On The Horizon: Challenges To Government Agency Power Are Stacking Up

by | Jan 24, 2024 | Labor Relations Ink, Labor Relations Insight, Legal, NLRB, SBWU, SCOTUS, SCOTUS, Starbucks

Right out of the gate, Biden’s incarnation of the NLRB formed a habit of changing the rules on employers to tip the balance in favor of unions. This tactic accelerated over the recent holidays, with the board fast-tracking elections right after they published a new final joint-employer rule, which landed while businesses were still distracted by an order to retool employee handbooks. It’s an aggressive domino effect, to say the least.

Is there any limit to how government agencies, including the NLRB, can seemingly act at whim to switch up standards?

The tide might be turning on a few fronts. Currently, the Supreme Court appears poised to either overturn or limit the long-standing Chevron doctrine. This move could end a 40-year standard that essentially directs courts, while interpreting an unclear law, to defer to any “reasonable interpretation” from an agency. That’s not a tough hurdle to meet, and that can be bad news when an agency such as the NLRB claims to possess unrivaled expertise to receive deference on labor issues.

As it stands, preliminary arguments show that the Supreme Court’s majority isn’t thrilled with the NLRB’s musical chairs and morphing policies that can force companies to switch course with new presidential administrations.

A final ruling will come later this summer, and in the meantime, we can look toward current cases involving SpaceX and the Starbucks union for further scrutiny of agency power.

SpaceX: The company’s recent federal lawsuit challenges the NLRB’s structure as unconstitutional due to violating separation of powers. In particular, SpaceX raises doubts about the agency’s use of in-house judges and the NLRB’s authority to enforce administrative law rulings – thereby acting as legislative, judicial, and executive branches in one package.

Part of the SpaceX argument revolves around the NLRB’s ability to internally approve General Counsel Jennifer Abruzzo’s requests for 10(j) injunctions against employers upon accusation of unfair labor practices, even before the facts of a case are discovered.

If the Elon Musk-helmed company succeeds with the above case, the NLRB’s ability to call the shots on workplace practices could take a hit.

Starbucks Workers United: The National Right to Work Foundation filed a federal lawsuit during pro bono representation of a Buffalo, NY, worker who lost a bid to ditch the union. According to the lawsuit, the NLRB dismissed the decertification petition, preventing a majority vote to remove the union. This shutdown follows the NLRB’s general practice of making union removal a slow, convoluted, and often grueling process, whereas the agency does everything possible to make unionization easier.

The NRTW further argued that the agency’s current framework is unconstitutional because the president cannot remove NLRB board members at will. This essentially grants the agency nearly unchecked power on matters of labor law, meaning that it issues rules, uses in-house judges to rule upon disputes – including union election procedure and removal of unions from a workplace  – and can enforce its own rulings.

Where this issue goes from here: These two lawsuits, along with strong suggestions that the Chevron doctrine could fall, point towards an interesting trend indeed. That is to say, the NLRB’s overreach may soon be somewhat constrained.

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