National Labor Relations Board v. SW General, Inc.

Issues 

May a senior agency official appointed by the president to serve as acting head of the same agency continue to serve in this capacity after being nominated by the president to permanently fill the office, even if the officer never served as first assistant to the office? 

Oral argument: 
November 7, 2016

This case presents the Supreme Court with an opportunity to interpret § 3345 of the Federal Vacancies Reform Act of 1998 (“FVRA”) and to determine if a person performing the acting duties of an office that requires Senate confirmation may continue to do so after the president nominates them to fill the vacancy permanently. The parties disagree over the meaning of § 3345(b)(1) of the FVRA, which dictates that officials serving in an acting capacity may continue to do so after being nominated for permanent status only if they served as first assistant to the vacant office for 90 days in the year prior to the vacancy. Petitioner, the National Labor Relations Board (“NLRB”), argues that this limitation only applies to first assistants who automatically assume acting duties under § 3345(a)(1). The NLRB contends that this interpretation accords with both the language and objectives of the FVRA, and also with the historical practices of prior presidents and the Senate. Respondent, SW General, Inc., maintains that § 3345(b)(1) applies to all acting officials appointed pursuant to § 3345(a). SW General argues that § 3345(b)(1)’s language and purpose are clear and that core principles like separation of powers and the protection of the balance between the state and federal governments support its interpretation. The outcome of this case will affect presidential appointments that require Senate confirmation. 

Questions as Framed for the Court by the Parties 

Many important government posts must be filled by persons who are nominated by the President and confirmed by the Senate. The Federal Vacancies Reform Act of 1998 (FVRA), 5 U.S.C. 3345 et seq., provides that when such an office is vacant, its functions and duties may be performed temporarily in an acting capacity by either the first assistant to the vacant post, under Section 3345(a)(1); a Senate-confirmed official occupying another office in the Executive Branch who is designated by the President under Section 3345(a)(2); or a senior official in the same agency designated by the President under Section 3345(a)(3). 

Section 3345(b) of the FVRA provides as a general rule that "[n]otwithstanding subsection (a)(1)," a person who is nominated to fill a vacant office that is subject to the FVRA may not perform the office's functions and duties in an acting capacity unless the person served as first assistant to the vacant office for at least 90 days in the year preceding the vacancy. 5 U.S.C. 3345(b). 

The question presented is whether the precondition in 5 U.S.C. 3345(b)(1) on service in an acting capacity by a person nominated by the President to fill the office on a permanent basis applies only to first assistants who take office under Subsection (a)(1) of 5 U.S.C. 3345, or whether it also limits acting service by officials who assume acting responsibilities under Subsections (a)(2) and (a)(3).

Facts 

The General Counsel of the National Labor Relations Board (“NLRB”) is a position that requires appointment by the president with the advice and consent of the Senate. See SW General v. NLRB, No. 14-1107, slip op. at 5 (D.C. Cir. Aug. 7, 2015). The protocol for dealing with vacancies in such offices is governed by § 3345 of the Federal Vacancies Reform Act (FVRA), which sets out three different classes of individuals who may serve in offices that require Senate approval on an acting basis. See id. at 70–71. § 3345(a)(1) describes the default scenario: when such an office becomes vacant, the first assistant to the office will serve as the acting officer. See id. § 3345(a)(2) says that the president may instead appoint an individual who holds a different office requiring Senate confirmation to serve as the acting officer. See id. Finally, § 3345(a)(3) provides that the president could instead direct a senior officer from the same agency who has served in their position for at least 90 days to perform the duties of the vacant office. See Brief for Petitioner, National Labor Relations Board (“NLRB”) at 3.

In June 2010, Ronald Meisburg resigned as NLRB General Counsel. SW General at 5. Following his resignation, President Obama directed Lafe Solomon to serve as acting General Counsel pursuant to § 3345(a)(3). See id. at 5–6. Solomon had served as Director of the NLRB’s Office of Representation Appeals for the previous ten years. See Brief for Petitioner at 17. Six months later, in January 2011, President Obama nominated Solomon to serve as NLRB General Counsel on a permanent basis. See SW General at 6. The Senate did not act upon the Solomon’s nomination, so the nomination was returned to the president. See id. After resubmitting the nomination and ultimately withdrawing it, President Obama nominated Richard Griffin to the General Counsel position. See id. The Senate confirmed Griffin on October 29, 2013. See id.

In January 2013, while Lafe Solomon was serving as acting General Counsel, an NLRB Regional Director acting on his behalf filed a complaint on behalf of SW employees alleging that SW General, Inc. had engaged in unfair labor practices. See SW General at 7. After a hearing, an administrative law judge determined that SW General had engaged in unfair labor practices. See id. SW General filed a petition for review in the United States Court of Appeals for the D.C. Circuit and alleged that the complaint the NLRB had filed against it was unlawful, arguing that Solomon had been impermissibly serving as acting General Counsel because he had been nominated to fill the position permanently but had never served as first assistant to the office. See id.

The D.C. Court of Appeals agreed with SW General’s interpretation of subsection 3345(b)(1) and held that the NLRB’s complaint against SW General was invalid. See id.

The NLRB appealed to the Supreme Court of the United States and was granted certiorari on June 20, 2016. See Brief for Petitioner at 1.

Analysis 

INTERPRETING FVRA §3345(b)(1)

The National Labor Relations Board (“NLRB”) argues that the text and structure of § 3345(b)(1) of the Federal Vacancies Reform Act of 1998 (“FVRA”) demonstrate that the limitations contained within apply only to first assistants taking office under § 3345(a)(1), but not to officials who assume acting responsibilities under §§ 3345(a)(2) and (a)(3). See Brief for Petitioner, National Labor Relations Board (“NLRB”) at 26. The NLRB claims that because § 3345(b)(1) begins with “[n]otwithstanding subsection (1)(a),” the limitation contained within § 3345(b)(1) applies only to § 3345(a)(1). See id. at 28. In other words, the NLRB argues that the term “notwithstanding” restricts the provision’s scope. See id. The NLRB contends that if Congress had intended for the limitation to apply to §§ 3345(a)(2) and (a)(3), Congress could have written that the rule applies “notwithstanding” all of the provisions, not just § 3345(a)(1). See id. Moreover, the NLRB maintains that although § 3345(b)(1) uses the terms “person” and “this section,” the limitations still only apply to § 3345(a)(1), noting that Congress later in the same section referred to a “person” when only discussing first assistants. See id. at 34.

SW General, however, contends that the language of the FVRA clearly demonstrates that the limitations of FVRA § 3345(b)(1) must apply to all acting officials serving under § 3345(a), not just those serving under § 3345(a)(1). See Brief for Respondent, SW General, Inc. at 22–23. SW General argues that the phrase “[n]otwithstanding subsection (1)(a)” does not narrow the scope of § 3345(b)(1) but instead illustrates the expansive reach of the subsection. See id. at 27. Further, SW General argues that because § 3345(b)(1) contains the term “a person,” the subsection must apply not only to first assistants but also to officials who assume acting responsibility under §§ 3345(a)(2) and (a)(3). See id. at 25–26. SW General contends that Congress would have substituted “first assistant” for “person” if it wanted § 3345(b)(1) to apply only to § 3345(a)(1). See id. at 25. SW General asserts that the term “this section” in § 3345(b)(1) also demonstrates that “persons” include all acting officers, noting that Congress could have simply referred to less than an entire section. See id. at 25–26. Lastly, SW General asserts that § 3345(b)(1) must apply to all acting officers because the NLRB’s interpretation would make other provisions of the FVRA unnecessary—an assertion the NLRB disputes. Id. at 29; see Brief for Petitioner at 35.

FULFILLING THE FVRA’S OBJECTIVES

The NLRB argues that SW General’s reading of FVRA § 3345(b)(1) would undermine the objectives of the FVRA. See Brief for Petitioner at 37. The NLRB contends that one goal of the FVRA and of §§ 3345(a)(2) and (a)(3) was to give the president more flexibility in choosing an acting official to fill a vacancy. See id. at 39. The NLRB contends that SW General’s reading of § 3345(b)(1) would revoke the president’s authority to designate presidentially appointed, Senate-approved (PAS) officials to serve in an acting capacity under § 3345(a)(2) nearly every time the president also nominates that same official to the permanent position. See id. The NLRB argues that SW General’s reading would have the same effect on § 3345(a)(3), a provision they contend was also included to give the president greater latitude. See id. at 39–40.  SW General’s reading of § 3345(b)(1), according to the NLRB, seemingly prohibits senior officials from serving in an acting capacity under § 3345(a)(3) if they are also qualified enough to be the president’s permanent nominee. See id.

SW General, on the other hand, maintains that the purpose and objectives of the FVRA prove that the limitations of § 3345(b)(1) apply to all acting officers. See Brief of Respondent at 32. SW General contends that the FVRA’s primary purpose was not providing the president more flexibility in selecting acting officers. See id. at 47. SW General argues that the primary objective of the FVRA was, instead, to limit the president’s power when selecting acting officers to salvage the Senate’s responsibility within the Appointments Clause. See id. at 32. In support of this claim, SW General notes that prior to the passage of the FVRA, presidents used acting service status to dodge restrictions on officials requiring confirmation, allowing acting officials to work for long periods of time without obtaining Senate approval. See id. SW General claims that their interpretation of § 3345(b)(1) closes this loophole, fulfilling the objectives of the FVRA. See id. at 33–34.

THE SIGNIFICANCE OF HISTORICAL PRACTICE

The NLRB claims that the way the FVRA has been applied and interpreted by both the executive branch and Congress shows that FVRA § 3345(b)(1) only applies to first assistants. See Brief for Petitioner at 48–49. According to the NLRB, the Supreme Court places great emphasis on historical practice when interpreting constitutional provisions involving the distribution of power between the executive and legislative branches. See id. at 49. The NLRB argues that both the Office of Legal Counsel (“OLC”) and Government Accountability Office (“GAO”) have issued written guidance that demonstrates that the limitations of § 3345(b)(1) only apply to first assistants. See id. at 50. The NLRB claims that the OLC put forth that understanding in written guidance after the enactment of the statute and that the GAO also did so in 2001 in a letter regarding the enforcement of the FVRA. Id.

The NLRB contends that these interpretations are also reflected in practice. See id. at 51–52. The NLRB claims that since the enactment of the FVRA, presidents have directed officials to serve in an acting capacity under FVRA §§ 3345(a)(2) or (a)(3) and nominated those same officials to the same office permanently more than 100 times, even where those officials were not serving as first assistants for at least 90 days prior to the vacancy. See id. The NLRB notes that the Senate could have objected to these nominees if the Senate believed they were not serving lawfully. See id. at 49. Further, the NLRB argues that Congress could have created new legislation to overrule the executive branch’s interpretation of the statute. See id.

In contrast, SW General places emphasis on longstanding constitutional principles in interpreting FVRA § 3345(b)(1). See Brief for Respondent at 35. SW General argues that the constitutional safeguards subjecting officers of the United States to advice and consent by the Senate should direct the Court in interpreting the statute. See id. Further, SW General disputes the NLRB’s reliance on OLC and GAO documents, noting that, first, neither the OLC or GAO statements receive Chevron deference. See id. at 54. Moreover, SW General disagrees on the documents’ content. See id. at 55–56. According to SW General, the OLC memorandum does not analyze the FVRA’s text, which reduces the document’s significance. See id. Further, SW General argues that while the GAO letter states that the limitations of § 3345(b)(1) apply to first assistants, it does not discuss whether the limitations apply to those who assume acting responsibilities under §§ 3345(a)(2) or (a)(3). See id.

SW General refutes the NLRB’s assertion that Congress assented to the executive branch’s reading by failing to object to nominees serving improperly and to enact legislation to override the executive branch’s interpretation. See id. at 57–60. First, SW General argues that the Senate may have been unaware that the executive branch’s interpretation was flawed. See id. at 56. SW General claims that even if the Senate knew of a nominee’s “improper acting service,” it was not required to reject the nominee, noting that the FVRA does not bar an acting officer serving improperly from holding the permanent office. Id. at 57. Additionally, SW General claims that Congress would not have enacted legislation to override the executive branch’s interpretation because the FVRA itself was Congress’s way of preserving its power under the Appointments Clause and curbing prior presidential abuses of power. See id. at 57–58. SW General also claims that several senators have renounced the NLRB’s interpretation of FVRA § 3345(b)(1). See id. at 59. Lastly, SW General argues that, just because the executive branch has “gotten away with” its interpretation for 18 years, it does not mean that the executive branch’s interpretation is correct or entitled to deference. Id. at 60–61.

Discussion 

This case is significant because it will impact the process by which the president may direct individuals to fill, in an acting capacity, offices requiring Senate confirmation. The outcome of this case will affect the president, acting officials, and the Senate. If the court rules in favor of the NLRB, acting officials whom the president appoints pursuant to FVRA §§ 3345(a)(2) or (3) will be able to continue serving in an acting role after being nominated to fill the office permanently even if they never served as first assistant to the office. However, if SW General wins, no officer the president appoints under § 3345(a) will be able to continue serving as the acting official after he has been nominated to permanently fill the office unless he served as first assistant to the office for at least 90 days in the previous year.

OBJECTIVES OF THE FVRA

The NLRB and supporting amici argue that their interpretation of FVRA § 3345(b)(1) adequately responds to Congressional concerns about presidents evading Senate approval while still preserving the president’s ability to appoint the most qualified individuals to carry out the duties of executive branch offices. See Brief for Petitioner, National Labor Relations Board (“NLRB”) at 22–23. The NLRB points out that interpreting § 3345(b)(1) to apply only to § 3345(a)(1) effectively addresses the main concern that prompted Congress to enact the FVRA— presidents dodging the Senate’s advice by concurrently appointing individuals who were neither high-ranking agency officials nor Senate-confirmed officers to serve as both first assistant and nominee. See id. at 22; Brief of Amicus Curiae American Federation of Labor and Congress of Industrial Organizations, in Support of Petitioner at 11. Further, the American Federation of Labor and Congress of Industrial Organizations argues that there is nothing to indicate that Congress intended to limit the ability of the president to appoint a high-ranking officer within the agency or a Senate-approved officer to serve as both the acting officer and nominee. See id.

However, SW General and amici claim that their interpretation of FVRA § 3345(b)(1) best accords with the separation of powers concerns that spurred Congress to enact the FVRA. See Brief for Respondent, SW General, Inc. at 20. They argue that since the impetus for enacting the FVRA was Congressional concern over presidents appointing long-serving acting officials without Senate approval, § 3345(b)(1) should be read to limit the president’s flexibility. See id. at 8. The Cato Institute contends that the legislature must “clearly and unambiguously” indicate any intention to alter the fundamental balance of power between the three branches of the federal system. Brief of Amicus Curiae The Cato Institute, in Support of Respondent at 21. Therefore, since Congress was unclear in this instance as to its intentions, the court should interpret § 3345(b)(1) so as to best protect the Framers’ preference for Senate advice & consent as a check on executive power. See id. at 25.

Further, Morton Rosenburg, whom the NLRB cited numerous times in its opening brief to the Court, argues in support of SW General that simply because the Senate confirmed an individual to serve in one office does not indicate that the Senate thereby approves of that person serving in any office that requires Senate confirmation. See Brief of Amicus Curiae Morton Rosenburg, in Support of Respondent at 9. He asserts that Senate confirmation is a detailed process that focuses exclusively on whether the nominee is suited to perform the duties of one specific office. See id. Therefore, contrary to the claims of the NLRB, Rosenburg contends that it is likely that Congress would have wanted to limit the ability of presidents to appoint Senate-approved officers to serve as both acting officers and nominees for other offices. See id.

PRESIDENTIAL DISCRETION VS. STATE INTERESTS

The Constitutional Accountability Center (“CAC”), in support of the NLRB, asserts that interpreting FVRA § 3345(b)(1) as SW General wishes would undermine the president’s ability to appoint the most qualified individuals to fill executive branch vacancies. See Brief of Amicus Curiae Constitutional Accountability Center, in Support of Petitioner at 11. The CAC points out that in order to execute the nation’s laws, the president must always have capable subordinate officers assisting him. See id. at 7. While acknowledging that some restrictions on circumventing advice and consent are necessary, the CAC argues that the Court should interpret § 3345(b)(1) to allow the president the requisite flexibility to fill vacancies with the individuals he judges as best prepared to help him carry out his significant responsibilities. See id. at 8.

West Virginia, Alabama, and twelve other states, however, urge the court to adopt SW General’s interpretation of subsection (b)(1). See Brief of Amici Curiae States of West Virginia, Alabama, and 12 Other States, in Support of Respondent at 17. They argue that the Senate’s advice and consent power is a critical way to maintain the balance between federal and state power. See id. at 8. The appointment of an agency head can have a significant impact on state interests, so the advice and consent power allows the states to thoroughly question nominees. See id. at 9. West Virginia and the others contend that adopting the NLRB’s interpretation would give presidents too much latitude to install their desired nominees without giving due regard to the state interests that the framers intended to protect. See id. at 17.

Edited by 

Acknowledgments 

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