A federal appeals court ruled Friday that President Barack Obama violated the Constitution in filling labor board vacancies, a decision that could reshape a long-standing practice by U.S. presidents to make recess appointments.
Such appointments—which bypass Senate approval to install top administration personnel—have been used by presidents for at least 90 years. But in the past two decades, Presidents George W. Bush and Bill Clinton ratcheted up use of the tactic to avert congressional obstacles. Friday's decision, if it holds, would restrain that power.
The three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit said the National Labor Relations Board for the past year has lacked the quorum required to conduct most business because three board members were named by Mr. Obama in recess appointments the court ruled invalid.
The decision strips the board of key powers and could void some of its actions over the past year.
The board made more than 200 case rulings last year, including a decision that protected workers from being fired for complaining about working conditions on sites like Facebook, FB -1.69% and a decision that gave greater rights to unions in employee-discipline cases.
The ruling also puts in jeopardy recent moves by the Consumer Financial Protection Bureau, since its director, Richard Cordray, also was installed in a recess appointment. The bureau, a centerpiece of the Dodd-Frank financial overhaul law, has pushed to crack down on the banking industry and rework consumer mortgage rules.
"The decision is novel and unprecedented, and it contradicts 150 years of practice by Democratic and Republican administrations," Jay Carney, the White House press secretary, said. "We respectfully but strongly disagree with the ruling."
Mr. Obama has made 32 recess appointments, compared with 171 by Mr. Bush and 139 by Mr. Clinton.
Republicans cheered the decision, since it limits Mr. Obama's ability to install future nominees using recess appointments.
A day before the ruling, President Obama said he would resubmit Mr. Cordray's nomination to the Senate for approval to make it permanent.
Friday's decision could give Senate Republicans additional leverage in securing changes to the structure of the consumer bureau, in return for allowing Mr. Cordray's nomination to move forward.
A CFPB spokesperson said the bureau "is not a party in the case decided today, and the court's ruling has no direct effect on the bureau."
The court case turned on whether the Senate was in recess when Mr. Obama made the appointments during a holiday break early last year. The Constitution allows a president to unilaterally install nominees to positions that normally require Senate confirmation when the Senate is in recess.
But Republican lawmakers held minutes-long meetings every few days, and lawyers for the plaintiffs argued that meant the chamber was technically in session.
While the plaintiff's case centered on those sessions, the court went a step further, declaring that Mr. Obama's appointments fell outside the bounds of his authority. It ruled that the Constitution's description of a recess refers only to the period between the roughly yearlong formal "sessions" of Congress, rather than during an effective break in proceedings. In this case, the Republicans contend Congress started a new session on Jan. 3, and Mr. Obama made the recess appointments on Jan. 4.