Supreme Court Agrees to Consider Legality of Two-Member NLRB Rulings

On November 2, 2009, the U.S. Supreme Court granted certiorari in New Process Steel LP v. NLRB, Supreme Court Docket No. 08-1457 to consider whether the National Labor Relations Board (NLRB), which is to comprise five members but has operated with just two members for the past 22 months, has a sufficient quorum and the legal authority to issue two-member rulings in unfair labor practice and representation cases.

The NLRB’s membership shrunk to only two following the expiration of the terms of its other members in late 2007. The two current members, Wilma B. Liebman (D) and Peter C. Schaumber (R), have issued approximately 500 published and unpublished rulings since then. In most of those cases, the parties have accepted the NLRB’s rulings and have adhered to its orders. However, other parties have challenged the legality of two-member rulings in dozens of cases pending in the federal appeals courts. The appellate circuits currently are split 3-1, with three circuit courts (First, Second, and Seventh) finding that decisions by only two NLRB members are valid. However, the D.C. Circuit Court of Appeals determined that a two-member Board does not constitute a proper quorum as defined by the NLRA, and, thus, cannot issue decisions.

Although the NLRB has operated with fewer than three members previously, it has never done so for such an extended period of time. Moreover, in those previous situations, the NLRB upon obtaining new members approved of the two-member decisions before judicial review, obviating any potential legal challenge.

Were the Supreme Court to invalidate the NLRB’s two-member decisions, there are a number of potentially significant ramifications that have never been addressed. These include:

1. What is the validity of any collective bargaining agreement reached as the result of an order by the two-member Board?
2. What is the validity of any union certification approved by the two-member Board?
3. If a party failed to raise the two-member Board issue before the Board, has the party waived its right to do so?
4. What is the validity of any unfair labor practice hearing or representation case hearing conducted pursuant to direction from the two-member Board?

We will continue to monitor developments regarding the New Process Steel case. A decision by the Supreme Court is not expected for several months. If you have any questions about the potential implications of New Process Steel, or if you have an NLRB matter that was decided by the two-member Board or currently have a matter pending before the NLRB, please contact the Seyfarth attorney with whom you work or any Labor & Employment attorney on our website.