New Process Steel, L. P. v. National Labor Relations Board

Background

A steel company, New Process Steel, challenged orders issued by the National Labor Relations Board (a federal agency that enforces workplace-labor law) after the Board delegated its powers to a three-member panel in December 2007. One panel member’s appointment expired three days later, leaving two members who went on to decide nearly 600 cases over 27 months, including two decisions against the company. The Seventh Circuit upheld those orders; the Supreme Court agreed to resolve whether two members could keep exercising authority after the group fell below three.

Reasoning

The Court asked whether a three-member delegee group must retain three members to exercise delegated authority. Reading §3(b) as a whole, the majority held that the statute requires a delegee group to maintain a membership of three. That reading harmonizes the delegation rule, the vacancy clause, the Board’s three-member quorum requirement, and the provision that two members can form a quorum of a properly constituted three-member group. The Court rejected the Government’s view that two members can act indefinitely once a delegation was made, and relied on the Board’s historical practice of reconstituting panels.

Real world impact

The ruling means the Board cannot continue to issue orders through a two-member quorum after the designated three-member group ceases to exist. Hundreds of decisions issued during the 27-month two-member period may face legal challenge, and the Board will be pressed to restore three-member panels by filling vacancies. The Court reversed the Seventh Circuit and remanded for further proceedings; Congress remains able to change the rule if it chooses.

Dissents or concurrances

Justice Kennedy’s dissent, joined by three Justices, argued the statute’s plain text allowed a two-member quorum of a properly designated three-member group and would have affirmed the Seventh Circuit, emphasizing practicality and past practice.