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Supreme Court: NLRB Lacked Authority for 600 Labor Decisions

Posted by Martha Zackin, Esq. on Jun 21, 2010 2:27:00 PM

(Martha J. Zackin, Esq., is Of Counsel to the law firm Mintz, Levin, Cohn, Ferris, Glovsky &  Popeo, P.C.)

On June 17, the United States Supreme Court ruled, in New Process Steel v. National Labor Relations Board, No. 08-1457, that the National Labor Relations Board ("NLRB" or the "Board") acted without statutory authority when it issued approximately 600 decisions during the period when vacancies left the Board with only two members. 

The impact of the decision will likely be narrow, affecting only the New Process Steel parties and the parties to the other 74 case currently pending before the Supreme Court and the Courts of Appeals that challenged the authority of the Board to act with only two members. 

By way of background, under the National Labor Relations Act ("NLRA"), the NLRB has the authority to resolve labor disputes.  The Board is comprised of five members, each of whom must be appointed by the president and confirmed by Congress. By statute, the Board may delegate its powers to any group of three or more members.  The statute also provides that three members of the Board constitute a quorum, except that when the Board's powers have been delegated to a group of three or more members, two members may constitute a quorum.

In late 2007, the Board had only four members, two of whose terms were about to expire. Concerned that there might be vacancies for an extended period, the Board delegated its authority to three members.  The action, the Board believed, would permit the remaining two members to exercise the full powers of the Board because those two members would constitute a quorum of the three-member group. 

The vacancies remained unfilled for 27 months and from January 2008 until March 2010, the group of two issued decisions in almost 600 cases.  In two of these cases the NLRB sustained two unfair labor practice complaints against New Process Steel ("NPS").  NPS appealed both orders, challenging the authority of the two-member Board to issue the orders.  The Court of Appeals sustained the authority of the Board.

The Supreme Court ruled that the NLRA required at least a three-member Board, and, therefore, the two-member Board's rulings against NPS were invalid. The Supreme Court's decision will not only impact the New Process Steel parties, but also  the parties to the seventy-four cases now on appeal that have challenged the authority of the two-member Board.  The NLRB issued a press release saying it expects those cases to be returned to the NLRB to be adjudicated by a proper quorum of the Board, which now has four members as two of the vacancies have been filled.

But what of the more than 500 other cases, which were improperly adjudicated but not appealed?  Typically, final judgments are just that- final.  However, it may be argued that principles of finality do not apply where the judgment was issued by a body that lacked statutory authority to decide the case in the first instance. 

In any event, the NLRB will be quite busy now and for some time to come - perhaps even too busy to work towards implementing the Employee Free Choice Act by NLRB fiat, as has been advocated by new Board member Craig Becker.

Topics: Employment Law, U.S. Supreme Court, NLRB

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