The U.S. Supreme Court handed down a unanimous opinion on June 26, 2014, in National Labor Relations Board v. Noel Canning, ruling that President Obama's recess appointments to the National Labor Relations Board (NLRB or "the Board") were invalid.

The Case

The National Labor Relations Board is an independent federal agency in charge of preventing and remedying unfair labor practices committed by private-sector employers and unions. In order for the Board to hear and decide a case, a three-member quorum must be present.

In January 2012, President Obama appointed three members to fill vacant seats on the NLRB. On February 8, 2012, three members of the board, two of which were members appointed by the president, affirmed an Administrative Law Judge's decision ordering Noel Canning, a bottler and distributor of Pepsi-Cola products, to sign a collective bargaining agreement with its employee union. Noel Canning had been engaging in negotiations with its employee union and during the final bargaining session agreed to submit two wage and pension plans to a vote by the union membership. The membership approved the union's preferred proposal, but Noel Canning disputed that the discussions led to a binding agreement. Subsequently, Noel Canning refused to incorporate the changes into a new collective bargaining agreement and the union filed a complaint with the Board. Both the Administrative Law Judge and the Board found that Noel Canning had unlawfully refused to reduce to writing and execute the collective bargaining agreement and ordered it to do so.

Noel Canning appealed to the U.S. Court of Appeals for the District of Columbia Circuit, contending, among other things, that the Board did not have a quorum and thus did not have the power to make a ruling because President Obama's appointments were invalid. The Recess Appointments Clause allows the president to make appointments while the Senate is "in recess." When President Obama made the appointments in January 2012, however, the Senate had been holding pro forma meetings every three business days since December 17, 2011.

The D.C. Circuit court held that the appointments fell outside of the clause because the clause does not include intra-session recesses, and that the president has the power to make appointments only in the period between the two-year sessions of Congress.

The Supreme Court agreed that the appointments were invalid but on other grounds. In an opinion written by Justice Stephen Breyer, the Supreme Court ruled that the president did not have the power to make the recess appointments because the Senate was not in a formal recess. The Court held, however, that the president can make appointments during recesses that occur in the middle of a two-year session, but that it has to be of sufficient length. The Court ruled that a recess of more than three days but less than 10 days is presumptively too short to fall within the clause. "For purposes of the Recess Appointments Clause, the Senate is in session when it says that it is, provided that, under its own rules, it retains the capacity to transact Senate business."

Although the decision may be seen as limiting the president's appointment power, it reflects for the first time recognition on the part of the Supreme Court of the president's continuing right to make appointments without the consent of the Senate when the Congress is in recess during a two-year session.

What This Means for Employers

The ruling calls into question all of the decisions that the five-member Board made while the contested members were there. The case involving Noel Canning was one of 436 made by the invalidly constituted Board during the 18-month period of January 4, 2012, through July 16, 2013. At the request of the litigants, decisions made by the Board during that time may be vacated and returned to the current Board for review.

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