As an update to my earlier blog postings (Supreme Court Agrees to Consider Legality of Two-Member NLRB Rulings, Second Circuit Agrees with First and Seventh Circuits that the Two-Member NLRB Had Authority to Issue Opinions, and Two Conflicting Federal Circuit Court Decisions Issued Today Call Into Question all NLRB Opinions Issued in the Past Year), last Thursday, the Supreme Court settled the issue of whether the two-member National Labor Relations Board (NLRB) that existed from January 1, 2008 to March 26, 2010 had the authority to issue binding opinions. 

In a surprise 5-4 decision, the Supreme Court held that the two member panel NLRB did not have authority to issue opinions—a decision that affects nearly 600 opinions issued during a two-year period of time. Justice Stevens, joined by Chief Justice Roberts and Justices Scalia, Thomas, and Alito, wrote the opinion for the Court. Justices Kennedy, Ginsburg, Breyer, and Sotomayor dissented.

Recall that, prior to this decision, there was a split between the federal courts of appeals regarding whether the two-member NLRB had authority to issue opinions. The First, Second, Fourth, Seventh, and Tenth Circuits had previously held that it had the authority, while the D.C. Circuit held that it did not.


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, which had only four members at the time, voted to delegate all of its power to a three-member panel. Three days later, the terms of two of the four members that made the vote to delegate expired, leaving only two members. During all of 2008, 2009, and early 2010, the Board had three vacancies while Congress and the President clashed on the nomination of replacement Board members. On March 27, 2010, President Obama made two recess appointments to the NLRB, bringing its numbers back up to four members. By then, the two-member panel had issued nearly 600 decisions, acting as a quorum of the three-member panel. The Supreme Court held that the two-member NLRB, lacked the authority to issue those decisions. 


The Impact of this Decision

This decision has a widespread impact on labor relations law. Every decision issued by the NLRB from January 1, 2008 to March 26, 2010—nearly 600 decisions—was issued by an NLRB without the authority to do so. It is likely that the decisions that were challenged in the federal court system will be vacated since the Court held that the Board lacked the authority to issue them. This means that all of those decisions will have to be reheard by the NLRB, which now has a sufficient number of members to issue opinions. 


As for those decisions not challenged, it is less clear. There may be an argument that the parties waived the right to challenge them as invalid by not appealing or that the judgments are final and cannot be reopened. Yet, the defect in these decisions goes to the power of the Board to issue the decisions, and thus, it may not be possible to waive.


The precedential effect of these decisions is similarly unclear. The current NLRB could issue an order accepting all of them as valid precedent (provided they have the authority to do that, something that is not clear), or the decisions could simply have no precedential effect at all and be reexamined as the issues arise in new cases. Regardless, the fall-out from this decision is likely to be significant and may be largely unsettled for much of 2010.