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"NLRB Temporarily in Limbo? - Federal Court Ruling Calls into Question Board's Current Authority"

Winter 2013

On January 25, 2013, the United States Court of Appeals for the D.C. Circuit ruled that President Obama exceeded his constitutional authority when he appointed three members to the National Labor Relations Board in January 2012 while the Senate was on a break, but not formally in recess.

Decision Clarifies The President’s Authority To Make Recess Appointments

The underlying controversy arises from the NLRB’s composition on February 8, 2012, the date of the challenged decision. By law, the NLRB must have a quorum of at least three members in order to issue decisions. At the time of the challenged decision, the NLRB was purportedly comprised of five members. Chairman Pearce and Member Hayes were confirmed by the Senate on June 22, 2010 and their positions were not in question. The other three members, Member Block, Member Flynn and Member Griffin were appointed by President Obama on January 4, 2012 and all three were challenged by the employer.

Members Block, Flynn and Griffin were all purportedly appointed under the Recess Appointments Clause in the Constitution. Thus, one of the key issues was whether the Senate was actually in recess when President Obama made the appointments in question. Although the Senate did not meet on January 4, 2013, the second session of the 112th Congress had formally convened on January 3, 2013. Because Congress had been formally convened the day prior, the Court concluded that the Senate was not in recess, as is required by the Recess Appointments Clause. Because Congress was not in recess, the recess appointments were deemed unconstitutional.

While this interpretation of the Constitution would have been sufficient to vacate the President’s action, the Court looked deeper into the Recess Appointments Clause to determine whether the President could have legally made these appointments had Congress been in recess given that the vacancies occurred prior to the recess. Inasmuch as all three vacancies occurred while Congress was in session, the Court concluded that the President did not have the option of using the Recess Appointments Clause to fill any of these vacancies. Instead, the President needed to fill the positions by the “advice and consent” of the Senate.

Implications Of The Decision

While the Department of Justice has already indicated its intent to appeal, the potential impact of this decision is significant. Assuming the decision survives appeal, the NLRB currently has only one validly appointed member (Member Hayes’ term expired on December 16, 2012). While the NLRB’s authority to hold labor elections or investigate unfair labor practices is unaffected, the NLRB is presently unable to render any legally binding decisions. This situation can only be resolved if the President can successfully obtain Senate approval of his nominees; however, this has proven difficult because the President’s nominees have been viewed by Senate Republicans as too pro-labor.

Further, Court's decision would invalidate hundreds of decisions rendered by the NLRB since January 3, 2012—the date the NLRB last had a valid quorum. During that time, the NLRB has issued rulings on several significant issues including:

  • The hotly debated issue of employees' use of social media sites such as Facebook and Twitter;
  • Union access to confidential witness statements;
  • Employers’ obligations to a union’s request for irrelevant information; and
  • Employers’ obligations to continue dues deductions after a CBA expires.

Notably, another controversial decision handed down by the NLRB—that arbitration agreements which waive an employee’s right to participate in a class action are invalid—survives because it was reached on the last day the NLRB had a valid quorum.

Chairman Pearce Says “Business As Usual.”

Despite the D.C. Circuit's decision, Chairman Pearce announced that the NLRB had important business to tend to and that the agency would continue “business as usual.”  Whether this approach will prove prudent or reckless will likely be decided by the United States Supreme Court somewhere down the road. For now, employers facing sanction by the NLRB may have a new challenge to NLRB action, namely, whether the NLRB has the authority to take action at all.