In a long-awaited decision, the U.S. Supreme Court has held that President Obama's recess appointments of Members Block, Griffin, and Flynn to the National Labor Relations Board (NLRB) on January 4, 2012, were unconstitutional.
Executive Summary: In a long-awaited decision, the U.S. Supreme Court has held that President Obama's recess appointments of Members Block, Griffin, and Flynn to the National Labor Relations Board (NLRB) on January 4, 2012, were unconstitutional. See NLRB v. Noel Canning (June 26, 2014). Although the Court broadly interpreted the President's power under the Recess Appointments Clause, it held that the three-day recess during which the appointments were made was too short to fall within the Clause. Accordingly, the Court found that the President lacked the authority to make these appointments. Although the positions held by these members have since been filled by validly appointed members, the decision calls into question the validity of hundreds of Board opinions issued during the time these members served because the Board lacked a valid quorum during that time.
Justice Breyer delivered the opinion of the Court, in which Justices Kennedy, Ginsburg, Sotomayor, and Kagan joined. Justice Scalia concurred in the judgment only. Chief Justice Roberts and Justices Thomas and Alito joined in the concurring opinion.
The Recess Appointments Clause
The Recess Appointments Clause creates an exception to the requirement that the President must obtain the advice and consent of the Senate before appointing officers of the United States. The Clause provides that "the President may 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." In analyzing the appointments, the Court noted that the Recess Appointments Clause is a subsidiary, not a primary, means of making appointments and that the Founders clearly intended most appointments to be made with Senate approval. Thus, the Court sought to interpret the Clause as giving the President the authority to make appointments during a recess but "not offering the President the authority routinely to avoid the need for Senate confirmation."
In finding the appointments invalid, the Court addressed three issues under the Clause: whether the phrase "recess of the Senate" includes both inter-session and intra-session recesses; whether the term "vacancy" refers only to vacancies that occur during a recess or also includes those that occur prior to a recess but continue into the recess; and whether pro forma sessions of the Senate must be considered in determining the length of a recess when evaluating whether a recess falls within the Clause.
"Recess" Includes Both Inter-Session and Intra-Session Recesses
The Court held that the term "recess of the Senate" refers to both inter-session breaks (breaks between formal sessions of Congress) and intra-session recesses (such as a summer recess in the midst of a Congressional session). Finding no dispute regarding whether inter-session recesses are covered, the Court addressed only intra-session recesses. After examining historical practice and memoranda addressing the issue, the Court held that the Clause covers such recesses if they are "of substantial length." Specifically, the Court held that a recess of more than three days but less than 10 days is presumptively too short to fall within the Clause. According to the Court, "[i]f a Senate recess is so short that it does not require the consent of the House, it is too short to trigger the Recess Appointments Clause. ... And a recess lasting less than 10 days is presumptively too short as well."
"Vacancy" Includes Those that Occur During a Recess and Before a Recess
The Court found no dispute that the term "vacancies that may happen" as used in the Recess Appointments Clause includes vacancies that first come into existence during a recess. It also held that this term includes vacancies that arise prior to a recess but continue to exist during the recess. The Court acknowledged that a literal reading of the language of the Clause "permits, though it does not naturally favor" this broader interpretation. However, after examining the Clause's purpose and historical practice, the Court found that both support interpreting the term broadly to include both types of vacancies.
Pro Forma Sessions are not Considered Part of a "Recess"
Finally, the Court addressed whether it should consider the Senate recess from December 17, 2011, through January 20, 2012, as one long recess or shorter recesses broken up by pro forma sessions during which no business was conducted. The Senate had adopted a resolution that from December 20, 2011, through January 20, 2012, it would hold pro forma sessions every Tuesday and Thursday during which no business would be transacted. At the end of each pro forma session, the Senate would adjourn until the following pro forma session. The President made the appointments in question on January 4, 2012, between the January 3 and January 6 pro forma sessions. The Court held that the pro forma sessions count as sessions, not as periods of recess, stating that "for purposes of the Recess Appointments Clause, the Senate is in session when it says it is, provided that, under its own rules, it retains the capacity to transact Senate business. The Senate met that standard here." Accordingly, since the recess during which these appointments were made was three days, it was too short to trigger the President's power under the Clause, making these appointments invalid.
Impact on Employers:
The Court's decision has potentially far-reaching repercussions because it calls into question hundreds of decisions issued and other actions taken by the Board during the time these invalidly appointed members served. According to the Supreme Court's 2010 decision in New Process Steel, the Board cannot act without a validly appointed quorum. After the New Process Steel decision, only about 100 of the approximately 550 cases decided without a proper quorum were returned to the Board for new decision to be issued, with the rest resolved without further litigation.
The Court's decision today means the Board lacked a valid quorum when it issued over 700 decisions, a number of which will have to be reconsidered. Many of the Board's decisions in 2012 were decided against employers and some were very high profile, including Costco Wholesale Corp., 358 NLRB No. 106 (Sep. 7, 2012), where the Board struck down an employer's social media policy, and Banner Health System, 2012 NLRB LEXIS 466 (July 30, 2012), where the Board adopted a new approach, holding that an employer commits an unfair labor practice if it asks an employee, who is the subject of an internal investigation, to refrain from discussing the matter while the employer conducts its investigation.
This process will likely delay the Board's momentum in issuing other decisions unfavorable to employers. With a pro-labor majority, however, the Board likely will uphold its earlier decisions that it must reconsider under Noel Canning.
The Court did not specifically rule on the validity of Member Craig Becker's appointment, which has been challenged in other cases. The Court's decision rest on narrow grounds, however, and does not appear to impact the validity of Becker's appointment because he was appointed during a recess that was not punctuated by pro forma sessions.
If you have any questions regarding this decision or its impact, please contact the author of this Alert, Rick Warren, rwarren@fordharrison.com, who is a partner in our Atlanta office, or the FordHarrison attorney with whom you usually work.