In a split decision, the United States Supreme Court has ruled
that nearly 600 National Labor Relations Board decisions decided by
a shorthanded board since January of 2008 must be reconsidered
because the NLRB did not have the authority to render those
decisions.
The NLRB is comprised of five members who are nominated by the
president and approved by Congress for five-year terms. Due to
political wrangling, as terms expired during the past two and a
half years, the members were not replaced. Knowing that two seats
would become vacant in December 2007, the five-member Board
delegated all of its powers to the three remaining board members.
The term for one of those three members expired on Jan. 1, 2008,
leaving only two members on the Board. The remaining two members
rendered decisions in about 600 cases in which they agreed,
operating under the belief that those two members made up a quorum
of the three-member Board. The two-member Board did not rule on
cases when they disagreed on the outcome.
Yesterday, the Supreme Court ruled that the National Labor
Relations Act requires that when the NLRB delegates its authority
to a three-member group, the group must maintain a membership of at
least three in order to continue exercising the delegated
authority. Justice John Paul Stevens authored the majority opinion.
Chief Justice John G. Roberts, Justice Scalia, Justice Thomas, and
Justice Alito joined in the decision.
Some of the decisions rendered by the two-member Board were
appealed to various federal courts of appeals on the theory that it
did not have authority to render those decisions under the federal
law that created the Board. Those appellate courts issued
conflicting decisions on whether the two-member Board had such
authority. The Supreme Court took the case, New Process Steel
LP v. National Labor Relations Board, No. 08-1457, to resolve
the disagreement and, as noted, determined the two-member Board did
not have the authority to render decisions.
In March, President Obama appointed two members to the board via
recess appointments, which last only until the end of the following
congressional session (i.e., the end of the 2011 congressional
session). The Board now has four members: three Democrats and one
Republican. The current four-member Board must now review the
hundreds of invalid decisions, rule on the pending cases on which
the two-member board could not reach agreement, and keep up with
its normal daily case load.
The timing of reviewing the nearly 600 now-invalid decisions may be
critical. The lone Republican's term expires in August.
Assuming he is not replaced because of continued political
wrangling, the Board will continue to have a quorum and the
authority to render decisions, albeit from the remaining three
Democrat members. One of those members' term expires in August
2011, and the recess appointments of members Pearce and Becker will
expire in December 2011. It is possible that at the end of next
year, the Board will not have any members, though President Obama
will likely continue to make recess appointments for Democrat
members so the Board maintains its three-member quorum.
The Supreme Court's decision left many questions unanswered,
though. For example:
- Which cases will have different results after they are re-decided?
- Will any of the decisions of the two-member Board be treated as binding or even useful precedent, either while waiting for a new decision or after a new decision is issued?
- If the invalid decision did not require the employer to pay back wages, but a new decision requires such payment, does the calculation of back wages continue until the valid decision is rendered or does it stop when the first, invalid decision was rendered?
- Will parties be able to appeal newly decided decisions, even though the time to appeal the invalid decision had already expired?
More questions will arise as the current four-member board
reviews the cases, and we will keep you informed of developments as
they occur during this unprecedented phase in board history.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.