(CN) – A Supreme Court decision on Thursday unraveled about two years’ worth of decisions by the National Labor Relations Board, which has resolved more than 500 disputes with just two members, despite its three-member quorum.
“If Congress wishes to allow the Board to decide cases with only two members, it can easily do so,” Justice John Paul Stevens wrote for the 5-4 majority. “But until it does, Congress’ decision to require that the Board’s full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than swept aside in the face of admittedly difficult circumstances.”
Stevens said the law “does not authorize the Board to create a tail that would not only wag the dog, but would continue to wag after the dog died.”
The board is supposed to have five members, but has been operating with three vacancies since 2008, after Democrats in Congress refused to ratify former President George W. Bush’s nominees, whom they considered to be too corporate-friendly.
The National Labor Relations Act stipulates that the board needs a three-member quorum to issue opinions and orders.
Nonetheless, the two-member board has settled more than 500 cases since Jan. 1, 2008, when a third board member’s term expired.
The legitimacy of the board’s decisions has divided federal appeals courts, with the D.C. Circuit ruling that the two-member board lacked quorum and the 7th Circuit deciding the opposite.
When the board had four members, they delegated the board’s powers to a three-member group. Government lawyers had advised them that if they did so, the three-member group “could continue to issue decisions and orders as long as a quorum of two members remained.”
But the Supreme Court disagreed, saying a vacancy in the three-member group invalidates the delegation itself.
“[T]hat only two members must participate to transact business in the name of the group does not establish that the group itself can exercise the Board’s authority when the group’s membership falls below three,” Stevens wrote.
He cited a 1947 law that expanded the board from three members to five, and its quorum from two members to three.
“[I]f Congress had wanted to allow the Board to continue to operate with only two members, it could have kept the Board quorum requirement at two,” he wrote.
Dissenting Justice Anthony Kennedy rebutted this argument, saying, “There is nothing inconsistent about Congress preferring Board decisions to be made by three members and advancing that preference through statutory requirements, while at the same time providing exceptions for suboptimal circumstances, such as those presented here.”
He acknowledged that a two-member board “was not ideal,” but said the law clearly allows the downsized board to issue orders.
“The court’s revisions leave the Board defunct for extended periods of time, a result that Congress surely did not intend,” Kennedy wrote.
He was joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.
The ruling means that the more than 500 cases decided since 2008 by board Chair Wilma Liebman, a Democrat, and fellow board member Peter Schaumber, a Republican, will have to be reopened.
New Process Steel had argued that the two-member board lacked the authority to rule against it.
The Supreme Court’s decision reversed the 7th Circuit’s ruling for New Steel.