In a unanimous decision authored by Chief Judge Sentelle, the United States Court of Appeals for the District of Columbia Circuit today held that a two member panel of the National Labor Relations Board does not constitute a quorum of the Board, and consequently, lacks authority to decide cases. Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, No. 08-1162, Slip Op., May 1, 2009. In its decision, the D.C. Circuit granted the petition for review filed by Laurel Baye Healthcare of Lake Lanier, Inc. ("Laurel Baye"), and held that the NLRB's order affirming an administrative law judge's finding that Laurel Baye had engaged in various unfair labor practices was "beyond its lawful authority" and "without force." The Court of Appeals vacated the Board's order and remanded "for further proceedings before the Board at such time as it may once again consist of sufficient members to constitute a quorum."
Since January, 2008, the Board has been functioning with two members – current Chair Wilma Liebman, and Member Peter Schaumber – after former Chairman Robert Battista retired, and the recess appointments of former Members Dennis Walsh and Peter Kirsanow expired. Prior to the expiration of those appointments, the Board delegated its authority to a three member panel consisting of Members Liebman, Schaumber and Kirsanow, which was intended to allow the Board to continue to issue decisions and orders with only two members. In doing so, the Board relied on language in Section 3(b) of the National Labor Relations Act, which provides that "two members shall constitute a quorum of any group" of three members to whom the Board may delegate its authority.
However, in Laurel Baye, the D.C. Circuit flatly rejected the Board's argument that two members were sufficient to constitute a quorum of the Board. Focusing on a provision in Section 3(b) which states that "three members of the Board shall, at all times, constitute a quorum of the Board," the Court of Appeals explained that the "Board's ability to legally transact business exists only when three or more members are on the Board." The Court of Appeals acknowledged that its decision might be "inconvenient," and suggested that a properly constituted Board (or perhaps Congress) may act to minimize the "dislocations" caused by its decision by ratifying or otherwise reinstating decisions by the two member panel.
NLRB Chair Liebman promptly issued a statement expressing disappointment with the Court's decision, but noting that President Obama had this week announced the nomination of two additional Board Members, who, if appointed, would create an "indisputable quorum." However, until such a quorum exists and acts to ratify the previous Board's decisions, the D.C. Circuit's decision casts a cloud over the approximately 400 other cases decided by the two member Board in the past sixteen months.
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