The United States Supreme Court has held that the National Labor Relations Board does not have the authority to act when it has only two members. New Process Steel, L.P. v. NLRB, No. 08-1457 (June 17, 2010). From January 1, 2008 until early-April 2010, the Board had only two of five members. Members of the Board are appointed by the President and must be confirmed by the Senate. As a result of political deadlock between President Bush, and later President Obama, and members of the Senate, the three remaining seats could not be filled.

During this period of time, the two-member Board issued nearly 600 opinions in unfair labor practice cases before it. A party in one of those cases, New Process Steel, lost before the Board, and appealed, arguing that because there was only two-members on the Board when it ruled against it, the ruling was invalid.

The Supreme Court agreed in a 5-4 decision. In a technical analysis of the law, the Court majority determined that the Board always needs a quorum of three members to issue decisions.

The Court’s ruling casts a shadow upon the nearly 600 decisions that the two-member Board issued during the 27 months it operated. In a press release, Board Chairman Liebman said:

“In proceeding to issue decisions in nearly 600 cases where we were able to reach agreement, we [Chairman Liebmen and Member Schaumber] brought finality to labor disputes and remedies to individuals whose rights under our statute may have been violated. We believed that our position was legally correct and that it served the public interest in preventing a Board shut-down. We are of course disappointed with the outcome, but we will now do our best to rectify the situation in accordance with the Supreme Court’s decision.”

Labor professionals should keep a close eye on how the Board, which now has four members as a result of recess appointments by President Obama, will "rectify the situation." If a losing party in those cases sought additional review, the Board might just adopt the opinion of the two-member panel after additional consideration. After all, the two members who issued them, now-Chairman Liebman and Member Schaumber, are still on the Board.

On the other hand, the Board could revisit the questions decided and change its rulings in these cases. Member Schaumber’s term will expire at the end of August 2010. Indeed, even if the Board were to act before August, with three Democratic appointees on the Board and only one Republican, the stakes involved in reopening any case could be high for an employer, depending on the circumstances.

Labor professionals should also watch for reactions by the Senate and the President. There are currently three nominations to the Board pending before the Senate, including two members currently serving under recess appointments by President Obama. The Court’s decision may influence action on those nominations.