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Saturday, February, 8, 2014

Petitioner Cornele Overstreet, on behalf of the National Labor Relations Board (NLRB or Board), filed a Petition for a Temporary Injunction under § 10(j) of the National Labor Relations Act (NLRA) against SFTC, LLC, d/b/a Santa Fe Tortilla Company. Section 10(j) provides that “the Board shall have power, upon issuance of a complaint . . . charging that any person has engaged in or is engaging in an unfair labor practice, to petition any United States district court . . . for appropriate temporary relief or restraining order.” 29 U.S.C.A. § 160(j). SFTC moved to dismiss the Petition, contending that the court lacked subject matter jurisdiction. The company argued that the Board did not have authority to act at the time it initiated this § 10(j) proceeding because it lacked a quorum, that the Board did not validly delegate its authority to initiate § 10(j) proceedings to its General Counsel, and that any delegation to the General Counsel did not survive the loss of a quorum.


The Board has a total capacity of five Members, and it is statutorily required to have a quorum of three Members to take action. In 2011, concerned that it might lose its quorum, the Board published an order in the Federal Register that contingently delegated certain aspects of its prosecutorial authority to its General Counsel. This Delegation Order was intended to allow the prosecutorial functions of the NLRB to continue without a quorum. The Board had, on multiple prior occasions in anticipation of the loss of a quorum, approved similar delegation orders. In both 2001 and 2002, the Board issued similar orders. Shortly before the § 10(j) petition here was filed, the D.C. Circuit held that, under the Recess Appointments Clause of the U.S. Constitution, the President must make the recess appointment during the same intersession recess when the vacancy for that office arose. “The Recess,” within the meaning of the Recess Appointments Clause, was limited to intersession recesses. Thus, the Presidential appointments to the NLRB, which were made after Congress began a new session and while the new session continued, were not made during the intersession recess, and therefore were invalid from their inception. Thus, the D.C. Circuit had determined that the Board did not currently have a quorum of three Members.


However, in this case, the U.S. District Court for the District of New Mexico held that the Board’s delegation of § 10(j) authority to the General Counsel survives the loss of a quorum. SFTC had argued that the 2011 Delegation Order was invalid because it was not issued by a properly constituted quorum. Specifically, it contended that one of the three Members who had issued the 2011 Delegation Order was invalidly appointed to the Board. The court, after considering the language of the 2001 and 2002 Delegation Orders, concluded that these prior orders remain in effect. Both orders include language rescinding the delegation during the periods when the Board has a quorum, but neither the 2001 nor the 2002 Delegation Order indicates that the reconstitution of a quorum permanently terminates the delegation. The 2001 order, which specifically delegates to the General Counsel authority to initiate § 10(j) petitions, states that the delegation “shall be effective during any time at which the Board has fewer than three Members.” The court found that this language contemplates that the order resumes in full effect at any time that the Board’s membership drops below three. Additionally, the order includes language that it “shall be revoked whenever” the Board has three members. The use of the word “whenever” similarly indicates that the delegation ceases when the Board has a valid quorum and becomes effective at any point when the Board membership drops below three. Though the court assumed without deciding that the 2011 delegation was invalid, that order further supported the court’s conclusion that the prior delegations remain in effect. The 2011 delegation of authority expressly states, “All existing delegations of authority to the General Counsel and to staff in effect prior to the date of this order remain in full force and effect.” By later referencing the 2001 and 2002 delegations and describing them as “existing” and remaining “in full force and effect [,]” the Board confirmed that the prior delegations remain valid. The Board’s action in issuing cumulative delegation orders merely demonstrated its efforts to ensure the validity of its actions; it did not demonstrate that the original delegation lacked validity.


Regardless of whether President Obama’s recess appointments to the Board were constitutional, the court held that the Board, either acting as a valid quorum or, alternatively, through the authority delegated to the General Counsel, had authority to bring a § 10(j) Petition. In the interest of judicial restrain, a court should not decide a constitutional question unless it is absolutely necessary to the court’s decision. Consequently, the constitutional question had no capacity to change the court’s decision to deny SFTC’s motion to dismiss.


References. Overstreet ex rel. N.L.R.B. v. SFTC, LLC, 2013 WL 1909154 (D.N.M. 2013). See Employment Coordinator, Labor Relations § 41:5; Employment Coordinator, Labor Relations § 41:7. See also Guide to Employment Law and Regulation §§ 17:4; Guide to Employment Law and Regulation §§ 17:5.


© 2013 Thomson Reuters

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