Supreme Court Declares Two-Member Board Did Not Have Authority To Issue Orders

On June 17, 2010, in New Process Steel, L.P. v. NLRB, the U.S. Supreme Court addressed whether, following a delegation of the Board’s power to act to a three-member panel, two members of the three-member panel had the authority to issue orders after the third member left the Board. The Supreme Court ruled that the two-member panel did not have such authority.

In December 2007, in anticipation of Board member vacancies, the Board delegated its authority pursuant to Section 3(b) of the National Labor Relations Act (NLRA) to a three-member panel.  At the time this occurred, there were only four of a possible five Board members. Shortly thereafter, their number was reduced to three. When the term of one of the three Board members expired at the end of 2007, a two-member quorum of the three-member panel continued to issue decisions.

On an appeal challenging the two-member panel’s authority, the Seventh Circuit ruled that the two members constituted a valid quorum of the three-member panel, to which the Board legitimately delegated its powers. The Supreme Court disagreed, holding that Section 3(b) of the NLRA requires a delegated three-member panel to maintain three participating members at all times to exercise the authority delegated by the Board. Accordingly, the two members did not have authority to issue orders.

Over a period of 27 months, the two-member panel issued about 600 decisions, all of which now may be invalid.

© 2010 Kiesewetter Wise Kaplan Prather, PLC