Wyatt Employment Law Report

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Supreme Court Issues Decision Invalidating Two-Member NLRB Decisions

By Edwin S. Hopson

On June 17, 2010, in New Process Steel, LP v. NLRB, 560 U.S. ____ (2010), the U.S. Supreme Court, in a 5 to 4 decision, ruled that the National Labor Relations Board could not operate as a two member Board due to vacancies which reduced its number from five members down to two.  The majority opinion by Justice Stevens was supported by Chief Justice Roberts, and Justices Scalia, Thomas and Alito.  Justice Kennedy wrote a dissent which was joined in by Justices Ginsberg, Breyer and Sotomayor.

 Toward the end of December, 2007, when it appeared that the Board would be reduced from four members to two due to vacancies occasioned by expiring recess appointments, the four members delegated their authority to a three member panel consisting of Members Liebman, Schaumber and Kirsanow, although Kirsanow’s recess appointment was about to expire.  It was believed that although Kirsanow was about to depart, that the remaining two members were a quorum of the three member panel to which the delegation had been made.  This was based primarily on an opinion from the Office of Legal Counsel of the U.S. Department of Justice, and limited prior practice.  The four member Board also delegated the Board’s authority to authorize certain litigation to the Board’s General Counsel.  That delegation was not under review by the Supreme Court in the instant case.

 Over the next 27 months, the Board operated with only two members and issued close to 600 cases.  The validity of those decisions appears now to be nonexistent.

 The majority construed Section 3(b) of the National Labor Relations Act to permit two member Board decisions only when the three member panel was reduced to two based on disqualification rather than vacancy.

 How the NLRB will deal with the almost 600 cases remains to be seen.  It is also possible that the Board’s 2007 delegation to the General Counsel of certain authority to litigate cases under the NLRA may now be challenged.