On January 25, 2013, a three-member panel of the D.C. Circuit Court of Appeals issued a decision in finding that the recess appointments to the National Labor Relations Board (NLRB or Board) by President Obama on January 4, 2012 were unconstitutional. Noel Canning v. NLRB, No. 12-1115, D.C. Circuit Court of Appeals (January 25, 2013). In an opinion on a case before it on appeal, the court held that the NLRB lacked a quorum of three members when it issued the decision on appeal, because the appointments did not occur during a "recess" of the Senate, as required by the U.S. Constitution. This ruling stands to have broad ramifications as it calls into question the validity of all of the decisions made by the Board dating back to January 4, 2012.

The case on appeal before the D.C. Circuit arose from an unfair labor practice charge brought against Noel Canning, a bottler and distributor in the state of Washington. An administrative law judge (ALJ) ruled that the company violated the National Labor Relations Act by refusing to reduce to writing and execute upon a collective bargaining agreement reached with the union. The ALJ then ordered Noel Canning to sign the agreement. The company appealed this decision to the NLRB. The Board affirmed the ALJ’s decision, and the company ultimately appealed the matter to the D.C. Circuit Court of Appeals.

On appeal, Noel Canning made certain substantive arguments related to the final agreement between the parties, but also challenged the authority of the Board to issue an order on two constitutional grounds. First, it claimed that the NLRB lacked a quorum under the applicable statute, because three members of the five-member Board were appointed when the Senate was not in recess. Second, it argued that the vacancies filled by these three members did not "happen during the Recess of the Senate" as required by the U.S. Constitution.

After finding that the Board’s decision was valid on statutory grounds, the D.C. Circuit turned to the constitutional arguments. Under Article II, Section 2, Clause 3 of the U.S. Constitution (also referred to as the Recess Appointments Clause), "[t]he 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." Pursuant to this provision, President Obama on January 4, 2012 appointed three members to the NLRB. At the time of those appointments, the Senate was, in fact, conducting pro forma sessions every three days, by agreement, over a two week period.

Noel Canning contended that the President’s appointments were invalid because they were not appointed during an actual "recess" of the Senate. Specifically, the company argued that the term “recess” refers to the intersession recess of the Senate (the period between sessions) when the Senate is not available to act upon nominations from the President. After carefully considering the plain text, history, and structure of the U.S. Constitution, the D.C. Circuit agreed with the company, stating that "To adopt the Board’s proffered intrasession interpretation of ‘the Recess,’" the court held, "would wholly defeat the purpose of the [f]ramers in the careful separation of powers structure reflected in the Appointments Clause [of the U.S. Constitution]." Thus, because the Board lacked a quorum of three members when it issued the ruling in the Noel Canning matter, the appellate court vacated the Board’s decision.

According to Harold P. Coxson, a principal with Ogletree Governmental Affairs, Inc. and shareholder in the firm’s Washington, DC office: "This is a seminal decision which is a ‘game changer’ for the NLRB and the parties subject to its jurisdiction. Under controlling U.S. Supreme Court precedent, this decision could mean that Board decisions issued since the invalid recess appointments were made – January 4, 2012 – lacked a quorum and will have to be recalled and re-decided by the Board. Coxson also adds that: "Although we can expect the Board to seek en banc review of the panel’s decision by the full D.C. Circuit, and then perhaps by the U.S. Supreme Court, it is unclear what the Board and the Obama Administration will do in the interim. It may not affect the actions of the Board’s ‘Acting’ General Counsel Lafe Solomon, himself appointed under the federal Vacancies Act, which has also been challenged – except, perhaps, where he seeks Board enforcement."

Additional Information

This important ruling and other issues relevant to the labor and employment law agenda will be addressed in detail during Ogletree Deakins’ 2013 Legislative and Regulatory Program on February 21 and 22 at the Renaissance Washington, DC Downtown Hotel. To view the full seminar agenda, click here. To register for the program, contact Kim Beam at (800) 277-1410 or e-mail her at kim.beam@ogletreedeakins.com.