Obama’s Appointments to the NLRB Were Unconstitutional, Now What?


As appearing in the Human Resources of Central Ohio (HRACO) monthly newsletter 


Obama’s NLRB Recess Appointments were Unconstitutional, Now What?

In order for the five-Member National Labor Relations Board to operate, there must be a quorum of at least three Board Members at all times. Less than three Board Members and any action taken by the Board is void. We learned this the hard way in 2010 when hundreds of cases were invalidated because the Board only had two Members. We may have learned the same lesson again, as one court recently held that the National Labor Relations Board Members appointed by President Obama in December 2011 were unconstitutionally appointed and all of their cases since that time may also be invalidated.

How Are Board Members Appointed To The NLRB

NLRB Members are supposed to be appointed by the President and confirmed by the Senate. Board Members serve staggered terms, so they are periodically rolling on and off. Due to political wrangling, President Obama’s appointees were not confirmed throughout 2011. So, no new Members replaced the Members whose terms expired and who rolled off the Board. Hoping to bypass the Senate confirmation part of appointing Board Members, and to keep the NLRB functioning with at least three Members, the President used his recess appointment power to appoint new Board Members in December 2011.

According to the United States Constitution, a President’s recess appointment power is only valid when Congress is officially not in session. If Congress was in session when the President appointed new Board Members, then those Members were unconstitutionally appointed and anything they do will be voided.

Instead of laying low and avoiding further controversy while the question of whether they were unconstitutionally appointed worked its way through the court system, the NLRB was extremely active. My columns over the past year have highlighted many of the controversial rulings emanating from a Board that brazenly sought to extend its breadth of governance as far as possible. The legality of these extensions and Board rulings are now in question.

How The Case Worked Its Way Through the Court System

In Noel Canning v. NLRB, a union filed an unfair labor practice charge against a company named Noel Canning. An arbitration was held, and Noel Canning lost. The Company appealed to the National Labor Relations Board and lost again. Since the National Labor Relations Board is part of the federal government, and the National Labor Relations Act is a federal law, appeals from the NLRB are heard by federal district courts. The Washington D.C. District Court affirmed the Board’s decision and Noel Canning lost, again. The company then appealed to the D.C. Circuit Court.

The D.C. Circuit Court held that Congress was in session when President Obama made recess appointments to the NLRB in December 2011, so those appointments were unconstitutional and anything the Board did since that time is void. Therefore, the Board’s decision against Noel Canning was void. The NLRB issued a press release in the wake of this decision disagreeing with the decision and vowing to continue to operate as usual.

The federal government had two options to appeal. It could have asked for an en banchearing before the D.C. Circuit Court, where all thirteen D.C. Circuit Court judges hear the case instead of the standard three judges that heard Noel Canning. But, the government decided to appeal the case to the United States Supreme Court hoping that the U.S. Supreme Court overturns the D.C. Circuit and holds that Congress was in recess when President Obama made the appointments. The Supreme Court does not hear every case appealed to it. In fact, the U.S. Supreme Court only hears about 75 of the 10,000 appeals each year. The Supreme Court has not yet decided whether it will hear the appeal.

Meanwhile, in California, the NLRB ruled against a company named HealthBridge after HealthBridge refused to reinstate employees who went on strike. HealthBridge sought an emergency appeal to the U.S. Supreme Court to determine whether it was required to follow an order from the NLRB after Noel Canning determined that the Board Members were unconstitutionally appointed. The U.S. Supreme Court twice declined to accept it, so no one knows whether the Supreme Court will accept the governments appeal in Noel Canning.

What are HRACO Members To Do

Noel Canning leaves us in a pickle. Practitioners like me are not certain whether the Supreme Court will accept the case. We do not know whether other Circuit Courts will agree or disagree with Noel Canning. We do know that the NLRB continues to rule on cases and make new laws as brazenly as it did before Noel Canning was decided.

This question will likely end up before the U.S. Supreme Court at some point assuming liberal Circuits, like the Ninth Circuit covering the west coast, determine the recess appointments were constitutional. Once this happens there is a split in the law that only the Supreme Court can remedy. But no one knows when the Supreme Court will hear the case, and two Supreme Court Justices will likely retire in the next few years paving the way for President Obama to appoint new Justices. Conventional wisdom is that the mostly conservative, i.e. employer-friendly, U.S. Supreme Court will be liberal, i.e. union-friendly by 2015, so timing is critical for if and when the Supreme Court decides whether the appointment of the Board Members was constitutional.

So where does Noel Canning leave us? The rule of thumb is for companies to continue abiding by decisions from NLRB Regional Offices and seek legal counsel for how to deal with anything going to or coming from the National Labor Relations Board in Washington D.C.

Matt Austin is a Columbus, Ohio employment lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Matt can be reached by email at Matt.Austin@Austin-Legal.com or by phone at 614.285.5342.