A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said that Obama did not have the power to make three recess appointments last year to the National Labor Relations Board. This decision could also affect the appointment of Richard Cordray as head of the Consumer Financial Protection Bureau, as all contested appointments were made on the same day in 2012. Cordray's appointment is the subject of a separate suit.
The decision stems from the president's recess appointments to the five-member NLRB after the Senate Republicans had held up the appointments for months claiming the appointees were biased toward labor unions. Obama claimed the appointments were valid because the Senate was on a 20-day recess at the time they were made; the court ruled that technically the Senate stayed in session, as it was gaveled in and out every few days for pro-forma sessions.
The Appeals Court decision is likely to be appealed to the Supreme Court by the White House, but if the administration loses the case there, hundreds of decisions rendered by the appointed NLRB board would be invalidated.
Among the three members Obama appointed, two were Democrats and one Republican. The Republican has since resigned, but the two Democrats remain. If the appointments are ruled invalid by the Supreme Court, the NLRB would functionally be out of business, having only one member left sitting. The board's rules require a quorum of three members of the five-member board in order to issue decisions.