As we reported earlier, there is a split in the federal courts of appeals regarding whether the National Labor Relations Board (NLRB) has authority to issue binding opinions while it is operating with only two members. Since that post, another federal circuit has weighed in on the issue. 

The NLRB is the federal agency charged with governing relations between private employers and unions and administering the National Labor Relations Act (NLRA). Ordinarily, the NLRB has five members and frequently delegates power to issue rulings and opinions to three-member panels. In order for the NLRB itself to act, it must have a three-member quorum. In late December 2007, the NLRB had one vacancy and two members whose terms were nearing expiration. Congress and the President clashed on the nomination of replacement NLRB members, and filling the vacancies became unlikely (and still has not occurred). Just before the expiration of the two members’ terms, the four-member NLRB delegated all of its power to a three-member panel, which included the two members whose terms were not set to expire. After the two departing members’ terms expired, the two remaining members of the three-member panel continued to issue opinions, relying on statutory language in the NLRA allowing a three-member panel to proceed as a quorum in the absence of one of its members.

During this period of time and to the date of this post, the two-member quorum of the panel has issued more than 400 opinions. Those opinions were challenged in several federal court actions arguing that, in order for two members of a three-member panel to proceed as a quorum, the NLRB itself must have a quorum of three members; otherwise, the NLRB and the panel lack authority to act. The First and Seventh Circuits held that the two-member panel had authority to issue opinions. The D.C. Circuit, however, held that it did not.

In Snell Island SNF LLC v. NLRB, No. 08-3822 (2d Cir. June 17, 2009), the U.S. Court of Appeals for the Second Circuit joined the First and Seventh Circuits on this issue holding that the two remaining members of the panel did have authority to issue binding opinions. It reached this result by relying on slightly different reasoning from that of the First and Seventh Circuits. Those courts relied primarily on the unambiguous plain text of the statute. The Second Circuit, instead, held that the plain text was ambiguous and deferred to the NLRB’s interpretation of the NLRA. The Court deferred to the NLRB’s interpretation under the United States Supreme Court’s decision in Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), which requires deference to agency statutory interpretation,because the NLRB is the agency charged with administering the NLRA, and the court found the NLRB’s interpretation reasonable.

On May 27, 2009, the NLRB filed a petition with the D.C. Circuit for re-hearing by the entire D.C. Circuit (en banc) of the decision holding that the NLRB lacked authority.

Given the split in authority and the potential impact on the more than 400 NLRB decisions issued in 2008 and 2009, it is likely that the United States Supreme Court will weigh in on this issue. Unless and until that happens, employers should proceed with caution when relying on NLRB decisions issued after December 31, 2007 by this two-member quorum.