- Fallout to regulatory agencies could be substantial. The Supreme Court’s recent Chevron ruling will likely have a major impact on many regulatory agencies, including the National Labor Relations Board.
- Impact on NLRA still unclear. It remains to be seen how the National Labor Relations Act may be affected, and what unions, employers and workers can anticipate from possible changes.
- Rules creation could be different going forward. In the post-Chevron environment, regulatory agencies will likely have to write “narrower” rules and seek alternative ways to advance regulatory policy positions.
The Supreme Court of the United States (SCOTUS) recently overturned the Chevron doctrine (from the 1984 case Chevron v. Natural Resources Defense Council), which required federal courts to defer to federal agency interpretations of federal statutes — if the agency’s statutory interpretation was deemed as “permissible.”
The June 28 rulings in the cases of Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce scuttled Chevron and sent reverberations across the U.S. regulatory landscape — affecting agencies overseeing numerous areas (e.g., labor/employment, healthcare, environmental protection, trade and commerce).
This article will explore the impact on the National Labor Relations Board (NLRB).
The Board Process and What May Come Next
According to John Wymer, a labor and employment lawyer at Thompson Hine LLP, with the Chevron decision, federal agencies such as the NLRB and the entities they regulate are left to wonder: What’s next? This has led to uncertainty from employers, labor unions and workers as to the status of protections and protocols existing within the National Labor Relations Act (NLRA).
“The NLRB operates uniquely among federal agencies,” Wymer explained, noting that while most agencies issue regulations, guidance, interpretations, bulletins, advice and advisory opinions, and memoranda, the NLRB primarily regulates labor relations through adjudicating disputes, typically between employee unions and employers.
“As a result, most NLRB decisions are heavily fact-specific, and courts uphold them if ‘supported by substantial evidence,’” Wymer said, explaining that courts typically defer to the board’s findings unless there is clear evidence to the contrary — ensuring the integrity of its rulings even when the evidence may seem to favor the opposing party.
Challenging an NLRB ruling typically involves appealing an adverse decision to a U.S. Circuit Court of Appeals. Wymer noted that federal trial courts have played a lesser role in reviewing NLRB actions than they have with other agencies. And until this SCOTUS decision, he explained, the Courts of Appeals have reviewed NLRB decisions with a “very high degree of deference” to what the board already has decided.
In fact, Wymer explained that a U.S. Court of Appeals will set aside a board order only when it departs from established precedent without “reasoned justification.”
This aspect of departing from established precedent is where the board may encounter greater headwinds in a post-Loper Bright world, he said.
Cemex Decision May Face Increased Scrutiny
Along those lines, according to Wymer, of the decisions issued by the current NLRB that depart from established precedent, the one most likely to be overturned by a Court of Appeals is the 2023 decision in Cemex Construction Materials Pacific, LLC.
Prior to Cemex, if a union’s unfair labor practice charges were ultimately found to have merit, an employer was required to take steps to remediate and essentially apologize for what it did and promise not to do it again. Subsequently, the board would conduct a re-run election. Per the NLRA, questions concerning representation are to be resolved by “an election by secret ballot.” That ended with the board’s Cemex decision, Wymer said.
Prior to that SCOTUS decision, he noted, if most of the voting employees do not vote in favor of union representation but the NLRB determines the employer committed one or more of those unfair labor practices prior to or during the vote, the NLRB simply could certify the union as the employees’ collective bargaining representative without conducting a re-run election. That would occur despite the fact the union lost the one and only one secret ballot election.
“There are a number of Biden-era, NLRB-issued decisions that are likely to receive heightened scrutiny after Loper Bright and Relentless,” Wymer said. “Of those decisions, Cemex is the most vulnerable because it substantially removes the right to a secret ballot election expressly required by the NLRA.”
Keep an Eye on Board Rules and Ongoing Litigation
According to Alexander MacDonald, a shareholder at the Littler Mendelson P.C. Workplace Policy Institute, the next few months also will reveal much about where labor and employment policy goes — not just with the NLRA, but in other related areas.
MacDonald also explained that the NLRB — as well as agencies such as the Equal Employment Opportunity Commission (EEOC) and the Occupational Safety and Health Administration (OSHA) — had already faced challenges to major rules, and consequently those rules could prove harder to defend under recent SCOTUS decisions.
In addition, this new legal landscape could affect ongoing litigation, MacDonald said. For example, the NLRB currently is defending a rule defining “joint employers” and a rule setting new minimum salaries for “white collar” exemptions under the Fair Labor Standards Act (FLSA). It is also defending a prevailing-wage rule under the Davis-Bacon Act and an FLSA rule defining “independent contractors.”
“Going forward, NLRB rules will now be easier to challenge, especially when they stray far from the statutory text,” MacDonald surmised.
The full impact on employers — and, by extension, their workers — remains to be seen.
“Agencies may need to write ‘narrower’ rules, and seek other ways to advance their policy positions,” MacDonald said.
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