Supreme Court Invalidates Nearly 600 Decisions Made by Two-Member NLRB
This morning the United States Supreme Court issued a highly-anticipated decision in New Process Steel v. National Labor Relations Board, ruling 5-4 to effectively invalidate almost 600 decisions made by the NLRB during the time it only had two members.
Normally, the NLRB is comprised of five members, but typically delegates its powers to decide most cases to panels of three members, in which a two-member majority can (and often does) carry the day. However, from late 2007 through March 2010, the Board only had two members. Those two members argued that they had the authority to decide cases as long as they agreed on the decision; after all, had they been the majority on a three-person panel, they would have made the same decisions.
The Supreme Court disagreed. It held that the National Labor Relations Act (NLRA), the law that gives the NLRB its powers, only allows the Board to delegate the authority to decide cases to a panel of at least three members. Accordingly, no two-member panel could have decision-making authority under the NLRA.
What does this mean for employers? If you had one of the 600 cases decided by the two-member Board, it may mean that your case will have to be reconsidered by a new three-member panel. We suspect, however, that the vast majority of those cases will be decided the same way. For the rest of us, this decision will have little impact. The two-member Board did not take up any controversial cases and did not issue any decisions that would overturn existing precedent or make "new law."
Supreme Court to Rule on Authority of Two-Member NLRB
This week the U.S. Supreme Court agreed to hear an appeal in New Process Steel v. NLRB and determine whether the National Labor Relations Board (NLRB or "the Board") has the authority to decide cases with only two sitting members.
The NLRB is the independent federal agency that administers the National Labor Relations Act, the primary law governing relations between unions and employers in the private sector. Typically, the NLRB is made up of five members, appointed by the President. There are currently three vacancies on the Board, leaving only two sitting members. The statute governing the NLRB's powers (29 U.S.C. § 153(b), if you really care) provides that "three members of the Board shall, at all times, constitute a quorum of the Board." Nevertheless, the two remaining Board members have decided a number of cases, under the theory that as long as those two members agree, they would have formed the majority of any three-member quorum anyway.
The Court will resolve a split between the federal appellate courts. In New Process Steel v. NLRB, (the case on appeal) the Seventh Circuit held that the current two-member NLRB does have the power to decide cases. The First Circuit agreed in in Northeastern Land Services v. NLRB. However, the D.C. Circuit disagreed in Laurel Baye Healthcare of Lake Lanier v. NLRB and rejected the power of a two-member Board to do anything. If you want to read more about this dispute, click here to read New Process Steel's Petition for Writ of Certiorari to the Court.
For most employers, New Process Steel will have little relevance--none of the cases decided by the two-member Board were particularly controversial, and none represented a significant departure from existing NLRB law. The only employers with a significant stake in the outcome of New Process Steel will be those employers whose cases were ruled on by the two-member Board. If the Court reverses New Process Steel, those cases will be reheard by a future three-member panel, and will likely be upheld.
