Recess Appointments Ruling Could Invalidate 1,400 Workers’ Rights Decisions

Less than two months after the powerful U.S. Court of Appeals for the D.C. Circuit invalidated President Obama’s January 2012 recess appointments to the National Labor Relations Board, 87 companies and several unions have cited the decision in pending actions before the NLRB, challenging its authority to rule in their pending cases.

This is in addition to dozens of separate challenges in federal court to already-decided rulings, and the Wall Street Journal reports that the litany of challenges is already putting significant strain on the NLRB, previewing the chaos that is only likely to build every month that this decision stands:

The companies are attempting to do a variety of things, including overturn or block union elections, undo penalties they were ordered to pay to fired workers and halt subpoenas. Employers also argue that at least 10 NLRB regional directors are illegitimate because they were installed by invalid Obama labor-board appointees, and say regional decisions should be voided, too.The surge of challenges tied to the court ruling is overwhelming the NLRB, a federal agency that referees disputes between companies and employees. Working through them is delaying resolution of cases alleging unfair labor practices, including whether workers can fairly hold union elections, said Lafe Solomon, the agency’s acting general counsel.

“It’s already having a huge impact,” Mr. Solomon said. “At every stage…we’re seeing attacks” citing the appeals court decision. The board contends these challenges lack merit since it believes Mr. Obama installed the members legitimately.

This is just the tip of the iceberg. The January 25 ruling by the U.S. Court of Appeals for the D.C. Circuit invalidated the recess appointments in a sweeping and radical ruling whose reasoning would also have blocked hundreds of presidential recess appointments going back more than a century. A recent Congressional Research Service memo lists at least 652 recess appointments that would have been prevented by the ruling just since 1981. But what the legal memo doesn’t get into is that many of these recess appointments are still in effect, and would also be subject to court challenge if this decision stands.


To understand what that means, consider the implications for just the NLRB. An upheld D.C. Circuit decision would immediately call into question some 600 NLRB rulings. Its reasoning would also subject to challenge Obama’s similar 2010 appointments to the NLRB, which would subject to challenge some 1,400 rulings, according to a former Republican member. On top of that, companies are already launching challenges to the NLRB’s regional rulings, on the theory that invalidly appointed NLRB members did not have the authority to install those regional directors. Upending each of these rulings would not just unsettle established decisions; it would also roll back protections for countless of workers at each of the companies questioning these rulings.

Outside of the NLRB, the implications are no less dramatic. Most coverage has noted that the ruling would inevitably lead to a challenge to the concurrent 2012 recess appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau, which could invalidate all sorts of CFPB action for which a director was required. (On Tuesday, a top House member even questioned whether it should keep funding the CFPB in light of the ruling.) But consider that there are still other Obama recess appointees whose status would be called into question by this decision. At the same time as Obama appointed NLRB members in 2010, he also appointed three members to the Equal Employment Opportunity Commission, a body that was also operating short of its three-member quorum at the time. Case law is not as clear about whether a quorum is required for all EEOC action as it is for NLRB action. But there is reason to believe that EEOC action would at the very least be challenged by a D.C. Circuit precedent.

If reason prevails, the chaos from the D.C. Circuit’s decision will never get this far, because it will be overturned at least in part by the D.C. Circuit on rehearing or the U.S. Supreme Court. But nothing is certain on a court with at least two judges who have suggested all labor, business and Wall Street regulation is unconstitutional. And even in the short-term, the U.S. Chamber of Commerce is making sure that businesses leverage this decision as much as possible to skirt workers’ rights and inundate the NLRB.