In a case with far-reaching implications both prospectively and retroactively, the D.C. Circuit Court of Appeals ruled on January 25, 2013, in Noel Canning v. NLRB, that President Obama's recess appointments of Sharon Block, Richard F. Griffin, Jr. and Terence Flynn to the National Labor Relations Board in January 2012 are invalid. This ruling not only calls into question the validity of all NLRB decisions since the recess appointments were made, but also casts into doubt the NLRB's authority to act going forward.
Under the Supreme Court's 2010 decision in New Process Steel, the NLRB cannot function without at least three validly-appointed members. Currently, the NLRB has only three members, two of whom received the recess appointments just ruled invalid in Noel Canning. Former Member Brian Hayes' term expired in December, 2012, and Member Flynn, who was recess appointed in January 2012, resigned in May, 2012 amid allegations that while a staff lawyer with the NLRB, he leaked confidential information to outsiders. Thus, as a result of the D.C. Circuit's ruling, only Chairman Mark Gaston Pearce has a valid appointment, leaving the NLRB well short of the quorum required.
On Friday, Chairman Pearce issued a statement strongly disagreeing with the decision, noting that other cases raising the same issues are currently pending in other circuit courts of appeal and expressing his view that the Noel Canning decision only applies to the specific facts of that case. It is anticipated that the NLRB will appeal the D.C. Circuit ruling to the Supreme Court in the very near future.
If the ruling in Noel Canning stands, the NLRB's controversial rulings since January 2012 involving issues of social media policies, confidentiality of investigations, communications with outsiders, at-will policies and the like, which we have reported on throughout the year, would likely be invalidated. Moreover, the NLRB's authority to render decisions or to adopt rules going forward will also be in question.
We will continue to monitor developments closely and report on them as they occur.© 2013 Schiff Hardin LLP