New England Biz Law Update
In a ruling likely to send ripples through the labor and employment law bar, a federal appellate court has ruled that President Obama’s recess appointments of three members to the National Labor Relations Board last year were unconstitutional.
The ruling from the U.S. Court of Appeals for the D.C. Circuit also calls into question the authority of the head of the Consumer Financial Protection Bureau, who was appointed simultaneously with the NLRB members, and sets the stage for a showdown before the U.S. Supreme Court.
In a unanimous three-judge panel ruling, the D.C. Circuit ruled in Canning v. NLRB that Obama’s appointments of Sharon Block, Terrence F. Flynn and Richard F. Griffin on Jan. 4, 2012, were invalid under the Recess Appointments Clause of the Constitution because the normal congressional intersession recess period had ended the day before.
During that scheduled recess period, GOP members of Congress thwarted the president’s efforts to make appointments by gaveling in periodic pro forma sessions to prevent Congress from standing at recess. Obama made the appointments during a brief period when Congress was not formally in session.
Businesses, trade groups and lawmakers signed onto a number of lawsuits challenging the president’s authority to install the agency officials. The Obama administration and intervening labor unions argued that the actions were valid because lawmakers were not actively in session when the appointments were made.
But after a lengthy analysis of the text of the constitutional clause, the D.C. Circuit disagreed, finding that Obama made the appointments during an “imaginary recess.”
“The Recess Appointments Clause … provides that ‘[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,’” Chief Judge David B. Sentelle wrote. “[A]s a matter of cold, unadorned logic, it makes no sense to adopt the Board’s proposition that when the Framers said ‘the Recess,’ what they really meant was ‘a recess.’ This is not an insignificant distinction. In the end it makes all the difference. … Considering the text, history, and structure of the Constitution, these appointments were invalid from their inception.”
Senate Leader Mitch McConnell, R-Ky., one of 42 Republican lawmakers who joined the challenge to the appointments as amici, praised the ruling and predicted that the appointment of Richard Cordray as director of the CFPB would suffer a similar fate.
Cordray’s appointment was not a subject of the ruling, but Obama installed Cordray in a recess appointment the same day he appointed the three NRLB members.
The president cannot “appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch or even when the Senate is in session and he is merely displeased with its inaction,” McConnell said in a statement. “This cannot be the law.”
Board, CFPB to continue operating
NLRB Chairman Mark Gaston Pearce said that the board, which now consists of three members, including two of the disputed recess appointees, will continue to operate as usual.
“The board respectfully disagrees with [the] decision and believes that the president’s position in the matter will ultimately be upheld,” Pearce said in a statement, adding that the ruling “applies to only one specific case.”
But if the Supreme Court takes up and ultimately upholds the D.C. Circuit’s ruling, the board may once again find itself in the situation it faced in 2010 after the Supreme Court’s ruling in New Process Steel v. NLRB, which invalidated roughly 600 NLRB rulings because the board did not have the three-member quorum required by the National Labor Relations Act.
And this time the impact could be much greater, said Joseph W. Ambash, managing partner of Fisher & Phillips in Boston and one of the winning attorneys in the New Process Steel case.
By the time New Process Steel was decided, the board once again had a quorum and, for the most part, simply reaffirmed the decisions that had been invalidated by the ruling, Ambash said.
Now, given the fact that recent NLRB rulings have been seen by workplace managers, their attorneys and GOP lawmakers as decidedly pro-union, employers may be less likely to settle union disputes and more likely to appeal adverse actions based on recent precedent in hopes for a favorable outcome in the end.
“Now the situation may be different,” Ambash said. “It will be interesting to see.”
But a Supreme Court decision upholding the D.C. Circuit could have another consequence: encouraging lawmakers to use procedural maneuvers to block administration appointments, a tactic that both Democrats and Republicans have used in recent administrations. That creates a level of uncertainty that harms employers, workers, and employment and labor attorneys on both sides.
“What this really tells us is there has to be a better system of coming to a consensus in appointing members to the NLRB,” Ambash said. “Congress really has to get it together, [and] both sides are going to have to deal with this reality. It’s absolutely bizarre.”
