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SCOTUS rules on Indiana steel plant case

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The Supreme Court of the United States has ruled on a case about a northern Indiana steel processing plant, overturning the 7th Circuit Court of Appeals and effectively limiting how a federal labor-relations board is able to conduct business regarding employee and union rights.

In a split 5-4 decision today in New Process Steel v. NLRB, No 08-1457, the nation’s justices overturned a 7th Circuit decision from last year and agreed that two of a total five-person National Labor Relations Board can’t effectively handle business when all members aren’t present or the spots are vacant.

The case involves a Butler-based steel-processing plant, which was involved in a collective bargaining agreement dispute in late 2007 that set the stage for this lawsuit. At the time, the five-person board was short three members so that only two were present to conduct business – about 600 case decisions in a 27-month period. New Process was involved in a dispute with the local AFL-CIO, which was negotiating a collective bargaining agreement on behalf of the company workers. The union filed an unfair labor practice charge against the plant, and an administrative law judge ruled in the union’s favor. New Steel appealed to the NLRB; the only two sitting NLRB members approved the ALJ decision and ordered the plant to accept the union contract.

On appeal, the sides disputed whether the board was able to affirm the decision of the ALJ because only two members of the five-member board voted. Statute allows a smaller, three-member panel to have authority to rule on issues, and it also allows for two members to constitute a quorum if the third person is unavailable. Due to the expiration of term limits and board vacancies, the vote was made only by the two-person quorum.

The 7th Circuit affirmed the ALJ and NLRB decisions, though other courts have ruled differently and the topic is one playing out in several Circuits throughout the country. The justices accepted the case to resolve that conflict and ruled against the government.

The majority reversed and remanded the case in favor of New Steel, holding that the National Labor Relations Act requires the NLRB to maintain at least three members as quorum in order to use the authority given to it by the full board. Justice John Paul Stevens authored the majority opinion, concluding “We are not insensitive to the Board’s understandable desire to keep its doors open despite vacancies. Nor are we unaware of the costs that delay imposes on the litigants. If Congress wishes to allow the Board to decide cases with only two members, it can easily do so. But until it does, Congress’ decision to require that the Board’s full power be delegated to no fewer than three members, and to provide for a Board quorum of three, must be given practical effect rather than be swept aside in the face of admittedly difficult circumstances.”

However, Justice Anthony Kennedy dissented with Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonya Sotomayor joining in disagreement.

“It is not optimal for a two-member quorum to exercise the full powers of the Board for an extended period of time,” Justice Kennedy wrote. “The Court’s revisions leave the Board defunct for extended periods of time, a result that Congress surely did not intend. The Court’s assurance that its interpretation is designed to give practical effect to the statue should bring it to the opposite result from the one it reaches.”

This ruling will likely impact multiple cases already pending nationwide – five more cases are before the SCOTUS, with 69 pending before the appellate courts. Those will likely be remanded to the NLRB, which now has four members.
 

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