This afternoon, the Circuit Court of Appeals for the D.C. Circuit effectively undid everything the National Labor Relations Board did in 2012. In Noel Canning, a Division of the Noel Corporation v. National Labor Relations Board, No. 12-1115 (D.C. Cir. Jan. 25, 2013), the Court ruled that the Board lacks a quorum because President Obama's purported recess appointments of several members were unconstitutional.
At the time the Board issued its order in Noel Canning, 358 No. 4 (Feb. 8, 2012), there were five sitting members -- but only two, Chairman Mark G. Pearce and Member Brian Hayes, had been confirmed by the Senate. The other three members were all appointed by the President on January 4, 2012, purportedly pursuant to the Recess Appointments Clause of the Constitution. Article 2, Section 2, cl. 2 of the Constitution requires that such appointments be made "with the Advice and Consent of the Senate." Article 2, Section 2, cl. 3 provides an exception:
[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.
On January 4, 2012, when the President purported to appoint the three Board members, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011, through January 23, 2012. The employer's argument, beyond its more typical objections under the NLRA, was that the recess appointments violated the Recess Appointment Clause as the Senate was not in "the Recess," and the vacancies being filled did not "happen during the Recess". As that would deny the Board the quorum of three members, consistent with the Supreme Court's decision in New Process Steel, 130 S.Ct. 2635 (2010), the Board's action was invalid.
The Court first analyzed the employer's statutory objections, noting well-settled principles of law that preclude courts from passing
...upon a constitutional question although properly presented by the record, if there is also present some other ground upon which the case may be disposed of.
Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 347 (1936) (Brandeis, J., concurring). The Court here, however, found support for the Board's substantive holdings, and thus, proceeded to the constitutional issue of the President's appointments.
In a thorough analysis, relying heavily on originalist and strict constructionist principles, the Court decided firmly that both arguments advanced by the employer had merit sufficient to invalidate the Presidential appointments, and thus, the Board's action. First, the Court reasoned that "the Recess" must refer only to an intercession recess of the Senate -- and not, as the Board urged, any intrasession break in activity:
As 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.
Beyond the pure logical and textual analysis of the language of the Recess Appointment Clause, the Court put significant stock in the basic principle of Separation of Powers at the foundation of American government:
An interpretation of “the Recess” that permits the President to decide when the Senate is in recess would demolish the checks and balances inherent in the advice-and-consent requirement, giving the President free rein to 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. This cannot be the law.
The Court was content that this interpretation of the Recess Appointment Clause alone was adequate basis to rule the appointments improper and invalidate the Board action for lack of a quorum. Yet, it proceeded to find merit in the employer's second argument -- i.e., that the vacancies filled by the appointments did not "happen during the Recess".
Again, there was no dispute that at least some of the vacancies originally arose well before the pro forma session of the Senate -- during the normal time for the official session. The Court refused to accept the Board interpretation that the power extends to the filling of any vacancies that simply may "exist" during the Recess. The Court was unimpressed with the Board's argument that, especially in the current political environment, this interpretation puts at risk the Executive's ability to carry out the laws. The Court wrote:
if Congress wished to alleviate such problems, it could certainly create Board members whose service extended until the qualification of a successor, or provide for action by less than the current quorum, or deal with any inefficiencies in some other fashion. And our suggestion that Congress can address this issue is no mere hypothesis. The two branches have repeatedly, and thoroughly, addressed the problems of vacancies in the executive branch.
The end result is not yet certain, as the Board and Administration are certainly reviewing legal options and a petition for Supreme Court review is likely. The decision identifies Circuit splits on a number of issues. For the time being, it seems all action taken by the Board itself after the January 4, 2012 appointments is of suspect viability. Still, whether by further judicial review or more likely eventual partisan compromise, ultimately the Board will wind up with a quorum at some point. If that happens before 2016, it is likely to be a Board with a majority sympathetic to the agency's 2012 efforts. It remains necessary for practitioners and stakeholders to consider the rationale set forth in those decisions, while we await further, more determinative resolution.
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It was going to be hard to top 2011 in terms of unique and dynamic labor law developments. But 2012 may just have lived up to the task.
