The Supreme Court Holds President Obama's 2012 NLRB "Recess Appointments" Were Unconstitutional

In one of the most important decisions of its term, the United States Supreme Court ruled on June 26, 2014, that President Obama’s January 2012 recess appointments to the National Labor Relations Board (“the Board”) were unconstitutional. This ruling affirmed an earlier District of Columbia Appeals Court decision which found that President Obama violated the Recess Appointments clause of the Constitution in making those appointments. The Supreme Court’s decision means that, during the time period those appointees held seats on the Board, it was without a valid quorum of members required to issue rules or decisions on unfair labor practice claims, and those decisions are therefore invalid.

In Noel Canning v. National Labor Relations Board (Case No. 12-1281), the Board, in a February 8, 2012 decision, had found that Noel Canning (the employer) had committed an unfair labor practice by refusing to sign a negotiated contract with the Teamsters Union. A three-member panel of the Board, consisting of Members Brian Hayes, Terrance Flynn and Sharon Block, issued the decision. Slightly more than a month before, on January 4, 2012, President Obama, using his claimed “recess appointment” authority, appointed Members Block and Flynn to fill vacancies on the five-member Board. At that time he also “recess appointed” Richard Griffin to the Board. The Senate had previously confirmed the appointments of Chairman Mark Pearce and Member Hayes on June 22, 2010.

In a prior case, New Process Steel, L.P. v. NLRB, 130 S.Ct. 2635 (2010), the United States Supreme Court held that the Board lacked decision-making authority when it was without a quorum of at least three members. Noel Canning challenged the Board’s unfair labor practice finding, in part, by alleging that President Obama’s January 2012 “recess appointments” were not valid, and that the Board, therefore, lacked a legal quorum under New Process Steel to issue the February 8 decision without the participation of the recess appointees.

The Supreme Court agreed with the Court of Appeals and the employer that the President’s recess appointments to the Board violated the “Recess Appointments Clause” of the Constitution, which states:

. . . the President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.

The Supreme Court found that the term “the Recess” can mean either “intrasession” breaks or “intersession” breaks of the Senate, but that the three day break during which President Obama made the appointments was too short to constitute a “recess.” In so holding, the Court considered the language of the clause, its purpose, and the history of past recess appointments. Specifically, the Court found the term “The Recess” was sufficiently ambiguous that it could mean either intrasession, or intersession, breaks of the Senate. The Court also found that the phrase “Vacancies that may happen . . .” was sufficiently ambiguous that it could mean either vacancies that first arose during a recess, or vacancies that existed at the time of a recess.

Noting that the purpose of the clause was to insure the proper functioning of government while the Senate was away, but not to allow the President the ability to evade the Senate confirmation process as the primary method for appointing government officers, the Court therefore held the President has the power to make recess appoints to existing vacancies during either intersession or intrasession breaks of the Senate.

The Court then considered the length of a break necessary for it to be considered a “recess,” and reviewed the historical practice of recess appointments. Finding that there is no history of recess appointments for intrasession breaks of less than ten day, the Court held that intrasessions breaks of less than ten days did not constitute a “recess” for purposes of the clause. Since the President’s January 4, 2012 appointments were made during such a short break, the Court found they did not meet the requirements of the Recess Appointments Clause, and were therefore invalid.

The Court’s decision therefore invalidates hundreds of decisions issued by President Obama’s 2012 recess appointees to the Board. Those decisions almost uniformly favored unions over employers and non-union employees. Among the most controversial of these now-invalid decisions are:

• WKYC-TV, 359 N.L.R.B. No. 30, (Dec. 12, 2012), in which the Board overturned 50 years of precedent and held that an employer's obligation regarding the check-off of dues - if contained in a collective bargaining agreement - continues after contract expiration, absent a specific contractual right to terminate such a requirement.

• Banner Estrella Medical Center, 358 N.L.R.B. No. 93 (July 30, 2012), in which the Board substantially limited employers’ ability to request or require that interviewed employees maintain confidentiality about the interview during an internal investigation.

• Finley Hospital, 359 N.L.R.B. No. 9 (Sept. 28, 2012), in which the Board held that an employer that negotiates a wage increase with its union must continue to offer such wage increase after contract expiration and during renewal contract negotiations, even though the previous wage increase was only for the duration of the expired collective bargaining agreement.

• Karl Knauz Motors Inc., 358 N.L.R.B. No. 164 (Sept. 28, 2012), in which the Board found that policies requiring employees to be courteous in the workplace, and refrain from using profanity, are unlawful under the NLRA, as such policies potentially “chill” employee free speech and organizing rights.

The overturning of these, and other decisions, will return the law, at least for now, to the prior status quo under the Clinton and Bush NLRBs and is a very favorable result for employers and non-union employees (more than 93% of the private sector workforce). However, it is likely that most of the invalidated decisions will be returned to the current NLRB for reconsideration. Because the members of the current Board have now been properly appointed by President Obama, and confirmed by the Senate, it is probable that many of the invalidated decision will simply be reissued by the current Board.

Feel free to contact Jon Olson, or any other attorney at Peters, Revnew, Kappenman & Anderson, P.A., with any questions you may have about this new case, and how it may affect your business.