D.C. Circuit Invalidates President’s Recess Appointments to the NLRB

By  Nicole Cuda Pérez

INTRODUCTION

In a decision released on January 25, 2013, the D. C. Circuit Court of Appeals invalidated President Obama's January 2012 appointments of three NLRB members. The Court held that the Recess Appointments Clause (“RAC”) of the U.S. Constitution did not govern the President’s actions because (1) the Senate was not “in the recess” at the time of the appointments; and (2) the Board vacancies did not arise or “happen” during the recess.  Since the appointments were not proper, the Board lacked a quorum when it issued its decision in Noel Canning and thus its order in that case was void.

BACKGROUND

On December 17, 2011, the Senate adopted a unanimous consent agreement providing that the Senate would adjourn on that date and not resume normal proceedings until January 23, 2012.  During this “break,” the Senate would meet for pro forma sessions only; the conduct of business during the break without unanimous consent was precluded by the agreement. 

On January 4, 2012, President Obama appointed three members to the Board: Sharon Block, Terence Flynn, and Richard Griffin. Craig Becker’s recess appointment had expired on January 3, 2012; Peter Schaumber’s former seat had been unfilled since the expiration of his term on August 27, 2010; and Wilma Liebman’s former seat had been unfilled since the expiration of her term on August 27, 2011.

THE UNION AND EMPLOYEE PERSPECTIVE

It is important to note the limited impact of this ruling.  The court vacated the Board’s order and denied enforcement of the Board’s order in this particular case.  As Chairman Pearce noted in his January 25, 2013 statement, there are similar cases pending in other Courts of Appeals, so it is not a given that about a year’s worth of Board work will be invalidated.

During the Senate’s “break,” the Senate conducted no business.  Since 2010, Senate Republicans have blocked votes on two Board nominations put forward by the President.  When yet another Board vacancy arose on January 3, 2012, leaving the five-member board without a quorum, the President decided that in order for the Board to function, he needed to act.

The President acted under the authority of the RAC, which states 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.” U.S. Const. art. II § 2, cl. 3 (emphasis added).  Furthermore, it has been held that the President is vested with the discretion to determine when there is a real and genuine recess.  See Evans v. Stephens, 387 F.3d 1220, 1222 (11th Cir. 2004), cert. denied, 544 U.S 942 (2005).  The RAC has been interpreted to allow the president to make a recess appointment when the Senate takes a break of at least a few days. See id.  387 F.3d at 1224 (a ten or eleven day break in the Senate’s session is of sufficient duration to permit recess appointments).  Furthermore, according to a 1905 Senate Report, the Senate is in “recess” whenever the Senate is not sitting in regular or extraordinary session, when its members owe no duty of attendance, when the Chamber is empty, when it cannot receive communications from the President, or when it cannot participate as a body in making appointments.  The Senate here explicitly agreed that no business was to be conducted during the pro forma sessions absent unanimous consent, and the Senate Chamber sat empty.  President Obama, therefore, reasonably determined the Senate was in recess.

The court departed from this long-standing understanding of the term “the Recess.”  Rather, the court held that the Constitution refers only to ”the” recess of the Senate, which can only mean the recess between sessions, and does not apply to intrasession recesses such as the one taken here.  This directly contradicts the 11th Circuit’s decision in Evans v. Stephens, which held that the RAC may be invoked during intrasession recesses as well.  387 F.3d at 1224.  With this split, it seems inevitable that the Supreme Court will have to take this issue up.  In the meantime, only the D.C. Circuit, with its tortured grammatical reading of the RAC, would strip the President of his prerogative to assure the proper functioning of government during the Senate’s absence.

What makes this case particularly difficult to accept is that the court held that the Board’s decision finding the employer guilty of violating the Act was indeed supported by substantial evidence.  (The employer here was found to have violated the Act when it refused to execute the collective bargaining agreement containing terms agreed to by the parties.)  Noel Canning is a bad actor getting away with its bad act by taking advantage of a partisan recess appointment controversy. 

Noel Canning, A Division of the Noel Corporation, Petitioner v. National Labor Relations Board,  No. 12-1115, United States Court of Appeals for the District of Columbia Argued December 5, 2012; Decided January 25, 2013.

Auditors’ Overtime FLSA Class Action Can Proceed, Rules New York Court U.S. Supreme Court Decision Did Not Change Standard for Certification of FLSA Collective Action

A New York federal court ruled that a lawsuit seeking unpaid overtime for employees who perform audits can proceed as a certified collective action.  In Pippins v. KPMG LLP, No. 11 Civ. 0377, 18 WH Cases2d 1179 (SDNY 2012), the plaintiffs were Audit Associates employed by KPMG, a major accounting firm.  Plaintiffs alleged that KPMG unlawfully misclassified them as administrative or professional employees who were exempt from the overtime provisions of the Fair Labor Standards Act (“FLSA”). 

Plaintiffs moved to conditionally certify the action as a collective action under the FLSA.  A court’s “certification” authorizes notice of the suit to similarly situated employees and to allow putative class members the opportunity to opt-in to the class.  “Certification” is conditional because the court can later decertify the action based on a more stringent factual analysis made post- discovery. The standard for certification of an FLSA action is less onerous than that under Rule 23 of the Federal Rules of Civil Procedure which governs other types of class actions.  Conditional certification in an FLSA action only requires plaintiffs to make a “modest factual showing” that they and other putative class members were victims of a common policy or plan that violated the FLSA. 

The court rejected the argument  advanced by defendant that the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), raised the bar for conditional certification of an FLSA action.  In Dukes, a Title VII discrimination case, the Supreme Court held that the “commonality” finding necessary for class certification under Rule 23 will frequently require the court to assess of the merits of the case.  The court in Pippins held that since the Rule 23 standards do not apply under the FLSA, the holding of Dukes was inapplicable. 

The Pippins court found that the FLSA standard for conditional certification had been met due to the plaintiffs’ showing that the Audit Associates performed the same or very similar duties, under similar supervision, after the same training, and subject to the same rules; and because of KPMG’s across-the-board policy classifying all Audit Associates as exempt.  Accordingly, the court authorized plaintiffs to send notice to similarly situated employees.

What is considered “Protected Concerted Activity” under the National Labor Relations Act?

It is now easier to find out whether employee conduct is considered protected concerted activity under the National Labor Relations Act (NLRA) by visiting the NLRB website at www.nlrb.gov/concerted-activity.  The NLRB’s new webpage acts as a guide to cases across the country describing workplace situations involving both union and non-union employees who were disciplined or discharged when they engaged in permissible work-related conduct, such as opposing unsafe work practices.  Under Section 7 of the NLRA, “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities.” This should be a useful tool for workers and advocates seeking to protect employees who join together to challenge or oppose questionable employer conduct, practices or policies.