Ignore The Last Two Years Of The NLRB

This morning’s [U.S. Supreme Court] decision in New Process Steel v. National Labor Relations Board, No. 08-1457 . . . held that for a two-year period that ended only recently, the Board had been acting without statutory authority in adjudicating nearly six hundred cases because vacancies had left the Board without a quorum.

From SCOTUS blog.

The Court summed up its ruling as follows:

[The law] as it currently exists, 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 NLRB is the national five person commission that issues private sector union-management law regulations, supervises union recognition elections and adjudicates union-management disputes as a quasi-judicial body.

It went almost two years with three vacancies on the board. In part due to a pitched Senate fight over the nominations driven by Republican concerns that the nominees would adopt the substance of the Employee Free Choice Act via regulations. The standoff was temporarily ended with recess appointments from President Obama in March.

A lack of subject-matter jurisdiction (i.e. authority to make a judicial ruling) normally invalidates a judicial decision, even if no objection is made at the time, so the ruling appears to invalidate every judgment in every private sector union-management dispute in the United States for the last two years. This may also invalidate two years of labor law precedents from those cases.

About three-quarters of the NLRB cases were unfair labor practices disputes and the rest were representation cases (e.g. determinations of whether a union should be recognized).

Presumably, the ruling will not reach cases that were settled in the process prior to an NLRB decision, and it isn't clear what the status quo will be in cases that were decided but not appealed because the parties accepted the results. This is important, because most NLRB cases are resolved without going to the Board itself. According to the NLRB:

Following an investigation, approximately 65 percent of all unfair labor practice charges are dismissed or voluntarily withdrawn for lack of merit. Of the remaining charges, every effort is made to resolve the case through an appropriate settlement. We have been successful in achieving settlements in such cases 86 percent of the time.

No merit decisions are made by a regional director and appealed to the General Counsel's Office of Appeals in Washington, DC. Unfair labor practices cases with merit are decided by an NLRB Administrative Law Judge and only reach the Board if they are appealed. There is a good argument that the status quo left in place when a case has been appealed to the full NLRB Board is the Administrative Law Judge's ruling, rather than the status quo before the NLRB took any action.

Even if there is a legal right to ignore a decision, the parties may choose not to avail themselves of that right.

It is also unclear if appellate court precedents reviewing NLRB decisions made without jurisdiction will themselves loose force as precedents. If the appellate court precedents retain legal force, and the NLRB decisions simply affirmed administrative law judge rulings, and the appellate court determined that the ALJ rulings were correct (or erroneous), then the parties may choose not to relitigate cases whose outcomes are foregone conclusions.

When, if ever, does a deadline to appeal a decision made the interim period start, now that the board is properly constituted?

Were deadlines to file cases with the NLRB equitably tolled while there was no NLRB with jurisdiction in existence? Normally, the statute of limitations to file an unfair labor practices case is just six months.

An affirmation of old case resolutions by the NLRB now that it has jurisdiction might, at least, start the clock ticking again, but only if the NLRB is legally allowed to rely on the record of the proceedings created when the NLRB lacked jurisdiction. Presumably, Administrative Law Judge hearing records would not be impaired by the lack of a Board quorum.

The Chair of the NLRB is disappointed and promises that board members will "do our best to rectify the situation."

The end result may not be what GOP opponents to the nominations intended.

[T]he term of the board’s lone Republican member, Peter Carey Schaumber, is set to expire in August. So, by summer’s end, the NLRB will be controlled by an all-Democratic majority with no Republican to file dissents or voice objections during debates on board action.

And things could grow still worse for the corporate world. By fall, Obama will have an opportunity to replace the board’s general counsel, currently a George W. Bush appointee.

From here.

Republicans are also unhappy about changes to the Department of Labor website that make it easier to get the full history of a company's safety violations and infractions, making it easier for those suing companies to show a pattern and practice of safety violations.

I'd be very curious to see what my more strongly labor law oriented peers in the blogosphere think about this result. Administratively, it is obviously a mess, but without knowing how well the two remaining board members did their jobs it is hard to know what to think about the substance of their rulings in the past two years.

One of the two people on the Board during the lack of quorum period was a Democrat and the other was a Republican. The rump NLRB apparently decided only easy cases:

"The only cases they are getting out are the pure vanilla cases, where it's abundantly clear the case should go one way," said former board Chairman Robert Battista, a Bush appointee who now is an attorney in private practice.

Presumably, almost all of the plain vanilla cases affirmed ALJ rulings, so the status quo may be left unchanged in these cases.

More than fifty contentious cases upon which the Board members could not agree and all regulatory action stopped during the interim period.