Supreme Court Ruling Against NLRB Results in Remand of Almost 100 NLRB Decisions

Date: July 22, 2010

On June 17th, the U.S. Supreme Court ruled that the National Labor Relations Board was not authorized to issue decisions in pending cases during a twenty-seven month period in which three of its five seats were vacant. The ruling was a victory for the employer in the case, New Process Steel, which had challenged an adverse ruling by the Board. But more significantly, the ruling of the Supreme Court puts into question almost 600 decisions issued by the two-member Board during a period of more than two years.

The central issue in the case was over the interpretation of a provision in the National Labor Relations Act, which provides the Board with authority to delegate its powers to a quorum of at least three members. The Board made such a designation in late 2007 while there were still four members on the Board. Within a short time period, however, the Board was reduced to only two members when the terms of the two other members expired. From there, the Board took the position that once a three member group was designated to handle cases, two of its members could constitute a proper quorum.

From January 2008 until late March 2010, therefore, the two-member Board continued to issue decisions in those cases where those two members could agree on the outcome. No decisions issued in those cases where the members could not agree. Still, over this two plus year time period, the Board issued almost 600 decisions, one of which was the New Process Steel case which made its way to the Supreme Court.

In a 5-4 decision, the Supreme Court held that under Section 3(b) of the National Labor Relations Act, a delegated group must have at least three members in order to exercise the delegated authority of the Board. In a single decision, the Supreme Court called into question the almost 600 decisions issued during the period in which only two members sat on the Board.

In response to the Court's decision, the Board issued a press release which noted that

  • [t]he same question [in New Process Steel] 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.

Now that the Board has four members, the cases may be properly reviewed upon remand. A July 1 press release from the Board stated just that, noting that each remanded case will be reviewed by a three member panel.

A more interesting question is the fate of approximately 500 cases that are final, meaning no appeal was taken or the process had concluded. At the time of the Supreme Court decision, only 96 of the two-member cases were on appeal. Res judicata principles would ordinarily preclude reopening a final judgment. However, where the body issuing the decision lacked the jurisdiction to issue the decision in the first place, the decision may still be subject to attack. From a practical standpoint, even if the cases were successfully reopened, the parties may find themselves back where they started even with a decision from a three-member panel. So the practical effect of the decision remains to be seen.