Appeals Court Rules NLRB Lacks Authority to Act

January 30, 2013

pic-supreme-courtOn Jan. 25, 2013, the U.S Court of Appeals for the District of Columbia Circuit ruled that the National Labor Relations Board (NLRB) lacks authority to act because it has only one lawful member.  The NLRB is composed of five members and must have at least a quorum of three to make decisions or take action. In a 2010 decision, New Process Steel v. NLRB, the Supreme Court held that the National Labor Relations Act requires the NLRB to have three members to act.

On Jan. 4, 2012, the President made recess appointments of Sharon Block, Terence F. Flynn and Richard Griffin to the NLRB. Flynn has since resigned. At the time of the President’s recess appointments of 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 Dec. 20, 2011, through Jan. 23, 2012. The agreement stated that no business would be conducted during those sessions. During the Dec. 23 pro forma session, the Senate overrode its prior agreement by unanimous consent and passed a temporary extension to the payroll tax reduction.  During the Jan. 3 pro forma session, the Senate acted to convene the second session of the 112th Congress.

The D.C. Appeals Court held that the President’s recess appointments to the NLRB made Jan. 4, 2012, were not constitutionally valid since the Senate was not in recess.  Since Block and Griffin are now not valid members, that leaves only one validly appointed member (Chairman Mark Gaston Pearce).  The decision also puts in doubt every decision made by the NLRB since Jan. 2012, an estimated 300 decisions because the NLRB did not have the legal authority to act. Moreover, the NLRB says that over 100 decisions are currently pending.

It is not certain that the NLRB will petition for a writ certiorari from the Supreme Court.  However, given the statements issued after the decision by NLRB and the White House, it is highly probable.

Chairman Pearce said that the NLRB “will continue to perform our statutory duties and issue decisions.” White House Press Secretary Jay Carney said that “the decision that was put forward today had to do with one case, one company, one court.  It does not have any impact, as I think the NLRB has already put out, on their operations or functions, or on the board itself.”

The status of NLRB decisions will be in doubt until the Justice Department fails to file a writ certiorari from the Supreme Court or, if it does, the Supreme Court decides. 

It is also not clear when or whether the President will submit nominations to the NLRB for consideration by the Senate.

Finally, although Lafe Solomon was named Acting General Counsel on June 21, 2010 and he was officially nominated on Jan. 5, 2011, his nomination has not come before the Senate for a vote.

CFPB Implications

Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) was appointed Jan. 4, 2012 by recess appointment at the same time as the three NLRB appointments were made.  If the Senate was not in recess on that date, then his recess appointment will be found to be constitutionally invalid as well.  This would raise serious doubts about all CFPB decisions and rules issued since his appointment as well.  Legal challenges to his appointment and rules issued under his authority are virtually certain.

Additional Information

To read Noel Canning v. NLRB, U.S Court of Appeals for the District of Columbia Circuit, January 25, 2013, click here.

To read the NLRB statement on the decision, click here.

 To read New Process Steel v. NLRB, 130 S. Ct. 2635 (2010) click here.

To read the White House announcement of the recess appointments challenged in the decision, click here.  

To read the press briefing by White House Press Secretary Jay Carney on January 25, 2013, click here.