Congress passed the National Labor Relations Act establishing the National Labor Relations Board in 1935 as an independent federal agency responsible for safeguarding employees’ rights to organize unions, engage in collective bargaining, and engage in concerted activities relating to their terms and conditions of employment.  The Act creates a five-member Board and gives the President the power to appoint Board Members for a five-year term, with the consent of the Senate, with one term expiring each year.  With respect to removal of Board Members, Section 3(a) of the NLRA provides, “Any member of the Board may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.”

 A Brief History of the NLRB’s Most Recent Constitutional Entanglements.

In the ninety years since its creation, the NLRB has been the subject of the occasional constitutional kerfuffle.  Most notably, during the Obama Presidency, the Supreme Court addressed challenges to the President’s appointment of two Board Members under the Recess Appointment Clause.  In National Labor Relations Board v. Noel Canning, 573 U.S. 513 (2014), the Supreme Court held that President Obama’s appointment of two Board Members under the Recess Appointment Clause was unlawful because the recess was not of sufficient length and the Senate remained available to deliberate.

The Supreme Court’s decision in Noel Canning was significant because, at the time, the Board did not have a full five Members, so the two recess appointees were necessary for a quorum.  Just four years earlier, the Supreme Court addressed the power of the Board to act when the Board did not have a quorum and held that the NLRB lacked the authority issue decisions – one of its main responsibilities – with only two members. 

Fast forward to April 2024 when SpaceX launched the most recent constitutional attack on the NLRB with a lawsuit filed against the Board in Western District Court of Texas.  SpaceX sought to block an unfair labor practice proceeding against it from moving forward based on the following two constitutional arguments:

• The NLRB’s Administrative Law Judges (ALJs) are unconstitutionally insulated from removal by the President; and
• The Board’s Members are unconstitutionally insulated from removal by the President because he may only remove them “for neglect of duty or malfeasance,” but no other cause.

The district court granted SpaceX’s motion for a preliminary injunction in July 2024, holding that SpaceX was likely to succeed in establishing that the Board Members and ALJs are unconstitutionally protected from removal.  That decision is now on appeal at the Fifth Circuit.  Following SpaceX, similar constitutional challenges have been filed against the Board in other Circuits, including the Ninth Circuit.

A Board without a Quorum. 

Shortly after his inauguration, President Trump removed Democratic Board Member Wilcox from the Board, becoming the first President to do so prior to the expiration of the Member’s term.  The President did not identify any neglect or malfeasance on Wilcox’s part.  Within days of her removal, Wilcox filed a lawsuit arguing that the President’s actions violated the NLRA.  The D.C. District Court agreed with Wilcox that her termination was unlawful, and a series of appeals and procedural motions have followed.  Most recently, the Supreme Court granted the Administration’s motion to stay Wilcox’s return to the Board pending the Court’s decision on the merits, which is expected next session.

Without Wilcox, the Board only has two Members and has been without a quorum since January.  As the Supreme Court held in New Process Steel, the Board cannot issue any decisions without a quorum.  While the President recently nominated two new Board Members, approval by the Senate is not expected anytime soon.

So, What Does this Dysfunction Mean for Employers? 

Not only does the lack of a quorum create an extraordinary backlog of cases awaiting decision by the Board, but it leaves the Biden Board’s largely pro-labor decisions undisturbed, including its 2023 Cemex decision completely upending the rules for union organizing.

Significantly, the dysfunction at the Board has not stopped the agency’s Regional offices from continuing to prosecute unfair labor practices filed against employers and union.  Region 28 – based in Phoenix – continues to actively prosecute ULPs.  Most recently, an ALJ found a cannabis retailer unlawfully disciplined and discharged a key union organizer at its Phoenix location.  If that decision is appealed, the Board will be unable to act until it has a quorum.