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Former Board member Craig Becker invalidly recess-appointed; clause refers to “intrasession break”

May 16th, 2013  |  Lisa Milam

By Sheryl C. Allenson, J.D. and Lisa Milam-Perez, J.D.

In yet another blow to the authority of the embattled NLRB, a divided Third Circuit ruled the recess appointment of former NLRB member Craig Becker was invalid; thus, a three-member panel comprised in part of Becker was improperly constituted when it denied reconsideration of a Board order finding the employer unlawfully refused to bargain with a newly elected union (NLRB v New Vista Nursing and Rehabilitation, May 16, 2013, Smith, D). The appeals court rejected the contention that the definition of recess is a nonjusticiable political question. Ruling that recess appointments could only be made during an intersession recess, the majority found the current practice permitting intrasession appointments unconstitutional, noting that it was “contrary to the structural framework set out in the Constitution.”

Union seeks certification. In the underlying case, a healthcare union petitioned the NLRB for certification as the representative of New Vista Nursing and Rehabilitation’s licensed practical nurses. Arguing that the LPNs were supervisors, the employer opposed the certification, but the Board’s regional director certified the union and ordered an election. New Vista appealed to the Board, which affirmed the regional director’s decision. After the union won a majority in the election, the employer refused to bargain and the union filed an ULP charge. In an order dated August 26, 2011, the Board granted summary judgment in favor of the union and against the employer. That order was issued by a three-member “delegee group” of the Board, including member Craig Becker, a recess appointee.

Thereafter, New Vista filed a series of motions for reconsideration with the Board. In one instance, the employer argued that the Board acted ultra vires, suggesting that the summary judgment decision was actually issued after member Wilma Liebman resigned—meaning the Board had only two panel members when it issued its decision. Rejecting this position, the Third Circuit noted that the decision was dated before Liebman resigned and that the employer did not rebut the presumption of regularity in the Board’s conduct.

Without addressing the recess appointments issue raised by the employer, the Board denied a second motion for reconsideration. In response, the employer filed yet another motion for reconsideration, this time arguing that the three-member delegee group that issued the most recent ruling lacked three members because two were invalidly appointed while the Senate was not in recess. After it denied the motion, the Board filed an administrative record with the appeals court, where the agency had previously filed an application for enforcement. The employer filed a petition for review of the second and third reconsideration orders, which was consolidated with its petition for review for all purposes.

Jurisdictional requirement. Considering sua sponte whether the NLRB panel that issued the August 26 order had jurisdiction, the appellate majority held the three-member composition requirement is jurisdictional—and that the jurisdictional requirement applies with equal force to administrative agencies as to Article III courts.

In its extended analysis of jurisdiction, the Third Circuit drew on the Supreme Court’s decision in New Process Steel for guidance. According to the appeals court, that decision “renders the three-member composition requirement a ‘threshold limitation’ on the scope of the power delegated to the Board by the NLRA: the Board cannot exercise its power through a delegee group if that group has fewer than three members.” Under New Process Steel, the three-member requirement speaks directly to the Board’s power to hear a case; in other words, its jurisdictional power, the appeals court explained. Thus, before it can exercise its power over a case, the Board must meet the three-member composition requirement. Accordingly, the appeals court scrutinized not whether Members Richard Griffin and Sharon Block were validly appointed when they participated in later challenged decisions (the issue that the parties had briefed), but whether Becker was properly appointed—given that he was the only member of the delegee group that issued the August 26 order who was recess-appointed. It held he was not.

“Recess of the Senate.” Turning to the question of whether there are judicially manageable standards to define the term “the recess of the Senate,” the appeals court noted that there was a range of standards advanced and that only the Board’s standard might be unmanageable. Under the Board’s standard, recess appointments could occur “any time the Senate is not in session.” This definition does not rely on any particular Senate procedure and would require judicial “explor[ation] [of] communications between the Senate Minority and the president.”

In deciding that there were judicially manageable standards, the court refused to bite on the amicus’ bait suggesting that it adopt such standards for partisan reasons. Differentiating between a decision that has political overtones and one that invokes political questions, the appeals court explained that, in this instance, it was defining the term “the Recess of the Senate” because it was a justiciable question.

Member Becker was appointed during an intrasession break that lasted 17 days. During that time, the Senate was indisputably not open for business. Thus, the validity of his appointment hung on whether the Recess Appointment Clause empowers presidents to make appointments during these intrasession breaks.

Definitions. The Third Circuit explained at length the history behind recess appointments, and described the three meanings of “the Recess of the Senate.” Intersession breaks, which the appeals court found operative, are between an adjournment sine die and the start of the next session. The second is intersession and intrasession breaks that last a non-negligible period, historically 10 days. The third is the definition advanced by the Board: any time the Senate is “not open for business” and thus unavailable to provide advice and consent on nominations. Interpreting the phrase “the Recess of the Senate,” the appeals court found that the Board’s position was implausible, noting that the under the Board definition recess appointments could occur “whenever [Senators] leave for the weekend, go home for the evening, or even take a break for lunch..”

To determine what the phrase does mean, the appeals court turned to the Recess Appointments Clause itself and noted that it contained some temporal guidelines which suggest that “recess” meant intersession breaks only. Citing the text of the clause, the appeals court explained that recess-appointed officers’ terms “shall expire at the End of [the Senate’s] next Session,” implying that their appointments were made during a period between sessions. If, on the other hand, recess were to include intrasession breaks, the recess appointment term would be expected to last only until the end of “that” term, the court suggested. Finding support in the nuances of the word “next,” the appeals court concluded that the term “recess” could only contemplate an intersession break.

Recent practice aside, the Third Circuit found no support in the Constitution for the second definition of “the Recess of the Senate.” Rather, that practice, appearing with recent frequency beginning with President Ronald Regan, was incompatible with the Constitution, the appeals court found. “This means the current practice is contrary to the structural framework set out in the Constitution and must be held unconstitutional.” Thus, only intersession breaks constitute “the Recess of the Senate,” the Third Circuit held.

Invalid appointment. Because he was appointed during the March 2010 intrasession break, Member Becker was invalidly appointed, the Third Circuit ruled. The delegee group had fewer than three members when it issued its August 26 order and, therefore, acted without power and lacked jurisdiction when it did so. The majority vacated the Board‘s orders without addressing whether the substantive decision was correct—or whether the delegee groups that issued subsequent reconsideration orders (which included Griffin and Block) were properly composed.

Dissent. Judge Greenaway dissented, arguing that the majority’s reasoning “undoes an appointments process that has successfully operated within our separation of powers regime for over 220 years.” He would hold that “the Recess” refers to both intrasession and intersession recesses because the Senate can be unavailable to provide advice and consent during both. Consequently, Greenaway would hold that Member Becker (as well as Members Block, Flynn, and Griffin) were all appointed under a valid exercise of the executive power granted to the president by the Recess Appointments Clause.

“The inclusion of intrasession recesses in the ambit of the Recess Appointments Clause is the interpretation most faithful to the text of the Constitution, the intent of the Framers, the purpose of recess appointments, and the tradition and practice of both the President and the Senate.”

Ruling’s impact. While the D.C. Circuit’s Noel Canning decision held the NLRB lacked a quorum since January 2012, the Third Circuit today found the Board has been without a valid quorum since as far back as August 2011—with the departure of former Board Chair Wilma Liebman—thus calling into question even more agency rulings. As the anti-union National Right to Work Legal Defense Foundation noted, more than 1,500 NLRB decisions may be invalidated as a result of the Third Circuit’s holding.

Specifically, today’s ruling “puts into question most decisions still remaining in the circuit court in which Craig Becker (a March 2010 recess appointee) was a panel member,” noted Jeffrey M. Hirsch, an associate professor at the University of North Carolina School of Law (and contributor to the popular Workplace Prof blog). “The court held that any three-member panel that included Becker was invalid. So any case with Becker, except for the bigger ones that included more than three Board members, would be vacated under this decision. It would kill all decisions with Becker from August 28, 2011, to January 3, 2012, and all three-member decisions with Becker the rest of the time. For cases that were pending before Noel Canning in another court, if I were counsel for an employer, I would wave this argument around.”

“The bigger, near-term issue is, now there is another circuit court that will not uphold any decisions with Members Block or Griffin,” Hirsch said. “Practically speaking, this isn’t that big of a deal because any employer (or union) could bring any Board case to the D.C. Circuit, but for employers with cases before the Third Circuit, they can pursue that avenue of appeal as well.”

Another outcome of today’s decision: “It already knocks the NLRB’s morale a bit lower,” said Hirsch, a former appellate attorney for the agency.

Coincidentally, the ruling was handed down the same day that the Senate HELP Committee was holding a hearing on the full package of current NLRB nominees (including Griffin and Block, who had been prodded by Republicans to resign following Noel Canning). It’s not clear what impact, if any, today’s decision will have on the HELP committee vote, scheduled for next week.

“I don’t think the Block and Griffin nominations were going anywhere anyway,” Hirsch told Employment Law Daily. “This ruling even decreases that chance, no matter their individual qualifications. When the White House nominated the two Republican nominees [Harry I. Johnson and Philip Andrew Miscimarra], I had a slight sliver of hope that there was a deal in the works. But I have no idea whether that’s true or not.”

Similarly, that the Supreme Court will take up Noel Canning is widely considered a certainty, so it’s not clear that New Vista will affect the High Court’s decision whether to grant cert. “The issue is a pretty big one,” Hirsch notes, adding that with today’s decision, “the highly probable grant of cert has gotten even higher.”

Hirsch, for one, is curious to see how the Supreme Court will rule on the issue. “These courts are flipping 150 years of practice,” he observed. “It’s really kind of startling.”