During her dozen years as a member of the vacancy-plagued National Labor Relations Board, current Chair Wilma Liebman has experienced a full five-member board, four members, three, two and herself alone for six weeks. Nothing, however, matches the unprecedented 26 months that she and her lone colleague, Peter Schaumber, have spent manning the quasi-judicial body.
The board now faces a “record accumulation of difficulties,” said Liebman in a recent speech to Washington University in St. Louis School of Law. Besides the three, long-vacant seats, she said, there is a U.S. Supreme Court challenge — to be argued this week — that could unravel many of the more than 500 decisions issued by her and Schaumber. And Senate Republicans are blocking President Barack Obama’s nomination of union lawyer Craig Becker who has been “packaged” with two other NLRB nominees.
“Today the NLRB has become emblematic of political paralysis,” she concluded.
Still, the Democratic-appointed Liebman and the Republican-appointed Schaumber press on. In terms of the board’s day-to-day work, Liebman said in an interview with The National Law Journal, the three vacancies mean “We are on every case.” That is not the situation when the board has its full five members and can sit in three-member panels.
And in line with long-standing board precedent, the two will not decide any cases that involve novel issues until there are at least three members. With just two members, “What we’re really striving for are ways to reach agreement,” said Liebman. “We don’t issue a decision if we disagree.”
That the two have been successful in reaching agreement as many times as they have is striking, she added with a mix of satisfaction and amazement. “We have very different views about the [National Labor Relations Act] and different philosophies,” she said. “Most knowledgeable observers of the board wouldn’t have expected us to be as successful as we have.”
WAITING TO RULE
It is not the success but, instead, the very act of choosing to decide labor cases that has triggered the Supreme Court challenge and more than five dozen related challenges in the lower courts.
In New Process Steel v. NLRB, the justices on March 23 will hear arguments on whether a two-member board has the legal authority to decide cases when the law speaks of a quorum of three. “The two members have decided roughly 500 cases by unanimous vote,” said labor law scholar Michael Goldberg of Widener University School of Law. “If the Supreme Court pulls the rug out from under those cases by saying the board had no authority to act, many of them will go back to square one and the [board's] backlog will explode unless and until the Senate approves one or more nominees.”
Even if the justices uphold the two-member board’s authority, he added, there remains the problem that these two members will not decide cases involving fundamental interpretations of the law.
“There are about 100 cases of that nature that have not been decided and have been sitting in limbo for as much as two years, some longer,” Goldberg said.
One of those cases, Liebman said, asks whether back pay can be awarded to undocumented workers whose employers retaliated against them for union activities and the employer knew the worker was undocumented. Another, she added, concerns the legality of agreements between unions and employers in which they decide the contract terms that would cover workers in advance of organizing campaigns.
Goldberg added to that list: clarifying the distinction between employees, who are covered by federal labor law, and independent contractors, who are not; questioning the NLRB’s ability to ban retaliatory lawsuits by employers against unions; and asking whether unions can use a giant inflatable rat on picket lines.
Although novel issues are being held in abeyance, Liebman rejected some critics’ claims that she and Schaumber are deciding “plain vanilla” cases. “We’re not doing anything particularly controversial and we’re not making new law, but to the parties involved, we’re settling their disputes,” she said. “If you’ve been fired for union activity, that’s a real dispute and not plain vanilla to them.”
Since its creation in 1935, the NLRB has always been controversial as different presidents sought to shape labor-management policies through their appointments to the board. Three of the five seats are filled by individuals of the same political party as the president.
“Stare decisis is not nearly as significant at the board as it is with courts,” said former board member Dennis Devaney of Devaney Jacob Wilson in Troy, Mich. “When the president appoints new members, the theory is policy changes are to be expected. You can find a case that stands for any proposition you want over the 75 years of the board’s existence. So consistency is not something Congress particularly wanted. It wanted an expert agency to interpret labor policy in light of what’s going on.”
The controversy now before the Supreme Court, however, is not over policy changes but over language in the National Labor Relations Act, the primary law governing relations between employers and unions in the private sector.
The New Process Steel case is a classic statutory interpretation challenge for the justices. It involves Section 3(b) of the act, which states that the “Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise.” It also provides that “three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group” to which the board has delegated its powers.
Toward the end of 2007, the board had four members and one vacancy. Anticipating that the terms of two of the four members were about to expire, the board delegated powers to three of its four members. Two of that three-member group — Liebman and Schaumber — would remain in January 2008 and be the quorum needed to do business, even though the three-member group no longer existed.
The question now before the Supreme Court is whether two members constitute a quorum in this instance, or whether three members are still required to be present for two to issue a decision.
THE NUMBERS QUESTION
In 2008, the board found that New Process Steel, a Houston-based processor and distributor of steel products, had violated the law when it withdrew recognition of the International Association of Machinists and Aerospace Workers, the exclusive bargaining representative for employees at the plant in Butler, Ind. That act, ruled the board, was barred by a binding collective-bargaining agreement.
The company’s appeal challenged the two-member board’s authority. The U.S. Court of Appeals for the 7th Circuit upheld the two-member quorum. Four other circuit courts — the 1st, 2d, 4th and 10th — agreed with the 7th. Only the D.C. Circuit has disagreed.
In the Supreme Court, New Process’ counsel, Sheldon Richie of Richie & Gueringer in Austin, Texas, argues that the plain language — “three members of the Board, shall, at all times, constitute a quorum” — answers the question.
The NLRB is authorized to decide cases so long as at least three members are present in a “group” that has been delegated any or all the powers of the board by the whole board, he contends. When Congress increased the board’s membership from three to five in 1947, it did so because “it was dissatisfied with the way the three-member board acted with a two-member quorum,” Richie said. “Congress wanted a five-member board with a minimum of three to act at all times. If you have three members, you will have a full discussion of the issues and you may have a dissenting voice trying to convince the others of another view.”
The NLRB, represented by the Office of the Solicitor General, argues that his interpretation of the act’s language is incorrect “because it ignores Congress’s decision to adopt a special group quorum provision.” The general quorum rule of three members, according to the government, has an express exception for groups with delegated powers and it allows those to operate with two members.
Devaney, the former NLRB member, has filed a brief supporting New Process Steel on behalf of the Michigan Regional Council of Carpenters, which faces a $1 million back-pay award after losing a case before Liebman and Schaumber. The U.S. Chamber of Commerce is also supporting New Process Steel. The AFL-CIO, however, is supporting the government.
“As a practical matter, the way this could be fixed is for the president to do a recess appointment to the board,” Devaney said. “He clearly has the right and I think that’s the better fix. Institutional expediency, which is what the two-member decisions accomplish, is not what the statute intended. It doesn’t do justice to the parties who have a right to five members, appointed by the president and confirmed by the Senate, to evaluate and make labor policy.”
Marcia Coyle can be contacted at email@example.com.