Friday’s ruling by the U.S. Appeals Court for the D.C. circuit invalidating three of President Obama’s appointments to the National Labor Relations Board technically dealt with a routine labor matter. But the decision, if upheld by the Supreme Court, could have important ramifications for Obama’s second term agenda and for the future of the presidential appointment process.

By way of background, the U.S. Constitution grants the president the power, “to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.” This power has been the subject of an ongoing cat and mouse game between Republicans and Democrats over the years, especially as presidential appointments have become increasingly contentious in the Senate, which is granted the general power to “advise and consent” on presidential nominations.

When President Clinton was in office, he bypassed the Senate to make 139 recess appointments and President George W. Bush made 171, according to the Congressional Research Service. But when Democrats took over the Senate in 2007, Majority Leader Harry Reid successfully blocked additional recess appointments by holding “pro forma” work days of the Senate every three days – even if in meant one Senator was present to gavel in the chamber for a few seconds before gaveling it out.

In his first year in office, 2009, Obama didn’t need to exercise his recess appointment power because Democrats had a 60-seat filibuster-proof majority for part of the year. By January 2010, with Scott Brown taking office, Republicans regained the ability to block nominees and Obama made 28 recess appointments in just that year alone.

Though Democrats maintained control of the Senate after the 2010 midterm elections, the Republican takeover of the House of Representatives introduced a new wrinkle. According to the U.S. Constitution, “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days…” That meant that the GOP-led House had the power to simply deny the Senate the ability to adjourn. Republicans used this as leverage to force Reid to revive the practice of holding “pro forma” Senate workdays every three days. This effectively prevented Obama from making any recess appointments throughout 2011.

Then, on January 4, 2012, Obama made three appointments to the NLRB and also appointed Richard Cordray to head up the Consumer Financial Protection Bureau, a new agency created by the 2010 Dodd-Frank financial regulatory law. Obama did this even though the Senate was still technically in a “pro forma” session.

When the newly stacked NLRB ruled against Yakima, Washington-based bottler Noel Canning in a union dispute, the company filed suit arguing that the board lacked the necessary quorum to make a decision, because three of its members were unconstitutionally appointed by Obama. Most Republican Senators as well as House Speaker John Boehner joined the suit.

In its Friday decision (read it in full here, key excerpts here), the D.C. Circuit threw out the NLRB’s ruling against Noel, agreeing the Obama’s appointments were unconstitutional.

The ruling has several immediate ramifications. To start, since its reasoning can be applied by litigants to any other NLRB decision, it effectively brings into question the validity of all NLRB rulings since last January and any decisions the current board may make going forward. In addition, the reasoning could also mean that Cordray’s regulatory work at the new CFPB is invalid given that he was recess appointed at the same time.

Beyond that, there’s the question of Obama’s second term agenda. Though Obama made an unapologetic case for liberalism in his second inaugural address, the reality is that as long as Republicans are in charge of the House and can sustain filibusters in the Senate, he won’t be able to enact major legislation. This means that any real progress he’s going to make on liberal agenda items is going to have to come on the regulatory front, which relies heavily on getting his appointees in place. As he put it in 2011, “(W)here Congress won’t act, I will.” This decision, if it withstands further appeals, would make matters more difficult for him, thus hampering his second term agenda.

According to the D.C. Circuit’s interpretation of presidential power, recess appointments can only be made in the recess that occurs between the two sessions of a given Congress, and only to fill vacancies that open up during that recess. Each Congress lasts for two years, divided into one-year sessions, meaning this reasoning, if adopted by the Supreme Court, would severely curtail the president’s appointment power.

Recess appointments have acted as a safety valve for presidents who cannot get their nominees confirmed. If the opposition party can block presidential appointments with 41 votes in the Senate and courts restrict presidential recess power, it will likely embolden Senate liberals pushing for weakening the filibuster, something Democrats ultimately backed away from this week.

I found the D.C. Circuit’s reasoning very sound. But whatever one’s position is on the decision, one thing that’s undeniable is that it draws very clear lines on the use of a power that has been extremely ill-defined by courts, leading to arbitrary attempts to define it by those in power. When do the vacancies have to occur? What counts as a session? Does the recess need to be at least three days? Can it be less? Does it need to be more?

Here’s to hoping the Supreme Court takes up the case and offers clearer guidance on the use of presidential recess appointment power.