On June 26, 2014, the U.S. Supreme Court decided NLRB v. Noel Canning. The Court set aside a National Labor Relations Board ("Board") order because the Board lacked a quorum when it issued the order. The Court ruled the Board lacked a quorum because President Obama invalidly appointed three of the five Board members. This decision may impact other cases decided by the unlawfully appointed Board members.
The case began as a labor dispute between a labor union and Pepsi-Cola distributor Noel Canning. The Board ruled the distributor unlawfully refused to execute a collective-bargaining agreement with the labor union. The Board ordered the distributor to execute the agreement and compensate employees for any losses. The distributor challenged the Board's order, arguing the Board could not take legal action because the President invalidly appointed three of the five Board members. Three lawfully appointed Board members are required for the Board to take any action.
President Obama appointed the three Board members on January 4, 2012 during a three-day Senate recess. Interpreting the Constitution's Recess Appointments Clause, the Court held a three-day recess is too short to trigger the President's recess-appointment power. Since the President invalidly appointed three of the five Board members, the Board lacked a quorum when it ordered the distributor to execute the collective-bargaining agreement and compensate employees for any losses.
This ruling may have far-reaching consequences. Many cases decided by the invalidly appointed Board members could be affected. The Board Chairman, Mark Gaston Pearce, stated the Board now has a quorum of validly appointed Board members and the agency is analyzing the impact of the Court's decision on other cases.