As we reported to you in March 2013, in Noel Canning v. NLRB, the U.S. Court of Appeals for the DC Circuit ruled that President Barack Obama’s January 2012 recess appointments of Members Richard Griffin, Terrence Flynn (who resigned prior to DC Circuit decision), and Sharon Block to the National Labor Relations Board (NLRB) were unconstitutional because they did not occur during an inter-session recess of the Senate. Without those three members, the DC Circuit held that the NLRB did not have a quorum and could not act lawfully, calling into question the continuing validity of literally hundreds of NLRB decisions issued between January 3, 2012 (when Member Becker’s term ended) and August 2013, when the current NLRB members were confirmed by the Senate.

Thursday, a unanimous United States Supreme Court affirmed the DC Circuit’s decision in NLRB v. Noel Canning that the President lacked authority under the Constitution’s Recess Appointments Clause in appointing Members Griffin, Flynn and Block to the NLRB on January 4, 2012 during a three-day intra-session recess of the Senate. The Court concluded that because the Senate was in session during its pro forma sessions on the date that President Obama appointed Griffin, Flynn and Block to the NLRB, the President made the recess appointments during a three-day recess. The Court held that while the Recess Appointments Clause empowers the President to fill any existing vacancy during a recess of sufficient length—whether intra-session or inter-session—a three-day recess was insufficient in length to trigger the President’s recess appointment power. Therefore, the Court found that the President lacked the authority under the Constitution to make those appointments.

Summary of the Case

The DC Circuit Decision

Noel Canning, a Pepsi-Cola distributor, petitioned the DC Circuit to review the NLRB’s decision that the company had refused to execute a collective bargaining agreement reached with the Teamsters union. In addition to challenging the merits of the decision, Noel Canning argued that the NLRB did not have the quorum necessary to act because Members Griffin, Flynn, and Block, three of the then-sitting five NLRB members, were never validly appointed since they filled vacancies that did not happen during a “Recess of the Senate,” as Article II, Section 2 of the Constitution requires. Citing the Supreme Court’s 2010 decision in New Process Steel, which invalidated decisions issued by the so-called “two-member” Board, and numerous historical documents, the DC Circuit ruled that the recess appointments were invalid, leaving the NLRB without a quorum, and therefore vacated the Noel Canning decision.

In reaching its decision, the DC Circuit ruled that “the Recess of the Senate” mentioned in the Constitution is limited to inter-session recesses only. The court rejected the NLRB’s arguments that President Obama acted properly because the Senate was in recess on January 4, 2012. The court ruled that the Senate had technically stayed in session when it conducted pro forma sessions every three days from late December 2011 through early January 2012, and thus, the NLRB appointments were made between the January 3 and January 6 pro forma sessions. The DC Court further held that the appointments were also invalid because the purported vacancies did not “happen” during a Senate recess. The court noted that the Constitution’s Recess Appointments Clause only permits Presidents to fill “Vacancies that may happen during the Recess of the Senate” and reasoned that this required the vacancies to actually occur during the recess. The court reasoned that because the vacancies filled by Griffin, Flynn, and Block had arisen prior to the recess the President did not have the right or authority to fill those vacancies during the recess. Since the Board lacked a quorum of three members when it issued its Noel Canning decision, the DC Circuit vacated the Board’s decision.

The Supreme Court’s Decision

On appeal, the Court considered three questions:

• Whether the phrase “the Recess of the Senate” refers only to inter-session recesses, such as a break between formal sessions of Congress, or also to intra-session recesses, such as a summer recess in the midst of a formal session of Congress;
• whether the phrase “vacancies that may happen” refers only to vacancies that first come into existence during a recess or whether it also includes pre-existing vacancies that continue to exist during a recess; and
• the length of a “recess” under the Recess Appointments Clause.

With respect to this last question, to determine the length of the recess, the Court also had to consider whether it would recognize pro forma sessions of Congress as being in session.

In reaching its decision, a majority of the Court (led by Justice Breyer and joined by Justices Kennedy, Ginsburg, Sotomayor and Kagan) first rejected the DC Circuit’s analysis that there is a distinction in the validity of recess appointments depending upon whether the Senate is an inter-session recess versus an intra-session recess. Reviewing the history of Presidential recess appointments occurring since 1867, the Court noted the frequent recess appointments made by Presidents during intra-session breaks and the fact that the Senate had never taken any action to deny the validity of intra-session recess appointments. Moreover, the Court noted that, in 1905, the Senate Judiciary Committee had defined “recess” as the “period of time when the Senate…because of its absence,” cannot “participate as a body in making appointments.” Thus, the Court concluded that because Presidents have made intra-session appointments for a century and a half and the Senate has never taken formal action to oppose them, the term “recess” in the Recess Appointment Clause must be broadly interpreted to include intra-session recesses.

The Court also rejected the DC Circuit’s interpretation of the phrase “vacancies that may happen during the recess of the Senate” to include only those vacancies that arise during a recess. Rather, the Court endorsed a broader interpretation of the phrase to include both vacancies that first come into existence during a recess as well as vacancies that initially occur before a recess but continue to exist during the recess, as it was consistent with Presidents’ historical practice (which had not been countered by the Senate), and also because it ensures that offices needing to be filled can be filled during a recess.

While finding that the President was permitted to use the Recess Appointment Clause to make intra-session appointments to pre-existing vacancies, the Court nevertheless concluded that that the recess in this case—a three-day recess—was too short to trigger the recess appointment powers. Specifically, the Court concluded that a Senate recess that is so short that it does not require the consent of the House under the Adjournments Clause is not long enough to trigger the President’s recess appointment power. The Court further explained that it had not found a historical example of a recess appointment made during an intra-session recess that was shorter than 10 days. The Court also concluded that absent very unusual circumstances, a recess of more than three days but less than 10 days would be too short to fall within the Recess Appointments Clause.

In reaching its conclusion that the NLRB appointments occurred during a three-day recess, the Court concluded that the Senate had stayed in session when it conducted pro forma sessions every three days from late December 2011 through early January 2012 because the Senate had retained the power to conduct business, and had, in fact, conducted business by passing a bill by unanimous consent during one of these pro forma sessions. Because the Senate was in session during its pro forma session and each pro forma session terminated the immediately preceding recess, the Court concluded that the President had made the recess appointments during a three-day recess. Because a three-day recess was insufficient to trigger the President’s recess appointments power, the Court found that the President lacked the authority under the Constitution to make those appointments.

Although the decision by the Court was unanimous on the judgment, Justice Scalia filed an opinion concurring in the judgment, joined by Chief Justice Roberts as well as Justices Thomas and Alito. Justice Scalia’s concurrence, which nearly matched the majority’s opinion in length, criticized the majority for engaging in “judicial adventurism” by relying on historical practice (which Justice Scalia found was unclear) instead of the text of the Constitution (which he found clear). Although he agreed with the majority decision, he would have permitted recess appointments only between formal sessions, rather than adopting a presumptive standard to resolve whether a particular intra-session break was long enough to trigger the President’s recess appointment power.

In Justice Scalia’s view, recess appointments are an anachronism designed to fill a need that no longer exists and that only serves to “circumvent the Senate’s role in the appointment process.” Under the approach outlined by the majority, he reasoned, when faced with uncertain confirmation of a nominee, the President could simply appoint that person unilaterally during an intra-session recess, allow the appointment to expire at the end of the next Congressional session, renew the appointment the following day, and repeat the process ad infinitum. Notwithstanding the past practice of recess appointments, Justice Scalia found no ground to depart from his interpretation of the recess clause, and therefore declined to join the reasoning offered by the majority.

Impact of Noel Canning

As was the case with the Supreme Court’s decision in New Process Steel, the high court’s decision could result in hundreds of NLRB decisions decided between January 2012 and January 2013 being invalidated and remanded to the current NLRB for decision. Legitimate questions exist, however, as to whether remanding these decisions to the current NLRB will produce a different outcome in those cases. Although the cases remanded in the aftermath of New Process Steel did not produce any significant pro-employer results, the aftermath here might be quite different. The two- member Board that led to the New Process Steel decision generally issued only noncontroversial cases that did not involve making new law. Not surprisingly, after remand, those decisions were overwhelmingly upheld. In contrast, the recess appointed members at issue in Noel Canning decided some extremely controversial and groundbreaking cases, including cases involving employers' social media policies, off-duty employee access rules, dues check-off after contract expiration, and employee discipline while bargaining for a first contract with a union.

As the Supreme Court recognized in its decision, there are also numerous decisions pending which challenge the appointment of Board Member Craig Becker, who was appointed by the President during an intra-session recess that was not punctuated by pro forma Senate sessions. Thus, the Court’s decision in Noel Canning could also result in decisions issued after August 31, 2011 (when then-Chairman Liebman’s term expired) or that involved Member Becker casting the deciding vote in a 2-1 decision being invalidated under Noel Canning’s rationale. Among the notable decisions in this group is the NLRB’s D.R. Horton decision about mandatory arbitration and class action waiver clauses.

Only time will tell how many of the NLRB’s decisions since August 2011 will be invalidated based on the Court’s Noel Canning ruling and what the impact will be on the employers who challenged these decisions. With the current pro-labor majority in the NLRB, some employers may see their decisions simply remanded and reissued with the same results. However, much could depend upon when these cases are remanded to the Board and the makeup of the Board at such time. Employers must keep in mind that Member Schiffer’s term expires in December, meaning that between now and December is the Board’s best opportunity to reaffirm any invalidated decisions and take action with respect to its other significant agenda items. Whether the NLRB will maintain its pro-labor majority after December, however, could depend on the makeup of the Senate after the November elections and whether President Obama will be successful in replacing Member Schiffer with another pro-labor Member. Who replaces Member Schiffer and when could significantly impact whether the current Board’s ideological agreement with the holdings in the key invalidated decisions will be affirmed. NLRB Chairman Pearce issued a statement yesterday saying that the Board intends to move quickly, but how quickly they can move remains to be seen, particularly given how long it took the NLRB to complete the review process after New Process Steel. The current Board simply may not have enough time to affirm all of its invalidated decisions before Member Schiffer’s term expires and may have to pick and choose amongst its most controversial invalidated decisions which ones it must affirm first.