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National Labor Relations Board v. Enterprise Leasing Company, LLC, No. 12-1514, 12-2000

Decided: July 17, 2013

The Fourth Circuit denied the National Labor Relations Board’s (the “NLRB”) application for enforcement of two bargaining orders because it found that the Obama Administration’s recess appointments to the NLRB violated the Constitution and, as such, the NLRB’s orders were invalid.

The Fourth Circuit consolidated two cases that involved labor disputes with Enterprise Leasing Company, LLC and Huntington Ingalls, Inc. (the “Companies”).  In both cases, the NLRB rejected the Companies’ substantive arguments regarding bargaining agreements with their respective labor unions and ordered both to comply with two bargaining orders issued.  The Companies challenged enforcement of the order first on substantive grounds and, in the alternative, arguing that the NLRB did not have a quorum to decide the issue.  The basis of their quorum challenge was that the Obama Administration, in appointing three of the current NLRB members on January 4, 2012, violated the Constitution’s Recess Appointments Clause, which provides 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.”   The Companies argued that the Administration’s decision to appoint three NLRB members during an “intrasession” recess violated the Recess Appointment Clause.  According to the court, Senate recesses can be classified into two categories: “intersession recesses–or, recesses that occur between two sessions of Congress–and intrasession recesses–or recesses that occur within one particular session of Congress.”  The NLRB filed an application for enforcement of its orders to the Fourth Circuit.

The Fourth Circuit first addressed the case on statutory grounds.  The court held that, under the applicable substantive laws, the NLRB’s orders were valid.  The court then turned to the Companies’ constitutional challenge – whether the President’s three recess appointments on January 4, 2012 were valid under the Recess Appointment Clause.  The court first pointed out that the Recess Appointment Clause has two important functions.  The first is to ensure that the government remains in operation during the times when the Senate would be unable to advise and consent to a nomination.  The second, and more important, function was to prevent the President from exercising his appointment power unilaterally, thereby preserving the separation of powers between the Executive and Legislative branches.  The court noted that there is a current split of opinion between the circuits regarding what the term “the Recess” means under the Clause.  Indeed, the Companies argued that the more narrow definition, adopted by the D.C. and Third Circuits, of “the Recess” limits the President’s recess appointment power to only intersession recesses.  On the opposite side, the NLRB argued that the Eleventh Circuit’s definition of a broader reading of the term to allow for intrasession recess appointments.  The court then discussed, at length, the different cases giving rise to the difference of opinions among the circuits and rationale for both arguments.  After an extensive examination of the text of the Recess Appointment Clause and a recognition of the historical understanding of the clause up until the 1920s, the Fourth Circuit agreed with both the D.C. Circuit and Third Circuit that the Recess Appointment Clause only applies to “intersession” recesses of the Senate and rejected the interpretation of the clause as allowing for intrasession appointments under the “unavailable for business” definition proposed by the NLRB and supported by the Eleventh Circuit.  As a result, the President’s January 4, 2012 appointments violated the Constitution and the bargaining orders were invalid because the NLRB did not have a quorum to decide the issues.

Full Opinion

– John G. Tamasitis