An unexpected Supreme Court ruling has vacated hundreds of labor
decisions, casting years of labor precedent into doubt. From 2008
until the middle of 2010, a two-member panel of the National Labor
Relations Board (the "Board") issued almost 600 decisions
in labor cases. In its June 17, 2010 decision in New
Process Steel LP v. NLRB, however, the Supreme Court
held that the National Labor Relations Act (the "Act")
did not authorize decisions by a two-member panel. In so doing, the
Supreme Court has invalidated more than two years of Board
The Board, the federal agency that rules on labor cases,
typically consists of five members. However, long-settled law has
allowed the Board to operate with only three members, known as a
"quorum of the Board." The "quorum" function
stems from the Act, which states that when there are vacancies on
the Board, the remaining members may "exercise all of the
powers of the Board, and three members of the Board shall, at all
times, constitute a quorum of the Board."
In December of 2007, the Board consisted of four members. Two of
those members' terms were about to expire however, and, due to
executive inattention and confirmation gridlock, no replacements
were pending. Anticipating the vacancies, the Board delegated its
powers to a three person "quorum." The three-person
quorum in turn delegated its powers to just two members, Wilma B.
Liebman (D) and Peter C. Schaumber (R). Starting in January 2009,
Liebman and Schaumber began issuing opinions in labor cases as a
two member panel. They did so until late March 2010, ultimately
issuing approximately 600 decisions.
Nationwide, approximately 75 losing parties challenged the
two-member Board decisions in court. Some of these challenges were
heard at the appellate level, and a circuit split developed. The DC
circuit, forecasting the eventual Supreme Court decision, held that
the two-member panel was invalid. The First, Second, Fourth and
Seventh circuits disagreed, however, and held that the two-member
"quorum" was valid under the Act.
Due in part to the weight of appellate precedent, most observers
believed the Court would uphold the validity of the two-person
delegation, and the Board itself appeared confident its position
would prevail. Writing for the majority, however, Justice Stevens
ruled that the Act does not permit the Board to issue decisions
with only two members. Notably, Justice Stevens, one of the
court's liberal stalwarts, was joined by the Court's
conservative bloc of Justices Roberts, Scalia, Thomas, and Alito. A
dissent by Justice Kennedy was joined by Justices Ginsburg, Breyer,
The full impact of the decision is not yet known. It is not
clear, for instance, whether new Board appointees Becker (D) or
Pearce (D) will join a panel with Liebman and Schaumber to reassess
the cases, or if they ultimately will be resolved in another
manner. The new Democratic majority on the Board may result in some
divergent outcomes. Whatever the ultimate result, the Supreme Court
decision has caused a scramble by the Board, labor attorneys, and
parties to the affected decisions. Employers with unionized
workforces, particularly those who have been involved in
proceedings at the Board in the past few years, should contact
their labor attorneys for an assessment of the likely impact of
this decision on their businesses.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
As early as next week, the Department of Labor is expected to issue its final rule implementing revisions to the regulations governing the application of the FLSA's "white collar" exemptions from overtime and minimum wage.
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).