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Monday, August 26, 2013

Rex Obama and SCOTUS’ Labor Pains

Will the U.S.’s highest court rein in the Obama Administration and the NLRB?

During its term that begins on October 7, 2013, the Supreme Court of the United States (SCOTUS) will hear and decide a significant union-related case—NLRB v. Noel Canning. It’s one to watch.

The case challenges the legitimacy of over 1,200 decisions rendered by the National Labor Relations Board (NLRB) between January 4, 2012, and July 30, 2013, for want of a legal quorum. It also challenges President Obama’s right to make up his own rules, whenever he likes, despite the Constitution and Congress’ procedural rules.

The Case

The NLRB normally has five members who are appointed by the President and confirmed by the Senate to five-year terms. In its New Process Steel decision (June 2010), SCOTUS ruled that the NLRB cannot hear any cases or make any decisions with fewer than three of its members. 

On January 1, 2012, there were only two Senate-confirmed members—Mark Pearce and Brian Hayes. On January 4, President Obama made three recess appointments (appointments without Senate confirmation) to the Board—Terrence Flynn, Sharon Block, and Richard Griffin. 

Pearce, Block, and Griffin reliably sided with unions in disputes, while Hayes and Flynn were usually sympathetic to union opponents. The union-friendly majority consistently rendered decisions designed to keep the President and his union cronies happy.

The NLRB issued one such decision against the Noel Canning Pepsi bottling firm on February 24, 2012. The board ordered Noel Canning to write a contract with the union that included terms to which Noel Canning had not agreed. The Board asserted that Noel Canning had agreed, while Noel Canning asserted it had not. Noel Canning appealed the NLRB decision to the D.C. Circuit Court of Appeals. On January 25, 2013, the Court decided against Noel Canning on the issue of who agreed to what and when, but it decided in favor of Noel Canning’s argument that the NLRB lacked a quorum when it rendered its decision. 

If upheld by SCOTUS, this would mean that over 1,200 (mostly union-friendly) NLRB  decisions since January 4, 2012, would be null and void. 

The D.C. circuit held that President Obama’s three recess appointments on January 4 were unconstitutional because the Senate was not in recess when the appointments were made. The Court said that the Senate was in pro-forma session on January 4, 2012. Moreover, and more significantly, the Court said that the President’s recess appointment power applies only to the once-yearly recess between sessions of Congress. Section 2 of the 20th Amendment to the Constitution stipulates that Congress convenes its sessions at noon on January 3 every year. Usually, Congress ends each session in December. Congress, not the President, decides when its sessions end. Obama, as is his wont, unilaterally and unconstitutionally declared that the Senate was not in session on January 4.

The NLRB appealed the appeals court’s decision to SCOTUS. On June 24, 2013, SCOTUS agreed to hear the case in the term that begins October 7.

The NLRB Goes Rogue

After the departures of Flynn in May 2012 and Hayes in December 2012, the NLRB had only one Senate-confirmed member, Mark Pearce, and two non-recess, recess appointees, Block and Griffin. Cheered on by Obama, the three renegades ignored the January 2013 D.C. circuit ruling and continued doing what they no longer had authority to do. They only stopped on July 30, 2013, when the Senate confirmed the nominations of a full Board of five members. 

To rub his defiance of the rule of law in the noses of his Congressional opponents, in February 2013 Obama resubmitted Block and Griffin to the Senate for confirmation along with two others—Harry Johnson and Phil Miscimarra—and renominated Pearce as board chairman. (His term was to expire in August.) Senate Republicans threatened to filibuster the nominations of Block and Griffin.

Republican Poltroons

Senate Majority Leader Harry Reid threatened Senate Republicans that unless they refrained from filibustering Obama’s executive-branch appointees, including  Block and Griffin, he would change Senate rules to forbid such filibusters. This is called the “nuclear option.” Like Obama, Reid likes to make the rules up as he goes along, notwithstanding the Constitution or existing Senate rules. Actually, this exact nuclear option was threatened by the Republican Senate majority during President George W. Bush’s second term. Reid’s response at that time was to call the threat an unconscionable, un-American betrayal of trust. Like Obama, Reid overlooks his past statements whenever it is politically useful to do so. After all, as they like to say, “We won.”

Reid’s nuclear-option threat continued until July 16, 2013, when Senator John McCain managed to round up enough Republicans to vote for a “compromise” (actually surrender) with Obama and Reid. Reid dropped the nuclear option threat and Obama withdrew the Block and Griffin nominations in exchange for the Republican poltroons voting to confirm two other union cronies–Kent Hirozawa and Nancy Schiffer–in their place. Hirozawa was chief counsel to Chairman Pearce, and Schiffer was an AFL-CIO associate general counsel.

On July 30, 2013, the Senate voted to confirm all five of Obama’s nominees for the NLRB. Pearce will continue as chairman. He, together with Hirozawa and Schiffer, will constitute the union-crony majority on the board; Johnson and Miscimarra will constitute the management-friendly minority. Obama and his union cronies can now be at ease. They will get whatever they want out of the NLRB.

Noel Canning Is Still Relevant

The fact that there is now a full slate of Senate-confirmed NLRB members does not render the issues involved in Noel Canning moot. It is true that even if SCOTUS upholds the D.C. circuit’s decision, all of the 1,200 invalid decisions between January 4, 2012, and July 30, 2013, can simply be reimposed by the new board. Nevertheless, the high court will decide whether any NLRB (or other executive agency) that is illegally constituted may continue to function after a circuit court of appeals has declared it unconstitutional to do so.

Finally, SCOTUS’ decision will define the limits to any President’s ability to make future recess appointments, not only to the NLRB, but also to any other federal agency or court. Given Obama’s propensity to do things on his own if Congress doesn’t bow to his commands, circumscribing his recess appointment power would be no small victory.


  • Charles Baird is a professor of economics emeritus at California State University at East Bay.

    He specializes in the law and economics of labor relations, a subject on which he has published several articles in refereed journals and numerous shorter pieces with FEE.