Last Thursday, June 17th, the Supreme Court of the United States held that the National Labor Relations Board lacked authority to act in nearly 600 decisions issued from the end of 2007 to March of this year. In New Process Steel v. National Labor Relations Board that the Board was not authorized to issue decisions when three of its five seats were vacant. (No. 08-1457), the Court ruled (by a 5 to 4 decision)
The events leading up to this case are as follows: The Taft-Hartley Act expanded the Board from three to five members and 1) permitted the Board to delegate any or all of its powers to “any group of three or more members”; 2) provided that a “vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board”; and 3) provided that three members of the Board shall, at all times, constitute a quorum of the Board…” At the end of 2007, the four members of the Board delegated all of its authority to a three-member group. Three days later, the appointment of one of those three members expired, leaving the remaining two members as the only members of the Board. For twenty seven months, the two-member board (consisting of one Republican and one Democrat) issued over 600 decisions pertaining to union-employer labor disputes under the National Labor Relations Act.
New Process Steel challenged two such NLRB decisions, arguing that the two-member Board lacked the authority to issue the orders. The Supreme Court held that a quorum of three members was necessary for the Board to have authority to issue any decision. While the Supreme Court was deciding this case, President Obama temporarily appointed two board members, bringing the current count to four and provided established authority to issue future decisions.
The repercussions of this closely watched decision are not yet entirely clear. The most pressing question seems to be this: How does it affect the nearly 600 decisions issued by the two-member board? In New Process Steel, the Supreme Court simply reversed the decision of the court of appeals and remanded for further consideration, which in all likelihood means that the current four-member Board will have to re-hear the matter. The same result is likely in other cases that are cases still being challenged in the courts of appeals.
The Board has issued a press release which intimates that the NLRB believes it will re-hear these cases: “Five more cases [presenting the same issue] are pending before the Supreme Court, and sixty nine are pending before the Courts of Appeals. It is expected that those cases will be remanded to the Board, and the now-four member Board will decide the appropriate means for further considering and resolving them.” Nevertheless, parties may decide that it is not worth the expense to challenge the two-member board decision after evaluating the likelihood of success in receiving a different decision the second time around.
For now, employers should be aware that prior NLRB decisions of the two-member board may be invalid and should review any current or prior litigation before the NLRB in order to determine if the Supreme Court’s decision affects them.
We will further update you when new decisions are issued.
If you have any questions about the National Labor Relations Act, the National Labor Relations Board or labor relations, please contact Albert S. Lee at 412.594.5611, Katherine E. Koop at 412.594.5508 or firstname.lastname@example.org; email@example.com.