Many of our hospitality industry clients presently have cases pending before or have recently had cases decided by the National Labor Relations Board (hereinafter "the Board" or "NLRB"). New Process Steel L.P. v. National Labor Relations Board, argued before the United States Supreme Court a few days ago, will decide whether some or all of 586 NLRB decisions issued since late 2007 by a two-member Board will need to be re-litigated.
At full-strength the Board has five members. Ordinarily it delegates its authority to three-member panels so that it can issue more decisions than it would if all decisions were decided by the full Board. In late 2007, following the expiration of the terms of two members and the resignation of a third, the remaining two-member Board began issuing decisions.
In New Process Steel, the Court is asked to decide whether the two-member Board has the authority to issue decisions. The case turns on the meaning of Section 3(b) of the National Labor Relations Act which provides, in relevant part, that the "Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . and three members of the Board, shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof."
Counsel for New Process Steel argued that Section 3(b) requires the Board to have at least three members at all times for it to issue decisions; whereas, the Deputy Solicitor General argued that the "plain text" of Section 3(b) permitted the Board to delegate its powers to a three-member group and for a two-member quorum of that three-member group to issue decisions.
Both counsel were aggressively questioned by Scalia, Breyer, Alito, and Roberts. The justices' concern centered on (1) the effect a finding that the two-member Board lacked authority to decide cases would have on Board operations, (2) the impact a two-member Board had on the Board's decision making process and the Board members' ability to vigorously debate the issues, and (3) whether a finding that a two-member Board has the authority to issue decisions in this case might permit the Board to effectively exclude management or labor side attorneys from the decision-making process whenever their party does not occupy the White House. The nature of the questioning makes it uncertain how the Court will rule in this case.
If you have any questions concerning how the Court's decision in New Process Steel may impact your business, please do not hesitate to contact a member of the Hospitality Group or Robert Murphy at (619) 696-6700.