BREAKING NEWS! U.S. Supreme Court Ruling Invalidates NLRB Decisions

supreme courtBY:  RACHEL D. GEBAIDETIMOTHY C. HAUGHEE

JUNE 26, 2014

This morning, the U.S. Supreme Court upheld the ruling of a lower appellate court that President Obama’s recess appointments of three National Labor Relations Board (NLRB) members exceeded his constitutional authority. As a result, hundreds of decisions rendered by the NLRB after the recess appointments, including decisions addressing social media in the workplace and at-will employment statements included in employee handbooks, are invalid.

As we previously wrote, the recess appointments occurred in January 2012 during the Senate’s 20-day holiday break. Prior to the break, the Senate passed a resolution providing for a series of “pro forma sessions” with “no business . . . transacted” every Tuesday and Friday in an effort to prevent any Presidential recess appointments. Notwithstanding the pro forma sessions, the President invoked the Recess Appointments Clause of the U.S. Constitution, which gives the President the power to “fill up all vacancies that may happen during the recess of the Senate,” and made the appointments during a three-day period in between the pro forma sessions.

After the three NLRB members were appointed, a labor dispute arose involving Noel Canning, a Pepsi-Cola distributor. The NLRB heard the labor dispute and found that Noel Canning had unlawfully refused to reduce to writing and execute a collective bargaining agreement with a labor union and ordered the company to execute the agreement and reimburse the employees for any losses incurred as a result of its prior refusal. Noel Canning appealed the NLRB’s decision, claiming that the three recess appointments were constitutionally invalid and that, as a result, the NLRB did not have the quorum necessary for it to act.

The Supreme Court agreed. In its opinion, the Supreme Court acknowledged that the Senate was in the midst of a three (3) day recess when the President made the appointments. However, after interpreting the Recess Appointments Clause in light of the historical “practice of government,” the Supreme Court held that a three (3) day recess is too short a time to constitute a “recess” within the scope of the Recess Appointments Clause such that the President lacked the power to make the recess appointments of the three NLRB members.

The ramifications of the Supreme Court’s decision are far-reaching and will have an impact on nearly all employers. For example, after the President made the recess appointments, the NLRB rendered decisions in hundreds of cases affecting union and non-union workplaces, including decisions on social media use by employees in the workplace and employee handbook statements on “at will” employment. As a result of the Supreme Court’s ruling today, those NLRB decisions have been rendered invalid.

Employers should be aware, however, that on July 31, 2013, the Senate confirmed five (5) new members of the NLRB. As a result, all NLRB decisions rendered after July 31, 2013 are valid and enforceable.

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