Adjunct Law Prof Blog

Editor: Mitchell H. Rubinstein
New York Law School

Friday, May 1, 2009

D.C. Circuit Strikes Down Two Member Board Decisions Creating Circuit Conflict

DCCir2 Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, ___F.3d____(D.C. Cir. May 1, 2009), is a critically important case that is probably going to wide up in the Supremes. The NLRB had found that the employer committed a ULP and the employer successfully challenged the authority of the NLRB to make that determination because the Board only had two members and did not meet the statutory Board quorum requirement of three members.  
The Board had argued that because the Board had earlier delegated all of its authority to a three-member panel, two members were a quorum.The court reasoned in part:

“A cardinal principle of interpretation requires us to
construe a statute ‘so that no provision is rendered inoperative
or superfluous, void or insignificant.’” Asiana Airlines v. FAA,
134 F.3d 393, 398 (D.C. Cir. 1998) (quoting C.F. Commc’ns
Corp. v. FCC, 128 F.3d 735, 739 (D.C. Cir. 1997)). The
Board’s interpretation of section 3(b), however, violates this
principle of statutory interpretation by eschewing various
portions of the statutory language. Specifically, the Board’s
position ignores the requirement that the Board quorum
requirement must be satisfied “at all times.” 29 U.S.C. § 153(b)
(emphasis added). Moreover, it ignores the fact that the Board
and delegee group quorum requirements are not mutually
exclusive. The delegee group quorum provision’s language does
not eliminate the requirement that a quorum of the Board is
three members. Rather, it states only that the quorum of any
three-member delegee group shall be two. Id. The use of the
word “except” is therefore present in the statute only to indicate
that the delegee group’s ability to act is measured by a different
numerical value. See id. The Board quorum requirement
therefore must still be satisfied, regardless of whether the
Board’s authority is delegated to a group of its members.
Reading the two quorum provisions harmoniously, the result is
clear: a three-member Board may delegate its powers to a threemember
group, and this delegee group may act with two
members so long as the Board quorum requirement is, “at all
times,” satisfied. Id. But the Board cannot by delegating its
authority circumvent the statutory Board quorum requirement,
because this requirement must always be satisfied.
Indeed, if Congress intended a two-member Board to be
able to act as if it had a quorum, the existing statutory language
would be an unlikely way to express that intention. The quorum
provision clearly requires that a quorum of the Board is, “at all
times,” three members. 29 U.S.C. § 153(b).

This case has the potential to result in hundreds of cases and Board orders becomming invalid. The court seemed well aware of this and offered a very interesting solution in dicta. Specificallly, the court states in dicta that a properly constituted Board or Congress can minimize "dislocations" by reinstating the "rump panel's previous decisions." The President recently announced his intention to name two new members so we will shortly have a "properly constituted Board." I discussed the President's nominations here.
I have a serious problem with this suggestion. It calls for arbitrary behavior and for Board Members to literally rubber stamp decisions for the sake of rubber stamps. If the quorum requirement is so important as this court holds that it is, then it should mean something.

This decision conflicts with Northeastern Land Services v. NLRB, ___F.3d___, 2009 WL 638248 (1st Cir. March 13, 2009) which we cited to and reported on here.  Additionally, the 7th Circuit also issued a decision today which conflicts with Laurel Baye Healthcare. New Process Steel v. NLRB, ___F.3d___ (7th Cir. May 1, 2009). The 7th Circuit also noted that there are cases concerning this issue pending in the 2nd and 8th Circuits. The Board issued a Press Release by Chairperson Liebman on May 1, 2009 expressing its disappointment and stating that the Board will examine its legal options.

The decision in Laurel Baye Healthcare, however, is particularly important. That is because review of NLRB orders can always be sought under Section 10 of the Act in the D.C. Circuit. Therefore, no employer or union has to literally comply with anything the NLRB has done since it lost its quorum.

I believe the loosing parties in D.C. Circuit and 7th Circuit will seek en banc review. If the D.C. Circuit decision stands, I believe that  the Board will seek review in the Supremes and a stay of the implication of Laurel Baye. I also believe that the Court will grant both applications.

Workplace Prof Blog has also covered this critical development.  Law review commentary on this issue is needed.

Mitchell H. Rubinstein

Labor Law, Law Review Ideas, NLRB | Permalink

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