June 24 (Bloomberg) -- The U.S. Supreme Court will decide whether President Barack Obama had authority to appoint members of the federal labor board without Senate confirmation, in a constitutional clash that may undercut his regulatory agenda.
The case, which the court will consider in its 2013-14 term, may affect about 1,000 decisions and orders issued by the National Labor Relations Board since January 2012. It will also have ramifications for the Consumer Financial Protection Bureau, the watchdog agency created by the 2010 Dodd-Frank law. Bureau director Richard Cordray was appointed by Obama on the same day he installed the NLRB officials.
The central question is whether the Senate was in recess when Obama made the NLRB appointments. A federal appeals court said the president’s constitutional power to appoint officials during Senate recesses applies only between Congress’s two-year sessions. The NLRB has continued to issue rulings since the court’s decision.
The appointments case has the potential to “really make the White House look very foolish” because the administration has maintained business as usual regarding labor board actions, Gary Chaison, a labor-relations professor at Clark University in Worcester, Massachusetts, said in a phone interview. “This has major implications for the administration and the NLRB and the labor movement as well,” he said.
If the justices agree that the recess appointments were invalid, the ruling would call into question all the NLRB decisions taken since January 2012, Chaison said. A decision that declares the appointments invalid would be a defeat for the labor movement, which is buoyed by a labor-friendly board, he said. The Supreme Court may also rule on the authority of the president to make appointments during pro-forma session of the Senate.
“We are confident that the president’s authority to make recess appointments will be upheld by the courts,” White House spokesman Jay Carney said. At issue, he said, is “the president having the authority that all of his predecessors have had.”
The NLRB didn’t have a comment on the court’s decision, agency spokesman Gregory King said in a phone interview. Officials from the the consumer financial bureau didn’t respond to requests for comment on the court’s decision to consider the case.
The case stems from a 2011-12 dispute between Obama and congressional Republicans. Facing the prospect that he would make appointments during Congress’s holiday break, House and Senate Republicans refused to formally adjourn. The Senate held “pro forma” sessions that sometimes involved a single senator’s brief appearance in the chamber every third day.
Obama, saying lawmakers were in recess, made the appointments of Sharon Block, Terence Flynn and Richard Griffin on Jan. 4, 2012.
The U.S. Chamber of Commerce is helping represent the company challenging the appointments, soft-drink bottler Noel Canning Corp. of Yakima, Washington. Congressional Republicans are also opposing the appointments.
A three-member NLRB last year approved findings that Noel Canning had committed an unfair labor practice by refusing to implement an agreement it had reached with the union representing its employees.
The U.S. Court of Appeals for the D.C. Circuit unanimously ruled that Obama’s NLRB appointments were invalid because the Senate wasn’t in recess at the time. The three-judge panel of Republican appointees said the recess-appointment power applies only after a two-year congressional session ends and before the next one begins, and not during breaks within a session.
“We warned last year that by appointing these members to the NLRB in such a controversial fashion, a cloud of uncertainty covered the agency and its work,” Thomas Donohue, president of the U.S. Chamber of Commerce, which challenged the appointments on behalf of one of its members, said today in a statement. He called the Supreme Court’s decision to hear the case “welcome news.”
The AFL-CIO, the nation’s largest labor group, called on the high court to overturn was it termed a “radical decision” by the appellate judges.
The decision “has wreaked havoc on the lives of working people seeking to exercise their rights to join together to improve their work lives,” said Josh Goldstein, a spokesman for the AFL-CIO, in an e-mail. “But workers can’t wait for the Supreme Court -- we need the Senate to confirm the bipartisan package of NLRB nominees now.”
Obama’s interpretation would give him “free rein to appoint his desired nominees at any time he pleases, whether that time be a weekend, lunch or even when the Senate is in session and he is merely displeased with its inaction,” Appellate Judge David Sentelle wrote in the decision the Supreme Court agreed to hear.
Two of the judges went further, saying valid appointments could be made only when the vacancy itself occurred while the Senate was adjourned.
The high court also will consider a third line of argument against the NLRB selections. Noel Canning contends that the president can’t use the recess appointment power when the Senate is convening every three days in pro-forma sessions.
In agreeing to hear the case, the Supreme Court directed the parties to argue whether the president can exercise recess-appointment power during the pro-forma sessions.
The Constitution says 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.”
Much of the debate turns on the wording of that clause. The two sides dispute whether the word “the” suggests that the constitutional framers intended to limit the appointment power to a specific recess -- namely, the one at the end of a session.
The litigants also disagree about the word “happen,” which the administration says is equivalent to “happen to exist” and the appeals court interpreted to mean “arise.”
Recess appointees can remain in office through the two-year congressional term that follows the one during which they were appointed.
A ruling against the administration would raise questions about the work of the Consumer Financial Protection Board, potentially letting companies seek to overturn Cordray’s appointment and forcing the agency to revisit its regulatory powers.
The Dodd-Frank law authorized the agency to undertake new regulatory policies, such as supervising mortgage lenders that played a role in the 2008 financial crisis, only after a director was in place.
The case is National Labor Relations Board v. Canning, 12-1281.
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