As Alan Kaplinsky recently noted, a challenge brought against the NLRB could well become an indirect vehicle for calling into question the validity of President Obama’s recess appointment of Richard Cordray to head the CFPB. Even as he wrote that blog, a case was pending in federal district court before Judge Amy Berman Jackson in the District of Columbia that may now become that vehicle.

In National Ass’n of Manufacturers et al. v. NLRB, No. 1:11-cv-01629-ABJ (D.D.C., filed Sept. 8, 2011), the plaintiffs are challenging the NLRB’s authority to promulgate a regulation that would require employers to post notices informing their employees of their right to organize a labor union. The Rule was to become effective on November 14, 2011, but on December 30, a three-member NLRB (there were two vacant Board seats, but three is sufficient for a quorum) delayed the effective date until April 30, 2012. The term of one of those three Board members expired on January 3, 2012, leaving only a two-person NLRB until Obama appointed Sharon Block, Richard Griffin, and Terence Flynn to the NLRB on January 4. On January 10, the Government moved to have these three individuals substituted as defendants in their official capacities as successors to the previously vacant NLRB seats.

On January 13, most of the Plaintiffs in the case filed a motion for leave to amend the complaint to allege that these three appointments are in violation of the Recess Appointments Clause. Generally speaking, leave to amend complaints in federal court is liberally granted, and if the court grants leave here, the validity of the NLRB recess appointments will be litigated. If the Government is unsuccessful in defending those appointments, then the validity of the contemporaneous recess appointment of Richard Cordray as Director of the CFPB will be in serious doubt.  Unlike the Cordray situation, where finding a plaintiff with standing is currently problematic, there appears to be no standing problem in the NLRB case.

Even if the Government is successful in defending the NLRB appointments, a separate challenge to Mr. Cordray’s appointment may still be possible because of a potential issue over whether the CFPB position was a “Vacancy” within the meaning of the Recess Appointments Clause. Unlike the NLRB, which has been in existence since the New Deal and has had Board seats filled and refilled many times, the position of CFPB Director is brand new and has never before been filled. While literally a “vacancy” is any empty post or position, in common usage (e.g., a vacancy on the Supreme Court, a vacancy in the IT Department), it connotes a position that was previously occupied but is now empty. This is consistent with the purpose of the Recess Appointments Clause, which was to provide emergency authority for the President when a vacancy “happened” during a recess of the Senate. Arguably, therefore, with a brand new agency, there is no “vacancy” to be filled.