U.S. Supreme Court holds a three-member quorum required for valid NLRB decisions

Iowa Employment & Labor Law Dickinson Law Firm Des Moines Iowa

Posted on 06/25/2010 at 09:16 AM by The Newsroom

On June 17, the U.S. Supreme Court issued its decision in New Process Steel v. National Labor Relations Board, holding that for more than two years, the Board had been acting without statutory authority in adjudicating nearly six hundred cases because vacancies had left the Board without a three-member quorum. The issue before the Court was whether Section 3(b) of the National Labor Relations Act, 29 U.S.C. § 153(b), authorizes the Board to act when only two of its five positions are filled, even if the Board has previously delegated its full powers to a three-member group of the Board that includes the two remaining members. In other words, does the Board have authority to decide cases with only two sitting members?   The Supreme Court answered the question: No; a delegee group of the Board must have three members to exercise the delegated authority of the Board. The statute provides that the 'Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise' and 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 three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.' At the end of 2007, the then-four-member Board delegated its authority to a three-member group. Three days later, the recess appointment of one of those members expired, leaving only two members on the Board. For more than two years, those two members acted as a quorum, deciding nearly six hundred cases. The petitioner in this case, New Process Steel, challenged two such decisions, arguing that the two-member Board lacked the authority to issue the orders. The U.S. Court of Appeals for the Seventh Circuit rejected New Process Steel's contentions, holding that the plain meaning of the statute supported the Board's delegation procedure: the two members of the Board constituted a quorum of the three-member group to which the Board had delegated its authority. The U.S. Supreme Court reversed and remanded, reasoning that requiring the delegee group to have at least three members was the only way to give meaningful effect to all of the provisions in Section 3(b), because reading the statute to allow two members to act as the Board would allow the permanent circumvention of the three-member quorum requirement. That same day, the NLRB issued a press release on the decision, noting: 'The same question has been raised in five more cases pending before the Supreme Court, and 69 that 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.' The decision leads Iowa employers to ponder several questions: how does the decision affect the parties to the prior adjudications? For the cases currently on appeal, it appears the decisions of the Board will be vacated and remanded to the now-four-member Board for reconsideration. But what happens to the cases that are 'final'?  Must the parties to prior final cases petition the Board for reconsideration? It may not be worth the time and expense for parties to challenge prior final judgments. Will the Board automatically reopen each of those cases? What is the precedential effect of the decisions issued in that two-year period? Might the Board simply issue a blanket order adopting those decisions on behalf of the now-four-member Board?  Labor law experts have not reached any firm conclusions about the implications of this case, but it appears the decision is likely to prompt a significant amount of litigation.  

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