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Federal Court of Appeals Declares NLRB Appointments Unconstitutional And Vacates An NLRB Decision

On May 16, 2013, the United States Court of Appeals for the Third Circuit, whose jurisdiction includes all of Pennsylvania, ruled that the appointment of a member to the National Labor Relations Board (the "Board") was unconstitutional, and as a result, a Board decision issued by a three-member panel that included the unconstitutionally-appointed member was also invalid.  

The Third Circuit's 2-to-1 decision follows a similar January 25, 2013 decision by the U.S. Court of Appeals for the District of Columbia Circuit, which held that President Barack Obama's recess appointments on January 4, 2012 to fill three vacant Board positions were unconstitutional and invalid.  That D.C. Circuit decision, which was the subject of a prior MacDonald Illig Client Alert, has been challenged by the Department of Justice and the Board who have asked the Supreme Court to review the ruling. Read our previous Client Alert regarding this matter here.   

The recent Third Circuit decision, N.L.R.B. v. New Vista Nursing and Rehabilitation, involved a challenge to a August 26, 2011 decision and order by a three-member panel of the Board.  A panel of the Board can issue decisions only if three or more Board members are on the panel.  Because one of the three members of the panel that issued the August 26, 2011 decision was appointed to the Board by President Obama during an intrasession Senate break in March 2010, the Third Circuit considered whether the Board had jurisdiction to issue the decision.  In a 102-page opinion, the Court held that the Recess Appointments Clause in the Constitution, which President Obama had invoked in making the intrasession appointment at issue, applied only to breaks between sessions of the Senate ("intersession breaks") and not to breaks within a session of the Senate ("intrasession breaks").  Accordingly, the Court held that President Obama did not have the constitutional authority to appoint the Board member during the March 2010 intrasession break.  Because the appointment was invalid, the Third Circuit vacated the Board's August 26, 2011 decision because it was not issued by at least three valid members of the Board.

As with the earlier D.C. Circuit ruling, the Third Circuit's New Vista decision calls into question the validity of hundreds of decisions issued by the Board in recent years and any current activity conducted by the Board.  While the D.C. Circuit's decision was founded on President Obama's recess appointments to the Board made on January 4, 2012, the New Vista ruling shows that even Board decisions made prior to January 4, 2012 may be invalid.  Additionally, although the Board member at issue in New Vista is no longer on the Board, the current Board has only three members, two of whom are recent "intrasession recess" appointees whose appointments would not be valid under the Third Circuit's reasoning.   

Employers that have dealt with the National Labor Relations Board in recent years, have matters currently pending before the Board, or have relied upon recent Board decisions, should contact a member of our Labor and Employment Practice Group to discuss the potential ramifications of the Third Circuit's decision.