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Supreme Court Invalidates NLRB Members' Recess Appointments

June 27, 2014Articles

The United States Supreme Court has invalidated the “recess” appointments of three members of the National Labor Relations Board (NLRB) who were appointed in January 2012 while the U.S. Senate was not in recess (Noel Canning v. NLRB, June 26, 2014). In a 9-0 decision, the Court’s order will necessarily void the decisions rendered by the NLRB from Jan. 31, 2012 through July 16, 2013 when the NLRB issued decisions without a constitutional quorum of members.

In January 2012 President Obama appointed members Richard Griffin, Sharon Block and Terrence Flynn to the NLRB. These members joined Chairman Mark Pearce and Brian Hayes, who were both nominated by the president and confirmed by the Senate. In that composition, the NLRB rendered 436 decisions, appointed and certified Regional Directors of the Agency, and certified representational election results, among other official action as an agency. When the appointments were made, the Senate was in pro forma session and was not in recess. As a result of the fact that the Senate was not in recess, the Court found that the appointments of the three members was constitutionally invalid. Under other Supreme Court precedent, the NLRB may not take official action as an agency without a quorum of at least three duly appointed members.

While the Court’s opinion has finally decided that the NLRB did not possess a quorum, its decision creates more questions than are resolved. NLRB Chairman Mark Pearce issued a press release on June 26 stating that the agency would take action “expeditiously” to resolve all outstanding issues created by the Noel Canning decision. However, “expeditiously” is a subjective term, and the agency faces a myriad of issues as a result of this opinion. What is certain is that significant delay and uncertainty will follow in the wake of the Order.

Here are some of the issues the NLRB faces:

1) By what process will the NLRB re-consider the 436 decisions issued by the invalid Board? The NLRB is currently composed of five members and under the historic practice of the agency, each Board member must have the opportunity to consider and vote upon a pending case. While each of the 436 decisions issued by the invalid Board were rendered with those safeguards in place, the issuing Board had no constitutional authority to consider or issue those decisions. Depending upon the re-consideration process adopted by the Board, it could result in years of delay.

2) Will the General Counsel of the NLRB afford any precedential value to the invalid decisions rendered by the invalid Board? The General Counsel will rapidly be required to determine whether the invalid decisions of the NLRB will have precedential value in considering unfair labor practice charges and issuing administrative complaints. Conflating this issue is the fact that the current General Counsel, Richard Griffin, was one of the NLRB members who was unconstitutionally appointed by the president in January 2012. Ordinarily, an ultra vires decision by a Court will be afforded no precedential value. It will be very important to determine what, if any, precedential value the General Counsel provides the invalid Board’s decisions or whether he will act consistently with judicial principles.

3) Will the Regional Directors certified by the invalid NLRB be determined to have authority to take official action? All Regional Directors must be certified by the NLRB. The Regional Director has extensive authority to issue decisions, issue complaints and conduct representational elections. If the Regional Directors were determined to be determined to have been improperly certified because their certification was accomplished by an invalid NLRB, this could have substantial impact upon their authority to take action.

4) What is the validity of the certification of the representational status of employees who voted for unions during the term of the invalid Board? A representational election vote is certified by the NLRB. Absent that certification, the union elected by the employees has no authority to demand recognition from an employer. As the NLRB certified many union representational election results, the Board must resolve what, if any, obligations an employer has to recognize and negotiate with a union certified by the invalid Board.

The Courts also will be impacted by this decision. Obviously, the federal circuit courts will have the opportunity to review the decisions identified above. However, many of the 436 decisions – and cases decided upon by their precedent – are pending federal court review now. The D.C. Circuit Court of Appeals has stayed a large volume of such cases awaiting the decision of the Supreme Court in Noel Canning. It is possible that many, if not all, of these cases will be dismissed as the NLRB that issued the initial decision was invalid and did not have a quorum.

While the decision of the Supreme Court is straightforward and easily summarized, the permutation of issues – only partially addressed above - is not. Continuing attention to the resolution of these and other issues will be critical to ensuring your business is appropriately fulfilling its duties under the National Labor Relations Act.

Mark A. Carter is the Labor Practice Group Chair of Dinsmore & Shohl LLP. On February 1, 2012 Mr. Carter testified before the House Oversight Committee of the US House of Representatives regarding the likely impacts of a Supreme Court decision that invalidated the recess appointments of President Obama in January 2012. That testimony can be accessed here. To determine how these issues might impact your business, contact Mark Carter at [email protected] / (304) 357-0924 or another Dinsmore Labor attorney.