June 17, 2010

Supreme Court Decides New Process Steel, L.P. v. National Labor Relations Board

On June 17, 2010, the Supreme Court decided New Process Steel, L.P. v. National Labor Relations Board, No. 08-1457, holding that the five-member NLRB must have at least three members seated in order to issue decisions. The Court invalidated decisions issued by a two-member Board from late 2007 until March 2010.

When fully constituted, the NLRB has five members. Because vacancies occur as members resign or the Senate has not acted on presidential nominations to the Board, the National Labor Relations Act (NLRA) provides that a quorum of three Board members may transact business. Late in 2007, the Board already had one vacancy, and it was anticipated that two more vacancies would occur at the end of the year. Therefore, as permitted by section 3(b) of the NLRA, 29 U.S.C. § 153(b) the four sitting members delegated the Board's powers to a group of three named members of the Board, one of whose terms ended soon thereafter. For 27 months from the end of 2007 until new members were appointed in March 2010, the Board's two remaining members functioned as a two-member quorum of the three-member delegee group, issuing numerous opinions on behalf of the Board, including two sustaining unfair-labor-practice claims against New Process Steel. New Process appealed those decisions, arguing that the two-member delegee group had no authority to issue orders. The Seventh Circuit rejected this argument, holding that the two members were a valid quorum of a three-member group to which the Board had properly delegated its powers.

The Supreme Court reversed, holding that a delegee group under section 3(b) must maintain a constant membership of at least three to exercise its delegated authority on behalf of the full Board. This construction of the statute, the Court said, is the only way to give full effect to all of its provisions, including: the authorization to delegate the full Board's powers to a three-member group; a clause providing that a vacancy in the Board's membership does not impair the right of the remaining members to exercise the Board's powers; and the requirement that "three members of the Board shall, at all times, constitute a quorum of the Board." Although section 3(b) also provides that two members of a three-member delegee group comprise a quorum of the group, that provision allows two members to act only if the delegee group otherwise includes three confirmed Board members. Any other reading would circumvent the three-member quorum provision and allow two members of a delegee group to act permanently for the Board—in the Court's words, to act as "a tail that would not only wag the dog, but would continue to wag after the dog died." If this had been Congress's intention, it could have used straight-forward language saying so.

Justice Stevens delivered the opinion of the Court, in which Chief Justice Roberts and Justices Scalia, Thomas, and Alito joined. Justice Kennedy filed a dissenting opinion, in which Justices Ginsburg, Breyer, and Sotomayor joined.

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