On June 17, 2010, in New Process Steel LP v. NLRB, U.S., No. 08-1457, 560 U.S. __ (2010), the United States Supreme Court ruled that the National Labor Relations Board (NLRB) lacked authority to act through two members.
The case arose after the expiration of three Board Members’ terms, which reduced the NLRB from its fully staffed level of five members down to only two members. Between early January 2008 and late March 2010, more than 600 decisions were issued by Board Members Wilma B. Liebman (D) and Peter C. Schaumber (R). The Court’s ruling has the effect of invalidating all of the decisions issued by two-member panels of the NLRB during this time period.
On appeal from a decision of the U.S. Court of Appeals for the Seventh Circuit, a majority of the Supreme Court in New Process Steel found that requiring three members as the minimum number of Board Members was consistent with Congressional intent. By ruling against the validity of action taken by the two-member panels, the Supreme Court sided with only the District of Columbia Circuit Court of Appeals and against five other United States Courts of Appeal, all of whom had examined the issue.
Though the direct impact of this decision will be felt by the individual parties to the more than 600 cases decided by the NLRB’s two members, the repercussions may be far reaching. By essentially invalidating more than two years of action by the NLRB, this decision will cast light on the perceived inability of the agency to protect employees and unions from unlawful employer conduct. This ruling may spark interest in broader labor law reform that would address perceived problems at the NLRB, while avoiding the politically charged debate which has ensued over the Employee Free Choice Act.
Though it is anyone’s guess whether any true labor law reform will emerge as a result of the New Process Steel case, employers of all sizes should keep abreast of developments in this regard.
If you have any questions about this decision or what you company can do to minimize risk, please contact any member of Baker Hostetler’s Labor Relations Team.
Authorship Credit: Joseph C. Devine
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