U.S. Supreme Court Rules Two-Member NLRB Acted Illegally

June 21, 2010

On June 17, 2010, the United States Supreme Court took many observers by surprise. The Supreme Court ruled in New Process Steel, LP v. NLRB, No. 08-1457, that the National Labor Relations Board lacked authority to issue decisions during the 27 months it operated with only two members. The Board operated with only two members between January 2008 and March 2010, while three of its seats remained vacant. The Two-Member Board issued nearly 600 unauthorized decisions. 

Now that President Obama has appointed a majority of the NLRB's members, we are likely to see significant changes in how the NLRB interprets federal labor law.  New Process Steel increases the new Board's opportunities to reinterpret the National Labor Relations Act by returning to the Board for fresh decisions cases decided before the Obama majority came into office, then challenged in the courts.

The five cases pending before the Supreme Court and the 69 cases pending before the Courts of Appeals will likely be remanded back to the Board. The Board – which now has four members as the result of interim appointments by President Obama in March – could remand the cases for new hearings. The Board could also simply issue new decisions that confirm the earlier ones.

The fate of the cases already finalized is unknown. For example, will employers who have been ordered to bargain with a union simply stop bargaining? Will an employer ordered to reinstate an employee, discharge that employee a second time? Will a union ordered to cease picketing, resume its picketing? It is unclear how the Board will handle these decisions.  Parties will have to determine whether it is even in their interest to attempt to reopen these cases. 

In issuing the 5-4 opinion for the Court, Justice Stevens stated, "We are not insensitive to the Board's understandable desire to keep its doors open despite vacancies. Nor are we unaware of the costs that delay imposes on the litigants.  If Congress wishes to allow the Board to decide cases with only two members, it can easily do so.  But until it does, Congress' decision to require that the Board's full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than be swept aside in the face of admittedly difficult circumstances."

If you are the subject of an NLRB decision rendered between January 2008 and March 2010, New Process Steel may directly impact your legal obligations. For all employers, New Process Steel undermines any legal guidance these decisions would otherwise provide.

Only time will tell the full impact of the Supreme Court's decision. For further information regarding this Legal Update, please contact Ray Neusch or any other attorney in Frost Brown Todd's Labor and Employment Group.