New Process Steel, L.P. v. National Labor Relations Board: Three Months Later

by Charles Ott September 23 2010, 20:02

On June 17, 2010, the Supreme Court held in New Process Steel, L.P. v. NLRB that over 600 decisions made by two-member panels of the National Labor Relations Board (NLRB) must be vacated and reheard because the procedure of having two-member panels hear a dispute did not comply with the National Labor Relations Act (NLRA). The majority and the dissent both based their decisions on their interpretation of the statute. However, in his dissent, Justice Kennedy also highlights the fact that when Congress passed the NLRA, they surely did not intend to allow the Labor Board be left defunct for a long period of time.

While labor unions in the United States have been in a serious decline for many years, the Bureau of Labor Statistics reports that in 2009 there were still 7.9 million workers in the private sector that belonged to a union. These 7.9 million people do not have the option of going to District Court in order to enforce the rights contained in the NLRA. The worker's right to have full process and the costs and benefits which go along with it, for violations of their statutory rights, has been traded for the ability to have their disputes adjudicated quickly and cheaply. Allowing the President or a member of Congress to block their right of adjudication for a period of time by either refusing to appoint or confirm new members would contravene the purpose of the statute. These workers would have no other remedy because their access to courts is blocked until they exhaust all administrative remedies through the NLRB(?).

So now that the labor board has begun reviewing the cases which were decided by the two member panel, almost all of the decisions have either been an affirmation without amendment of the two member panel's decision or an order to show cause in the case of a refusal to bargain complaint. Almost of all these decisions included almost identical language except for the two decisions which amended the original decision. The amended decisions did not alter the original holding, but rather they added to the original decision. There was only one decision where one of the two board members who made the original decision dissented and the dissent was based on the amendment to the decision.

The outcome of these decisions can be explained two ways. The first explanation could be that since the two original board members were on the three member panel, they agreed, explicitly or implicitly, to just uphold all of their decisions and overrule the third member, if the third member disagreed. This is probably not accurate since there was a decision which was amended and one of two members who originally made the decision dissented.

Another explanation is that the third member of the delegation really had no effect on the outcome. The third member of the panel would not actually add to the range of outcomes but rather simply serves as a tie breaking vote, should there be a tie. Since all of the decisions were unanimous, there was no need for a tie breaking vote and no need for a third member.

Still, it is important to note that there is a strong argument for reversal of two member Labor Board's decisions other than the strictly textual one espoused by the majority. While the Labor Board technically has the power to delegate their decision making ability to two members under certain circumstances, it is not ideal and it is not intended for a long period of time. Since the typical decision making body of the board is three members, a two member board reduces the range of possible outcomes and as a result, the best outcome may not be the one which is decided upon. While the actual outcomes have increased from two (side 1/side 2) to three (side 1/side 2/tie), the range of outcomes in terms of the basis of the decision decreases. Imagine a delegation of three members where one is pro-management and two are pro-labor. While the pro-management member of the board might agree with the outcome, he or she may not agree with the majority's reasoning. If it is a two member panel, with one member being pro-management and one pro-labor, the outcome may be the same but the reasoning behind the decision would be more conservative. While there may be an even better outcome with more members than three, the number three was decided upon for a reason. Due to the limited number of outcomes, it would probably be inefficient to raise the number of board members on any given decision.

However, the situation in this case was the best scenario for this delegation to occur. Both of the board members who remained were on opposing sides of the labor-management continuum. The decision to delegate was made by four members of the board. The decisions which resulted from this delegation were decisions where both a person who was labor oriented and a person who was management oriented agreed. While the optimal situation would have included another management or labor oriented member, it can not be said that either side was rubber stamping decisions because of their bias.

A driving principle behind the NLRA is that justice delayed is justice denied. By overturning the Labor Board's decisions, they delayed and as a result denied justice for many workers. Since the Labor Board did not change their mind on any of the decisions, justice was sacrificed for no real purpose. It will be interesting to see in the future whether or not the President or members of Congress decide to use their newly acquired power to destroy the Labor Board without formally repealing it.

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