In an eagerly awaited ruling, the United States Supreme Court held today that it will uphold the D.C. Circuit’s Noel Canning ruling.  Issued on January 25, 2013, the D.C. Circuit held in Noel Canning that the National Labor Relations Board lacked a quorum because President Obama’s purported recess appointments of several members were unconstitutional.  Both the Fourth Circuit and the Third Circuit agreed with the D.C. Circuit’s holding, which solidified a split amongst the Circuits, with the Eleventh, Ninth, and Second disagreeing, and teed the case up for Supreme Court review.

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.

Justice Breyer’s Opinion answered three important questions. First, the Opinion held that the Recess Appointments Clause empowers the President to fill any existing vacancy during any recess of “sufficient length.” Critically, the recess can be either an “intersession” recess or an “intra-session” recess. Second, the Opinion held that the phrase “vacancies that may happen during the recess of the Senate” applies both to vacancies that come into existence during a recess and to vacancies that initially occur before a recess, but continue to exist during a recess. Third, the Opinion provided that the Senate is in session when it says that it is, provided that it retains the capacity to conduct business.

The Court placed significant weight on the historical practice surrounding “intra-session” recess appointments in concluding that the President has the authority make either intra-session or intersession recess appointments. Presidents, Justice Breyer explained, have made recess appointments since the beginning of the Republic. For example, President Johnson made intra-session recess appointments in the 1867-68 term. In blessing the legality of the appointments, the Attorney General did not find the fact that the recesses occurred during an intra-session break to be significant. Furthermore, President Franklin D. Roosevelt commissioned General Eisenhower during an intra-session recess, and President Truman made Dean Acheson Secretary of State during an intra-session recess.

In determining that the President also has the authority to fill vacancies that come into existence both during and outside of a recess, the Court noted that the actual Constitutional language is subject to different interpretations. President Jefferson acknowledged the ambiguous nature of the clause, noting that it is “certainly susceptible of [two] constructions.” It “may mean vacancies that may happen to be, or may happen to fall, during a recess.” The Court then noted that, while the phrase itself was ambiguous, the clause’s “purpose strongly supports” the broader interpretation that the President can fill both types of vacancies. “That purpose is to obtain the assistance of subordinate officers when the Senate, due to its recess, cannot confirm them.” Further, adopting a narrow interpretation of the clause would risk preventing the President “from making any recess appointments that arose before a recess, no matter who the official, no matter how dire the need, no matter how uncontroversial the appointment, and no matter how late in the session the office fell vacant.”

The Court finally addressed the propriety of the Senate’s pro forma sessions and whether they should be considered recesses. The Court concluded that they do not. “[F]or 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.” Explaining that the Constitution grants the Senate a “broad delegation of authority,” as well as a great deal of control over its own schedule, the Court determined that the Senate’s “determination about what constitutes a session should merit great respect.” However, the Court did hold that the Senate will be found not to be in session when it lacks a capacity to act. For purposes of the decision, the Senate actually retained the ability to act during the pro forma session at issue, so the Senate was never in a recess.

The decision invalidates the rulings made by the National Labor Relations Board during the tenure of recess appointees Sharon Block, Richard Griffin, and Terence Flynn. However, decisions involving former Board Member Craig Becker are not impacted by this ruling because Member Becker was appointed during an intra-session recess. As a practical matter, however, the decision will not stop the Board from operating because the current Board consists of a full quorum of five validly appointed and confirmed members. The challenge for that body is to now figure out how to process review of what is estimated to be potentially hundreds of decisions and administrative actions whose viability is in question (some commentators have suggested there could even be thousands).  Notwithstanding the suggestion of an AFL-CIO lawyer at this past Tuesday’s Congressional hearing on the NLRB, this is extremely different than the Board’s reconsideration of approximately 100 non-controversial, unanimous decisions following the Supreme Court’s 2010 New Process Steel decision.  We will intently await word from the Board as to how the agency intends to tackle this unprecedented issue.