U.S. Supreme Court Rules That a Two Member National Labor Relations Board Lacked Authority to Issue Decisions

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June 18, 2010

On Thursday, June 17, 2010 the U.S. Supreme Court ruled that the National Labor Relations Board (NLRB) did not have authority to issue any decisions during the period January 1, 2008 through March 27, 2010. During that 27- month period, the NLRB operated with only two members. Normally, the NLRB is a five-member board.
In late 2007, the Board was operating with only four members and one vacancy. However, the Board anticipated that there would be two more vacancies at the end of the year as a result of recess-appointments expiring. This would leave the Board with only two members which was too few to meet the NLRB’s quorum requirement. The four sitting members decided to take action to preserve the NLRB’s authority to function. The Board delegated to three members of the Board all of the Board’s powers under Section 3 (b) of the National Labor Relations Act (NLRA) which authorizes the NLRB to delegate its powers to a “group of three or more members.” At that time the Board expressed its opinion that its action would permit the two members who would remain on the Board after the recess-appointments expired to exercise the authority of the Board because the remaining two members would constitute a quorum of the three member group.
While operating with only two members, the NLRB issued almost six hundred decisions. During that period, losing parties appealed dozens of NLRB decisions to the federal courts arguing that the two member Board lacked authority to issue decisions. The Supreme Court agreed to take up the question after five Circuit Courts of Appeal ruled in favor of the Board and one ruled against it. The same question is pending in five more cases pending before the Supreme Court and another sixty-nine are pending in the Court of Appeals.
The case which the Supreme Court ruled involved a steel company plant in Indiana that had unilaterally withdrew recognition of a union. The two-member Board had ordered the employer to recognize the union, honor a contract negotiated with the union and make all employees whole for any income lost when the employer refused to honor the contract.
On March 27, 2010 President Obama recess-appointed two additional members. Therefore, the current four member Board will decide the appropriate action needed to further consider and resolve pending cases.
The Supreme Court decision was another 5-4 decision. The decision was authored by Justice Stevens who was joined by Chief Justice Roberts, and Justices Scalia, Thomas and Alito. Justice Kennedy filed a dissenting opinion which was joined by Justices Ginsburg, Breyer and Sotomayor.
If you have questions regarding the above, please contact any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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