The NLRB Saga Continues: Fourth Circuit Holds Recess Appointments Are Unconstitutional and Refuses to Enforce Board Orders

Even as recent political developments may end up effectively mooting the issue, the US Court of Appeals for the Fourth Circuit, on July 17, 2013, became the third different court of appeals to invalidate President Barack Obama’s January 2012 recess appointments to the National Labor Relations Board (NLRB or the Board). A divided panel held that the court could not enforce two separate NLRB orders on the ground that the unconstitutionality of the three appointments necessarily deprived the Board of a quorum. NLRB v. Enterprise Leasing Company Southeast, LLC, No. 12-1514, 2013 WL 3722388 (4th Cir. July 17, 2013). The Fourth Circuit encompasses the states of Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

The two NLRB orders in question arose from similar fact patterns. In the lead case, NLRB v. Enterprise Leasing Company Southeast, LLC, the Board had held that Enterprise violated sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (NLRA or the Act) by refusing to bargain with the union that had been certified by the Board as the exclusive bargaining representative of a unit of Enterprise’s employees. The NLRB had reached a similar conclusion in Huntington Ingalls Inc. v. NLRB, and filed for enforcement of its orders in both cases.

The Fourth Circuit first rejected the employers’ statutory challenges to the NLRB’s orders in their cases, holding that the Board’s various findings with regard to the union elections that led to the violations were all based upon prior case law and supported by substantial evidence. Because the orders were valid as a matter of statutory interpretation, the court turned next to whether, at the time the orders were entered, the NLRB was operating with a quorum. Under the Supreme Court’s decision in New Process Steel, L.P. v. NLRB, the Board must have three members to have a quorum.

The Recess Appointments Clause of Article II provides that the President “shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” Joining the DC and Third Circuits, the Fourth Circuit interpreted “the Recess of the Senate” to refer exclusively to an intersession recess (“the period of time between an adjournment sine die and the start of the Senate’s next session”), as opposed to the intrasession recess (“the period of time between a non-sine die adjournment and the time the Senate reconvenes”) during which President Obama made the three appointments at issue.

Although the DC and Third Circuits had relied heavily on the use of the definite article “the Recess,” the Fourth Circuit concluded that the stronger basis for such a holding was the distinction between the term “Recess” in the Recess Appointments Clause, and the Constitution’s references elsewhere to “adjournments,” which clearly encompassed both intersession and intrasession recesses. In short, the Fourth Circuit held that the critical textual consideration was the singular usage — and sole textual appearance — of the term “Recess.”

The majority rejected a vigorous dissent from Judge Albert Diaz, who argued that, in light of the textual ambiguity, a more practical construction of the Recess Appointments Clause was called for — one in which the President should be allowed to exercise his power whenever the Senate is not “open for business,” regardless of the specific reason why the Senate was not in a position to confirm the President’s nominees. In dismissing that view, the majority concluded that each of President Obama’s three recess appointments were therefore invalid, and so the NLRB lacked a quorum when it promulgated the orders at issue in both Enterprise and Huntington.

Unlike its sister circuits, the Fourth Circuit did not reach the additional question of whether vacancies that are filled by a recess appointment must themselves arise during the recess. Thus, its analysis seems to add little beyond additional fodder for the constitutional debate already underway in the Supreme Court, which granted certiorari on June 24 to review the DC Circuit’s decision in Noel Canning v. NLRB.

Perhaps the most curious feature of the Fourth Circuit’s decision is its timing — coming more than three weeks after the Supreme Court granted certiorari in Noel Canning, and in the same week as lawmakers apparently reached a deal pursuant to which the Senate will confirm President Obama’s new nominees to the NLRB. Once confirmed, these new nominees would give the Board a quorum, and thus the power to revisit the orders at stake in these cases — thereby in effect mooting the Fourth Circuit’s decision.

Conclusion

The lasting significance of the Fourth Circuit’s decision may not be in its effect on the parties thereto, but rather its extended contribution to both sides of the growing discourse on the constitutionality of intrasession recess appointments. In the interim, the NLRB orders in question have been invalidated, until and unless the new Board reinstates them. Arent Fox will continue to monitor developments in this area as they occur.