Court Declares NLRB Recess Appointments Unconstitutional

In what will likely be one of the more significant labor law developments in 2013, a federal court of appeals in Washington, D.C. ruled today that President Obama’s recess appointments to the NLRB were unconstitutional.  On January 4, 2012, three individuals received recess appointments to the NLRB:  Members Flynn (R), Block (D), and Griffin (D).  At the time, they joined Chairman Pearce (D) and Member Hayes (R), both of whom had been confirmed by the U.S. Senate. 

After those appointments, a three-member panel made up of Flynn, Hayes, and Block issued a decision finding that a company, Noel Canning, engaged in an unfair labor practice.  The company appealed that decision to the D.C. Circuit Court of Appeals arguing, among other things, that the recess appointments were not constitutionally valid.  The company argued that, on January 4, 2012, the U.S. Senate was not actually in a "recess" and thus the President had no authority to make recess appointments.  The court agreed (pdf) with the company. 

In a statement issued this afternoon, Chairman Pearce said that the NLRB disagreed with the ruling.  He did not state, however, that the NLRB would appeal.  Rather, he noted his belief that the President’s position on the appointments (that they were constitutional) would "ultimately be upheld" and observed that the same issue was pending in a number of different cases.

For labor professionals, the decision is significant for four reasons:

• It casts doubt on all of the NLRB’s decisions since January 4, 2012, the date on which the recess appointments were made.  These include a number of significant decisions, including continuing union dues deductions after a contract expires and the NLRB’s first Facebook decision.
• It does not mean, however, that all of these decisions are invalid.  Only if this issue makes it to the U.S. Supreme Court, and the Court agrees with the decision, would those decisions be invalid. 
• Don’t expect the decision to slow down the NLRB.  Until the Supreme Court affirms the reasoning of the court of appeals, there is no legal requirement that the NLRB must stop issuing decisions or take the court’s reasoning into account in other cases.  In fact, the NLRB has historically not considered itself bound, in other cases, by a court of appeals decision with which it disagrees in a different case.  Moreover, Chairman Pearce’s statement states that "we will continue to perform our statutory duties and issue decisions."
• Watch for the NLRB’s decision on whether to appeal.  An appeal would certainly be useful to labor professionals so as to resolve the uncertainty this decision creates surrounding the NLRB’s authority to act.