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January 23, 2013

While record-breaking cold hit the East Coast last Friday, the National Labor Relations Board (NLRB) faced its own deep freeze. In a unanimous decision, a three judge panel of the D.C. Circuit Court of Appeals declared unconstitutional President Obama's "recess appointments" in January, 2012 to fill vacancies on the five-member Board and establish a legal quorum.

The decision effectively holds that the Board has no authority to operate and calls into question hundreds of decisions issued by its "illegal quorum" since January 2012. The decision does not enjoin the Board from acting, however, and by all accounts, unless ordered otherwise, it has every intention to keep doing what it is doing. The Obama administration is expected to seek review by the D.C. Circuit as a whole or appeal to the Supreme Court.


The NLRB, an independent federal agency, administers the National Labor Relations Act (NLRA). It issues decisions on union election disputes and unfair labor practice claims, and it sets rules on NLRA compliance. Most cases proceed (and are resolved) before one of about 40 administrative law judges (ALJs), and the five-member Board gets involved only if a party appeals from an ALJ decision. But parties can stipulate to bypass the ALJ and proceed directly to the Board.

In the late fall of 2011, the Board lacked a quorum - it had only two members - and Washington gridlock obstructed the President's appointments from any prospect of Senate confirmation. So, like many of his predecessors, Obama resorted to the technique of a "recess appointment" to appoint three members to the Board. This is allowed under the "Recess Appointments Clause" of the Constitution, but Congressional gamesmanship last January raised an issue of whether the Congress was properly in "recess" when Obama made his NLRB appointments on January 4, 2012.

Congress was in an "intrasession" recess at the time. Between December 20, 2011 and January 23, 2012, the Senate met in pro forma sessions every three business days, but it conducted no business. In one of those sessions, on January 3, 2012, the Senate convened the second session of the 112th Congress to formally fulfill its Constitutional duty to assemble once every year, commencing on January 3rd. The Senate conducted no official business that day or on January 4th.

Last Friday, a little over a year later, in Noel Canning v. NLRB, the D.C. Circuit held that the Senate's "intrasession" recess on January 4, 2012 was not a "recess" under the Recess Appointments Clause, and, therefore, the President's three appointments to the Board on that day were unconstitutional. It also held that the vacancies did not properly happen during a "recess" as required by the Clause. Thus, the Court said that the Board's order under review was issued without a quorum and was, therefore, void.

Other federal courts have taken a different view. As a result, the Board has some cover to continue operating, and the only order technically declared void by this decision is the one challenged by Noel Canning and addressed by the Court.

What does this mean for Indian Country?

Very little at the moment, but an order or decision by the Supreme Court upholding the D.C. Circuit likely would halt any further action by the Board or void its rulings in three cases which raise questions about whether Indian nations or their enterprises are subject to the NLRA.

One involves an unfair labor practice claim against the WinStar World Casino, owned and operated by the Chickasaw Nation. The question of the NLRB's authority to proceed in that case previously was before a federal court, but, by agreement of the parties, was put before the Board last summer. Another involves an unfair labor practice claim against the Soaring Eagle Casino, owned and operated by the Saginaw Chippewa Tribe. Last March, an ALJ ruled against the Casino on the question of NLRB jurisdiction as well as the merits of the claim. The Tribe appealed to the Board and argues that the NLRA does not apply. The third case involves a claim that labor laws enacted and implemented by the Little River Band of Ottawa Indians constitute unfair labor practices because they vary from the NLRA. Nearly two years ago, the parties to that case stipulated to present the issue of NLRB jurisdiction directly to the Board.

The D.C. Circuit's decision certainly does not mean that Indian nations and enterprises are free from the implications of San Manuel Indian Bingo & Casino v. NLRB. Unions will continue to eye tribal gaming enterprises, and the NLRB's attorneys will prosecute cases before the ALJs that fit the San Manuel profile.

These issues are explored in Labor and Employment Law in Indian Country, jointly published by Drummond Woodsum and the Native American Rights Fund.

For the D.C. Circuit's decision in Noel Canning v. NLRB, click here. For some blunt commentary on the decision by Jeffrey Tobin, click here.

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