuse himself.

The employer sought review by the NLRB, and by a unanimous decision dated August 26, 2011, a three-member panel of the Board consisting of Democrats Wilma Liebman and Craig Becker, and Republican Brian Hayes, rubber-stamped the ALJ’s recommended decision. A fourth member of the Board, Mark Gaston Pearce, did not participate. Liebman’s term expired the next day (August 27, 2011), and the Board’s decision was mailed to the parties on August 29, 2011.

The employer fi led several motions for reconsideration, the last in March 2012, all of which were denied. The employer then sought review at the Third Circuit, and the Board asked the court to enforce its bargaining order.

Here is where it gets interesting. New Vista argued that the panel had no authority to issue the August 26 decision, not because Becker was invalidly appointed, but because the decision was not mailed until after Liebman had resigned. The company argued that the decision was not “issued” until the mailing date and that Liebman’s departure meant that the panel did not have the three-member minimum. The court rejected this argument and found that the decision was “issued” on August 26, while Liebman was still on the Board.

New Vista also made a Noel Canning argument that the Board’s denials of its motions for reconsideration in 2012 – after Becker had left the Board – were invalid because the Board lacked a quorum. New Vista argued that the Board lacked the quorum because President Obama’s January 2012 recess appointments of Sharon Block and Richard Griffi n were invalid.

The Third Circuit panel did not rule on the Noel Canning issue, but on its own initiative, the majority (Judges D. Brooks Smith and Franklin Van Antwerpen) found that the delegated panel that issued the August 26, 2011, decision lacked the required three members in light of Becker’s “recess” appointment in 2010. The court majority found that Becker’s appointment was invalid because it occurred within a session of the Senate rather than during a recess between two different sessions. Therefore, the three-member Board panel that decided the case in August 2011 was in reality only a two-member panel. And because the National Labor Relations Act (scroll down to § 153(b)) as interpreted by the Supreme Court in New Process Steel requires that Board action (if delegated) must be delegated to a panel consisting of no fewer than three members, the August 26, 2011, decision was invalid. Because the underlying decision was invalid, so were the subsequent decisions denying New Vista’s motions for reconsideration, and so the court vacated all of the Board’s decisions in the case.

Judge Joseph Greenaway, Jr., dissenting, criticized the majority for adopting a rationale on the recess appointment issue that he asserted would undo an appointment process that had been in use for more than 220 years, and said that the majority’s rationale would presumably also result in a fi nding that the recess appointments of Block and Griffi n made in January 2012 were invalid (as had the D.C. Circuit in Noel Canning).

What Now?

If not reversed by the Supreme Court, New Vista will be binding in the Third Circuit, which includes Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands. The decision lends signifi cant new weight to the Noel Canning decision, indicating that the D.C. Circuit was not simply a “rogue” court out to strike down the recess appointments of President Obama.

Perhaps more importantly, the decision calls into question many Board decisions and other actions taken when a recess appointee participated on a delegated panel or was necessary for a Board quorum. Even current Chairman Mark Gaston Pearce was initially “recess” appointed with Becker on March 27, 2010, so Pearce’s initial appointment was presumably also invalid. However, Pearce’s “recess” appointment may not be much of an issue because he was subsequently confi rmed by the Senate in June 2010.

In any event, potentially more than a thousand Board decisions since March 27, 2010, as well as regulatory action and appointments, are now “contaminated” by multiple recess appointments that were arguably unconstitutional. Years of Board actions may be null and void or voidable, and require new, valid actions. The cost to taxpayers and parties before the Board “to undo and redo” – caused by the President’s exercise of the recess appointment power when there was arguably no recess allowing it – may be significant.

That having been said, the Board has shown no sign that it is backing away from “business as usual” as it awaits U.S. Supreme Court action on the Noel Canning case. The New Vista case may now be joined with Noel Canning at the Supreme Court (more likely), or the Board could seek en banc review by all of the judges of the Third Circuit (less likely, because the Board is already seeking Supreme Court review of Noel Canning). Furthermore, given the aggressive positions taken by Chairman Pearce, it is possible that he will act promptly to try to “fix” the Board’s Noel Canning/New Vista problems as soon as he has two other Democrats confi rmed as Board Members. Any attempted “fi x” may then take on a legal life of its own.