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On Friday, January 25, 2013, a three-judge panel of the U.S. Court of Appeals for the DC Circuit issued an opinion that will invalidate every NLRB decision issued during 2012 if the opinion is followed by other courts or affirmed by the Supreme Court. In Noel Canning v. NLRB, the DC Circuit determined that President Obama’s January 2012 recess appointments to the NLRB were improper. Without those appointments, the Board lacked enough members to take effective action under the law.

The case stems from the January 4, 2012 “recess” appointments made to the Board by President Obama. The court invalidated the appointments because they did not comply with the court’s interpretation of when recess appointments are permitted. The President made those appointments even though Congress was not in full recess because the Senate failed to take action on approval of the President’s nominees to the NLRB, which would have left the agency without a quorum.

As a practical matter, until new nominees to the NLRB are approved, all future NLRB case decisions may be invalidated if they are appealed to the DC Circuit. That puts a cloud over most NLRB actions and significantly hamstrings the agency. Because of that, the administration and the NLRB have pledged to stay the course and appeal Noel Canning to the Supreme Court. A decision on whether the Supreme Court will hear the case is likely to occur this year, but it is unclear whether the case would be added to the court’s docket before the fall.

For employers and unions not awaiting decision on cases before the NLRB, the primary impact of the decision is that it may delay determinations from the NLRB on controversial issues that most observers believe were likely to favor labor unions and disadvantage employers.

While controversial decisions issued by the NLRB in the last year may ultimately be overturned as a result of the ruling, long-term relief for employers is unlikely, since the NLRB will likely reaffirm its rulings once new nominees are approved. Some of the more significant changes pursued by the NLRB in the last year included decisions (i) requiring employers to provide a union with notice and an opportunity to bargain over suspensions and discharges when there is no collectively bargained grievance and arbitration process in place, (ii) extending contractual dues check-off obligations beyond the expiration of a collective bargaining agreement and (iii) compelling employers to provide unions with witness statements obtained during investigations of workplace misconduct for grievance or arbitration purposes.

In the interim, employers who ignore these and other rulings that are subject to challenge as a result of this decision will act at their own peril. The NLRB’s General Counsel and Regional Directors will continue to treat those rulings as good law and will prosecute accordingly.

We will keep you informed of any future developments.

If you have any questions about this decision and its implications, or how it impacts a particular case, please contact Kenneth F. Sparks at +1 (312) 609 7877, Mark L. Stolzenburg at +1 (312) 609 7512 or any other Vedder Price attorney with whom you have worked.

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Kenneth F. Sparks