NLRB - GIF.gifThe National Labor Relations Act calls for the National Labor Relations Board (the quasi-judicial body that decides cases, and that also has certain rulemaking authority) to consist of five members, but the Board does have the power and authority to issue decisions at times when it has only three members.

The Board, however, does not have the authority to issue decisions (or adopt new rules) with only two members. This was the conclusion that the Supreme Court reached in June of 2010 in New Process Steel, LP v. NLRB, 130 S. Ct. 2635 (2010).  The New Process Steel case was the culmination of a 27-month period from January of 2008 to March of 2010 during which the Board issued hundreds of decisions with only two members, and it created quite a fallout.  In any case, it is now settled that the Board cannot decide cases or engage in rulemaking any time that it is down to only two members.

Most recently, the Board has consisted of three members – Mark Pearce, Brian Hayes, and Craig Becker.  However, Craig Becker’s term expired at the end of the last session of the Senate, at approximately noon on January 3, 2012.  This reduced the number of Board members to two.

Members of the Board are nominated by the President, subject to the consent of the Senate. Thus, generally speaking, the President is supposed to nominate individuals to serve as Board members, and the Senate is supposed to confirm them before they can actually be appointed. There is, however, an important exception.  When the Senate is in recess, the President may temporarily appoint a Board member without Senate approval, and this is termed a recess appointment.  (Member Becker was, in fact, a recess appointment.)

On January 4, 2012, President Obama announced his intent to recess appoint three individuals as Board members – Sharon Block, Terence Flynn, and Richard Griffin.  These recess appointments would bring-up the number of Board members to five.

The President’s use of the recess appointment process in this case is not without controversy.  Republicans have accused the President of abusing recess appointments by placing controversial individuals into high-ranking positions without the approval of the Senate.  Accordingly, Republican lawmakers have attempted to block recess appointments at this time by holding pro forma sessions in an effort to avoid a recess of more than three days.   The Department of Justice under President Clinton previously opined that a recess has to last for more than three days to permit a valid recess appointment, although the Supreme Court has never ruled on the issue.  In this case, the Senate met on January 3 and is scheduled to reconvene on January 6 – a recess that is too short for making recess appointments, if this is indeed the requirement.

Apart from the three Board members, the President on January 4 appointed Richard Cordray to lead the Consumer Financial Protection Bureau. It remains to be seen whether more recess appointments will follow.  In any event, we anticipate that there will be legal challenges to the President’s authority to make recess appointments in these circumstances.

On a final note, by tradition, the Board (when at its full complement of five members) has consisted of three members from the President’s own party, and two members from the other major political party.  In this case, Mark Pearce (the current Chair), Sharon Block, and Richard Griffin are from the Democrat side, whereas Brian Hayes (the other current member) and Terence Flynn are from the Republican side.  Thus, this collection of five Board members would match the traditional balance.  However, with a majority of three members on the Democrat side, we expect that the Board would continue to issue decisions that many people view as unfavorable to the business community, and that it would also continue to push for controversial changes to the union election process.

Attorney Jessica M. Marsh contributed to this report.