Recess-appointment question likely headed to Supreme Court in the fall.

The Jan. 25, 2013, decision by the U.S. Court of Appeals for the District of Columbia in the Noel Canning v. National Labor Relations Board case sent shockwaves through Washington, D.C. On the one hand, the decision is bound to have major consequences on a number of controversial rulings made by the National Labor Relations Board (NLRB). By some counts, more than 220 decisions are in jeopardy. On the other hand, the Court’s ruling may also upend other appointments and change how recess appointments are made in the future.

The Noel Canning case stems from collective bargaining negotiations between the Teamsters Local 760 and a Yakima, Wash., Pepsi bottling plant owned by the Noel Canning Corp. Following failed negotiations, the union filed an unfair labor practice charge to the NLRB. A review by an administrative law judge (ALJ) ruled in favor of the union, so Noel Canning appealed to the NLRB, which upheld the ALJ’s decision.

Noel Canning then appealed its case to the U.S. Court of Appeals for the District of Columbia, arguing that the NLRB did not have a quorum to rule in the case since three of its members were improperly appointed without Senate confirmation. The NLRB is made up of five members appointed by the President and approved by the Senate. When the NLRB ruled in the Noel Canning case on February 8, 2012, vacancies had reduced the Board to just three members.

In its ruling, the Court found that the Obama Administration violated the Constitution when appointing two Democrats (Sharon Block and Richard Griffin) and one Republican (Terrence Flynn) on Jan. 4, 2012, as recess appointments to fill vacancies.

The Court’s decision hinges on what constitutes a Senate recess. In late December 2011 and early January 2012, Senate Democrats continued to convene the Senate in “pro forma” sessions instead of adjourning to end the First Session of the 112th Congress. No committees met, nor were any floor votes held. In fact, on several days the Senate met for only 30 seconds. And because the Senate did not adjourn, but continued to meet, the Court found this was not an “intersession” recess that occurs between the First and Second Session of a two-year Congress.

As a result, the Court determined that the appointments did not occur during a recess and therefore were unconstitutional. The ruling retroactively nullified the appointments and threw into question the status of any cases the NLRB has ruled on since Jan. 3, 2012, when the illegal recess appointments were made. Anyone or any company facing an adverse decision issued by the NLRB since that date would now have standing to appeal that ruling to the D.C. Circuit.

The court found the recess appointment clause only allows intersession recess appointments.  This is a significantly different interpretation of the President’s recess appointment authority than has been used for many Administrations dating back to the 1800s. That said, it seems consistent with the intent of the Constitution, as was mentioned in the decision.

Some believe that challenges to recess appointments at the NLRB may go back further than Jan. 3, 2012, to the decisions and rules involving another controversial recess appointee, Craig Becker. Becker’s appointment was made in March 2010, also at a time when the Senate was not in recess. So, any cases where he was one of three members on a decision may be subject to challenge. This would also mean the NLRB may have lost a quorum going back as far as August 11, 2011, when former Chair Wilma Leibman left. 

Under this reasoning, several controversial rules implanted by the NLRB may be exposed to legal challenges, such as the August 2011 rule requiring employers to post notices of an employee’s right to join a union, and the December 2011 ambush election rule to expedite the organizing process. 

Incidentally, the Noel Canning decision also impacts President Obama’s appointment of Richard Cordray to head up the Consumer Finance Protection Board (CFPB), the independent watchdog agency within the Federal Reserve. Cordray was appointed the same day as the three NLRB appointments nullified by the Noel Canning ruling.  

The government does have 45 days to file for a rehearing of the Noel Canning case, but there’s some uncertainty about whether they have enough votes to overturn. So the strategy may be to appeal to the Supreme Court.

While it’s likely the Obama Administration will appeal the Noel Canning decision to the Supreme Court, a final ruling may not come until the next Supreme Court, session which starts in October.    ν

Charles McCrudden is Vice President/Government Relations for the AirConditioning Contractors of America, www.acca.org. He can be reached at charlie.mccrudden@acca.org.