CEI Experts Welcome Court's Decision to Rule on NLRB Case

CEI Experts Welcome Court's Decision to Rule on NLRB Case

Case Also Could Affect CFPB's Richard Cordray, Whose Appointment CEI Is Challenging
June 24, 2013

WASHINGTON, D.C., June 24, 2013 – Legal and labor policy experts at the Competitive Enterprise Institute said today they are pleased the Supreme Court has accepted a case that challenges President Obama’s recess appointments to the National Labor Relations Board and expect a favorable outcome.

"The Supreme Court should reject President Obama’s radical interpretation of the Constitution’s recess appointments clause,” said Hans Bader, senior attorney and counsel for special projects at CEI. “That interpretation would, as Judge David Sentelle noted, give Obama ‘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.’”

The Supreme Court announced it would accept National Labor Relations Board v. Noel Canning. NLRB ruled Noel Canning, a soft drink bottler in Yakima, Wash., committed an unfair labor practice when it failed to implement an agreement it had reached with its workers’ union. Noel Canning challenged the ruling on the basis the NLRB could not act because three of its members received recess appointments even though the Senate was not in recess.

The case will turn on whether the appointments of the three members appointed that day are valid. And their validity will turn on whether the Senate was in recess when it was conducting only pro forma sessions in December 2011, when President Obama made the appointments.

Bader said President Obama’s position has been rejected not only by a unanimous ruling of the D.C. Circuit Court, but also by the more liberal Third Circuit Court of Appeals, which pointed out the “implausibility” of the administration’s position and said it would “eviscerate” the constitutional separation of powers.

The case could affect about 1,000 decisions and orders issued by the NLRB since the appointments were made. It also could affect the appointment of Richard Cordray as head of the Consumer Finance Protection Bureau. He was appointed the same day under the same circumstances, and a case that challenges his appointment and the constitutionality of other aspects of the Dodd-Frank financial services legislation – State National Bank of Big Spring v. Geithner, also is in the courts. CEI and other groups are participating in this case as well.

“Whatever the Supreme Court decides on the constitutionality of the NLRB appointments almost certainly will apply to the appointment of Cordray,” said John Berlau, senior fellow for finance and access to capital at CEI. “This means the voluminous rules CFPB has issued on everything from mortgages to small businesses – as well as the data base it is building that threatens consumer privacy – are all under a constitutional cloud. The Senate should wait for this decision before it moves to confirm Cordray or anyone else for this post permanently.”

Matt Patterson, who leads CEI’s labor policy team, said the case provides the court “an opportunity to preserve and protect the balance of power between the political branches” and that he hopes the ruling will “help bring some stability and predictability to our battered and bruised business community.”