As a result of two contradictory opinions issued today, over 300 decisions issued by the National Labor Relations Board (NLRB or “Board”) in 2008 are potentially in jeopardy because, according to one federal circuit, they were issued by a two-member panel without the authority to issue binding opinions.
By way of background, the NLRB is a federal agency that administers the National Labor Relations Act (NLRA), which governs the relations between private employers and unions. It is made up of five members. Yet, the NLRA allows for the five-member Board to delegate power to issue rulings and opinions to a three-member panel. On December 28, 2007, the Board had only four members. On that date, the four-member Board voted to delegate all of its power to a three-member panel. Just three days later, the terms of two of the four members that made the vote to delegate expired, leaving only two remaining members. During all of 2008 and early 2009, the Board had three vacancies for which Congress and the President clashed on the nomination of replacement Board members. Yet the two-member panel issued over 300 published and unpublished opinions in the labor relations area, proceeding as a quorum of the three-member panel—with two of the three required members of the three-member panel to whom the Board delegated its power.
The U.S. Court of Appeals for the D.C. Circuit ruled today that those decisions were invalid because the Board, including the panel to whom it delegated its power, lacked authority to act without at least three members. Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, Nos. 08-1162, 08-1214 (D.C. Cir. May 1, 2009). In reaching this conclusion, the D.C. Circuit relied on a provision of the NLRA requiring the Board to have a quorum of the Board itself (i.e. three members) “at all times” in order to be able to act. The D.C. Circuit held that, in order for two members of a three-member panel to act as a quorum under the statute, the Board itself must have at least three members; otherwise, the panel’s power is suspended along with the power of the Board itself. This decision invalidated all of the NLRB opinions issued in 2008 and early 2009.
The U.S. Court of Appeals for the Seventh Circuit reached the opposite conclusion in another decision issued today, New Process Steel, L.P. v. NLRB, Nos. 08-3517, 08-3518, 08-3709 & 08-3859 (7th Cir. May 1, 2009). It held that the opinions of the two remaining members were valid because the plain meaning of the statute permits the Board to delegate power to a three-member panel and then also permits a three-member panel to proceed as a quorum despite the absence of one of the members. The Seventh Circuit ignored the quorum requirement provision for the Board itself in its reasoning.
The First Circuit also reached this same conclusion in March 2009. See Northeastern Land Servs. Ltd. d/b/a NLS Group v. NLRB, No. 08-1878 (1st Cir. Mar. 13, 2009). The Second and Eighth Circuits also have pending cases on this same issue. Given the split in authority and the potential impact of these decisions, it is likely that the U.S. Supreme will weigh in on this issue. In the meantime, employers should proceed with caution in relying on NLRB opinions issued in 2008 and early 2009 in taking actions.