Opinion ID: 1192930
Heading Depth: 2
Heading Rank: 1

Heading: NLRB's jurisdiction

Text: New Process' first objection to the NLRB's orders is that it lacks authority to issue them in the first place. A little background information is needed for this argument. The NLRB, by statute, consists of five members. Those members are appointed by the President with the advice and consent of the Senate and serve staggered five year terms. 29 U.S.C. § 153(a). Also by statute, the NLRB is allowed to delegate the authority of the five member body to smaller, three member panels. This delegation process was spelled in § 3(b) of the NLRA: 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 ... A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and 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 designated pursuant to the first sentence hereof. 29 U.S.C. § 153(b). On December 28, 2007, with one seat already vacant and another member's term about to expire, the four members of the Board delegated all of its authority to a three member panel. When the recess appointment of one member of that group of three expired three days later, the remaining two members proceeded as a quorum. As of January 2009, the NLRB had issued over 300 opinions, both published and unpublished, through this two-member quorum. New Process alleges that this delegation procedure violates both the plain meaning of § 3(b) of the NLRA and the purpose of that act as embodied in the relevant legislative history because it was in fact a delegation to a two-member panel rather than a three-member panel. We begin with the plain meaning of the statute. New Process claims that the Board's delegation was improper in the first instance. The third member, whose term was about to expire, was in New Process' view a phantom member who would not actually consider the cases before the Board. New Process claims that this procedure violated the plain meaning of the first sentence of the act because it is not a delegation to three or more members of the NLRB, but only to two members. The upshot of New Process' view, as their counsel explained at oral argument, is that the first sentence of § 3(b) restricts the Board from acting when its membership falls below three. The NLRB argues that the statute at issue is clear that the vacancy of one member of a three member panel does not impede the right of the remaining two members to execute the full delegated powers of the NLRB. As the NLRB delegated its full powers to a group of three Board members, the two remaining Board members can proceed as a quorum despite the subsequent vacancy. This indeed is the plain meaning of the text. As we read it, § 3(b) accomplished two things: first, it gave the Board the power to delegate its authority to a group of three members, and second, it allowed the Board to continue to conduct business with a quorum of three members but expressly provides that two members of the Board constitutes a quorum where the Board has delegated its authority to a group of three members. [2] The plain meaning of the statute thus supports the NLRB's delegation procedure. This reading is also in line with the two other circuit courts to consider this issue. Because the NLRB has been issuing decisions through a two-member quorum since 2007, the issue is pending in several circuits at this time. [3] The First Circuit is so far the only one to address the issue in a published opinion. In Northeastern Land Services v. NLRB, 560 F.3d 36 (1st Cir. 2009), the court held that, [t]he Board's delegation of its institutional power to a panel that ultimately consisted of a two-member quorum because of a vacancy was lawful under the plain text of section 3(b). at 41. As the First Circuit pointed out, this result is also consistent with an Office of Legal Counsel memorandum concluding that, In our view, if the Board delegated all of its powers to a group of three members, that group could continue to issue decisions and orders as long as a quorum of two members remained. Quorum Requirements, Memorandum from M. Edward Whelan III, Principal Deputy Assistant Attorney Gen., Office of Legal Counsel, (Mar 4.2003), available at 2003 WL 24166831. In a case decided well before the current vacancies, the Ninth Circuit upheld the NLRB's ability to act in panels of two if there is a resignation or vacancy in a properly constituted panel of three. Photo-Sonics Inc. v. NLRB, 678 F.2d 121 (9th Cir.1982). The petitioner in Photo-Sonics argued that the order in that case was invalid because one member of the panel of three left the Board prior to the release of the decision. Id. at 122. The Ninth Circuit rejected that argument, holding that under § 3(b) two members was a quorum and that courts had interpreted quorum as the number of the members of the court as may legally transact judicial business. Id. (quotation omitted). New Process attempts to distinguish Photo-Sonics by arguing that the third Board member in that case participated in the underlying decision, while in this case the decision was made by a panel of two. By its terms, however, § 3(b) contains no requirement about whether a vacant Board member needs to have heard evidence or participated in a decision in order for the quorum requirement to apply. As long as the panel consisted of three NLRB members at the time it was constituted, Photo-Sonics is persuasive authority endorsing the NLRB's reading of the statute. When the plain meaning of a statute is unambiguous, we need not consider a statute's legislative history or analogous cases in order to interpret it. See United States v. Easter, 553 F.3d 519, 526 (7th Cir.2009) (Where, as here, the plain meaning of the statute is unambiguous, that is the end of the matter.). However, we also take time to note that the legislative history behind § 3(b) does not support New Process' reading of the statute. § 3(b) of the NLRA was amended by the Taft-Hartley Act, which expanded the size of the NLRB from three members to five. The Taft-Hartley Act itself was a compromise between competing House and Senate revisions of the original National Labor Relations Act. The House version created a Labor-Management Relations Board of three members whose sole duty was to decide cases. H.R.Rep. No. 80-245, at 25 (1947). The Senate version expanded the size of the NLRB from three members to seven but included the delegation and quorum provisions. S. Rep. 80-105, at 19 (1947). The eventual bill, which expanded the NLRB to five members, was a compromise between the two versions. New Process insists that the Taft-Hartley revisions were designed to make the NLRB function more like a court of appeals and to bring a greater variety of opinions into the review of administrative decisions. It is true that the Congressional framers of the Taft-Hartley Act were concerned with the quality of the adjudicative work of the Board, but their primary concern was increasing the efficiency of the Board. [4] There is no field in which time is more important, yet the Board is from 12 to 18 months behind in its docket.... The expansion of the Board from three to seven members, which this bill proposes, would permit it to operate in panels of three, thereby increasing by 100 percent its ability to dispose of cases expeditiously in the final stage.... S.Rep. No. 80-105, at 8 (1947). The purpose of the revisions, then, was to allow the NLRB to hear more cases by creating panels of the entire Board. There is no suggestion in the relevant reports that the Board is restricted from acting when its membership falls below a certain level, as New Process would have it. Indeed, a court interpreting the statute that way would hinder the efficient panel operation that Congress intended to create. See also Hall-Brooke Hospital v. NLRB, 645 F.2d 158, 162 n. 6 (2d Cir.1981) (Congress added [§ 3(b) ] to the NLRA to enable the Board to handle an increasing caseload more efficiently.). To find support for its reading of the statute in the legislative history, New Process would need statements establishing that the Board was forbidden from operating with a quorum of two, or that Congress was particularly concerned about delegating authority to Board members whose term was about to expire. They have produced nothing to that effect. To the extent that the legislative history points either way in this case, then, it establishes that Taft-Hartley created a Board that functioned as an adjudicative body that was allowed to operate in panels in order to work more efficiently. Forbidding the NLRB to sit with a quorum of two when there are two or more vacancies on the Board would thus frustrate the purposes of the act, not further it. Finally, New Process argues that the NLRB's delegation process is invalid because the Supreme Court has disapproved of similar quorum procedures in analogous situations. They rely on the Supreme Court's decision in Nguyen v. United States, 539 U.S. 69, 123 S.Ct. 2130, 156 L.Ed.2d 64 (2003), which held that a circuit court of appeals could not operate with a panel of two Article III judges and a third Article IV judge. The statute at issue in Nguyen, 28 U.S.C. § 46, requires the hearing and determination of cases and controversies by separate panels, each consisting of three judges. 28 U.S.C. § 46(b). The Court held that a panel consisting of fewer than three judges was not a properly constituted panel even if two Article III judges constituted a quorum of a panel of three. There are two ways to distinguish Nguyen from the present case. First, 28 U.S.C. § 46 contains no delegation or quorum clauses, simply a requirement that panels consist of three judges. Second, the Court in Nguyen found while examining the legislative history that Congress amended 28 U.S.C. § 46 in part because of concerns about circuits routinely assigning cases to panels of two. Nguyen, 539 U.S. at 83, 123 S.Ct. 2130. But § 3(b) was not motivated by similar concerns, and indeed contains quorum and delegation clauses that cover the scenario at issue here. Additionally, a number of administrative law opinions hold that a public board has the authority to act despite vacancies because the board, rather than the individual members, has the authority to act, a principle that suggests the NLRB has the authority to act so long as they have satisfied the quorum requirements. See, e.g., FTC v. Flotill Prods., Inc., 389 U.S. 179, 183-86, 88 S.Ct. 401, 19 L.Ed.2d 398 (1967) (common law quorum rules apply to public bodies). This principle is borne out in other court decisions allowing administrative agencies to operate with a quorum of remaining members. See Falcon Trading Group, Ltd. v. SEC, 102 F.3d 579, 582 (D.C.Cir.1996) (SEC allowed to create quorum rules permitting the commission to operate with only two of five members); Railroad Yardmasters of Am. v. Harris, 721 F.2d 1332, 1335 (D.C.Cir.1983) (National Mediation Board allowed to operate with only one of three members). We ruled on a similar issue in Assure Competitive Transp. Inc. v. United States, 629 F.2d 467, 473 (7th Cir.1980). Assure concerned the Interstate Commerce Commission, which by statute has eleven members but, because of vacancies, had dwindled to six members by the late 1970s. The ICC asked Congress to amend the statutory language of its quorum rules to allow the commission to act with a quorum of the remaining commissioners rather than with a quorum of the entire number of seats on the board. Id. at 474. This court held that the quorum rules permitted the ICC to act with fewer than the full complement of the six remaining board members, so long as a quorum of the current board was present. Id. New Process argues that this actually undercuts NLRB's position, because the ICC went to Congress for permission to act with a quorum of the remaining board, which the NLRB did not do. This argument presumes, however, that the NLRB is acting outside of its statutory authority or that, in other words, we accepted New Process' plain meaning argument. Given that the plain meaning of the statute supports NLRB's reading of the statute, New Process' interpretation of Assure is unpersuasive. We thus find that the NLRB had authority to hear the labor dispute in this case and to issue orders regarding the unfair labor practices claim and New Process' withdrawal of recognition from the union, and proceed to the merits of the case.