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Federal Court Voids NLRB’s Authority to Act, Deeming Recent Appointments Unconstitutional

On Friday morning, a federal court of appeals revoked the National Labor Relations Board’s authority to act as it is currently comprised and potentially voided every decision the NLRB has issued since early last year. This decision represents a major victory for employers because, unless overturned on appeal, it will effectively cancel several recent pro-union decisions and slow the NLRB’s union-friendly agenda.

This case arose after President Obama took a unique step to avoid challenges to his NLRB appointments. Under established law, the NLRB cannot issue decisions unless it has three or more members. In January 2012, the NLRB had only two members, and Republican senators had expressed concerns about two of the additional appointees President Obama had proposed. In order to prevent these senators from blocking his appointments, President Obama made these appointments when Congress was taking a short break. He did so because a president does not need to obtain the Senate’s consent for appointments he or she makes during “the Recess of the Senate.”

Several parties challenged the appointments, arguing that the Senate’s short break did not constitute a true “Recess.” These challengers asserted that President Obama lacked authority to make the appointments and, thus, the NLRB lacked sufficient members to act. On Friday morning, the U.S. Court of Appeals for the District of Columbia agreed. The court characterized the Senate’s break as an “adjournment,” not a true “Recess,” and thus voided the three appointments. It further held that this “recess authority” only permits the president to make recess appointments for vacancies that actually arise during the same recess; the president cannot, on the other hand, wait until a recess to fill a vacancy that arose earlier. Because the court ruled the appointments unconstitutional, it held that the NLRB had lacked authority to act, and vacated the decision before it.

This decision will have far-reaching consequences, although its ultimate impact is not yet certain. As the law currently stands, the NLRB lacks authority to act because it has only two valid members. Further, every party whom the NLRB has ruled against since Jan. 4, 2012 will have grounds to ignore or challenge the NLRB’s decision. This includes numerous decisions where the NLRB has changed established law to favor labor unions, for example by making it more difficult to discipline union-represented employees, requiring employers to revise key policies, assisting unions’ organizing efforts and increasing unions’ lobbying funds. Finally, the court’s ruling would make it far more difficult for President Obama to make recess appointments for these and other types of positions (including federal judgeships), and thus require him to submit appointees who Republican Senators accept and confirm.

Employers should note, however, that this decision will be appealed, and the Supreme Court could overturn it. The Obama administration already has indicated that it will challenge this decision, and there may be other ways its consequences could be avoided. Thus, until the Supreme Court acts, the state of the law remains uncertain. Nevertheless, this decision will at least significantly disrupt the NLRB’s trend of reversing established law to benefit labor unions, as it places at substantial risk any decisions the NLRB issues in the near future.

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