New Process Steel, LP v. Nat'l Labor Relations Board, 2010 U.S. LEXIS 4973 (June 17, 2010)

The Supreme Court holds that the National Labor Relations Board's delegation clause requires a delegated group to maintain a membership of three.

In New Process Steel, the Supreme Court determined that the National Labor Relations Board ("NLRB") did not have the authority to issue orders when the Board was comprised of only two members between January 2, 2008, through March 27, 2010. In 2007, there were four members of the NLRB and it anticipated two additional vacancies. As a result, the members delegated all of the Board's powers to a three-member group of the Board which, the NLRB opined, would allow the two remaining members to exercise the powers of the Board since two members would constitute a quorum. Following the expiration of the third member's term, the NLRB was left with two members and, over the next 27 months, decided close to 600 cases, including one involving New Process Steel. In reversing the decision of the NLRB, the Supreme Court held that following a delegation of the Board's powers to a three-member group, two members may not continue to exercise the delegated authority once the group's membership falls to two. In so holding, the Court reasoned that Congress could have used straightforward language if it intended to authorize two members alone to act for the Board on an ongoing basis, but it did not, and stated that the "Board quorum requirement and the three-member delegation clause should not be read as easily surmounted technical obstacles of little to no import." Moreover, the delegation clause "does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag the dog after the dog died." The bigger question following the Supreme Court's decision is what will occur with the close to 600 cases decided by the NLRB during the period when NLRB likely did not have the authority to issue the decisions.

Case Law Alert - 3rd Qtr 2010