On February 8, 2012 the National Labor Relations Board found Noel Canning, a division of the Noel Corporation, in violation of the National Labor Relations Act (NLRA) for "refusing to reduce to writing and execute a collective bargaining agreement reached with Teamsters Local 760." Noel Canning v. NLRB, Docket No. 12-1115, slip op 3 (D.C. Cir. Jan. 25, 2013). Noel Canning is a Pepsi-Cola bottler and distributor. This action would constitute an unfair labor practice under sections 8(a)(1) and 5 of the NLRA. Id. at slip op 4. The NLRB requires a quorum to issue orders. The NLRB was meant to be a five member board with three members required to constitute a quorum. Three members of the board were not validly appointed by the President as they were recess appointments made while the Senate was not actually in recess. Recess appointments are permitted in Article II, Section 2, clause 3 of the United States Constitution. Orders issued by the agency in the absense of a quorum are void from their inception. Id. at slip op 4.
The D.C. Circuit rejected Noel Canning's statutory objections to the NLRB order. It ruled that the board's order was supported by substantial evidence. Id. Slip Op at 9. Noel Canning and the Union had agreed on all points of the contract except for wages and pensions by the final negotiating session. Id. at Slip Op 5. The parties, according to Union notes, agreed to present two alternative proposals on these issues to the membership. Both proposals included wage and pension increases, but they were allocated in different manners. Id. The parties agreed to be bound by the Union vote. Id. The next day Noel Canning emailed the proposals to the Union membership, but the union proposal was altered, without Union consent, to cap the amount of the pay increase that could be applied to the pension fund. Noel Canning asserted that the agreement the previous day was not binding since it was not in writing. Id. at Slip Op 6. The Union membership ratified the Union proposal without the alteration allocating the entire pay increase to the pension fund, but Noel Canning considered this to be merely a non-binding counter-offer and rejected it. Id. Noel Canning refused to execute a written agreement with the Union ratified terms. Id.
The Union filed a charge with the NLRB for an unfair labor practice based on the company's refusal to execute the agreement. Id. An administrative law judge (ALJ) conducted a two day hearing and found the parities reached consensus on the Union's proposal meaning that the Noel Canning's refusal to execute the agreement was an unfair labor practice. Id. The NLRB affirmed the ALJ's decision with three members present. Id. at Slip Op 13.
On appeal Noel Canning also claimed that Washington law should have been applied before the NLRB, but they did not preserve this objection when they objected to the ALJ's decision before the NLRB so the argument was not preserved. Id. at Slip Op 9. The D.C. Circuit also ruled that it had jurisdiction to consider the constitutional recess appointments issue under the NLRB even though it was not raised as an issue before the NLRB, because the question is an extraordinary circumstance going to the power of the board to act and the separation of powers. Id. at Slip Op 11.
On February 8, 2012, the date of the decision, the NLRB had five members. Two members had been confirmed by the Senate on June 22, 2010. Id. at Slip Op 13. The other three recess appointments by the President on January 4, 2012. Id. at Slip Op 14. One filled a seat vacated the previous day by expiration of another recess appointment. Another filled a seat that had been vacant since August 27, 2010 and the third filled a seat that had been vacant since August 27, 2011. Id.
On January 4, 2012 the Senate had been operating in pro forma sesssions under a unanimous consent agreement every three business days from December 20, 2011 to January 23, 2012 without conducting any business with the exception of December 23 when it passed an extension to the payroll tax holiday and January 3 when it opened the new congressional session. Id.
Members of the NLRB are officers of the United States and thus are subject to the Appointments Clause of the Constitution which requires the advice and consent of the Senate. Id. at Slip Op 15. The recess appointments were not made with the advice and consent of the Senate. The President may fill vacanies that happen during the Recess of the Senate, but these appointments expire at the end of the next congressional session. Noel Canning argued that the appointments were not made while the Senate was in recess and that the vacancies did not arise while the Senate was in recess. Id. at Slip Op 16.
The court distinguished between Senate recesses and "the Recess." The recess was the period between sessions of congress as opposed to times within a session when congress might recess. Each congress has two sessions. The court noted that the early interpretation of the recess appointments clause in the period immediately after it was ratified tilted towards the recess between congressional sessions. The court wrote that no president attempted to make an intrasession recess appoint for the first 80 years after the ratification. Id. at Slip Op 20. There were only three total prior to 1947. Id. The original purpose of the recess appointment was to act as a stopgap when the Senate was unable to provide advice and consent. The intersession recess was often 6 to 9 months early in American history. Id. at Slip Op 22. The court noted that the framers distinguished the recess from adjournments or recesses or even breaks for lunch. The three day period of the adjournments clause applied to adjournments not recesses. Id. at Slip Op 24. The Office of Legal Counsel apparently argued that the president should have the discretion to determine when the Senate was unavailable to perform its advice and consent function. The court rejected this as that would unbalance the separation of powers. Id. The Eleventh Circuit had ruled that the recess includes intrasession recesses, but the D.C. Circuit was not convinced as the Eleventh Circuit opinion did not account for the fact that the Senate must be unavailable to perform its advice and consent function. Id. at Slip Op 26. The opinion also goes on to hold that the vacancy filled must happen during the recess. Id. at Slip Op 30-32. The court reasoned that the president should not be able to bypass the advice and consent of the Senate by simply waiting for the recess to fill the position by recess appointment as that was not the intent of the clause. Id. at Slip Op 32. The government argued that this approach would imperil the functioning of government or national security. The court pointed out that for other multimember boards congress allowed members to serve after their term had expired until a successor was confirmed. Id. Slip Op at 38-39. Congress did not do so for the NLRB. Id.
As applied to the facts the vacancies in August 2010 and August 2011 occured during intrasession recesses and not during the recess. The vacancy in January 2012 happened at the end of the congressional session and the 112th Congress did not recess between sessions that year. Id. at Slip Op 40-44.
The D.C. Circuit opinion concluded that recess appointments by the President can only be made during recesses between sessions of congress (there is one session per calandar year) and only for vacancies arising during that recess. Judge Griffith concurred, but would have not addressed the issue about when the vacancy happen as it was not necessary. The case was already decided on the other grounds at that point. Id. at 47.
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