Even a narrow win could invalidate more than 1,000 NLRB decisions and lead to other recess appointee challenges
The NLRB vs Noel Canning legal case will decide a basic separation of powers issue: when can the president make appointments without the Senate’s advice and consent, known as recess appointments? Specifically at issue is the legitimacy of three National Labor Relations Board (NLRB) board members. Even a narrow ruling holding the appointments unconstitutional could invalidate more than 1,000 NLRB decisions and send 140 cases currently being appealed to the Circuit Courts of Appeals back to the NLRB for new decisions.
This potential instability is mitigated by the fact that last summer the Senate confirmed a full board. As ‘the board and properly constituted’, explains Bernard Bobber, vice chair of Foley & Lardner’s labor and employment practice, ‘it can review any of the important decisions from 2012 and the first half of 2013 that may be invalidated and simply issue a new ruling that is the same or nearly the same as the initial ruling.’
If history is any guide, however, the fact that the board is now properly constituted doesn’t guarantee that those reissued decisions will come quickly or even that the current board will be the one to reissue all of them. Nonetheless, Bobber says, ‘employers would be wise, for now, to simply heed the guidance of the board’s rulings in 2012 even if Noel Canning wins its argument that the appointments were unconstitutional.’
Consequences of ruling for Noel Canning
At oral argument, the justices were unimpressed by the potential instability posed by a ruling in favor of Noel Canning, explains Jeremiah Hart of BakerHostetler, who represents employers. The court addressed the instability argument in two ways. ‘Justice Scalia brought up the de facto officer doctrine, which would allow the court to give validity to the decisions,’ Hart says. ‘The court has done that in the past.’ In that case, all of the NLRB’s current decisions would stand, subject to any pending appeals. Justice Breyer said, however, that ‘invalidating decisions wasn’t a big deal in the wake of [the] New Process Steel [case, and] the NLRB was able to clean that up pretty quickly.’ ‘So you had two justices offering different reasons why the court did not believe ruling for Noel Canning would be too disruptive,’ Hart notes.
As a result, the potential impact of a ruling for Noel Canning is impossible to predict, even though such a ruling appears likely. Existing law may remain settled, pending ongoing appeals, or more than 1,000 NLRB decisions may be tossed out. If the court doesn’t validate the decisions, follow-on litigation could invalidate even more NLRB actions. For example, a Noel Canning win could also upend decisions by regional directors within the NLRB.
‘If the Supreme Court sides with Noel Canning, employers aggrieved by a decision or action of a regional director appointed while the board lacked a proper quorum will have an argument that the regional director was improperly appointed, and that his or her decisions or actions are therefore invalid,’ Hart explains.
A Noel Canning win also has the potential to reach backward in time to the recess appointment of Craig Becker, who left the board the day before the three appointments challenged by Noel Canning were made. Becker’s appointment was intra-session, and if the court holds such appointments to be unconstitutional, it would call into question the decisions the NLRB issued during the six months Becker’s board membership was necessary for a quorum. As Becker’s appointment is not directly before the court in Noel Canning, however, additional litigation would likely be needed to challenge those decisions.
Reissued decisions will take time
As Bobber points out, if the court invalidates a thousand or more decisions, the NLRB will re-review the record in each case that was otherwise not settled by the parties and issue fresh decisions. That is what the NLRB did after New Process Steel vs NLRB, which invalidated actions taken by a two-member NLRB board. Gregory King, spokesperson for the NLRB, says New Process Steel invalidated 595 decisions but, because the parties had settled so many, only 112 of these were ultimately re-decided. The last of those reissuances was in January 2013, three and a half years after New Process Steel was decided by the court.
If the court invalidates the decisions at stake in Noel Canning, reissuing them will likely take significantly longer. One reason is the number of affected cases. Patrick Scully of law firm Sherman & Howard, who represents employers before the NLRB, explains that not only are more decisions at stake in Noel Canning, but the nature of the decisions is also different. The New Process Steel decisions had been issued by one Democratic and one Republican member, resulting in consensus outcomes and reasoning.
This time, Scully says, the challenged decisions were issued by a Democratic majority and were more controversial. In addition, a number of the 112 reissued New Process Steel decisions could be invalidated by Noel Canning, because the reissuing board acting during approximately one of those three and a half years is the very board that may be ruled invalid.
Nor is it certain that the outcome or reasoning in a reissued decision will remain the same. While the majority of the current NLRB remains Democratic, the people are different, making it more plausible that some decisions may change. Moreover, if the reissuing process takes long enough, the reissuing board may lose its Democratic majority or may again fall to two or fewer members. For example, if the Republicans win the Senate this November, they could prevent President Obama from confirming a replacement for Nancy Schiffer, a Democrat whose term expires on December 16, 2014. If the Senate and the presidency are controlled by different parties as a result of the 2016 elections, additional appointments could be blocked, as the term of one NLRB member expires every year.
Reconsidered decisions
Even if the Democratic majority remains throughout the reissuing process, Scully notes that one decision in particular might be reconsidered, as it overturned 50 years of precedent. The case – WKYC-TV – held that employers had to keep facilitating union dues collection even after the union contract had expired, which enables unions to remain fully funded while negotiating a new contract. Additionally, Hart warns, ‘a significant set of cases that will be affected if the Supreme Court sides with Noel Canning are the board’s recent handbook and social media policy cases, some of which involve non-union employers.’
A win for Noel Canning could also pave the way for challenging other recess appointees and their agencies’ actions. One target could be the rules issued by Richard Cordray of the Consumer Financial Protection Bureau before he was confirmed. Cordray had been a recess appointment made at the same time as the challenged NLRB appointees; if their appointments were invalid, his was too. Professor Michael Herz of the Benjamin N Cardozo School of Law points out that in August 2013 Cordray attempted to head off challenges to his preconfirmation actions by publishing in the Federal Register an across-the-board ‘ratification’ of ‘any and all’ such actions. Whether the ratification was necessary and, if so, whether it is effective are not certain. Herz believes the ratification effectively cures any defect, but predicts the question will be raised in further litigation.
The Supreme Court will issue its decision on Noel Canning before the end of June.
