Supreme Court May Rule on Questionable Validity of 500 Decisions Made by Two-Member NLRB

By Mike Grubbs

The National Labor Relations Act specifies that the National Labor Relations Board, the appellate judicial body that reviews the decisions of administrative law judges on unfair labor practice cases, shall consist of five members.  29 U.S.C. § 153(a).  The Act also explicitly authorizes the Board to delegate its authority to a group of three or more members.  29 U.S.C. § 153(b).  But, what happens when the NLRB, due to political changes, drops below the three-member requirement?  Can the Board still validly issue rulings in unfair labor practice cases?  These questions may be definitively answered soon, if the U.S. Supreme Court accepts the NLRB's recent petition for certiorari.

Before December 2007, the Board consisted of five members, as the Act directs. On December 16, 2007, one member's term expired.  On December 20, 2007, the remaining four members delegated the Board's powers to a three-member group.  The Board took this action knowing that two of the members' commissions would expire soon thereafter.  Since January 1, 2008, the Board has been functioning with only two members, Chairman Liebman and Member Schaumber.

Several employers that were found by the Board to have committed unfair labor practices have challenged the validity of such decisions in the federal courts of appeals, contending that the NLRB cannot lawfully function without three members. The First, Second, and Seventh Circuits have rejected this argument, holding that a two-member Board has the authority to act. The D.C. Circuit, however, accepted the argument, in the case of Laurel Baye Healthcare of Lake Lanier Inc. v. NLRB.  Because most NLRB rulings may be appealed to the D.C. Circuit, the Laurel Baye ruling is viewed as a significant victory for employers.

With this split in the circuit courts, the NLRB filed briefs with the U.S. Supreme Court on September 29, 2009, asking it to uphold the authority of the two-member Board and settle the question of whether the NLRB is authorized to issue decisions while three of its five seats are vacant.

At stake are an estimated 500 rulings that the two-member Board has issued since January 1, 2008. 

The NLRB made its requests in two cases that depict the conflicting circuit court decisions, one upholding and one overturning the Board's two-member authority.  The Board's filings are available at http://www.nlrb.gov/nlrb/shared_files/documents/Laurel_Baye_Pet_Final.pdf, and http://www.nlrb.gov/nlrb/shared_files/documents/New_Process_Steel_08-1457.pdf.

The Supreme Court has not yet agreed to examine the issue.

Regardless of whether the Supreme Court agrees to hear these cases, the questions surrounding the NLRB's authority going forward should be cleared up with President Obama's nominations of Craig Becker, Mark G. Pearce and Brian E. Hayes to fill the vacant NLRB seats, if those nominations are confirmed by the Senate.  Even so, adding new Board members will not cure the two-member Board's decisions, if that Board was acting without authority.  The question of what to do with cases decided since January 1, 2008, will remain unanswered until and unless the Supreme Court decides the matter.

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© 2009 Sherman & Howard L.L.C.                                                 October 12, 2009