Welcome to KOHP.com

Since January 2008, the National Labor Relations Board (NLRB) has been operating with only two members rather than the five members designated by the National Labor Relations Act (NLRA). Three members’ terms expired at the end of 2007, and the Senate was at that time disinclined to entertain new Bush Administration appointees. So, for nearly two years now, the Board has been functioning, so to speak, with just Democrat member Wilma B. Liebman (who was made Chair in January 2009 at the outset of the Obama Administration) and Republican member Peter C. Schaumber.

In July 2009, President Obama sent three nominations to the Senate to fill the three vacancies: Democrat Craig Becker, an associate general counsel with the Service Employees International Union (SEIU); Democrat Mark G. Pearce, a partner with a Buffalo, NY law firm that represents unions; and Republican Brian E. Hayes, labor policy director for the Senate’s Health, Education, Labor, and Pensions Committee. However, the Senate adjourned for its month-long recess in August without taking any action on these nominations — which may well generate hearings (something rare for Board nominees) due to Becker’s and the SEIU’s aggressive support for the proposed Employee Free Choice Act (EFCA).

While it had been expected in some quarters that the new Obama Administration would push some version of EFCA into law during 2009, at this writing EFCA appears to have completely stalled in Congress due to the many other major initiatives on the legislative plate (e.g., healthcare, energy, the economy, financial regulation). Readers will recall from our last Insight that EFCA would, in its original form, bring about a major re-working of the NLRA by: (1) substituting cardchecks for NLRB-supervised secret ballot elections; (2) authorizing arbitrators to decide the terms of initial labor contracts if bargaining was not quickly successful; and (3) imposing far more severe penalties for NLRA violations. We may have to wait until next year, or perhaps longer, to see what new labor relations rules come out of the political pipeline.

During the nearly two years that the Board has been operating with only two members, its regional offices around the country have continued to process union election and unfair labor practice cases; administrative law judges have continued to conduct hearings; and the two vestigial members have continued to issue decisions and orders in cases in which they are able to agree on the outcome — which means they are not considering cases that are sensitive, raise significant policy issues, or might alter the Board’s current precedent. The two-member Board has claimed the interim power to act in this fashion based on a “delegation order” signed in December 2007 when there were still four Board members sitting. The U.S. Justice Department had concluded that, if an adequately constituted Board “delegated” its powers to a group of three members, that group of three could continue to issue decisions as long as a quorum of two members remained — even though one of the three had actually left office. Under that reasoning, two is enough, as long as they agree with each other. The bureaucratic maneuver is clearly controversial.

During 2008 and 2009, these two remaining Board members have issued hundreds of decisions and orders affecting employers and unions throughout the country — some of which have been challenged in the courts on the ground that the Board has lacked authority to act during this hiatus when it has not been properly constituted. On May 1, 2009, the U.S. Court of Appeals for the District of Columbia Circuit held in Laurel Baye Healthcare v. NLRB, that the Board lacked authority to act with only two members, based on that court’s construction of the quorum provisions of the NLRA. Nevertheless, three other U.S. Courts of Appeals (the First, Second, and Seventh Circuits) have reached the opposite outcome, finding the delegation to two members a proper way to continue the agency’s business. Several of the affected employers have recently filed petitions for a writ of certiorari asking the U.S. Supreme Court to address and decide this unusual but rather basic issue affecting the NLRB’s authority.

Stay tuned for some real and potentially earthshaking developments on the traditional labor relations front, as the coming year may well see the appointment of three new Board members (thereby establishing “the Obama Board”); significant revisions to the NLRA (that may or may not look like EFCA); and a possible declaration from the Supreme Court concerning the Board’s power (or lack thereof ) to operate short-staffed during the last two years.

Theodore R. Opperwall